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Chapter 7.14 Utility License Law

- Note

(Replaced by Ordinance No. 182432, Effective January 15, 2009.)

7.14.005 Short Title.

Chapter 7.14 of the Portland City Code shall be known as the Utility License Law.

7.14.010 Fees for Revenue.

The term “license” as used in the Utility License Law shall not be construed to mean a regulatory permit.  The fees prescribed in the Utility License Law are for general revenue purposes and are not regulatory permit fees.

7.14.020 License Required.

Any person, including any bureau of the City, operating a utility within the City shall obtain a license for such business covering the period of the calendar year, from January 1 through December 31, or if application is made after January 1 of any year, then for the balance of the same calendar year.

7.14.030 Administration.

A.  The Utility License Law shall be administered by the Director.  The Director may adopt procedures, forms, and written policies for administering the Utility License Law.

B.  Authority granted to the Director may be delegated, in writing, to employees or agents of the Bureau.

C.  The Director may, upon request, issue written interpretations of how the Utility License Law applies in general or to specific circumstances.

D.  Nothing in the Utility License Law precludes the informal disposition of controversy by the Director in writing, whether by stipulation or agreed settlement.

E.  The Director may implement procedures, forms, and written policies for administering the provisions of the Utility License Law.

F.  The Director may adopt rules relating to matters within the scope of this Chapter to administer compliance with Utility License Law.

1.  Before adopting a new rule, the Director must hold a public hearing.  Prior to the hearing, the Director will notify Licensees.  Such notice, which may be provided by mail or electronic means, must be distributed to Licensees not less than ten nor more than thirty days before the hearing.  The notice must include the place, time and purpose of the public hearing, a brief description of the subjects covered by the proposed rule, and the location where copies of the full text of the proposed rule may be obtained.

2.  At the public hearing, the Director will receive oral and written testimony concerning the proposed rule. The Director will either adopt the proposed rule, modify, it or reject it, taking into consideration the testimony received during the public hearing.  If a substantial modification is made, additional public review will be conducted, but no additional public notice is required if an announcement is made at the hearing of a future hearing for a date, time and place certain at which the modification will be discussed.  Unless otherwise stated, all rules are effective upon adoption by the Director.  All rules adopted by the Director will be filed in the Bureau’s office.  Copies of all current rules will be posted on the Bureau’s website and made available to the public upon request.

3.  Notwithstanding Subsections 1 and 2, the Director may adopt an interim rule without prior public notice upon a finding that failure to act promptly will result in serious prejudice to the public interest or the interest of the affected parties, stating the specific reasons for such prejudice.  An interim rule adopted pursuant to this Subsection is effective for a period of not longer than 180 days.

7.14.040 Definitions.

(Amended by Ordinance Nos. 182527, 184882, 185756, 186827, 187339 and 187717, effective June 3, 2016.)

A.  “Bureau” means the Bureau of Revenue and Financial Services of the City of Portland, Oregon, along with its employees and agents, or such other bureau as the City Council may designate.

B.  “Cable Communications Utility” means a business that provides cable service or telephone service to subscribers, including voice services delivered through the use of Internet protocol, through its own cable system or a cable system owned by another person.

C.  “Director” means the Bureau Director.

D.   “Gross revenue” means any revenue earned within the City, after adjustment for the net write-off of uncollectible accounts, from the sale of electrical energy, gas, district heating or cooling, or water, or sewage disposal and treatment service, from the furnishing or sale of communications or associated services by or from a telecommunications or cable communications business, or any revenue earned by a Utility within the City from the use, rental, or lease of operating facilities, or any revenue earned within the City for supplying electricity or natural gas.  Gross revenues do not include proceeds from:

1.  The sale of bonds, mortgages, or other evidence of indebtedness, securities, or stocks, or sales at wholesale by one utility to another of electrical energy when the utility purchasing such electrical energy is not the ultimate consumer; or

2.  Public purpose charges collected by a utility selling electrical energy or gas.  For purposes of this Subsection, “public purpose charges” means a charge or surcharge to a utility customer that the utility is required or authorized to collect by federal or state statute, administrative rule, or by tariff approved by the Oregon Public Utility Commission, that raises revenue for a public purpose and not as compensation for either the provision of utility services or for the use, rental, or lease of the utility’s facilities within the City.  “Public purpose” includes energy efficiency programs, market transformation programs, low-income energy efficiency programs, carbon offset programs and other types of programs designed to benefit utility customers within Oregon and the City.

3.  Revenues associated with Universal Service funding requirements under 47 U.S.C. § 254 (2012) or revenues associated with taxes for emergency communications under ORS Chapter 403 (2011).

