Bill Text: MI HB5459 | 2009-2010 | 95th Legislature | Introduced
Bill Title: Communications; video services; assessment of public service commission's costs against competitive video service providers; extend sunset. Amends sec. 6 of 2006 PA 480 (MCL 484.3306).
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2009-09-24 - Printed Bill Filed 09/24/2009 [HB5459 Detail]
Download: Michigan-2009-HB5459-Introduced.html
HOUSE BILL No. 5459
September 23, 2009, Introduced by Rep. Geiss and referred to the Committee on Energy and Technology.
A bill to amend 2006 PA 480, entitled
"Uniform video services local franchise act,"
by amending section 6 (MCL 484.3306).
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 6. (1) A video service provider shall calculate and pay
an annual video service provider fee to the franchising entity. The
fee shall be 1 of the following:
(a) If there is an existing franchise agreement, an amount
equal to the percentage of gross revenues paid to the franchising
entity by the incumbent video provider with the largest number of
subscribers in the franchising entity.
(b) At the expiration of an existing franchise agreement or if
there is no existing franchise agreement, an amount equal to the
percentage of gross revenues as established by the franchising
entity not to exceed 5% and shall be applicable to all providers.
(2) The fee due under subsection (1) shall be due on a
quarterly basis and paid within 45 days after the close of the
quarter. Each payment shall include a statement explaining the
basis for the calculation of the fee.
(3) The franchising entity shall not demand any additional
fees or charges from a provider and shall not demand the use of any
other calculation method other than allowed under this act.
(4) For purposes of this section, "gross revenues" means all
consideration of any kind or nature, including, without limitation,
cash, credits, property, and in-kind contributions received by the
provider from subscribers for the provision of video service by the
video service provider within the jurisdiction of the franchising
entity. Gross revenues shall include all of the following:
(a) All charges and fees paid by subscribers for the provision
of video service, including equipment rental, late fees,
insufficient funds fees, fees attributable to video service when
sold individually or as part of a package or bundle, or
functionally integrated, with services other than video service.
(b) Any franchise fee imposed on the provider that is passed
on to subscribers.
(c) Compensation received by the provider for promotion or
exhibition of any products or services over the video service.
(d) Revenue received by the provider as compensation for
carriage of video programming on that provider's video service.
(e) All revenue derived from compensation arrangements for
advertising attributable to the local franchise area.
(f) Any advertising commissions paid to an affiliated third
party for video service advertising.
(5) Gross revenues do not include any of the following:
(a) Any revenue not actually received, even if billed, such as
bad debt net of any recoveries of bad debt.
(b) Refunds, rebates, credits, or discounts to subscribers or
a municipality to the extent not already offset by subdivision (a)
and to the extent the refund, rebate, credit, or discount is
attributable to the video service.
(c) Any revenues received by the provider or its affiliates
from the provision of services or capabilities other than video
service, including telecommunications services, information
services, and services, capabilities, and applications that may be
sold as part of a package or bundle, or functionally integrated,
with video service.
(d) Any revenues received by the provider or its affiliates
for the provision of directory or internet advertising, including
yellow pages, white pages, banner advertisement, and electronic
publishing.
(e) Any amounts attributable to the provision of video service
to customers at no charge, including the provision of such service
to public institutions without charge.
(f) Any tax, fee, or assessment of general applicability
imposed on the customer or the transaction by a federal, state, or
local government or any other governmental entity, collected by the
provider, and required to be remitted to the taxing entity,
including sales and use taxes.
(g) Any forgone revenue from the provision of video service at
no charge to any person, except that any forgone revenue exchanged
for trades, barters, services, or other items of value shall be
included in gross revenue.
(h) Sales of capital assets or surplus equipment.
(i) Reimbursement by programmers of marketing costs actually
incurred by the provider for the introduction of new programming.
(j) The sale of video service for resale to the extent the
purchaser certifies in writing that it will resell the service and
pay a franchise fee with respect to the service.
(6) In the case of a video service that is bundled or
integrated functionally with other services, capabilities, or
applications, the portion of the video provider's revenue
attributable to the other services, capabilities, or applications
shall be included in gross revenue unless the provider can
reasonably identify the division or exclusion of the revenue from
its books and records that are kept in the regular course of
business.
(7) Revenue of an affiliate shall be included in the
calculation of gross revenues to the extent the treatment of the
revenue as revenue of the affiliate has the effect of evading the
payment of franchise fees which would otherwise be paid for video
service.
(8) In addition to the fee required under subsection (1), a
video service provider shall pay to the franchising entity as
support for the cost of public, education, and government access
facilities and services an annual fee equal to 1 of the following:
(a)
If there is an existing franchise on the effective date of
this
act January 1, 2007, the fee paid to the franchising entity by
the incumbent video provider with the largest number of cable
service subscribers in the franchising entity as determined by the
existing franchise agreement.
(b) At the expiration of the existing franchise agreement, the
amount required under subdivision (a) not to exceed 2% of gross
revenues.
(c) If there is no existing franchise agreement, a percentage
of gross revenues as established by the franchising entity not to
exceed 2% to be determined by a community need assessment.
(d) An amount agreed to by the franchising entity and the
video service provider.
(9) The fee required under subsection (8) shall be applicable
to all providers.
(10) The fee due under subsection (8) shall be due on a
quarterly basis and paid within 45 days after the close of the
quarter. Each payment shall include a statement explaining the
basis for the calculation of the fee.
(11) A video service provider is entitled to a credit applied
toward the fees due under subsection (1) for all funds allocated to
the franchising entity from annual maintenance fees paid by the
provider for use of public rights-of-way, minus any property tax
credit allowed under section 8 of the metropolitan extension
telecommunications rights-of-way oversight act, 2002 PA 48, MCL
484.3108. The credits shall be applied on a monthly pro rata basis
beginning in the first month of each calendar year in which the
franchising entity receives its allocation of funds. The credit
allowed under this subsection shall be calculated by multiplying
the number of linear feet occupied by the provider in the public
rights-of-way of the franchising entity by the lesser of 5 cents or
the amount assessed under the metropolitan extension
telecommunications rights-of-way oversight act, 2002 PA 48, MCL
484.3101 to 484.3120. A video service provider is not eligible for
a credit under this subsection unless the provider has taken all
property tax credits allowed under the metropolitan extension
telecommunications rights-of-way oversight act, 2002 PA 48, MCL
484.3101 to 484.3120.
(12) All determinations and computations made under this
section shall be pursuant to generally accepted accounting
principles.
(13) The commission within 30 days after the enactment into
law of any appropriation to it shall ascertain the amount of the
appropriation attributable to the actual costs to the commission in
exercising its duties under this act and shall be assessed against
each video service provider doing business in this state. Each
provider shall pay a portion of the total assessment in the same
proportion that its number of subscribers for the preceding
calendar year bears to the total number of video service
subscribers in the state. The first assessment made under this act
shall be based on the commission's estimated number of subscribers
for each provider in the year that the appropriation is made. The
total assessment under this subsection shall not exceed
$1,000,000.00 annually. This subsection does not apply after
December 31, 2009 2014.
