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Current Status Bill Number:View additional legislative information at the LPITS web site.3276 Ratification Number:191 Act Number:112 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:19990114 Primary Sponsor:Wilkins All Sponsors:Wilkins, Cato, Bailey, Barrett, Battle, G. Brown, H. Brown, Carnell, Cobb-Hunter, Easterday, Gamble, Harrell, Harrison, Jennings, Keegan, Kelley, Kirsh, Klauber, Mason, McGee, McKay, Quinn, Sandifer, Sharpe, D. Smith, R. Smith, Tripp, Young-Brickell, Leach, Whatley, Meacham-Richardson, Law, Seithel, Woodrum, Trotter, Fleming, Chellis, Walker, Loftis, Altman, Riser, Stille, Rodgers, Rice, Bauer, Beck, Edge, Dantzler, Maddox, Cooper, Lanford, Martin, Hamilton, Campsen, Phillips, Lee, Gilham, Robinson, Simrill Drafted Document Number:l:\council\bills\gjk\20126sd99.doc Companion Bill Number:329 Date Bill Passed both Bodies:19990624 Date of Last Amendment:19990624 Governor's Action:S Date of Governor's Action:19990630 Subject:Telecommunications providers, municipal corporations charges to; Public Service, Political Subdivisions History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 19990721 Act No. A112 ------ 19990630 Signed by Governor ------ 19990624 Ratified R191 Senate 19990624 Free Conference Committee Report 89 SFCC adopted, enrolled for ratification Senate 19990624 Free Conference Powers granted, 89 SFCC Moore appointed Senators to Committee Hutto of Free Conference Ravenel House 19990623 Free Conference Committee Report 99 HFCC adopted House 19990623 Free Conference Powers granted, 99 HFCC Cato appointed Reps. to Committee of Sandifer Free Conference Lee Senate 19990603 Conference powers granted, 88 SCC Moore appointed Senators to Committee Hutto of Conference Ravenel House 19990603 Conference powers granted, 98 HCC Cato appointed Reps. to Committee of Sandifer Conference Lee House 19990603 Insists upon amendment Senate 19990603 Non-concurrence in House amendment House 19990603 Senate amendments amended, returned to Senate with amendment Senate 19990527 Amended, read third time, returned to House with amendment Senate 19990520 Debate interrupted by adjournment Senate 19990519 Debate interrupted by adjournment Senate 19990512 Amended, debate interrupted by adjournment Senate 19990505 Amended, debate interrupted by adjournment Senate 19990413 Made Special Order Senate 19990407 Amended Senate 19990406 Amended, read second time, ordered to third reading with notice of general amendments Senate 19990331 Introduced, placed on Calendar without reference House 19990330 Read third time, sent to Senate House 19990325 Amended, read second time House 19990325 Co-Sponsor added (Rule 5.2) by Rep. Simrill House 19990324 Debate adjourned until Thursday, 19990325 House 19990324 Co-Sponsor added (Rule 5.2) by Rep. Robinson House 19990315 Co-Sponsor added (Rule 5.2) by Rep. Gilham House 19990311 Committee report: Favorable with 26 HLCI amendment House 19990304 Co-Sponsor removed (Rule 5.2) by Rep. Delleney House 19990202 Co-Sponsor removed (Rule 5.2) by Rep. Knotts House 19990128 Co-Sponsor removed (Rule 5.2) by Rep. Hinson House 19990121 Co-Sponsor removed (Rule 5.2) by Rep. Harris House 19990119 Co-Sponsor added (Rule 5.2) by Rep. Lee House 19990119 Co-Sponsor added (Rule 5.2) by Rep. Phillips House 19990119 Co-Sponsor removed (Rule 5.2) by Rep. J. Smith House 19990114 Introduced, read first time, 26 HLCI referred to Committee Versions of This Bill Revised on March 11, 1999 - Word format Revised on March 25, 1999 - Word format Revised on March 31, 1999 - Word format Revised on April 6, 1999 - Word format Revised on April 7, 1999 - Word format Revised on May 5, 1999 - Word format Revised on May 12, 1999 - Word format Revised on May 27, 1999 - Word format Revised on June 3, 1999 - Word format Revised on June 24, 1999 - Word format
(A112, R191, H3276)
