S*0290(Rat #0441, Act #0360 of 2002)  General Bill, By Bauer

Similar(S 1151, H 4956)
 A BILL TO AMEND CHAPTER 9, TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976,
 RELATING TO TELEPHONE, TELEGRAPH, AND EXPRESS COMPANIES, BY ADDING ARTICLE 23
 SO AS TO REGULATE GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS,
 EXCLUDING THAT BY THE STATE BUDGET AND CONTROL BOARD, SPECIFICALLY TO PROHIBIT
 SPECIAL GOVERNMENTAL BENEFITS, SUBSIDIZATION OF COSTS FROM OTHER SOURCES,
 INCLUSION OF CERTAIN CAPITAL COSTS AND TAXES AND FEES IN THEIR RATES, AND
 MAINTENANCE OF SEPARATE BOOKS; TO REQUIRE THAT GOVERNMENT-OWNED
 TELECOMMUNICATIONS SERVICE PROVIDERS BE SUBJECT TO THE SAME STATUTORY
 REGULATION AS NONGOVERNMENTAL PROVIDERS AND PREPARE AND PUBLISH AN INDEPENDENT
 ANNUAL AUDIT; TO PROVIDE FOR PAYMENT AND COLLECTION OF TAXES LIKE A
 NONGOVERNMENTAL PROVIDER; TO LIMIT THE APPLICABILITY OF THE DEPARTMENT OF
 REVENUE CONFIDENTIALITY PROVISIONS; TO PROVIDE THAT THE DEPARTMENT OF
 INSURANCE DETERMINE MARKET RATES AND REQUIRE THE RATE OF PAYMENT BY
 GOVERNMENTAL PROVIDERS TO EQUAL OR EXCEED THE AVERAGE MARKET RATE; AND TO
 AMEND SECTION 58-5-30, RELATING TO EXEMPTION OF MUNICIPALITIES FROM CERTAIN
 REGULATION, SO AS TO EXEMPT PUBLIC UTILITIES OWNED OR OPERATED BY A
 MUNICIPALITY OR REGIONAL TRANSPORTATION AUTHORITY FROM OTHER REGULATION BY THE
 PUBLIC SERVICE COMMISSION.-amended title

   02/06/01  Senate Intd. & placed on local & uncontested cal. w/o
                     reference SJ-16
   03/07/02  Senate Read second time SJ-29
   04/11/02  Senate  Moved to the statewide calendar SJ-19
   04/30/02  Senate Amended SJ-20
   04/30/02  Senate Read third time and sent to House SJ-20
   05/01/02  House  Introduced and read first time HJ-60
   05/01/02  House  Referred to Committee on Labor, Commerce and
                     Industry HJ-60
   05/16/02  House  Committee report: Favorable with amendment Labor,
                     Commerce and Industry HJ-3
   05/22/02  House  Objection by Rep. Stuart HJ-12
   05/22/02  House  Requests for debate-Rep(s). Rice, Cobb-Hunter,
                     Kennedy, Davenport, Govan and Mack HJ-12
   05/22/02  House  Requests for debate removed-Rep(s). Cobb-Hunter HJ-71
   05/29/02  House  Amended HJ-156
   05/29/02  House  Read second time HJ-165
   05/29/02  House  Roll call Yeas-92  Nays-1 HJ-165
   05/30/02  House  Read third time and returned to Senate with
                     amendments HJ-30
   06/06/02  Senate House amendment amended
   06/06/02  Senate Returned to House with amendments
   06/06/02  House  Non-concurrence in Senate amendment HJ-100
   06/06/02  Senate Senate insists upon amendment and conference
                     committee appointed Sens. Hutto, Martin, Richardson
   06/06/02  Senate  Sen. Bauer replaces Sen. Richardson
   06/06/02  House  Conference committee appointed Reps. Wilder,
                     Sandifer and Cato HJ-160
   06/06/02  Senate Conference report received and adopted
   06/06/02  House  Conference report received and adopted HJ-172
   06/06/02  House  Ordered enrolled for ratification HJ-205
   06/06/02         Ratified R 441
   08/02/02         Signed By Governor
   08/14/02         Effective date 7/1/02
   08/14/02         Copies available
   08/22/02         Act No. 360

