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Bill 1151

                    Current Status

Bill Number:                      1151
Type of Legislation:              General Bill GB
Introducing Body:                 Senate
Introduced Date:                  20020321
Primary Sponsor:                  McConnell
All Sponsors:                     McConnell, Moore, Leatherman, Land, 
                                  Ryberg, Martin, Jackson, Ford, Reese, Setzler, 
                                  Richardson, Hawkins
Drafted Document Number:          l:\council\bills\gjk\21113sd02.doc
Residing Body:                    Senate
Current Committee:                Judiciary Committee 11 SJ
Subject:                          Government-owned telecommunications 
                                  service providers, regulation of


                        History

Body    Date      Action Description                     Com     Leg Involved
______  ________  ______________________________________ _______ ____________
Senate  20020321  Introduced, read first time,           11 SJ
                  referred to Committee


              Versions of This 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.

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:

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 to the extent that state constitutional or statutory provisions of law authorize this activity. 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 except as provided herein.

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 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.

(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 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.

(B) A government-owned telecommunications service provider shall specify a geographical area within which it will provide telecommunications service and must be required to provide telecommunications service as a carrier of last resort to all customers throughout such specified geographic area.

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 58-9-2640. Notwithstanding any other provision of law, government-owned telecommunications providers shall have the same liabilities and immunities under federal or state law as nongovernment-owned telecommunication service providers."

SECTION 2. The 1976 Code is amended by adding:

"Section 15-78-65. 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 as defined in Article 23, Chapter 9 of Title 58."

SECTION 3. 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 4. This act takes effect upon approval by the Governor.

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