AN ACT TO AMEND CHAPTER 9 OF TITLE 58, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO TELEPHONE, TELEGRAPH, AND EXPRESS COMPANIES, BY ADDING ARTICLE 20 SO AS TO PROVIDE FOR THE MANNER IN WHICH AND CONDITIONS UNDER WHICH AMOUNTS MAY BE CHARGED BY MUNICIPALITIES TO TELECOMMUNICATIONS COMPANIES FOR THE USE OF THE PUBLIC RIGHTS-OF-WAY AND FOR BUSINESS LICENSE TAXES IN ORDER TO ENSURE THAT SUCH CHARGES ARE IMPOSED ON A COMPETITIVELY NEUTRAL AND NONDISCRIMINATORY BASIS, TO LIMIT OR RESTRICT THE IMPOSITION OF CERTAIN OTHER FEES AND TAXES ON TELECOMMUNICATIONS COMPANIES BY MUNICIPALITIES; TO PROVIDE A MAXIMUM RATE OF BUSINESS LICENSE TAX THAT MAY BE IMPOSED ON RETAIL TELECOMMUNICATION SERVICES BY A MUNICIPALITY AFTER 2003 AND THE METHOD OF DETERMINING THAT MAXIMUM RATE; TO PROHIBIT A MUNICIPALITY FROM USING ITS AUTHORITY OVER THE PUBLIC STREETS AND PUBLIC PROPERTY AS A BASIS FOR ASSERTING OR EXERCISING CERTAIN REGULATORY CONTROL OVER TELECOMMUNICATIONS COMPANIES REGARDING MATTERS WITH THE JURISDICTION OF THE PUBLIC SERVICE COMMISSION OR THE FEDERAL COMMUNICATIONS COMMISSION; TO ALLOW A COMMUNICATIONS COMPANY THAT IS OCCUPYING THE PUBLIC STREETS AND PUBLIC PROPERTY OF A MUNICIPALITY WITH ITS PERMISSION ON THE EFFECTIVE DATE OF THIS ARTICLE TO CONTINUE USING THE PUBLIC STREETS AND PUBLIC PROPERTY WITHOUT OBTAINING ADDITIONAL CONSENT; TO PROVIDE CONDITIONS UNDER WHICH A MUNICIPALITY MAY ENFORCE AN ORDINANCE OR PRACTICE INCONSISTENT WITH THE PROVISIONS OF THIS ARTICLE; TO AUTHORIZE A TELECOMMUNICATIONS COMPANY TO INCLUDE A STATEMENT IN A MUNICIPAL CUSTOMER'S BILL THAT THE CUSTOMER'S MUNICIPALITY CHARGES A BUSINESS LICENSE TAX TO THE COMPANY; AND TO PROVIDE FOR RELATED PROCEDURAL AND OTHER MATTERS.
Whereas, Congress enacted the Telecommunications Act of 1996 to open local telephone markets to competition, and the telecommunications industry is in a state of transition; and
Whereas, in addition to new competitors in traditional local exchange telecommunications markets, a number of new technologies has developed and is developing at a rapid pace, expanding the array of telecommunications providers and services available to consumers; and
Whereas, since the passage of the Telecommunications Act of 1996, competition in telecommunications services and the number of competitors in the telecommunications industry in South Carolina has grown and continues to grow, as evidenced by the hundreds of new entrants into the industry. In South Carolina, over four hundred companies have been authorized to provide long distance service and over seventy companies have been authorized to provide local telephone service. South Carolina now has over one thousand authorized pay phone service providers and numerous digital and analog wireless and paging providers. Telephony may also now be provided over Internet protocol and cable modems; and
Whereas, the citizens of municipalities in South Carolina have long enjoyed the public benefit of dependable local exchange and long distance telecommunications service provided to them by telecommunications carriers that have constructed, operated, and maintained telecommunications facilities to serve those citizens, and that currently occupy the municipal rights-of-way in the State; and
Whereas, Congress has stated that nothing in Section 253 of the Telecommunications Act of 1996 affects the authority of the state or local government to manage the public rights-of-way or to require fair and reasonable compensation from telecommunications providers, on a competitively neutral and nondiscriminatory basis, for use of public rights-of-way on a nondiscriminatory basis, if the compensation required is disclosed by such government. The General Assembly finds that shifting of current taxation and fees from a franchise fee basis to the basis outlined in the attached article is necessary and appropriate due to the transition of the telecommunications industry and is fair and reasonable, and taxes and fees exceeding such amount, except upon extraordinary circumstances, would be unreasonable. Now, therefore,
Be it enacted by the General Assembly of the State of South Carolina:
Municipal charges to telecommunications providers
SECTION 1. Chapter 9 of Title 58 of the 1976 Code is amended by adding:
Section 58-9-2200. As used in this article:
(1) 'Telecommunications service' means the provision, transmission, conveyance, or routing for a consideration of voice, data, video, or any other information or signals of the purchaser's choosing to a point, or between or among points, specified by the purchaser, by or through any electronic, radio, or similar medium or method now in existence or hereafter devised. The term 'telecommunications service' includes, but is not limited to, local telephone services, toll telephone services, telegraph services, teletypewriter services, teleconferencing services, private line services, channel services, Internet protocol telephony, and mobile telecommunications services and to the extent not already provided herein, those services described in Standard Industrial Classification (SIC) 481 and North American Industry Classification System (NAICS) 5133, except satellite services exempted by law.
