By: Eiland H.B. No. 3675
A BILL TO BE ENTITLED
AN ACT
relating to assessments and taxes on subscription video service
providers.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subtitle C, Title 2, Utilities Code, is amended
by adding Chapter 67 to read as follows:
CHAPTER 67. SUBSCRIPTION VIDEO SERVICES
Sec. 67.001. DEFINITIONS. In this chapter:
(1) "Cable service" is defined as set forth in 47
U.S.C. Section 522(6).
(2) "Direct broadcast satellite service" means the
distribution or broadcasting of video programming or services by
satellite directly to a subscriber's or paying customer's receiving
equipment. The term includes:
(A) the rental of receiving equipment used by the
subscriber or paying customer to obtain the service;
(B) the provision of premium channels; and
(C) the installation or repair of receiving
equipment used by the subscriber or paying customer to obtain the
service.
(3) "Provider" means a provider of subscription video
services.
(4) "Subscription video services" means cable
service, direct broadcast satellite service, or video service.
(5) "Video service" means multichannel video
programming services provided through the provider's wireline
facilities located at least in part in the public right-of-way
without regard to delivery technology, including Internet protocol
technology. This definition does not include any video service
provided by a commercial mobile service provider as defined in 47
U.S.C. Section 332(d).
Sec. 67.002. SUBSCRIPTION VIDEO ASSESSMENT. (a) There is
imposed on each provider an assessment of 6-1/4 percent of gross
revenues derived from the provision of subscription video services
in this state.
(b) The assessment imposed by Subsection (a) shall not apply
to Internet access services as defined in Section 151.00394(a), Tax
Code, including such services purchased, used, or sold to provide
subscription video services.
(c) To the extent such amounts are included by a provider in
the calculation of gross revenues in Subsection (a), a provider of
subscription video services is entitled to deduct the following
amounts from gross revenues subject to the assessment imposed by
Subsection (a):
(1) bad debts to the extent provided for in Section
151.426, Tax Code, in the same manner set forth therein;
(2) gross revenue derived from a contract to sell or
transfer subscription video services for further commercial
broadcast, rebroadcast, transmission, retransmission, licensing,
relicensing, distribution, redistribution or exhibition of the
product, in whole or in part, to another person or persons;
(3) gross revenue received by an affiliate or any
other person in exchange for supplying goods and services used by a
provider;
(4) refunds, rebates, or discounts made to a
subscriber, advertiser, or other person;
(5) a fee, tax, or other assessment levied by the
United States or any state or local government that is permitted or
required to be added to the sales price of subscription video
services, if the fee, tax, or other assessment is stated separately
on a subscriber's bill;
(6) revenue from the sale of capital assets or surplus
equipment not used by the purchaser to receive subscription video
service from the provider;
(7) late payment fees collected from subscribers of
subscription video services; and
(8) revenue from advertising services.
Sec. 67.003. CREDIT FOR FEES PAID TO MUNICIPALITIES. (a)
Each provider is entitled to a credit against the assessment
imposed under this chapter for fees paid to municipalities, as
provided by this section.
(b) The amount of the credit is the sum of fees paid during
the reporting period by the provider to municipalities, pursuant to
a franchise governed by Chapter 66 or 47 U.S.C. Sections 541 and
542.
(c) The total credit claimed on an assessment report may not
exceed the amount of the assessment due for the report.
(d) If a provider is eligible for a credit that exceeds the
limitation under Subsection (c), the provider may not carry the
credit forward or back.
Sec. 67.004. INFORMATION SHOWN ON SUBSCRIBER BILL. A
provider may show, as a separate line item on each regular bill of
each subscriber, the amount of the total bill resulting from any
assessment imposed under this chapter, net of any credit claimed
under Section 67.003. For each subscriber, the amount of any credit
for fees paid to a municipality and applied against the assessment
imposed under this chapter shall be based on the rate of the fees
paid to the municipality and assessed on that subscriber's bill.
Sec. 67.005. ASSESSMENT DUE DATES. The assessment imposed
by this chapter is due and payable to the comptroller on or before
the last day of the first month following the end of each calendar
quarter.
Sec. 67.006. ASSESSMENT REPORT. (a) A provider required to
pay an assessment under this chapter shall file an assessment
report with the comptroller on a form prescribed by the
comptroller. The assessment report is due on the date the
assessment is due under Section 67.005.
