GTE Northwest, Inc. v. PUC

• Decision Date: 23 January 2002
• Parties: GTE NORTHWEST INCORPORATED, a Washington corporation, Appellant, v. OREGON PUBLIC UTILITY COMMISSION, Roger Hamilton, Ron Eachus and Joan H. Smith, Commissioners; Lincoln County, a political subdivision of the State of Oregon; and Economic Development Alliance, an Oregon non-profit corporation, Respondents.
• Court: Oregon Court of Appeals

39 P.3d 201

179 Or. App. 46

GTE NORTHWEST INCORPORATED, a Washington corporation, Appellant, v. OREGON PUBLIC UTILITY COMMISSION, Roger Hamilton, Ron Eachus and Joan H. Smith, Commissioners; Lincoln County, a political subdivision of the State of Oregon; and Economic Development Alliance, an Oregon non-profit corporation, Respondents.

98C-19114; A106560

Court of Appeals of Oregon.

Argued and Submitted May 12, 2000.

Decided January 23, 2002.

James M. Brown, Marylhurst, argued the cause for appellant. With him on the briefs was Enfield Brown Collins & Knivila.

Jas. Jeffrey Adams, Salem, argued the cause for respondent Oregon Public Utility Commission. With him on the brief were Hardy Myers, Attorney General, and Michael D. Reynolds, Solicitor General.

Rob Bovett, Assistant County Counsel, argued the cause and filed the brief for respondent Lincoln County.

No appearance for respondent Economic Development Alliance.

Before EDMONDS, Presiding Judge, and ARMSTRONG and KISTLER, Judges.

EDMONDS, P.J.

Plaintiff GTE brought this action in circuit court pursuant to ORS 756.580. Plaintiff sought to have the court set aside findings and conclusions of law made by the Oregon Public Utility Commission (PUC). The trial court held for defendants, and plaintiff appeals. We affirm.

The Economic Development Alliance of Lincoln County (Alliance) and Lincoln County filed separate applications for authority to provide telecommunication services. The applications were consolidated for consideration by the PUC. The final amended applications sought approval to provide interexchange service in Lincoln, Lane and Douglas Counties. According to the applications, applicants sought to be resellers of a data communication service that will use a fiber optic network system. The network system will utilize fiber optic strands and equipment contributed by Alliance and Lincoln County and will provide the means to transport communications. Plaintiff filed a protest to the applications. PUC granted the applications, designating Lincoln County as a provider of the transmission service in Lincoln, Lane and Douglas Counties.

On appeal, plaintiff makes two assignments of error. First, it argues that Lincoln County lacks authority to engage in competitive economic activities with other telecommunication service providers within Lincoln County. Alternatively, it argues that Lincoln County lacks authority to provide competitive telecommunication services beyond its geographical boundaries. The county in response, relies on ORS 203.035 for that authority, which provides, in pertinent part:

"(1) Subject to subsection (3) of this section, the governing body or the electors of a county may by ordinance exercise authority within the county over matters of county concern, to the fullest extent allowed by Constitutions and laws of the United States and of this state, as fully as if each particular power comprised in that general authority were specifically listed in ORS 203.030 to 203.075.

"(2) The power granted by this section is in addition to other grants of power to counties, shall not be construed to limit or qualify any such grant and shall be liberally construed, to the end that counties have all powers over matters of county concern that it is possible for them to have under the Constitutions and laws of the United States and of this state."

When interpreting a statute to discern the legislature's intent, we first examine the text and context of the statute. Subsection (1) of the statute authorizes the governing body of the county to "exercise authority within the county over matters of county concern" to the fullest extent allowed by law. Subsection (2) provides that "counties have all powers over matters of county concern that it is possible for them to have" under the law. Neither party points us to a statutory or constitutional provision that expressly restricts the county's purported authority as a telecommunication service provider. However, plaintiff argues that competitive economic activity by a county with the private sector is generally beyond the authority historically granted by the legislature to counties. The county counters that, in 1973, the Oregon Legislature granted counties "statutory home rule" powers. Under that grant of authority, the county has acted to enhance economic development within Lincoln County by developing a communications network. We agree that the grant of authority in ORS 203.035 is broad and, on its face, is limited only by the phrase "matters of county concern." However, it is not evident from the text or context what activities the legislature contemplated would constitute "matters of county concern." We turn to the legislative history for more guidance.