AN ACT TO AMEND CHAPTER 9, TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TELEPHONE, TELEGRAPH, AND EXPRESS COMPANIES, BY ADDING ARTICLE 23 SO AS TO REGULATE GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS, EXCLUDING THAT BY THE STATE BUDGET AND CONTROL BOARD, SPECIFICALLY TO PROHIBIT SPECIAL GOVERNMENTAL BENEFITS, SUBSIDIZATION OF COSTS FROM OTHER SOURCES, INCLUSION OF CERTAIN CAPITAL COSTS AND TAXES AND FEES IN THEIR RATES, AND MAINTENANCE OF SEPARATE BOOKS; TO REQUIRE THAT GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS BE SUBJECT TO THE SAME STATUTORY REGULATION AS NONGOVERNMENTAL PROVIDERS AND PREPARE AND PUBLISH AN INDEPENDENT ANNUAL AUDIT; TO PROVIDE FOR PAYMENT AND COLLECTION OF TAXES LIKE A NONGOVERNMENTAL PROVIDER; TO LIMIT THE APPLICABILITY OF THE DEPARTMENT OF REVENUE CONFIDENTIALITY PROVISIONS; TO PROVIDE THAT THE DEPARTMENT OF INSURANCE DETERMINE MARKET RATES AND REQUIRE THE RATE OF PAYMENT BY GOVERNMENTAL PROVIDERS TO EQUAL OR EXCEED THE AVERAGE MARKET RATE; AND TO AMEND SECTION 58-5-30, RELATING TO EXEMPTION OF MUNICIPALITIES FROM CERTAIN REGULATION, SO AS TO EXEMPT PUBLIC UTILITIES OWNED OR OPERATED BY A MUNICIPALITY OR REGIONAL TRANSPORTATION AUTHORITY FROM OTHER REGULATION BY THE PUBLIC SERVICE COMMISSION.

Be it enacted by the General Assembly of the State of South Carolina:

Government-owned telecommunications service providers

SECTION 1. A. Chapter 9 of Title 58 of the 1976 Code is amended by adding:

Section 58-9-2600. This article regulates the provision of telecommunications service by an agency or entity of the State or a political subdivision of this State, excluding the State Budget and Control Board for services provided as of this article's effective date.

Section 58-9-2610. As used in this article:

(1) 'Government-owned telecommunications service provider' means a state or local political subdivision or person or entity providing telecommunications service to the public for hire over a facility, operation, or system that is directly or indirectly owned by, operated by, or a financial benefit obtained by or derived from, an agency or entity of the State or any local government. 'Government-owned telecommunications service provider' does not include the State Budget and Control Board for services provided as of this article's effective date.

The term 'government-owned telecommunications service provider' does not include any state or local governmental entity or agency that obtains or derives financial benefit solely from leasing or renting, to any person or entity, property that is not, in and of itself, a facility used to provide telecommunications service.

(2) 'Telecommunications service' for the purpose of this section is defined in Section 58-9-2200(1).

(3) 'Person' as defined in Section 58-9-10(4) includes a 'government-owned telecommunications service provider'.

(4) 'Public' means the public generally or any limited portion of the public, including a person or corporation. The term 'public' excludes governmental agencies or entities when they receive telecommunications service from the Budget and Control Board pursuant to its statutory authority or other legal requirements.

Section 58-9-2620. Notwithstanding any other provision of law, a government-owned telecommunications service provider shall:

(1) be subject to the same local, state, and federal regulatory, statutory, and other legal requirements that nongovernment-owned telecommunications service providers are subject to, including regulation by the Public Service Commission;

(2) not be the recipient of any financial benefits of any type that nongovernment-owned telecommunications service providers are not recipients of including, but not limited to, tax exemptions and governmental subsidies of any type. Tax exempt capital financing may be used consistent with Sections 58-9-2620(4)(a) and 58-9-2630(C);

(3) not be permitted to subsidize the cost of providing telecommunications service with funds from any other nontelecommunications service, operation, or other revenue source. If a determination is made that a direct or indirect subsidy has occurred, the government-owned telecommunications service provider immediately shall increase prices for telecommunications service in a manner that ensures that the subsidy shall not continue, and any amounts used directly or indirectly to subsidize the past operations shall be reimbursed to the general treasury of the appropriate state or local government;

(4) impute, in calculating the cost incurred and in the rates to be charged for the provision of telecommunications services, the following:

