9-582

9-582. Taxes and other charges;
telecommunications facilities; limitations

A. A political subdivision shall not levy a tax, rent, fee or charge on a
telecommunications corporation, including a telecommunications corporation that provides
interstate services as described in section 9-583, subsection C, for the use of a public
highway to provide telecommunications services, or levy a tax, fee or charge upon the
privilege of engaging in the business of providing telecommunications services within
that political subdivision other than:

1. Any transaction privilege tax authorized by law on the business of providing
telecommunications services, except that this section does not allow the imposition of a
transaction privilege tax on the business of providing interstate telecommunications
services. Any transaction privilege tax authorized by law on the business of providing
commercial mobile radio service shall not exceed the tax rate levied on the business of
providing telecommunications services.

2. A telecommunications application fee for the issuance of a telecommunications
license or franchise if the application fee applies on a competitively neutral and
nondiscriminatory basis to all telecommunications corporations that use the public
highways to provide telecommunications services. A political subdivision may require only
one application fee and one license or franchise for each telecommunications corporation
whether the telecommunications corporation provides local services only or local and
long-distance services, including intrastate or interstate services. An application fee
is not required for a telecommunications corporation described in subsection E of this
section.

3. A telecommunications construction permit fee for the issuance of a construction
permit to place telecommunications facilities in the public highways if the permit fee
applies on a competitively neutral and nondiscriminatory basis to all telecommunications
corporations that place telecommunications facilities in the political subdivision's
public highways to provide telecommunications services. Political subdivisions shall
establish a nonbinding outside arbitration procedure to attempt to resolve disputes over
recovery of reasonable, proportionate and attributable costs of construction permit fees
pursuant to this paragraph and other fees pursuant to this article before the disputes
are submitted to a court for resolution.

4. A fee under section 9-583, subsection C.

B. All application fees, permit fees and charges levied by a political subdivision
on telecommunications corporations pursuant to subsection A, paragraphs 2 and 3 of this
section shall be levied on a competitively neutral and nondiscriminatory basis and
directly related to the costs incurred by the political subdivision in providing services
relating to the granting or administration of applications or permits. These fees and
charges also shall be reasonably related in time to the occurrence of the costs.

C. Notwithstanding subsections A and B of this section, a political subdivision may
require a telecommunications corporation to bear all of the reasonable costs associated
with construction, maintenance and operation of its facilities in the public highway used
to provide telecommunications services, including bearing reasonable costs associated
with damage caused to public highways.

D. Notwithstanding subsections A and B of this section, in a license or franchise,
a political subdivision and a telecommunications corporation may agree to in-kind
payments for use of the public highways different from those specified in subsection A or
B of this section. The license or franchise shall be structured so that the in-kind
payments made for use of the public highways to provide interstate telecommunications
services under the license or franchise are less than or equal to and are offset against
any linear foot charge owed pursuant to section 9-583, subsection C, paragraphs 2 and 3.
The license or franchise shall be structured so that the in-kind payments made under the
license or franchise pursuant to subsection A, paragraph 1 of this section are less than
or equal to and are offset against any transaction privilege license tax on the business
of providing telecommunications services. The valuation of any in-kind benefits shall
be set forth in such agreements. The in-kind facilities that are used to offset any or
all payments in this subsection are limited to the costs of the in-kind facilities and
shall remain in possession and ownership of the political subdivision after the term of
the existing license or franchise expires. In-kind facilities may be offset for either
payments of intrastate transaction privilege taxes or for interstate linear foot charges
but shall not be offset for any combination of intrastate and interstate charges.
However, a political subdivision shall not require a telecommunications corporation to
provide in-kind services, make in-kind payments or pay a fee in addition to the fees
described in subsections A through C of this section as a condition of consent to use a
highway to provide telecommunications services.

E. Notwithstanding subsection D of this section, any telecommunications corporation
that was providing telecommunications service within this state on November 1, 1997
pursuant to a grant made to it or its lawful predecessors prior to the effective date of
the Arizona Constitution may continue to provide telecommunications service pursuant
to that state grant until it is lawfully repealed, revoked or amended. Such
telecommunications corporation shall require no additional grant from any political
subdivision to provide telecommunications services.

F. Nothing in this article shall be deemed to affect the terms or conditions of any
franchise, license or permit issued by a political subdivision prior to November 1, 1997,
or to release any party from its obligations thereunder. Those franchises, licenses or
permits shall remain fully enforceable in accordance with their terms. A political
subdivision may lawfully enter into agreements with franchise holders, licensees or
permittees to modify or terminate an existing franchise, license or agreement.

G. A political subdivision may not discriminate against a cable operator in its
provision of telecommunications services if that cable operator complies with
requirements applicable to telecommunications corporations. Nothing in this subsection
limits the authority of any political subdivision to license cable systems and to
establish conditions on those licenses consistent with federal law.