Testimony presented before the House Ways & Means Committee on Wednesday, April 12, 2000 by Daniel Navin, Ohio Chamber director of taxation and public finance.

Mr. Chairman and Members of the Committee,

My name is Daniel Navin and I am the director of taxation & public finance for the Ohio Chamber of Commerce. I am here today to testify in support of HB 589, legislation we believe rectifies some of the problems experienced by schools and other units of local government during the process of adjudicating public utility personal property tax administrative appeals.

Some of you may have had at least one school district affected by a long-pending public utility personal property tax appeal decided in favor of the taxpayer. Frankly, such a situation causes challenges for both the affected taxing jurisdictions and the utility taxpayer alike. While some high-profile cases involving utilities such as Duquesne Light, United Telephone and MCI have garnered the most attention, we realize the problems engendered by legal decisions granting utility taxpayers refund claims dating back in some cases 10-15 years have their origin, in part, in the initial reporting, assessment and payment of the tax.

To alleviate some of these concerns, the bill specifies the requirements for a utility taxpayer to raise objections in either a petition for reassessment or when making additional objections before the Commissionerõs final determination. In particular, the petition must state the total amount of reduction in taxable value sought. This has the practical effect of defining the maximum amount of tax liability that could be at issue.

If an objection is raised that the assessment percentage used by the Commissioner is erroneous, the taxpayer must state the reduction in taxable value being sought both with and without what the utility claims is the correct percentage. This provision serves to allow the affected taxing jurisdictions, in cases where the assessment percentage is at issue, to get a handle on their potential liability exposure at the beginning of the appeal process rather than near the end.

Finally, if an objection is raised about how taxable value is apportioned among taxing jurisdictions, the utility must submit its proposed apportionment within 45 days after filing its petition for reassessment. This places the onus on the utility taxpayer to promptly raise apportionment issues, or such objections will be quickly dismissed.

HB 589 will help school districts avoid paying the large refund claims that pose such a financial burden. It also puts utility taxpayers on largely the same footing with respect to paying and appealing personal property tax assessments as other general business taxpayers. We believe HB 589 deserves your support.