- Associated Press - Wednesday, February 19, 2014

SALEM, Ore. (AP) - The Oregon Legislature may be on the verge of resolving a longstanding conflict over how to tax prepaid cellphones to pay for emergency services.

The House Revenue Committee is scheduled to vote Thursday on legislation backed by phone providers and 911 centers.

Much of the funding for Oregon’s 911 centers comes from a charge of 75 cents per month for every landline and standard cellphone line, but state lawyers have disagreed about whether the tax applies to the prepaid cellphones. Seeking to make it explicit, state lawmakers have struggled for years to agree on who should pay it - cellphone companies or their customers - and how it should be collected.

Under the compromise, phone companies would pay the tax for the first nine months of next year. Starting in October, consumers would pay 75 cents each time they purchase prepaid phone credits.

“The 911 system is underfunded, and it’s exciting that we’re nearing the possibility of bringing those (phones) into the system,” said Rep. Tobias Read, a Beaverton Democrat who has been involved in brokering the compromise.

Oregon has about 60 centers that take 911 calls and dispatch emergency crews. Their funding varies widely, but on average they get about 25 percent of their funding from the 911 tax, said Hasina Squires, a lobbyist for the Special Districts Association of Oregon, which represents the centers.

The 911 centers worry that growing adoption of prepaid phones would erode their revenue if lawmakers didn’t assess the tax. The Legislative Revenue Office is still crunching numbers on how much money the changes will raise, but Squires said she expects it to be in the low millions of dollars per budget year, distributed statewide.

Phone companies had sought to prohibit local governments from imposing their own higher taxes for 911 services, but that provision did not make the compromise, Squires said.

The legislation also applies the tax to Voice over Internet Protocol service and ties the definition to the Federal Communication Commission’s definition so it doesn’t get outdated as technology changes.

“We won’t have to come back and have this conversation again,” said Rep. Jennifer Williamson, a Portland Democrat who was involved in the negotiations.

The compromise is contained in an amendment to HB 4055.

“Sprint supports moving the system to one in which all individuals that have access to 911 services, whether it’s post-paid or prepaid, are paying for those services, and this amendment takes us to that place,” said Jack Dempsey, a lobbyist who represents Sprint Corp.

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