4.  The calculation of gross revenues for telecommunications utilities for purposes of the Utility License Fee shall not include revenues from any tariffed or non-tariffed charge or service applicable to any connection, circuit or equipment which brings an E9-1-1 call to the appropriate responding Public Safety Answering Point, regardless of where the E9-1-1 call is originated.

E.  “Internet Service" means a service that includes computer processing applications, provides the user with additional or restructured information, or permits the user to interact with stored information through the internet or a proprietary subscriber network. "Internet service" includes provision of internet electronic mail, access to the internet for information retrieval, and hosting of information for retrieval over the internet or the graphical subnetwork called the world wide web.  "Internet" means the international computer network of both federal and nonfederal interoperable packet switched data networks, including the graphical subnetwork called the world wide web.

F.  “Licensee” means any person or entity coming within the provisions of the Utility License Law, whether or not application has been made or a utility license has been issued.

G.  “Public Safety Radio System” means a radio system whose licensing and use of radio transmitters by state and local government and non-governmental entities is regulated by the Federal Communications Commission as engaged in public safety activities.

H.  “Telecommunications” means the providing or offering for rent, sale or lease, or in exchange for other value received, of the transmittal of voice, data, image, graphic and video programming or any other information between or among points by wire, cable, fiber optics, laser, microwave, radio, or similar facilities, with or without benefit of any closed transmission medium, but does not include:

1.  cable television services;

2.  private telecommunications network services;

3.  over-the-air radio or television broadcasting to the public-at-large from facilities licensed by the Federal Communications Commission or any successor thereto;

4.  direct-to-home satellite service within the meaning of Section 602 of the Telecommunications Act of 1996;

5.  services  provided solely for the purpose of providing internet service to the consumer;

6.  public safety radio systems;

7.  mobile service within the meaning of 47 U.S.C. § 153(33) (2012) and

8.  services to devices exclusively utilizing electromagnetic spectrum unlicensed by the Federal Communications Commission.

I.  “Utility” means the business of supplying electrical energy, gas, district heating or cooling, water, sewage disposal and treatment, or cable, telecommunications, or other services through or associated with telephone or coaxial cable, and other operations for public service.  “Utility” does not include transportation service or railroad operations.

7.14.050 Application and Issuance.

A.  Any person, including any bureaus of the City, operating a utility coming within the provisions of the Utility License Law shall file an application for a utility license on forms supplied by the Bureau.

B.  A person is not required to apply for or obtain a utility license if all its revenues earned from operations as a utility otherwise meet the criteria for deduction under Section 7.14.070.  The Director may exercise the authority under Section 7.14.080 to require reports and review records to determine whether revenues are qualified for deduction under Section 7.14.070.

C.  Applications for utility licenses shall be filed with the Bureau on or before December 31 for each subsequent calendar year.  In the case of any person operating a utility coming within the provisions of the Utility License Law which commences operations within the City after January 15, 2009, the person operating such utility shall apply for a utility license on or before the date of commencing such operations.  The application shall include such information as the Director may require in order to determine whether the utility has paid the license fee owed.

D.  Upon receiving a completed application, together with any payment due, the Director shall issue a utility license to the applicant.  A utility license shall be valid for no longer than one year.  Each utility license shall expire on December 31 of the year of issuance.

E.  The Director shall prepare application forms and make them publicly available.  Failure to receive or secure a form shall not relieve any person from the obligation to obtain a license and pay a license fee under the Utility License Law.

7.14.060 Fees and Payment.

(Amended by Ordinance Nos. 185756 and 186366, effective January 3, 2014.)

A.  Except as provided in Section 7.14.070, the fee for a utility license shall be measured by a percentage of the gross revenues earned by the utility for each quarter year period of licensed operation.  The percentage for each type of utility shall be as follows:

Electrical Utility 5.0 percent
Gas Utility  5.0 percent
Sewer Utility   5.0 percent
District Heating or Cooling Utility 5.0 percent
Water Utility 5.0 percent
Telecommunications Utility   5.0 percent
Cable Communications Utility  5.0 percent

The licensee shall compute the license fee by multiplying the percentage applicable to the type of operation in which such utility engages, by the gross revenues received during the quarter.

B.  The licensee shall pay the utility license fee to the Bureau on the following basis: on or before May 15 the fee for the period extending from January 1 through March 31, inclusive, of the same calendar year; on or before August 15 the fee for the period extending from April 1 through June 30, inclusive, of the same calendar year; on or before November 15 the fee for the period extending from July 1 through September 30, inclusive, of the same calendar year; on or before February 15 the fee for the period extending from October 1 through December 31, inclusive, of the preceding calendar year.  All such payments shall be subject to the deductions set forth in Section 7.14.070.

C.  A licensee commencing operations as provided in Subsection 7.14.050 C. shall make the initial payment to the Bureau on or before the payment date following the first quarter year period after commencing operations.  In the event a licensee terminates operations which come within the provisions of the Utility License Law, the final payment shall be made on or before the 45th day following the date of such termination.