(a) cost of capital component that is the equivalent to the cost of capital available to nongovernment-owned telecommunications service providers in the same state or locality; and

(b) an amount equal to all taxes, licenses, fees, and other assessments applicable to a nongovernment-owned telecommunications provider including, but not limited to, federal, state, and local taxes, rights-of-way franchise consent, or administrative fees, and pole attachment fees;

(5) keep separate books and separately account for the revenues, expenses, property, and source of investment dollars associated with the provision of telecommunications service; and

(6) be required to prepare and publish an independent annual audit in accordance with generally accepted accounting principles that reflects the full cost of providing the service, including all direct and indirect costs. The indirect costs shall include, but are not limited to, amounts for rights-of-way franchise, consent, or administrative fees, regulatory fees, occupation taxes, pole attachment fees, and ad valorem taxes. The annual accounting must reflect any direct or indirect subsidies received by the government-owned telecommunications provider. Records demonstrating compliance with the provisions of this section shall be filed with the Public Service Commission and be made available for public inspection and copying. The compliance shall be overseen by the Public Service Commission pursuant to and not inconsistent with its power and jurisdiction set forth by law including Section 58-3-140.

Section 58-9-2630. (A) A government-owned telecommunications service provider shall pay or collect taxes each year in a manner equivalent to taxes paid by nongovernment-owned telecommunications service providers through payment of the following:

(1) all state taxes, including corporate income taxes, under Section 12-6-530 and utility license taxes under Section 12-20-100;

(2) all local taxes, including local business license taxes, under Section 58-9-2230, together with any franchise fees and other local taxes and fees, including impact, user, service, or permit fees, pole rental fees, and rights-of-way, franchise, consent, or administrative fees; and

(3) all property taxes on otherwise exempt real and personal property that are directly used in the provision of telecommunication services.

(B) A government-owned telecommunications service provider shall be required to compute, collect, and remit taxes in the same manner as a nongovernment-owned telecommunications service provider and shall be entitled to the same deductions.

(C) A government-owned telecommunications service provider shall annually remit to the general fund of the government entity owning the telecommunications service provider an amount equivalent to any and all taxes or fees a private sector telecommunications provider would be required to pay.

(D) The taxpayer confidentiality provisions contained in Title 12 shall not apply to the filings of government-owned telecommunications service providers. Provided, however, the Department of Revenue shall require an annual report of all telecommunications providers. The report shall require any telecommunications company licensed in this State to report the total gross of retail telecommunications, to which the business license tax is applicable, pursuant to Section 58-9-2220. This information shall be available to any entity authorized to collect a tax on retail telecommunications or their agent. Information provided to an entity or agent authorized to collect a tax may not be disclosed or provided in any manner to any other person. Such information may only be used by an entity or agent of an entity authorized to collect a tax for purposes of determining the accuracy of tax returns, filings, and payment of taxes.

Section 58-9-2650. The Department of Insurance must determine the South Carolina average market rate for private sector liability insurance for telecommunications operations. In order to have government-owned and nongovernment-owned telecommunications service providers in the same competitive position, to the extent possible, the rate paid for liability insurance for government-owned telecommunications operations must be equal to or greater than the average market rate for private sector liability insurance in South Carolina as determined by the Department of Insurance. To the extent that any government-owned telecommunications service provider pays less than the average market rate for this insurance established by the Department of Insurance, the difference shall be remitted by the government-owned telecommunications service provider to the general fund of the government owning the telecommunications provider. Provided, however, nothing in this section shall be construed to mean that government-owned telecommunication providers are not covered by the South Carolina Tort Claims Act."

B. Section 58-5-30 of the 1976 Code is amended to read:

"Section 58-5-30. Except as provided in Article 23, Chapter 9 of Title 58, nothing contained in Articles 1, 3, and 5 of this chapter shall give the commission any power to regulate or interfere with public utilities owned or operated by or on behalf of any municipality or regional transportation authority as defined in Chapter 25 of this title or their agencies."

C. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this article is for any reason held to be unconstitutional or invalid, the holding shall not affect the constitutionality or validity of the remaining portions of this article, the General Assembly hereby declaring that it would have passed this article, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.

Time effective

SECTION 2. Upon approval by the Governor this act takes effect July 1, 2002.

Ratified the 6th day of June, 2002.

Approved the 2nd day of August, 2002.