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Published 11:57 am Monday, March 2, 2015

SALEM — Data centers in rural areas would get a tax break, and telecommunications companies would have their property taxes clarified, under a bill that has cleared the Oregon Senate.

The 27-3 vote Monday sent Senate Bill 611 to the Oregon House.

The bill has several aims. It would exempt from central assessment by the state data centers such as those Google opened in The Dalles in 2006, Facebook opened in Prineville in 2011, and Apple has completed in Prineville. Amazon, the electronic retailer, also has data centers near Boardman.

But Apple and Amazon, among others, delayed plans for more data centers because of uncertainty over future tax policy. Lawmakers had passed a temporary fix for data centers in 2012.

“We can’t risk losing the investment of companies like Facebook and Apple,” said Sen. Bill Hansell, R-Athena, whose district includes Boardman.

Those communities were seen as desirable because of their available land, drier climate and access to lower-cost power required to operate such centers.

“With SB 611 we have tackled an economic development challenge and agreed on a solution that will create jobs in rural Oregon while bolstering the state’s reputation as a technology hub in the U.S,” said Sen. Mark Hass, D-Beaverton, chairman of the Senate Finance and Revenue Committee that originated the bill.

Under central assessment, the worth of a company’s brand and other “intangibles” are taken into account in calculating how property taxes are assessed on data centers. The bill, however, would not take into account the worldwide value of the data centers.

The bill also would exempt from central assessment Internet service providers with superfast computing, and substitute a different formula. It is seen as an incentive for Google Fiber to choose Portland for a high-speed Internet network.

Another part of the bill would deal with the after-effects of a 2014 ruling by the Oregon Supreme Court, which defined Comcast’s cable and Internet services as “data transmission services.”

The Oct. 2 ruling subjected Comcast to central assessment, which the Oregon Department of Revenue shifted to in 2009, and led to increasing Comcast’s taxable value from $434 million to $1.14 billion — and a subsequent increase in its property tax bills.

The court sided with the state agency, based on a 1973 law.

“The evidence in the record about the nature of Comcast’s internet and cable transmission services is effectively undisputed and establishes that … both services are ‘data transmission services,’” Justice Virginia Linder wrote for the court.

The bill would cap the taxable values of Comcast and similar companies, based on their historical investment in Oregon.

According to the Legislative Revenue Office, which analyzes tax measures, the bill would cost local governments $16.2 million in property taxes in the 2016-17 tax year, $33.5 million in the following two-year cycle, and $35 million in 2019-21.

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