7.14.065 Limitations.

(Repealed by Ordinance No. 186366, effective January 3, 2014.)

7.14.070 Deductions.

A.  A licensee may deduct from the utility license fee required in the Utility License Law the amount of any payments made or accrued to the City for the period upon which the utility license fee is computed, under any provision of franchise, permit, or ordinance in lieu of franchise granted by the City Council.  A licensee may not deduct amounts paid to the City for interest charges or penalties.  This Subsection shall not relieve any licensee from paying in accordance with the provisions of a franchise, temporary revocable permit, Charter provision or ordinance when the amount to be paid thereunder exceeds the amount of the utility license fee required under the Utility License Law.

B.  A licensee may not deduct from the utility license fee the value of any right given to City to use poles, conduits, or ducts to other facilities in common with the licensee. A licensee may not deduct from the utility license fee any permit or inspection fee imposed under any Code provision or ordinance of the City.

7.14.080 Reports and Review of Records.

A.  Each person paying a utility license fee shall simultaneously file a report to the Bureau in a form satisfactory to the Director.  The report shall show the licensee’s calculations of the license fee, the licensee’s gross revenues earned within the corporate limits of the City, and any deductions against the licensee’s gross revenues or the amount of the utility license fee.  Such reports shall be verified by the licensee or an authorized agent to the effect that all statements made therein are true.

B.  If a person asserts that any provision of federal, state or local law imposes a limit upon the amount of utility license fees which the City may impose or require from a licensee, the licensee claiming to be within such limitation shall identify in its utility license fee report the specific federal, state or local law, and the service it provides that it claims is subject to the exception.

C.  Every person required to be licensed under the Utility License Law shall keep and preserve for not less than three (3) years such documents and records, including state and federal income or excise tax returns, accurately supporting the information required to be reported on the licensee’s application and calculation of utility license fee for each license year.

D.  The Director shall have authority to arrange for and conduct reviews of all financial records relevant to the calculation of a licensee’s payments to the City under the Utility License Law.  The Director shall make all requests for review in writing.  The Director may determine the scope of review in each instance.

1.  The Director may examine any books, papers, records, invoices, and other data needed to determine the accuracy of any license fee due.  Such records and documentation shall be open for inspection or examination by the Director or a duly authorized agent.  The Director shall have the authority, after notice, to:

a.  Require the attendance of any person required to be licensed under the Utility License Law, or officers, agents, or other persons with knowledge of the person’s business operations, at any reasonable time and place the Director may designate;

b.  Take testimony, with or without the power to administer oaths to any person required to be in attendance.  The Director may designate employees who shall have the power to administer oaths.  Such employees shall be notaries public of the State of Oregon; and,

c.  Require proof for the information sought, necessary to carry out the provisions of the Utility License Law.

2.  If a licensee has not provided copies of all information reasonably within the scope of the review to the Director within 30 days from the date of the written request, the licensee shall provide the Director with access to the requested records within the Portland metropolitan region, during normal business hours, upon 48 hours prior written notice.

3.  If the Director requests in writing that the licensee provide, or cause to be provided, copies of any information reasonably within the scope of the review, and the licensee fails, refuses or neglects to provide copies within 30 days of receipt of the Director’s written request, then the three (3) year periods under Subsections 7.14.080 C. and 7.14.120 A. shall be extended by one day for each day or part thereof beyond 30 days that the licensee fails to provide, or fails to cause to be provided, such requested information.

4.  If any licensee fails, refuses or neglects to provide or make records available to the Director for determining the amount of utility license fees due or payable, the Director may determine the amount of the utility license fees due or payable based upon readily-available facts and information.  The Director shall notify the licensee in writing of the amount of such fee so determined, together with any penalty or interest due.  The total of such amounts shall thereupon become immediately due and payable.  The licensee may seek to establish the correct amount by appeal to the Code Hearings Officer under Section 7.14.090.  In such an appeal, the licensee shall have the burden of establishing that the Director’s determination is incorrect, either in whole or in part.

7.14.085 Refunds by City to Licensee.

Whenever the amount of any utility license fee, penalty, or interest has been erroneously collected or paid to the Bureau under the Utility License Law, it may be refunded, provided the licensee files with the Bureau a verified claim in writing therefor, stating the specific reason upon which the claim is founded, within 3 years from the date of payment.  The claim shall be made on forms provided by the Bureau.  If the claim is approved by the Bureau, the excess amount collected or paid may be credited against any amounts due and payable under the Utility License Law from the licensee from whom the overpayment was collected or by whom it was paid, until the licensee is repaid.

