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Table of Contents Table of Contents PURF Working Group | October 1, 2019 Agenda Tab 1 Overview of Legislative History Tab 1 Relevant Terms, Background & Analysis Tab 2 Regulatory Finance & Budget Information Tab 3 Regulatory Agency Data Tab 4 S. B. 130 “Universal Service Fund Tab 5 Amendments” Public Service Commission Report Tab 6 UUSF Information Tab7 Sales Tax Information for Telecommunications Tab 8 Service Providers CLEC Fees and Taxes Tab 9 Taxes & Fees Presentation, Leonine Public Tab 10 Affairs, Telecommunications Industry Rural Incumbent Local Exchange Provider Tab 11 Taxes & Fees on Subscribers Bills 1. Introductions & Materials Recap • Reconstituted packet • Questions, discussion, or edits to the packet? 2. Known Policy Options & Proposals: Rep. Christofferson • Stakeholder positions? • Potential tradeoffs? • Others not listed? 3. Potential Next Steps • Public Utilities, Energy, and Technology PURF committee bill • Other? 4. Close Meeting/Misc. 1 Overview What is it? A special fee imposed to defray the costs of public utility regulation. Who determines and imposes the fee? The executive director of the Department of Commerce for the Department of Commerce. The chair of the Public Service Commission for the Public Service Commission. How much is the fee? For a public utility other than an electrical cooperative, the fee may not exceed the greater of .3% of the public utility's gross operating revenues for the preceding calendar year or $50. For an electrical cooperative, the fee may not exceed the greater of .15% of the electrical cooperative's gross operating revenues for the preceding calendar year or $50. What is included in gross operating revenue? The gross operating revenue for the preceding calendar year is derived from each public utility's business and operations during that period within this state, excluding income derived from interstate business and does not include income to a wholesale electric cooperative derived from the sale of power to a rural electric cooperative which resells that power within the state. When is it due? The fee is due and payable on or before July 1 of each year. What costs are the fee intended to cover? The fee is intended to provide all of the funds for the administration, support, and maintenance of: 1) the Public Service Commission; 2) state agencies within the Department of Commerce involved in the regulation of public utilities; and 3) expenditures by the attorney general for utility regulation. How is the revenue from the fee used? The revenue is deposited into the Public Utility Regulatory Restricted Account and is used by: 1) the Department of Commerce to administer the Division of Public Utilities and the Office of Consumer Services; and 2) the Public Service Commission to administer the Public Service Commission. What is the Supplemental Levy Committee? A committee created to levy additional assessments on public utilities when unanticipated costs of regulation occur in any fiscal year. The total of all fees imposed, including a supplemental fee imposed by the supplemental levy committee, is capped at the maximum .3% of the public utility's gross operating revenues for the preceding calendar year. 2 Year History of changes Citation • Public utilities regulatory fee enacted • Amount fixed and determined by the State Tax Commission as a uniform percentage of gross operating revenue of each utility for preceding calendar year derived from its public utility business within the state Laws of Utah (excludes income derived from interstate business) 1965 1965, Ch. • Deposited in the Public Service Commission Fund as dedicated credits 107, § 1 • Used for the purpose of defraying costs and expenses of regulating the public utilities doing business in the state • Fee may not exceed .25% (one quarter of one per centum) of its gross public utility operating revenue but minimum fee is $2. • Fee transferred to the General Fund rather than the Public Service Laws of Utah 1967 Commission Fund (unexpended revenues from the Public Service 1967, Ch. Commission Fund transferred to the General Fund) 130, § 1 • Included the Department of Transportation’s responsibilities relating to Laws of Utah 1975 carrier safety in the costs to be covered by the public utility regulatory fee 1975, 1st SS, Ch. 9, § 23 • Fee fixed and determined by the Executive Director of the Department of Business Regulation and subject to audit by the State Auditor (rather than being determined by State Tax Commission) • Authorized the use of the funds for expenses of state agencies within the Department of Business Regulation involved in the regulation of public utilities, including expenditures by the attorney general for utility regulation Laws of Utah 1981 • Increased fee cap to 3/10 of 1% of its gross public utility operating 1981, Ch. 36, revenue and minimum fee increased to $50 (from $2) § 1 • Supplemental levy committee created for the purpose of levying additional assessments on public utilities occasioned by unanticipated costs of