Bill Text: DE HB171 | 2015-2016 | 148th General Assembly | Draft
Bill Title: An Act Amending Titles 9 And 22 Of The Delaware Code Relating To Taxes On Special Betterments.
Spectrum: Moderate Partisan Bill (Democrat 11-3)
Status: (Enrolled - Dead) 2015-07-01 - HS 2 for HB 171 - Passed by Senate. Votes: Passed 21 YES 0 NO 0 NOT VOTING 0 ABSENT 0 VACANT [HB171 Detail]
Download: Delaware-2015-HB171-Draft.html
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SPONSOR: |
Rep. Bennett & Sen. Hall-Long |
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Reps. Hudson, Q. Johnson, Keeley, Longhurst, Schwartzkopf, M. Smith, Viola; Sens. Blevins, Lavelle, McDowell, Poore, Simpson |
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HOUSE OF REPRESENTATIVES 148th GENERAL ASSEMBLY |
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HOUSE BILL NO. |
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AN ACT AMENDING TITLES 9 AND 22 OF THE DELAWARE CODE RELATING TO TAXES ON SPECIAL BETTERMENTS. |
Section 1.Amend §8101(e)(8), Title 9 of the Delaware Code, by making deletions as shown by strike through and insertions as shown by underline as follows:
(e) Special betterments, whether or not also considered to be improvements, shall include and be limited to the following:
(8) Poles, wires, cable and conduit for distribution of telephone communication services either above or below ground; provided, however, that in no event shall the amount of tax imposed on such property exceed the amount paid on such property to each political subdivision in the fiscal year ending June 30, 2015;
Section 2. Amend §001, Title 22 of the Delaware Code, by making deletions as shown by strike through and insertions as shown by underline as follows:
§2001 Limitation of municipal taxing powers.
(a) Every municipal corporation in this State, regardless of population, shall only have the power to impose, levy, assess, or collect a tax of any kind whatsoever as expressly authorized in its municipal charter or this title.
(b) Any provision in a municipal charter granting the municipal corporation "all powers," or any derivation thereof, shall not be construed as exempting the municipal corporation from the limitation set forth in subsection (a) of this section.
(c) The amount of tax imposed by municipal corporations on poles, wires, conduit and cable for distribution of telephone communication may not exceed the amount paid on such property to each municipal corporation in the fiscal year ending June 30, 2015.As of June 30, 2018, no municipal corporation may impose a tax on poles, wires, conduit and cable for distribution of telephone communications.
Section 3. Legislative Findings.The General Assembly finds as follows:
a. Competition and changes in technology have expanded types of communications services available to businesses and consumers in Delaware.
b. Most state and local taxes on communications services were adopted before changes in technology and the emergence of competition.
c. Antiquated tax structures, such as taxation of telecommunications poles, wires and conduit, are no longer suitable for the current and future communications marketplace.
d. Tax policy should encourage investment in communications networks because communications services are vital to the state's economic growth and competitiveness.
e. The State, municipalities, school districts and counties all currently receive revenues from communications taxes, and should participate in any discussions about restructuring those taxes.
f. Property taxes received by received by municipalities, school districts and counties on telecommunications facilities will decrease in the coming years as a result of the transition to new technologies throughout the State.
g. More information about the revenue impact of tax restructuring on consumers and local governments receiving revenues from current taxes is necessary so that the General Assembly may consider tax restructuring options that are revenue-neutral to local governments and eliminate the disparate treatment of like communications providers during the 2017 legislative session.
h. A Review Group of qualified persons representing the interests most affected by tax restructuring should study the issues and submit a recommendation and proposed legislation to the General Assembly.
Section 4.Legislative Directives.The General Assembly directs that a Telecommunications Tax Modernization Review Group (the "Review Group") be formed for the purpose of studying and making recommendations on funding mechanisms to replace the current property tax on poles, wires, cable and conduit for distribution of telephone service.The Review Group should consider options that: (1) are revenue-neutral to the localities, (2) are competitively neutral to providers of like communications services, and (3) encourage investment in broadband networks.
Section 5.The General Assembly further directs the Review Group to report findings and recommendations to the House of Representatives and Senate by March 1, 2017, or earlier if appropriate.
Section 6. The General Assembly further directs that the Chair of the Review Group shall be a member of the House of Representatives appointed by the Speaker of the House and, in addition to its chair, the Review Group shall have the following members:
1. One member of the Senate, appointed by the President Pro Tempore of the Senate;
2. The Secretary of Finance or his designee;
3. One representative from New Castle County government, appointed by the County Executive;
4. One representative from Kent County government, appointed by the President of Kent County Levy Court
5. One representative of Sussex County, appointed by the President of Sussex County Council;
4. Two representatives from local governments, appointed by the Chair;
5. One representative from the school districts, appointed by the Chair; and
6. One representative from a provider of landline telephone service that pays property tax on poles, wires, cable and conduit, appointed by the Chair:
Section 7. The General Assembly further directs that the Chair of the Review Group be responsible for guiding the administration of the Review Group by, at a minimum:
1.Setting dates, times and places for meetings;
2. Supervising the preparation and distribution of meeting notices, agendas, minutes, correspondence, and reports of the Review Group; and
3. Ensuring that the final report of the Review Group is submitted to the Speaker of the House of Representatives and President Pro Tempore of the Senate with a copy to the Governor, the Director of the Division of Research of Legislative Council and the Delaware Public Archives.
Section 8. The General Assembly further directs that staff support for the Review Group be provided by the Controller General's Office and the Office of the Secretary of Finance, under the direction of the Chair of the Review Group.
Section 9. The General Assembly further directs that in order to evaluate the revenue impacts of such proposal, if necessary, the Department of Finance is directed to collect information from municipalities, counties, and any other relevant agencies including itself, to determine the amount of revenue collected and remitted to the respective governments from all current taxes on communications services for the fiscal year beginning July 1, 2014 and ending June 30, 2014. The Department of Finance also may collect information from communications service providers about the amount of revenue paid or collected and remitted to governments from all communications taxes for the fiscal year beginning July 1, 2014 and ending June 30, 2014. Subject to the restrictions provided by §368 of Title 30 of the Delaware Code, the Department of Finance shall provide the information collected under this section to the Review Group immediately upon receipt, or prior to September 15, 2015.
Section 10.The General Assembly further directs that the information collected from communications service providers shall not be disclosed to the public unless it is aggregated so that market share and other sensitive market information for individual companies cannot be determined.Information not so aggregated or other individual company information is not subject to disclosure.
Section 11.The General Assembly further directs that the governmental entities, agencies and communications providers shall cooperate reasonably with the Department of Finance's information gathering under this resolution. The Department shall have the authority to subpoena any entity, agency or communications provider that fails or refuses to cooperate reasonably with the Department's information gathering.
Section 12.The restrictions imposed on the counties' and municipalities' taxation of poles, wires, cables and conduit for distribution of telephone communication services in Sections 1, 2 and 3 above shall also apply to school districts.
Section 13.Section 1 of this bill is effective June 30, 2018.
Section 14.Sections 2-15 of this bill are effective upon enactment.
SYNOPSIS
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This bill establishes a Telecommunications Tax Modernization Review Group to study and make recommendations for establishing a future funding mechanism to replace the property tax on telecommunications equipment and addressing the projected decrease in revenue to the counties, municipalities and school districts from the transition to new technologies throughout the State.The resulting mechanism should be revenue-neutral to the localities and competitively neutral to providers of like services.To encourage investment in broadband infrastructure, this bill also caps the amount of tax on telecommunications equipment at FY15 rates and eliminates the tax as of June 30, 2018. |
