Chapter 0319 - 541R - S Ver of SB1528

Be it enacted by the Legislature of the State of Arizona:

Section 1. Section 9-1411, Arizona Revised Statutes, is amended to read:

START_STATUTE9-1411. Local governments; uniform video service license agreements; forms; provisions

A. From and after December 31, 2019, a local government has the exclusive authority to issue a uniform video service license to a person to provide video service and to construct and operate a video service network in any service area within its boundaries.

B. On or before July 1, 2019, each local government shall adopt a standard form of uniform video service license agreement for video service providers to be used by the local government and a standard form of application and affidavit as described in section 9‑1414. A local government shall prescribe other forms only as necessary to implement this chapter.

C. The uniform video service license agreement adopted under subsection B of this section must include all of the following provisions in substantially the following form and may not include any other provisions:

1. The name of the video service provider, its type of entity and its jurisdiction of formation.

2. The address and telephone number of the video service provider's principal place of business.

3. The name and address of the video service provider's principal executive officers or general partners and any persons authorized to represent the video service provider before the local government.

4. If the video service provider is not an incumbent cable operator, the date on which the provider expects to provide video services service in the area identified under paragraph 5 of this subsection.

5. An exact description of the service area to be served, as identified by a geographic information system digital boundary that meets or exceeds national map accuracy standards.

6. A requirement that the video service provider pay the license fees required under this chapter and all other lawful fees and charges imposed by the local government.

7. A requirement that the video service provider file in a timely manner with the federal communications commission all forms required by that agency before offering video service in the service area, including the forms required by 47 Code of Federal Regulations section 76.1801.

8. A requirement that the video service provider agrees to comply with and be subject to all valid and enforceable federal and state laws.

9. A requirement that the video service provider agrees to comply with all generally applicable, nondiscriminatory local laws, including highway use, mapping, insurance, performance bonds, security fund, indemnification, letters of credit or similar requirements that apply to the use and occupation of any highway and that conform to this chapter.

10. A requirement that the video service provider comply with the public, education and government programming requirements of this chapter.

11. A requirement that the video service provider comply with all customer service rules of the federal communications commission under 47 Code of Federal Regulations section 76.309(c) applicable to cable operators.

12. A requirement that the video service provider comply with the consumer privacy requirements of 47 United States Code section 551 applicable to cable operators.

13. A grant of authority by the local government to provide video service in the service area as described under paragraph 5 of this subsection.

14. A grant of authority by the local government to use and occupy the highways in the delivery of the video service, subject to the laws of this state and the police powers of the local government.

15. The term of the uniform video service license.

16. A requirement that the parties to the agreement are subject to and must comply with this chapter.

D. Except as otherwise provided in this chapter, from and after December 31, 2019 a person may not act as a video service provider or construct or operate a video service network within the boundaries of a local government without first having been issued and continuing to hold a uniform video service license with a service area encompassing the boundaries.

E. A local license shall remain enforceable in accordance with its terms until terminated under section 9‑1412, subsection B. END_STATUTE

Sec. 2. Section 9-1414, Arizona Revised Statutes, is amended to read:

START_STATUTE9-1414. Uniform video service license; application; fees

A. To obtain a uniform video service license, a person shall file with the clerk of the local government an application and affidavit that are signed by one of the principal executive officers or general partners of the applicant and that comply with this section.

B. The application and affidavit shall be in the form required by the local government and shall be required to contain all of and not more than the following:

1. Each service area in which the applicant intends to provide video service in the format as described in section 9‑1411, subsection C. Except as provided in section 9‑1412, subsection B, paragraph 2, under a uniform video service license the boundaries of the local government is are a single service area and the service area consists of all of the territory within the boundaries of that local government.

2. The information prescribed by section 9‑1411, subsection C, paragraphs 1 through 4. The holder shall notify the local government in writing of changes to this information within thirty days after the change occurs.

3. The term of the uniform video service license, which may not exceed ten years.

4. An agreement to pay all lawful fees and charges imposed by the local government.

C. An incumbent cable operator described in section 9‑1412, subsection B, paragraph 2 may elect to apply for a uniform video service license for a service area that consists of the boundaries of a local government.

D. If the local government determines that the application and affidavit are incomplete or otherwise deficient for failure to comply with this section, the local government shall provide written notice to the applicant not later than fifteen days after the date of filing of the application and affidavit. The written notice shall do both of the following:

1. Explain the incompleteness or deficiency in detail.

2. Specify the information or other items that are necessary under this section for proper completion of the application and affidavit.

E. The local government may not do any of the following:

1. Charge a fee for filing or processing an application, affidavit, notice or other document under this chapter article.

2. Except as provided in this article, vote on or take other official action regarding the application, affidavit, notice or other document.

