HF 4186

as introduced - 93rd Legislature (2023 - 2024) Posted on 03/13/2024 12:46pm

A bill for an act
relating to telecommunications; imposing a public, educational, or governmental
programming fee on certain digital video service providers; providing penalties;
proposing coding for new law in Minnesota Statutes, chapter 238.

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

Section 1.

new text begin [238.095] DIGITAL VIDEO SERVICE PROVIDERS; PEG
PROGRAMMING FEES.
new text end

new text begin Subdivision 1. new text end

new text begin Definitions. new text end

new text begin (a) For purposes of this section, the following terms have
the meanings given.
new text end

new text begin (b) "Digital entertainment service" means a paid service that: (1) provides audio, video,
or computer-generated or computer-augmented entertainment; and (2) delivers the
entertainment to a subscriber without regard to delivery technology.
new text end

new text begin (c) "Digital video service provider" means a person that sells, delivers, or provides digital
entertainment service to a subscriber in Minnesota by sending the media directly through
an Internet-connected device. Digital video service provider includes a direct broadcast
satellite service provider, even if the direct broadcast satellite service provider does not use
Internet-connected devices to deliver the digital entertainment service. Digital video service
provider does not include: (1) except as provided in subdivision 3, a cable communication
system; (2) cable service, as defined under United States Code, title 47, section 522(6); or
(3) any video programming provided (i) by a commercial mobile service provider defined
under United States Code, title 47, section 332(d); or (ii) solely as part of and via a service
that enables a user to access content, information, electronic mail, or other services offered
over the Internet.
new text end

new text begin (d) "Direct broadcast satellite service" has the meaning given in Code of Federal
Regulations, title 25, part 103.
new text end

new text begin (e) "Gross revenues" means all revenue received directly or indirectly by a digital video
service provider that arise from, are attributable to, or in any way are derived from selling,
delivering, or providing digital entertainment service to a subscriber residing within
Minnesota or a local unit of government, as applicable, during a single calendar year. Gross
revenues do not include bad debts, investment income, refunded deposits, or any taxes on
services furnished by a digital video service provider and imposed directly upon a subscriber
by a local, state, federal, or other governmental unit.
new text end

new text begin (f) "Local unit of government" means a city, county, township, commission, district,
authority, or other political subdivision or instrumentality of Minnesota. Local unit of
government includes a joint powers commission and a local public, educational, or
governmental programming organization.
new text end

new text begin (g) "Public, educational, or governmental programming" or "PEG programming" means
a public access facility, as defined under United States Code, title 47, section 522, that is
provided in accordance with United States Code, title 47, section 531.
new text end

new text begin (h) "Subscriber" means a person who: (1) receives digital entertainment service from a
digital video service provider; and (2) does not further distribute the digital entertainment
service in the ordinary course of business.
new text end

new text begin Subd. 2. new text end

new text begin PEG programming fees authorized. new text end

new text begin (a) A local unit of government must
impose a PEG programming fee on a digital video service provider that sells, delivers, or
provides digital entertainment service within the local unit of government's jurisdiction.
new text end

new text begin (b) A PEG programming fee assessed under this section equals five percent of the digital
video service provider's gross revenues that directly or indirectly arise from, are attributable
to, or are in any way derived from digital entertainment services sold, delivered, or provided
to subscribers that reside within the assessing local unit of government. The assessment
authorized in this section is for each year or portion of each year that the digital video service
provider sells, delivers, or provides digital entertainment service to subscribers that reside
within the local unit of government.
new text end

new text begin (c) A digital video service provider must pay the PEG programming fee assessment
under this section directly to the applicable local unit of government 45 days after the date
the calendar quarter closes. In addition to the PEG programming fees assessment, the digital
video service provider must submit a report that documents the information used to calculate
the quarterly payment.
new text end

new text begin (d) A digital video service provider may, but is not required to, itemize the costs
associated with a PEG programming fee on a subscriber's bill. If a digital video service
provider itemizes the PEG programming fee on a subscriber's bill, the amount itemized
must be labeled accurately and reflect the exact amount of the digital video service provider's
PEG programming fee that is attributable to the particular subscriber.
new text end

new text begin (e) For purposes of this section, a subscriber resides within a local unit of government
if the subscriber's billing address is located within a zip code that the local unit of government
has jurisdiction over.
new text end

new text begin Subd. 3. new text end

new text begin Cable communication systems. new text end

new text begin A cable communications system that sells,
delivers, or provides digital entertainment service that are not included in the franchise fees
that the cable communications system pays under a contract executed with a local unit of
government pursuant to this chapter must pay the PEG programming fees authorized under
subdivision 2. A cable communication system subject to this subdivision is required to pay
PEG programming fees under subdivision 2 only for the digital entertainment service the
cable communication system sells, delivers, or provides to subscribers in Minnesota that
are not included in the franchise fees that the cable communication system pays under a
contract executed with a local unit of government pursuant to this chapter.
new text end