7.14.090 Appeals.

A.  Any person who has received a written determination from the Director applying the provisions of the Utility License Law may appeal such determination of the Director to the Code Hearings Officer of the City as provided in Chapter 22.10 of this Code.

B.  The filing of any notice of appeal shall not stay the effectiveness of the Director’s determination unless the Code Hearings Officer so directs.

7.14.100 Interest.

A.  If a person fails to pay to the City all or any part of the utility license fee on or before the date on which the fee is due, interest shall be due on the entire unpaid amount, assessed at the rate of .833 percent simple interest per month or fraction thereof (10 percent per annum), computed from the original due date of the fee to the 15th day of the month following the date of payment. Payment of interest charges shall be due at the same time as the unpaid utility license fee is due.

B.  For purposes of calculating interest under Subsection 7.14.100 A., the amount of the utility license fee due shall be reduced by the amount of any fee payments received by the Bureau on or before the due dates for fee payment established in the Utility License Law.

C.  Interest amounts properly assessed in accordance with this Section may not be waived or reduced by the Director.

7.14.110 Civil Penalties.

(Amended by Ordinance No. 187717, effective June 3, 2016.)

A.  The Director may assess civil penalties for any of the following violations of the Utility License Law:

1.  Any failure to file a license application at the time required under the Utility License Law;

2.  Any failure to pay the utility license fee when due;

3.  Any failure to file a utility license fee report when due;

4.  Any failure to provide or make available all books, financial records, papers, invoices, documents, data and related information when required by the Director; or,

5.  For any person to make any false statement on any license application or utility license fee report or to provide false information in any investigation or audit conducted pursuant to the Utility License Law.

B.  The Director may assess civil penalties for any violation under Subsection 7.14.110 A. of the greater of either a minimum of $500 per occurrence or up to two percent (2%) of the utility’s gross revenues subject to the Utility License Law for the period during which the violation occurred.

C.  The Director may assess a civil penalty of $500 if a person fails to file a reporting form as required under Section 7.14.080.

D.  In assessing civil penalties under this Section, the Director shall produce a written decision, identifying the violation, the amount of the penalty, and the basis for the decision.  In making such determination, the Director shall consider the following criteria:

1.  The extent and nature of the violation;

2.  Any benefits to the licensee and any impacts to the City or the general public, financial or otherwise, resulting from the violation;

3.  Whether the violation was repeated and continuous, or isolated and temporary;

4.  Whether the violation appeared willful (characterized primarily by substantial acts of commission) or negligent (characterized primarily by substantial acts of omission);

5.  The magnitude and seriousness of the violation;

6.  The City's costs of investigating the violation and correcting or attempting to correct the violation; and,

7.  Any other factors the Director deems relevant in the particular case.

E.  The Director may impose civil penalties under this Section only after having given written notice of the potential for assessment of civil penalties identifying the violation serving as the basis for the assessment.

F.  The Director may waive or reduce any civil penalty for good cause, according to and consistent with written policies.

7.14.120 Collection of Delinquencies.

A.  Upon written approval of the Commissioner in Charge, the Director may have the City Attorney institute legal proceedings in the name of the City to collect any utility license fee or any amount of fee, interest or civil penalties.  Any collection action must be filed within three years after the amount required to be collected becomes due and payable to the City, or within three years after any written determination by the Director becomes final, that is otherwise subject to appeal under Section 7.14.090.

B.  In addition to other enforcement authority, upon written approval of the Commissioner in Charge, the Director may have the City Attorney institute legal proceedings to enforce the Utility License Law or any determinations made by the Director under the Utility License Law.

7.14.130 Confidential Financial Information.

Except as otherwise required by law, the Bureau, the Auditor, or any officer, employee, or agent of the City, shall not divulge, release, or make known in any manner any financial information submitted or disclosed to the Bureau under the Utility License Law.  Nothing in this section shall be construed to prohibit:

A.  The disclosure to, or the examination of, financial records by City officials, employees or agents for the purpose of administering or enforcing the terms of the Utility License Law, or collecting utility license fees imposed under the terms of the Utility License Law, or collecting City business license fees;

B.  The disclosure to the utility licensee or its authorized representative of its financial information, including amounts of utility license fees, penalties, or interest, after filing of a written request by the utility licensee or its authorized representative and approval of the request by the Director;

C.  The disclosure of the names and addresses of any persons to whom utility licensees have been issued;

D.  The disclosure of general statistics in a form which would prevent the identification of financial information regarding any particular utility licensee quarterly reports;

E.  The disclosure of financial information to the City Attorney or other legal representatives of the City, to the extent the Director deems disclosure or access necessary for the performance of the duties of advising or representing the Bureau; or,

F.  The release of such information in the filing of any legal action by or on behalf of the Bureau to obtain payment on unpaid license fees, interest and penalties, or to enforce any determination by the Director.