ORS 203.035 was enacted in 1973, and the scope of its language, especially the phrase "matters of county concern," has remained essentially the same since that date. Or. Laws 1973, ch. 282, § 2.¹ House Bill 3009 (1973), which ultimately became ORS 203.035, was proposed by the House Local Government and Urban Affairs Committee and by the Association of Oregon Counties. The perceived need, according to Steve Orrick of the Association of Oregon Counties, was to fundamentally alter the scope of a county's authority to act. Tape recording, House Committee on Local Government and Urban Affairs, HB 3009, March 26, 1973, Tape 14, Side 2 (statement of Steve Orrick). He explained that, under then-existing law, a county was presumed to be unable to take any given action unless it could find a specific, enumerated power somewhere in the statutory framework that bestowed the specific power. Otherwise, counties were limited to the exercise of specifically delineated powers that the legislature conferred by statute. Id.

At the time, there were numerous opinions of the Attorney General, and several older cases, that had strictly construed a county's authority. See, e.g., Powell Grove Cem. v. Multnomah Co., 228 Or. 597, 365 P.2d 1058 (1961)

; Fales v. Multnomah County et al, 119 Or. 127, 133, 248 P. 151 (1926). Such a framework had resulted in an overwhelming number of requests by specific counties during each legislative session for the legislature to grant new, enumerated powers that would allow a county to act in specific situations. Tape recording, House Committee on Local Government and Urban Affairs, SB 3009, March 26, 1973, Tape 14, Side 2.

Orrick testified that the purpose of the bill was to "reverse" the status quo or, in other words, to reverse the presumption of lack of authority and to grant counties the authority to act without seeking express legislative approval. The proposed change would place the onus on the legislature to circumscribe the county's authority by specific legislation. Id. Orrick gave two examples. He explained that, in most counties, there was a pressing need for transportation services for the elderly but that private entities were not willing to provide the service. He explained that, under then-existing statutes, counties did not have an enumerated grant of authority to offer transportation services, so they could not perform that function. He stated that the bill, if adopted, would give counties that power because transportation for the elderly was clearly a matter of county concern. He also explained that the bill would allow counties to impose a hotel/motel tax if desired, which they did not have the legislature's specific statutory authorization to do. He explained that the bill was intended to be prospective and to confer powers, which the legislature could then limit after the fact, if it wished to make a matter one of statewide concern. Id.

Another legislator expressed the concern that the legislature might prefer to have counties come to it and ask for specific authority in each instance, rather than granting blanket authority. Orrick acknowledged that the legislature would still retain the ability to limit a county's exercise of power under the proposed bill but that the presumption would be in favor of the county's exercise of its power in the absence of legislative action. Orrick then discussed the interaction between home rule counties, chartered counties, and the proposed statute.²Id. He concluded by saying that the bill was not a new attempt to enumerate powers at all but was intended to be broad and sweeping; no one would know what powers had been conferred under the bill until a specific challenge to a county's exercise of power was tested in court. Id. While there was extensive additional discussion about whether a county should have the ability to tax and produce revenue without legislative approval, the general terms of HB 3009 regarding "matters of county concern" were adopted without much additional comment. SB 3009 was enacted in 1973 in substantially the same form in which it was proposed.

In Allison v. Washington County, 24 Or. App. 571, 581, 548 P.2d 188 (1976), we addressed the issue of the 1973 Legislature's intentions in enacting ORS 203.035. We said:

"ORS 203.035 (which became law via Oregon Laws 1973, ch. 282) obliterates most distinctions between the powers of general law counties and home rule counties. Home rule counties derive their legislative power from Art. VI, s[ection] 10 of the Oregon Constitution and from their individual charters. Art. VI, s[ection] 10 grants home rule counties authority `over matters of county concern.' General law counties derive their legislative power from specific statutory grants and from the broad general [statutory] grant in ORS 203.035 of authority `over matters of county concern.' General grants of power to counties convey exactly that broad grant articulated therein, except that which is preempted by state law. Schmidt v. Masters, 7 Or.App. 421, 429, 490 P.2d 1029 (1971), [rev. den.] (1972). Therefore, in the absence of state preemption or a limiting charter provision, home rule and general law counties have the same legislative authority." Allison, 24

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