MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Ways and Means

By: Representative Ellis

AN ACT TO CREATE THE MISSISSIPPI COMMUNICATIONS TAX REFORM ACT; TO PROVIDE THAT EVERY PERSON OR ENTITY PROVIDING COMMUNICATIONS SERVICES SHALL BE ENTITLED TO A REBATE FROM THE STATE OF MISSISSIPPI IN AN AMOUNT NOT TO EXCEED 50% OF THE AGGREGATE AMOUNT OF THE AD VALOREM TAX PAID BY SUCH PERSON OR ENTITY ON CLASS IV PROPERTY TO LOCAL TAXING DISTRICTS IN THIS STATE; TO PROVIDE THAT TO THE EXTENT POSSIBLE SUCH REFUNDS SHALL BE PAID BY THE STATE TAX COMMISSION FROM THE TELECOMMUNICATIONS AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND CREATED BY THIS ACT; TO PROVIDE THAT AMOUNTS IN EXCESS OF THE AMOUNTS NECESSARY TO PAY SUCH REBATES SHALL BE PAID TO MUNICIPALITIES, COUNTIES AND SCHOOL DISTRICTS; TO CREATE THE TELECOMMUNICATIONS AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND; TO PROVIDE THAT THE MONEY IN SUCH FUND SHALL BE UTILIZED TO PAY THE REBATES AUTHORIZED BY THIS ACT; TO PROVIDE THAT SUCH FUND SHALL BE ADMINISTERED BY THE STATE TAX COMMISSION; TO PROHIBIT POLITICAL SUBDIVISIONS FROM LEVYING ANY TAX, CHARGE OR FEE ON COMMUNICATIONS SERVICES OR COMMUNICATIONS SERVICE PROVIDERS AFTER THE EFFECTIVE DATE OF THIS ACT UNLESS ANY SUCH TAX, CHARGE OR FEE IS OTHERWISE PROVIDED BY LAW; TO REQUIRE A RATE REDUCTION BY CERTAIN COMMUNICATIONS SERVICE PROVIDERS THAT EXPERIENCE A TAX SAVING AS A RESULT OF THE PROVISIONS OF THIS ACT; TO IMPOSE A TAX ON PERSONS OPERATING TELEGRAPH AND TELECOMMUNICATIONS BUSINESSES FOR THE TRANSMISSION OF MESSAGES AND CONVERSATIONS ORIGINATING OR TERMINATING IN THIS STATE, VIA INTERSTATE TELECOMMUNICATIONS; TO AMEND SECTION 27-65-19, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT CHARGES FOR SERVICES THAT ARE RESOLD ARE NOT SUBJECT TO TAX UNDER SUCH SECTION; TO AMEND SECTION 27-65-75, MISSISSIPPI CODE OF 1972, TO PROVIDE THAT THE SALES TAX ON INTERSTATE COMMUNICATIONS SERVICES SHALL BE DEPOSITED WITHOUT DIVERSION INTO THE TELECOMMUNICATIONS AD VALOREM TAX REDUCTION AND LOCAL DISTRIBUTION FUND; TO AMEND SECTION 27-35-319, MISSISSIPPI CODE OF 1972, TO REMOVE PROVISIONS THAT CLASSIFY THE PROPERTY OF TELEPHONE COMPANIES LOCATED IN MORE THAN SIX COUNTIES AS CLASS IV OR CLASS II PROPERTY; AND FOR RELATED PURPOSES.

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

SECTION 1. This act may be cited as the Mississippi Communications Tax Reform Act.

SECTION 2. As used in Sections 1 through 6 of this act:

(a) "Communications service" means the provision, transmission, conveyance or routing, for a consideration, of voice, data, video or any other information or signals of the purchaser's choosing to a point, or between or among points, specified by the purchaser, by or through any electronic, radio or similar medium or method now in existence or hereafter devised. The term "communications service" shall include, but not be limited to, local telephone services, toll telephone services, telegraph services, teletypewriter services, teleconferencing services, private line services, channel services and mobile communications services. The term "communications service" shall not include cable television service and shall not include information and data services, including the storage of data or information for subsequent retrieval, the retrieval of data or information, or the processing, or reception and processing, of data or information intended to change its form or content.

