Report Title:

Cable Television; Subscriber Rebate; Franchise Fee Study

Description:

Allows DCCA to provide a rebate to cable television subscribers if the annual fee collected from subscribers exceeds the cable television regulatory program's administrative costs. Requires DCCA to study highest and best use of franchise fees. (SD2)

THE SENATE

S.B. NO.

769

TWENTY-THIRD LEGISLATURE, 2005

S.D. 2

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO CABLE TELEVISION.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. Under the department of commerce and consumer affairs' administrative rules, each cable television operator is required to pay an annual fee of one per cent of the preceding year's income received from cable television subscribers. Under federal law, the cable television operators are allowed to pass on this annual fee to subscribers of cable television services. The annual fee goes into the compliance resolution fund and is used to cover the costs of administering cable television regulation in Hawaii.

On occasion over the years, the one per cent annual fee has resulted in the department accumulating more funds than it requires to cover the costs of administering cable television regulation in the State under chapter 440G, Hawaii Revised Statutes. In those instances, the legislature believes it is appropriate that the department rebates the surplus funds to subscribers to ensure that the department does not maintain more moneys than are necessary to administer chapter 440G.

However, the department currently lacks statutory authority to order such a rebate. The purpose of this Act is to provide the department with explicit statutory authority to order a rebate to cable television subscribers if the annual fee collected from subscribers and deposited in the compliance resolution fund exceeds the amount necessary to fund the operations of the department to regulate cable television in the State.

SECTION 2. Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (o) to read as follows:

"(o) Every person licensed under any chapter within the jurisdiction of the department of commerce and consumer affairs and every person licensed subject to chapter 485 or registered under chapter 467B shall pay upon issuance of a license, permit, certificate, or registration a fee and a subsequent annual fee to be determined by the director and adjusted from time to time to ensure that the proceeds, together with all other fines, income, and penalties collected under this section, do not surpass the annual operating costs of conducting compliance resolution activities required under this section. The fees may be collected biennially or pursuant to rules adopted under chapter 91, and shall be deposited into the special fund established under this subsection. Every filing pursuant to chapter 514E or section 485-6(15) shall be assessed, upon initial filing and at each renewal period in which a renewal is required, a fee that shall be prescribed by rules adopted under chapter 91, and that shall be deposited into the special fund established under this subsection. Any unpaid fee shall be paid by the licensed person, upon application for renewal, restoration, reactivation, or reinstatement of a license, and by the person responsible for the renewal, restoration, reactivation, or reinstatement of a license, upon the application for renewal, restoration, reactivation, or reinstatement of the license. If the fees are not paid, the director may deny renewal, restoration, reactivation, or reinstatement of the license. The director may establish, increase, decrease, or repeal the fees when necessary pursuant to rules adopted under chapter 91. The director may also increase or decrease the fees pursuant to section 92-28.

There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection. Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund. Unencumbered balances existing on June 30, 1999, in the cable television fund under chapter 440G, the division of consumer advocacy fund under chapter 269, the financial institution examiners' revolving fund, section 412:2-109, the special handling fund, section 414-13, and unencumbered balances existing on June 30, 2002, in the insurance regulation fund, section 431:2-215, shall be deposited into the compliance resolution fund. This provision shall not apply to the drivers education fund underwriters fee, section 431:10C-115, insurance premium taxes and revenues, revenues of the workers' compensation special compensation fund, section 386-151, the captive insurance administrative fund, section 431:19-101.8, the insurance commissioner's education and training fund, section 431:2-214, the medical malpractice patients' compensation fund as administered under section 5 of Act 232, Session Laws of Hawaii 1984, and fees collected for deposit in the office of consumer protection restitution fund, section 487-14, the real estate appraisers fund, section 466K-1, the real estate recovery fund, section 467-16, the real estate education fund, section 467-19, the contractors recovery fund, section 444-26, the contractors education fund, section 444-29, and the condominium management education fund, section 514A-131. Any law to the contrary notwithstanding, the director may use the moneys in the fund to employ, without regard to chapter 76, hearings officers, investigators, attorneys, accountants, and other necessary personnel to implement this subsection. Any law to the contrary notwithstanding, the moneys in the fund shall be used to fund the operations of the department. Notwithstanding any law to the contrary, the director may use moneys in the fund deposited under chapter 440G to provide a rebate to subscribers of a portion of the fees collected from subscribers and for any costs associated with the rebate; provided that the director shall determine that the fees collected from subscribers exceed the amount needed to fund the operation of the department's cable television division. The moneys in the fund may be used to train personnel as the director deems necessary and for any other activity related to compliance resolution.