new text begin Subd. 4. new text end

new text begin PEG programming fees; use; documentation. new text end

new text begin (a) PEG programming fees
collected under this section may be used by the collecting local unit of government for
capital or operating expenses associated with PEG programming and, at the discretion of
the local unit of government, may be used to address unique local community needs and
interests relating to local public, education, and government communications technology.
new text end

new text begin (b) A local unit of government must document how PEG programming fees collected
under this section are used. The documentation must be created and maintained in a manner
consistent with the standards and guidance issued by the Governmental Accounting Standards
Board.
new text end

new text begin Subd. 5. new text end

new text begin Digital video service provider record keeping. new text end

new text begin (a) A digital video service
provider subject to this section must maintain records regarding the sale, delivery, and
provision of digital entertainment service in Minnesota. At a minimum, the records must
include: (1) the digital video service provider's gross revenues received that directly or
indirectly arise from, are attributable to, or in any way are derived from selling, delivering,
or providing digital entertainment service to subscribers in Minnesota each year; (2) PEG
programming fees paid to all local units of government in Minnesota each year; and (3) the
reports submitted to local units of government under subdivision 2, paragraph (c). The
records must be maintained for the period of time specified under section 541.05, subdivision
1.
new text end

new text begin (b) A digital video service provider subject to this section is subject to an audit of gross
revenues and PEG programming fees remitted under subdivision 2. An audit under this
paragraph may be conducted by the local unit of government or the local unit of government's
agent only to determine any overpayment or underpayment of the digital video service
provider's payment of PEG programming fees to the local unit of government.
new text end

new text begin Subd. 6. new text end

new text begin Enforcement; penalties. new text end

new text begin (a) Except as provided in paragraph (b), a digital
video service provider that fails to remit PEG programming fees to a local unit of government
under subdivision 2 within 30 days of the deadline established under subdivision 2 is assessed
a monetary penalty in an amount equal to two percent of the gross revenues derived from
or pertaining to selling, delivering, or providing digital entertainment service to subscribers
residing in the local unit of government during the reporting period. An additional penalty
of up to one percent may be assessed for each subsequent 30-day period a digital video
service provider fails to remit the assessment due, up to a total cumulative monetary penalty
of five percent under this paragraph. A monetary penalty or late fees assessed under this
subdivision must be remitted directly to the local unit of government that is owed the PEG
programming fees under subdivision 2.
new text end

new text begin (b) A digital video service provider that fraudulently fails to remit in full the programming
fees to a local unit of government under subdivision 2 within 30 days of the deadline
established under subdivision 2 may be assessed a monetary penalty in an amount up to
100 percent of the gross revenues derived from or pertaining to selling, delivering, or
providing digital entertainment service to subscribers residing in the local unit of government
during the reporting period. A monetary penalty assessed under this subdivision must be
remitted directly to the local unit of government that is owed the PEG programming fees
under subdivision 2.
new text end

new text begin (c) A digital video service provider that fails to make available for audit the records
required under subdivision 5 within 30 days of the deadline established under subdivision
4 is assessed a monetary penalty in an amount equal to one percent of the gross revenues
derived from or pertaining to selling, delivering, or providing digital entertainment service
to subscribers residing in Minnesota during the reporting period. An additional one percent
penalty may be assessed for each subsequent 30-day period a digital video service provider
fails to submit the report, up to a total cumulative monetary penalty of five percent under
this paragraph. A monetary penalty assessed under this paragraph must be remitted directly
to the local unit of government that is owed the PEG programming fees under subdivision
2.
new text end

new text begin (d) In addition to the remedies under paragraphs (a) to (c), a local unit of government
adversely impacted by the action, or failure to act, of a digital video service provider under
this section may, within seven years of the subject action or inaction, bring an action to
recover any unpaid assessments and monetary penalties, or enjoin the operations of any
noncompliant digital video service provider, in a court of competent jurisdiction.
new text end

new text begin (e) In addition to the remedies under paragraphs (a) to (d), the attorney general may
enforce this section under section 8.31. An action taken under this paragraph is in the public
interest.
new text end

new text begin Subd. 7. new text end

new text begin Exemption; limitations. new text end

new text begin (a) This section does not apply to a digital video
service provider that earned less than $250,000 in gross revenues from providing digital
entertainment service to subscribers in Minnesota during the previous calendar year.
new text end

new text begin (b) Nothing in this section affects the authority of the state, a local unit of government,
or an instrument of the state or local unit of government with respect to the ownership and
control of public property or public rights-of-way.
new text end

new text begin (c) A department or agency of the state or a local unit of government does not have the
authority to regulate the rates charged by a digital video service provider.
new text end

new text begin (d) Nothing in this section exempts a digital video service provider from paying a tax
or fee, including but not limited to a tax or fee that is or may later be required to be paid by
or through the digital video service provider with respect to the provision of any
communications service, that is or may later be imposed by the local unit of government.
new text end

new text begin (e) A digital video service provider is not otherwise subject to regulation under this
chapter solely as a result of being subject to this section.
new text end