(2) 'Retail telecommunications service' includes telecommunications services as defined in item (1) of this section but shall not include:
(a) telecommunications services which are used as a component part of a telecommunications service, are integrated into a telecommunications service, or are otherwise resold by another provider to the ultimate retail purchaser who originates or terminates the end-to-end communication including, but not limited to, the following:
(i) carrier access charges;
(ii) right of access charges;
(iii) interconnection charges paid by the providers of mobile telecommunications services or other telecommunications services;
(iv) charges paid by cable service providers for the transmission by another telecommunications provider of video or other programming;
(v) charges for the sale of unbundled network elements;
(vi) charges for the use of intercompany facilities; and
(vii) charges for services provided by shared, not-for-profit public safety radio systems approved by the FCC;
(b) information and data services including the storage of data or information for subsequent retrieval, the retrieval of data or information, or the processing, or reception and processing, of data or information intended to change its form or content;
(c) cable services that are subject to franchise fees defined and regulated under 47 U.S.C. Section 542;
(d) satellite television broadcast services.
(3) 'Telecommunications company' means a provider of one or more telecommunications services.
(4) 'Cable service' includes, but is not limited to, the provision of video programming or other programming service to purchasers, and the purchaser interaction, if any, required for the selection or use of the video programming or other programming service, regardless of whether the programming is transmitted over facilities owned or operated by the cable service provider or over facilities owned or operated by one or more other telecommunications service providers.
(5) 'Mobile telecommunications service' includes, but is not limited to, any one-way or two-way radio communication service carried on between mobile stations or receivers and land stations and by mobile stations communicating among themselves, through cellular telecommunications services, personal communications services, paging services, specialized mobile radio services, and any other form of mobile one-way or two-way communications service.
(6) 'Service address' means the location of the telecommunications equipment from which telecommunications services are originated or at which telecommunications services are received by a retail customer. If this is not a defined location, as in the case of mobile phones, paging systems, maritime systems, and the like, 'service address' means the location of the retail customer's primary use of the telecommunications equipment or the billing address as provided by the customer to the service provider, provided that the billing address is within the licensed service area of the service provider.
(7) 'Bad debt' means any portion of a debt that is related to a sale of telecommunications services and which has become worthless or uncollectible, as determined under applicable federal income tax standards.
Section 58-9-2210. Nothing in this article shall limit a municipality's authority to enter into and charge for franchise agreements with respect to cable services as governed by 47 U.S.C. Section 542.
Section 58-9-2220. Notwithstanding any provision of law to the contrary:
(1) A business license tax levied by a municipality upon retail telecommunications services for the years 1999 through the year 2003 shall not exceed three-tenths of one percent of the gross income derived from the sale of retail telecommunications services for the preceding calendar or fiscal year which either originate or terminate in the municipality and which are charged to a service address within the municipality regardless of where these amounts are billed or paid and on which a business license tax has not been paid to another municipality. The business license tax levied by a municipality upon retail telecommunications services for the year 2004 and every year thereafter shall not exceed the business license tax rate as established in Section 58-9-2220(2). For a business in operation for less than one year, the amount of business license tax authorized by this section must be computed based on a twelve-month projected income.
(2)(a) The maximum business license tax that may be levied by a municipality on the gross income derived from the sale of retail telecommunications services for the preceding calendar or fiscal year which either originate or terminate in the municipality and which are charged to a service address within the municipality regardless of where these amounts are billed or paid and on which a business license tax has not been paid to another municipality for a business license tax year beginning after 2003 is the lesser of seventy-five one hundredths of one percent of gross income derived from the sale of retail telecommunication services or the maximum business license tax rate as calculated by the Board of Economic Advisors pursuant to subsection (b). For a business in operation for less than one year, the amount of business license tax authorized by this section must be computed based on a twelve-month projected income.