As used in this subsection, unless otherwise required by the context, "compliance resolution" means a determination of whether:

(1) Any licensee or applicant under any chapter subject to the jurisdiction of the department of commerce and consumer affairs has complied with that chapter;

(2) Any person subject to chapter 485 has complied with that chapter;

(3) Any person submitting any filing required by chapter 514E or section 485-6(15) has complied with chapter 514E or section 485-6(15);

(4) Any person has complied with the prohibitions against unfair and deceptive acts or practices in trade or commerce; or

(5) Any person subject to chapter 467B has complied with that chapter;

and includes work involved in or supporting the above functions, licensing, or registration of individuals or companies regulated by the department, consumer protection, and other activities of the department.

The director shall prepare and submit an annual report to the governor and the legislature on the use of the compliance resolution fund. The report shall describe expenditures made from the fund including non-payroll operating expenses."

SECTION 3. Section 440G-15, Hawaii Revised Statutes, is amended to read as follows:

"§440G-15 Annual fees. (a) Each cable operator shall pay an annual fee to be determined by the director. The fees so collected under this section shall be deposited into the compliance resolution fund established under section 26-9(o).

(b) The director shall adjust the fees assessed under this section, as necessary from time to time, pursuant to rules adopted in accordance with chapter 91.

(c) The fees collected under this section and deposited to the compliance resolution fund may be used to provide a rebate to subscribers of a portion of the fees collected from subscribers and for any costs associated with the rebate; provided that:

(1) The director shall determine that the fees collected from subscribers exceed the amount needed to fund the operation of the department's cable television division; and

(2) The rebate is provided pursuant to a decision and order issued by the director."

SECTION 4. Act 164, Session Laws of Hawaii 2004, is amended by amending section 5 to read as follows:

"SECTION 5. Section 26-9, Hawaii Revised Statutes, is amended by amending subsection (o) to read as follows:

"(o) Every person licensed under any chapter within the jurisdiction of the department of commerce and consumer affairs and every person licensed subject to chapter 485 or registered under chapter 467B shall pay upon issuance of a license, permit, certificate, or registration a fee and a subsequent annual fee to be determined by the director and adjusted from time to time to ensure that the proceeds, together with all other fines, income, and penalties collected under this section, do not surpass the annual operating costs of conducting compliance resolution activities required under this section. The fees may be collected biennially or pursuant to rules adopted under chapter 91, and shall be deposited into the special fund established under this subsection. Every filing pursuant to chapter 514E or section 485-6(15) shall be assessed, upon initial filing and at each renewal period in which a renewal is required, a fee that shall be prescribed by rules adopted under chapter 91, and that shall be deposited into the special fund established under this subsection. Any unpaid fee shall be paid by the licensed person, upon application for renewal, restoration, reactivation, or reinstatement of a license, and by the person responsible for the renewal, restoration, reactivation, or reinstatement of a license, upon the application for renewal, restoration, reactivation, or reinstatement of the license. If the fees are not paid, the director may deny renewal, restoration, reactivation, or reinstatement of the license. The director may establish, increase, decrease, or repeal the fees when necessary pursuant to rules adopted under chapter 91. The director may also increase or decrease the fees pursuant to section 92-28.

