Northwest Natural Gas Co. v. City of Gresham

Summarized by:

  • Court: Oregon Supreme Court
  • Area(s) of Law: Tax Law
  • Date Filed: 05-05-2016
  • Case #: A150990
  • Judge(s)/Court Below: Balmer, C.J. for the Court; Kistler, J.; Walters, J.; Baldwin, J.; Brewer, J.; & Nakamoto J.
  • Full Text Opinion

An increase in licensing fees may be valid if it is a “privilege tax” and the utilities operate “without a franchise” under ORS 221.450.

Plaintiffs (Rockwood Water People’s Utility District (Rockwood PUD), Northwest Natural Gas Company (NW Natural) and Portland General Electric Company (PGE)) appealed a decision that the City of Gresham’s licensing fee increase from five percent to seven percent for gross revenue earned was valid. Plaintiffs sought a declaration that the increase was unenforceable because of a preemption conflict with ORS 221.450. The trial court agreed that there was a conflict with ORS 221.450. On appeal, there was no preemption issue found because the utilities were not operating “without a franchise” and that a city’s tax authority under the home-rule is not affected by a utility’s municipal corporation status. The Supreme Court held that the license fee was a “privilege tax” and the utilities operated “without a franchise” under ORS 221.450. Also, there was no preemption issue with ORS 221.450 from imposing the privilege tax on NW Natural and PGE. However, no express statutory authority was given to increase the to above 5 percent. Affirmed in part and reversed in part.

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