(b) The assessment report must include a statement of the
gross revenues received from the provision of subscription video
services and fees described by Section 67.003(b) paid to
municipalities during the preceding quarterly period and any other
information required by the comptroller.
Sec. 67.007. SUBSCRIPTION REPORT. (a) A provider subject
to the assessment imposed under this chapter shall file a
subscription report with the comptroller on a form prescribed by
the comptroller. The subscription report is due annually on or
before December 31.
(b) The subscription report must include a statement of the
number of subscribers the provider had on December 1 of the calendar
year in which the report is due:
(1) in the incorporated area of each municipality in
which the provider provides subscription video services; and
(2) in the unincorporated area of each county in which
the provider provides subscription video services.
(c) A provider shall base the number of subscribers reported
in Subsection (b)(1) or (2) on the service address of the
subscriber. For purposes of this section, "service address" means
the location where the subscriber receives subscription video
services.
Sec. 67.008. RECORDS. (a) A provider on whom the
assessment is imposed by this chapter shall maintain the necessary
records, and any other information required by the comptroller, to
determine:
(1) the amount of the assessment that the provider is
required to remit and any credit that the provider is entitled to
claim under this chapter; and
(2) the number of subscription video service
subscribers in each incorporated area and in the unincorporated
area of each county.
(b) The records shall be open at all times to inspection by
the comptroller.
Sec. 67.009. PENALTY FOR FAILURE TO FILE REPORT OR PAY
ASSESSMENT. (a) A person who fails to file an assessment report as
required by Section 67.006 or who fails to pay an assessment imposed
by this chapter when due forfeits five percent of the amount of the
assessment due as a penalty, and if the person fails to file the
assessment report or pay the assessment within 30 days after the day
on which the assessment or assessment report is due, the person
forfeits an additional five percent.
(b) A person who fails to file a subscription report as
required by Section 67.007 forfeits five percent of the amount of
the most recent assessment due as a penalty, and if the person fails
to file the subscription report within 30 days after the day on
which the subscription report is due, the person forfeits an
additional five percent.
(c) The minimum penalty imposed by this section is $1.
Sec. 67.010. ALLOCATION OF REVENUE. (a) Three-fourths of
the revenue collected from the assessment imposed by this chapter
shall be deposited to the credit of the general revenue fund.
(b) One-fourth of the revenue collected from the assessment
imposed by this chapter shall be deposited to the credit of the
subscription video assessment clearance fund created under this
chapter.
Sec. 67.011. SUBSCRIPTION VIDEO ASSESSMENT CLEARANCE FUND.
(a) The subscription video assessment clearance fund is a special
fund in the state treasury outside the general revenue fund. The
fund is exempt from the application of Section 403.095.
(b) The fund consists of revenue deposited pursuant to
Section 67.010(b).
(c) Effective on January 1, 2012, not later than the last
day of the second month following a calendar quarter, the
comptroller shall:
(1) calculate the pro rata share of total subscription
video service subscribers for each municipality and the
unincorporated area of each county according to the most recent
subscription report filed by each provider pursuant to Section
67.007; and
(2) issue warrants as provided in Subsection (d).
(d) The comptroller shall distribute the balance of the
amount in the subscription video assessment clearance fund, less
any retention authorized by Subsection (e), by issuing a warrant
drawn on the fund to:
(1) each municipality with subscription video service
subscribers in an amount equal to the municipality's pro rata share
of the amount in the fund as of the date the warrant is issued, less
any retention authorized by Subsection (e); and
(2) each county with subscription video service
subscribers outside of an incorporated area in an amount equal to
the county's pro rata share of the amount in the fund as of the date
the warrant is issued, less any retention authorized by Subsection
(e).
(e) The comptroller may retain up to five percent of the
balance of the fund to process:
(1) a refund of an overpayment of the assessment
imposed under this chapter; or
(2) a correction in the allocation of revenue received
under this chapter.
Sec. 67.012. RULES. The comptroller may adopt rules
necessary to enforce this chapter.
SECTION 2. Section 151.051, Tax Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) Except as provided by Subsection (c), the [The] sales
tax rate is 6-1/4 percent of the sales price of the taxable item
sold.
(c) The sales tax rate on a taxable item that also meets the
definition of "subscription video services" as that term is defined
by Section 67.001(4), Utilities Code, is 5-3/4 percent of the sales
price of the taxable item sold.
SECTION 3. This Act takes effect October 1, 2011, and
applies to the provision of subscription video services, as defined
by this Act, on or after that date.