3. Require the applicant to obtain the approval of the local government regarding the application, affidavit, notice or other document.

4. Require the applicant to enter into an agreement as described in section 9‑1442, subsection I. END_STATUTE

Sec. 3. Section 9-1415, Arizona Revised Statutes, is amended to read:

START_STATUTE9-1415. Authority granted by uniform video service license; conditions and limitations prohibited; providing video service

A. Within the time frame that the local government has in place pursuant to section 9-835, but not later than thirty forty-five days after the date an applicant files a completed application and affidavit pursuant to section 9‑1414, the local government shall issue a uniform video service license to the applicant in the form prescribed by section 9‑1411. If the local government does not notify the applicant about the completeness of the uniform video service license agreement within the time period prescribed by section 9‑1414, subsection D or issue the agreement within the time period required under this subsection, the agreement shall be considered complete and issued to the applicant in the form submitted.

B. The uniform video service license issued to an applicant, including an incumbent cable operator, by a local government is a nonexclusive license granting to the holder of the uniform video service license the authority for the term requested in the application to do all of the following:

1. Provide video service in all service areas designated in the application and affidavit filed with the local government.

2. Construct and operate a video service network in the highways in each service area in compliance with this chapter and all local laws that are not in conflict or otherwise do not conform to this chapter or the purposes and objectives of this chapter.

3. Operate and maintain facilities installed in the highways in the service area under a local license pursuant to all of the following:

(a) Section 9‑506, subsections I and J.

(b) Section 9‑584.

C. A local government may not condition or limit a uniform video service license by imposing any obligation or requirement that is not authorized by this chapter, including any of the following:

1. Any office location, institutional network or other build-out, line extension, investment or other requirements relating to the overall scope, extent and timing of infrastructure, facilities or deployment of equipment.

2. Any requirements to pay to any person any application, document, license, service or other fee, tax, charge or assessment that is not authorized by this chapter.

D. A holder of a uniform video service license shall provide video service in accordance with the certifications made by the holder in each application and affidavit that the holder files with a local government pursuant to this article. END_STATUTE

Sec. 4. Section 9-1445, Arizona Revised Statutes, is amended to read:

START_STATUTE9-1445. Review and audit; bundling discounts; action to recover underpayment or overpayment

A. Not more than once every three years, a local government may on reasonable written notice audit the business books and records of a video service provider to the extent necessary to ensure payment of license fees pursuant to this chapter. The local government may not audit any period that ends more than three years before the date that the notice of audit is received. A local government may assess additional license fees due at any time within four years after the date on which the fees were required to be paid. Any audits of a period of time before issuance of a uniform video service license shall be conducted pursuant to the local laws in effect during the period of time.

B. Except as otherwise provided by federal law, if a video service provider offers video service bundled with other services that are not video service for a single discounted price, all of the following apply:

1. The method that the video service provider uses to determine gross revenue subject to license fees by allocating the single discounted price among the bundle of video service and nonvideo services shall be reasonable and supported by the video service provider's books and records.

2. The local government shall accept as reasonable, for purposes of meeting the video service provider's burden of proof, an allocation based on an objective and verifiable method using the books and records that the video service provider kept in the regular course of business for other purposes, including nontax purposes.

3. A video service provider may not use bundled offerings as a means to evade paying license fees.

C. The local government and the video service provider shall each pay its own costs and fees relating to each audit performed pursuant to subsection A of this section. If the sum determined to be underpaid exceeds five percent of the total fees that the audit determines should have been paid for the period, the video service provider shall pay the local government's reasonable costs of the audit.

D. The rate of interest for both underpayments and overpayments is the federal short-term rate determined pursuant to 26 United States Code section 6621(b), plus three percentage points.

E. A person that performs a review and audit under subsection A of this section may not receive compensation that is based, in whole or in part, on either of the following:

1. Finding a particular result.

2. The amount of any underpayment or overpayment of the license fee that is identified because of the review and audit.

F. A complaint by a local government for underpayment of a license fee from a video service provider or by a video service provider for overpayment of a license fee to a local government shall be made pursuant to article 5 of this chapter.

G. A complaint for a violation of the license fee obligations under this chapter may not be made unless a written demand by a local government for payment of the license fees or a written demand by a video service provider for refund of license fees is made within four months after the local government or video service provider realizes it has been damaged or knows or reasonably should know of the damage caused by the alleged violation.

H. A complaint must be filed pursuant to article 5 of this chapter within two three years after the written demand is made pursuant to this subsection but not sooner than four six months after the written demand. END_STATUTE