regulation, authorized to impose a supplemental fee on the regulated utilities • Aggregate of all fees (including supplemental fee) may not exceed 3/10 of 1%, supplemental fee is credited as a departmental collection • Fee fixed and determined for the department of business regulation by Laws of Utah the executive director of the department of business regulation and for 1983 1983, Ch. the public service commission by the chairman of the commission 246, § 14 • Amended supplemental levy committee membership • Clarified that the director of the Dept. of Business Regulation fixes and determines the fee for the Department of Regulation and the chairman Laws of Utah of the Public Service Commission fixes and determines the fee for the 1987, Ch. Public Service Commission 161, § 154 1987 • Provided that auditor may audit each or any public utility each year to Laws of Utah determine its fee by May 15th 1987, Ch. • Amendments made to the special levy committee process 175, § 1 • Provided that gross operating revenue may not include income to a wholesale electric cooperative derived from the sale of power to a rural 3 electric cooperative which resells the power within the state, amends supplemental levy committee procedures • Department of Business Regulation is changed to the Department of Laws of Utah 1989 Commerce 1989, Ch. 225, § 18 • Repealed the provision that allows expenses of the Department of Laws of Utah 1996 Transportation’s responsibilities relating to carrier safety to be covered 1996, Ch. by the fund 170, § 50 • Regulatory fee replaced with the Utility Regulation Tax • Imposed as the greater of 3/10 of 1% of the public utility's gross operating revenues for the preceding calendar year derived from each public utility's business and operations during that period within this state or $50 • Exempted revenue derived from interstate business and revenue of a wholesale electric cooperative derived from the sale of power to a rural electric cooperative which resells that power within the state Laws of Utah 2000 • Tax is paid to the Department of Commerce on or before July 1 of each 2000, Ch. year 352, § 111 • Proceeds of the tax used for: the administration, support, and maintenance of the Public Service Commission and the Office of the Public Advocate; expenditures by the Office of the Attorney General to provide legal counsel for the Public Service Commission and the Office of the Public Advocate; and the support and maintenance of any other programs, services, or functions provided by the state, as appropriated by the Legislature • Utility Regulation Tax repealed and regulatory fee reinstated • Fee for electrical cooperative reduced to .15% of the electrical cooperative’s gross operating revenue, but commission authorized to Laws of Utah impose supplemental fee if the regulation of one or more electrical 2001 2001, Ch. cooperatives causes unanticipated costs of regulation in a fiscal year 212, § 2 • The aggregate of all fees on an electrical cooperative in a calendar year may not exceed the greater of .3% of the electrical cooperative's gross operating revenues for the preceding calendar year or $50. • Enacted the Public Utilities Restricted Account • Provided that the Department of Commerce may use the funds in the Public Utility Regulator Restricted Account to administer the Division of Laws of Utah Public Utilities and the Office of Consumer Services and the Public 2017 2017, Ch. Service Commission may use the funds in the Public Utility Regulatory 396, § 1 Restricted Account to administer the Public Service Commission • Enacted $3,000,000 cap on balance in the Public Utility Regulatory Restricted Account 4 Key Terms & Acronyms For the purposes of this working group only, the following terms and definitions are borrowed from the Utah Code to supplement the meeting attendees’ understanding of the policy issue. Terms are listed in alphabetical order; underlines point to defined terms that are used to define another term in this same document, while * mean that the term’s definition was adapted utilizing the definition of another term that is not listed in this document due to a need for conciseness, but resides in the Utah Code. Access Line (Title 54 definition/UUSF): a circuit-switched connection, or the functional equivalent of a circuit-switched connection, from an end-user to the public-switched network (Utah Code Section 54-8b-2). Access Line (Title 69 definition/E-911 Charges): means a circuit-switched connection, or the functional equivalent of a circuit-switched connection, from and end user to the public switched network, including a local exchange service switched access line within the state, a revenue producing radio communications access line with a billing address within the state, and a line by a service, including voice over Internet protocol, to a user with an address within the state, that allows the user to receive a call that originates on the public switched network and terminate a call to the public switched network (Utah Code Section 69-2-102).
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