Bill Text: MI HB4576 | 2009-2010 | 95th Legislature | Introduced

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Bill Title: Communications; other; video service provider; clarify public, education, and government access fee. Amends sec. 6 of 2006 PA 480 (MCL 484.3306).

Spectrum: Partisan Bill (Democrat 2-0)

Status: (Introduced - Dead) 2009-03-17 - Printed Bill Filed 03/13/2009 [HB4576 Detail]

Download: Michigan-2009-HB4576-Introduced.html

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HOUSE BILL No. 4576

 

March 12, 2009, Introduced by Reps. Barnett and Johnson 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 that 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 a provider is operating under an existing

 

franchise agreement 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 the provider shall pay the fee as determined

 

by the existing franchise agreement until the agreement expires.

 

     (b) At the expiration of the existing franchise agreement, the

 

amount required under subdivision (a) an amount as established by

 

the franchising entity not to exceed 2% of gross revenues.

 

     (c) If there is no existing franchise agreement , a percentage

 

of gross revenues or if, on or after January 1, 2007, a provider

 

enters into or possesses a uniform video service local franchise

 

agreement, an amount as established by the franchising entity not

 

to exceed 2% to be determined by a community need assessment of

 

gross revenues.

 

     (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.