There is created in the state treasury a special fund to be known as the compliance resolution fund to be expended by the director's designated representatives as provided by this subsection. Notwithstanding any law to the contrary, all revenues, fees, and fines collected by the department shall be deposited into the compliance resolution fund. Unencumbered balances existing on June 30, 1999, in the cable television fund under chapter 440G, the division of consumer advocacy fund under chapter 269, the financial institution examiners' revolving fund, section 412:2-109, the special handling fund, section 414-13, and unencumbered balances existing on June 30, 2002, in the insurance regulation fund, section 431:2-215, shall be deposited into the compliance resolution fund. This provision shall not apply to the drivers education fund underwriters fee, section 431:10C-115, insurance premium taxes and revenues, revenues of the workers' compensation special compensation fund, section 386-151, the captive insurance administrative fund, section 431:19-101.8, the insurance commissioner's education and training fund, section 431:2-214, the medical malpractice patients' compensation fund as administered under section 5 of Act 232, Session Laws of Hawaii 1984, and fees collected for deposit in the office of consumer protection restitution fund, section 487-14, the real estate appraisers fund, section 466K-1, the real estate recovery fund, section 467-16, the real estate education fund, section 467-19, the contractors recovery fund, section 444-26, the contractors education fund, section 444-29, and the condominium education trust fund, section    -71. Any law to the contrary notwithstanding, the director may use the moneys in the fund to employ, without regard to chapter 76, hearings officers, investigators, attorneys, accountants, and other necessary personnel to implement this subsection. Any law to the contrary notwithstanding, the moneys in the fund shall be used to fund the operations of the department. Notwithstanding any law to the contrary, the director may use moneys in the fund deposited under chapter 440G to provide a rebate to subscribers of a portion of the fees collected from subscribers and for any costs associated with the rebate; provided that the director shall determine that the fees collected from subscribers exceed the amount needed to fund the operation of the department's cable television division. The moneys in the fund may be used to train personnel as the director deems necessary and for any other activity related to compliance resolution.

As used in this subsection, unless otherwise required by the context, "compliance resolution" means a determination of whether:

(1) Any licensee or applicant under any chapter subject to the jurisdiction of the department of commerce and consumer affairs has complied with that chapter;

(2) Any person subject to chapter 485 has complied with that chapter;

(3) Any person submitting any filing required by chapter 514E or section 485-6(15) has complied with chapter 514E or section 485-6(15);

(4) Any person has complied with the prohibitions against unfair and deceptive acts or practices in trade or commerce; or

(5) Any person subject to chapter 467B has complied with that chapter;

and includes work involved in or supporting the above functions, licensing, or registration of individuals or companies regulated by the department, consumer protection, and other activities of the department.

The director shall prepare and submit an annual report to the governor and the legislature on the use of the compliance resolution fund. The report shall describe expenditures made from the fund including non-payroll operating expenses."

SECTION 5. Before a rebate of franchise fees may be made under this Act, the department of commerce and consumer affairs shall first conduct an evaluation and study of the highest and best uses of the franchise fees authorized pursuant to chapter 440G, Hawaii Revised Statutes, including but not limited to providing additional support for the Institutional Networks, for services to and programming in rural and underserved areas, for the Hawaii Statewide Civic Affairs Network, and for other public, educational, and governmental access programming initiatives. The department shall report to the legislature on the evaluation and study's findings and recommendations no later than twenty days before the convening of the regular session of 2006.

SECTION 6. New statutory material is underscored.

SECTION 7. This Act shall take effect on July 1, 2050; provided that section 4 shall not take effect if the contingent amendment addressed in section 35(5) of Act 164, Session Laws of Hawaii 2004, takes effect on July 1, 2005; and provided further that section 2 shall not take effect if the contingent amendment addressed in section 35(5) of Act 164, Session Laws of Hawaii 2004, does not take effect on July 1, 2005.