South Carolina General Assembly
114th Session, 2001-2002

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Bill 4956


Indicates Matter Stricken
Indicates New Matter


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CORRECTED AND REPRINTED

Indicates Matter Stricken

Indicates New Matter

AMENDED

April 24, 2002

    H. 4956

Introduced by Reps. Cato, Wilkins, W.D. Smith, Harrison, Harrell, Law, Lee, Riser, G. Brown, White, Talley, Battle, Kelley, Altman, Simrill, Scarborough, Phillips, Tripp, Trotter, Barrett, Dantzler, Bales, J.E. Smith, Lourie, Chellis, Leach, Kirsh, Taylor, Wilder, Barfield, Edge, Hinson, Jennings and Owens

S. Printed 4/25/02--H.

Read the first time March 21, 2002.

            

A BILL

TO AMEND CHAPTER 9, TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TELEPHONE AND TELEGRAPH COMPANIES, BY ADDING ARTICLE 23 SO AS TO PROVIDE FOR THE MANNER IN WHICH GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS SHALL BE REGULATED AND TAXED, AND TO PROVIDE FOR OTHER PROVISIONS RELATING TO THE OPERATIONS OF THESE GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDERS; BY ADDING SECTION 15-78-65 SO AS TO PROVIDE THAT A GOVERNMENTAL ENTITY HAS NO WAIVER OF IMMUNITY FOR A LOSS RESULTING FROM THE PROVIDING OF TELECOMMUNICATIONS SERVICE BY A GOVERNMENT-OWNED TELECOMMUNICATIONS SERVICE PROVIDER UNDER ITS AUTHORITY; AND TO AMEND SECTION 58-5-30, RELATING TO THE EXEMPTION OF MUNICIPAL UTILITIES FROM REGULATIONS BY THE PUBLIC SERVICE COMMISSION, SO AS TO FURTHER PROVIDE FOR EXCEPTIONS TO THIS EXEMPTION.

    Amend Title To Conform

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

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

"Article 23

Government-owned Telecommunications Service Providers

    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 act's effective date, to the extent that state constitutional or statutory provisions of law authorize this activity.

    Except for the Public Service Commission in regard to its duties and responsibilities under this article, nothing in this article shall be construed to recognize, broaden, or enlarge the authority or legal capacity of any agency or entity of the State or a political subdivision of this State to engage in such activity.

    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 act'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'.

    Section 58-9-2620.    (A)    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, governmental subsidies of any type, or tax exempt financing;

        (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, including depreciation expense, 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.

        (7)    The term '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 58-9-2630.    (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 remit to the Department of Revenue any local tax or fee that it imposes and would otherwise be entitled to retain, and the Department of Revenue shall deposit these monies into the general fund and have the same rights and responsibilities as the local government entity to collect, audit, or contest the amount of the taxes paid.

    (D)    The taxpayer confidentiality provisions contained in Title 12 shall not apply to government-owned telecommunications service providers.

    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 State Treasurer for deposit in the state general fund.

SECTION    2.    Section 58-5-30 of the 1976 Code is amended to read:

    "Section 58-5-30.    Nothing 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."

SECTION    3.    If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act 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 act, the General Assembly hereby declaring that it would have passed this act, 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.

SECTION    4.    This act takes effect upon approval by the Governor.

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