(b) The Board of Economic Advisors from the appropriate municipal records shall determine actual total municipal revenues from business license taxes, franchise fees, and other fees contractually imposed on the sale of telecommunications services and received from telecommunications companies in 1998, and actual total revenues received by municipalities in 1999, 2000, 2001, 2002, and 2003 from such taxes and fees imposed on the gross income derived from the sale of retail telecommunications services. The board shall determine an annual average growth rate applicable to such revenues by averaging the annual growth rates applicable to these revenues for 1999-2000, 2000-2001, 2001-2002, and 2002-2003 and shall apply that average growth rate to the 1998 actual revenues compounded annually to derive an estimated 2004 total revenue. The tax rate to be calculated by the board is the fraction produced by dividing the 2004 estimated revenue as determined above by gross income in 2003 derived from the sale of retail telecommunications services in municipalities in this State.
(c) If the maximum business license tax rate that may be levied by a municipality on retail telecommunications services, as determined by the Board of Economic Advisors, is calculated or determined to exceed seventy-five one hundredths of one percent of gross income derived from the sale of retail telecommunication services a joint telecommunications study committee shall review the maximum business license tax calculation, as determined by the Board of Economic Advisors, and verify the maximum business license tax calculation. Upon verification of the maximum business license tax calculation, the joint telecommunications study committee must sponsor a joint resolution to allow a municipality to levy the maximum business license tax rate greater than seventy-five one hundredths of one percent of gross income derived from the sale of retail telecommunications services.
(d) The joint telecommunications study committee shall consist of six members of the General Assembly: three Senators appointed by the President Pro Tempore of the Senate and three Representatives appointed by the Speaker of the House. The joint telecommunications study committee shall utilize the staff and resources of the Labor, Commerce and Industry Committee of the House of Representatives and the Judiciary Committee of the Senate. The joint telecommunications study committee is authorized to verify the maximum business license tax rate determined by the Board of Economic Advisors.
(3) A business license tax levied by a municipality upon the retail telecommunications services provided by a telecommunications company must be levied in a competitively neutral and nondiscriminatory manner upon all providers of retail telecommunications services.
(4) The measurement of the amounts derived from the retail sale of telecommunications services does not include:
(a) an excise tax, sales tax, or similar tax, fee, or assessment levied by the United States or any state or local government including, but not limited to, emergency telephone surcharges, upon the purchase, sale, use, or consumption of a telecommunications service, which is permitted or required to be added to the purchase price of the service; and
(b) bad debts.
(5) A business license tax levied by a municipality upon a telecommunications company must be reported and remitted on an annual basis. The municipality may inspect the records of the telecommunications company as they relate to payments under this article.
(6) The measurement of the amounts derived from the retail sale of mobile telecommunications services shall include only revenues from the fixed monthly recurring charge of customers whose service address is within the boundaries of the municipality.
Section 58-9-2230. (A) A municipality must manage its public rights-of-way on a competitively neutral and nondiscriminatory basis and may impose a fair and reasonable franchise or consent fee on a telecommunications company for use of the public streets and public property to provide telecommunications service unless the telecommunications company has an existing contractual, constitutional, statutory, or other right to construct or operate in the public streets and public property including, but not limited to, consent previously granted by a municipality. Any such fair and reasonable franchise or consent fee which may be imposed upon a telecommunications company shall not exceed the annual sum as set forth in the following schedule based on population:
Tier I - 1 - 1,000 - $ 100.00
Tier II - 1,001 - 3,000 - $ 200.00
Tier III - 3,001 - 5,000 - $ 300.00
Tier IV - 5,001 - 10,000 - $ 500.00
Tier V - 10,001 - 25,000 - $ 750.00
Tier VI - Over 25,000 - $1,000.00
(B) A municipality must manage its public rights-of-way on a competitively neutral and nondiscriminatory basis and may impose an administrative fee upon a telecommunications company which is not subject to subsection (A) in this section that constructs or installs or has previously constructed or installed facilities in the public streets and public property to provide telecommunications service. Any such fee which may be imposed on a telecommunications company shall not exceed the annual sum as set forth in the following schedule based on population:
Tier I - 1 - 1,000 - $ 100.00
Tier II - 1,001 - 3,000 - $ 200.00
Tier III - 3,001 - 5,000 - $ 300.00
Tier IV - 5,001 - 10,000 - $ 500.00
Tier V - 10,001 - 25,000 - $ 750.00
Tier VI - Over 25,000 - $1,000.00
(C) No municipality shall levy any tax, license, fee, or other assessment on, with respect to, or measured by the receipts from any telecommunications service, other than (a) the business license tax authorized by this article, and (b) franchise fees as defined and regulated under 47 U.S.C. Section 542; provided, however, that nothing herein shall restrict the right of any municipality to impose ad valorem taxes, service fees, sales taxes, or other taxes and fees lawfully imposed on other businesses within the municipalities.
(D) A telecommunications company, including a mobile telecommunications company providing mobile telecommunications services, shall not be deemed to be using public streets or public property unless it has constructed or installed physical facilities in public streets or on public property, provided that the use of public streets or public property under lease, site license, or other similar contractual arrangement between a municipality and a telecommunications company shall not constitute the use of public streets or public property under this article. Without limiting the generality of the foregoing, a telecommunications company shall not be deemed to be using public streets or public property under this article solely because of its use of airwaves within a municipality. Should any telecommunications company, including a telecommunications company providing mobile telecommunications services, request of a municipality permission to construct or install physical facilities in public streets or on public property, such request shall be considered by such municipality in a manner that is competitively neutral and nondiscriminatory as amongst all telecommunications companies.
Section 58-9-2240. A municipality may not use its authority over the public streets and public property as a basis for asserting or exercising regulatory control over telecommunications companies regarding matters within the jurisdiction of the Public Service Commission or the Federal Communications Commission including, but not limited to, the operations, systems, service quality, service territory, and prices of a telecommunications company. Nothing in this section shall be construed to limit the authority of a local governmental entity over a cable television company providing cable service as permitted by 47 U.S.C. Section 542.
Section 58-9-2250. A telecommunications company, its successors or assigns, that is occupying the public streets and public property of a municipality on the effective date of this article with the consent of the municipality to use such public streets and public property shall not be required to obtain additional consent to continue the occupation of those public streets and public property.
Section 58-9-2260. (A) No municipality may enforce an ordinance or practice which is inconsistent or in conflict with the provisions of this article, except that:
(1) As of the time of the effective date of this article, any municipality which had entered into a franchise agreement or other contractual agreement with a telecommunications provider prior to December 31, 1997, may continue to collect fees under the franchise agreement or other contractual agreement through December 31, 2003, regardless of whether the franchise agreement or contractual agreement expires prior to December 31, 2003.
(2) Nothing in this article shall be interpreted to interfere with continuing obligations of any franchise or other contractual agreement in the event that the franchise agreement or other contractual agreement should expire after December 31, 2003.
(3) In the event that a municipality collects these fees under a franchise agreement or other contractual agreement herein, the fees shall be in lieu of fees or taxes that might otherwise be authorized by this article.
(4) Any municipality that, as of the effective date of this article, has in effect a business license tax ordinance, adopted prior to December 31, 1997, under which the municipality has been imposing and a telecommunications company has been paying a business license tax higher than that permitted under this article but less than five percent may continue to collect the tax under the ordinance through December 31, 2003, instead of the business license tax permitted under this article.
(5) Any municipality which, by ordinance adopted prior to December 31, 1997, has imposed a business license tax and/or franchise fee on telecommunications companies of five percent or higher of gross income derived from the sale of telecommunications services in the municipality, to which tax and/or fee a telecommunications company has objected, failed to accept, filed suit to oppose, failed to pay any license taxes or franchise fees required thereunder, or paid license taxes or franchise fees under protest, may enforce the ordinance and the ordinance shall continue in full force and effect until December 31, 2003, unless a court of competent jurisdiction declares the ordinance unlawful or invalid. In this event, the municipality is authorized until December 31, 2003, to collect business license taxes and/or franchise fees thereunder, not exceeding three percent of gross income derived from the sale of telecommunications services for the preceding calendar or fiscal year which either originate or terminate in the municipality instead of the business license tax permitted under this article; however, this proviso applies to any business license ordinance and/or telecommunications franchise ordinance notwithstanding that same is amended or has been amended subsequent to December 31, 1997.
(B) The exception to this article described in subsection (A)(5) no longer applies after December 31, 2003.
Section 58-9-2270. A telecommunications company may include the following statement or substantially similar language in any municipal customer's bill when that customer's municipality charges a business license tax to the telecommunications company under this chapter: 'Please note that included in this bill there may be a line-item charge for a business license tax assessed by your municipality'."
Severability clause
SECTION 2. If a section, paragraph, provision, or portion of this article is held to be unconstitutional or invalid by a court of competent jurisdiction, this holding shall not affect the constitutionality or validity of the remaining portions of this article, and the General Assembly for this purpose hereby declares that the provisions of this article are severable from each other.
Time effective
SECTION 3. This act takes effect upon approval by the Governor.
Ratified the 24th day of June, 1999.
Approved the 30th day of June, 1999.
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