(b) "Local exchange telephone company" means any communications service provider that derives more than one-half (1/2) of its revenues received from Mississippi customers from the provision of local telephone services.

(c) "Local telephone service" means the access to a local telephone system and the privilege of communications within a local calling area.

SECTION 3. (1) (a) Except as otherwise provided in paragraph (b) of this subsection (1), for ad valorem tax payments made after December 31, 1999, every person or entity providing communications services shall be entitled to a refund from the State of Mississippi in an amount not to exceed fifty percent (50%) of the aggregate amount of the ad valorem tax paid by such person or entity on Class IV property as defined in Section 112, Mississippi Constitution of 1890, to local taxing districts. In calculating the percentage used for refunds under this paragraph (a), the State Tax Commission shall calculate such percentage to ensure that the total amount of refund payments does not exceed the amount in the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund created pursuant to Section 4 of this act.

(b) For ad valorem tax payments made by local exchange telephone companies after December 31, 1999, and prior to December 31, 2000, such local exchange telephone companies shall be entitled to a refund from the State of Mississippi in an amount equal to twenty-five percent (25%) of the aggregate amount of the ad valorem tax paid by such company on Class IV property as defined in Section 112, Mississippi Constitution of 1890, to local taxing districts, thereafter any such company shall be entitled to payments in the amount provided for in paragraph (a) of this subsection (1).

(2) On or before March 15, 2000, and on or before March 15 of each year thereafter, the State Tax Commission shall pay all refunds to which communications service providers are entitled under the provisions of subsection (1) of this section for ad valorem taxes that became due on or before the first day of February immediately preceding March 15.

(3) To the extent possible, payments made pursuant to subsection (1) of this section shall be paid by the State Tax Commission out of the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund created pursuant to Section 4 of this act.

(4) On or before April 15, 2000, and on or before April 15 of each year thereafter, amounts in the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund in excess of the amounts necessary to make the payments provided for in subsection (1) of this section shall be paid to each local taxing district as follows:

(a) One-third (1/3) shall be distributed to each municipality in this state in the proportion that the amount of revenues derived from the provision of communications services in such municipality bears to the total amount of revenues derived from the provision of communications services in all municipalities in this state.

(b) One-third (1/3) shall be paid by the State Tax Commission to the State Department of Education to be distributed to each school district in this state in the proportion that the average daily attendance in such school district bears to the total average daily attendance of all public school districts in the state.

(c) One-third (1/3) shall be distributed to each county in this state in the proportion that the assessed value of the Class IV property of communications service providers in such county bears to the assessed value of all such property in the state.

SECTION 4. (1) There is created in the State Treasury a special fund to be known as the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund, into which shall be deposited the money specified in Section 27-65-75(17) and such other money as the Legislature may provide by appropriation. The money in the fund shall be used to pay the reasonable and necessary expenses incurred by the State Tax Commission in administering the provisions of this act as provided for in subsection (3) of this section and to make the payments provided for in Section 3 of this act.

(2) The Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund shall be administered by the State Tax Commission, and money in the fund shall be expended upon appropriation by the Legislature. Unexpended amounts remaining in the fund at the end of the state fiscal year shall not lapse into the State General Fund, and any interest earned on amounts in the fund shall be deposited to the credit of the fund. The State Tax Commission shall make the calculations necessary to make the distributions required pursuant to Section 3 of this act.

(3) A portion of the money in the fund may be utilized by the State Tax Commission to pay the reasonable and necessary expenses of the State Tax Commission incurred in administering this act. This amount shall be one percent (1%) of the monthly amount deposited in the fund.

SECTION 5. (1) Upon the effective date of this act, no political subdivision of this state may levy any tax, charge or fee on communications services, or collect any such taxes, charges or fees on communications services not otherwise provided by law.

(2) For purposes of this section, a tax, charge or fee includes any tax, charge, fee or in-kind payment of property or services, which is in the form of a sales tax, franchise fee, excise tax, user fee, occupational or business license tax, subscriber charge or other charge measured by the amount charged for services.

(3) Nothing in this section affects the authority of a political subdivision of this state to manage the public right-of-way or to exercise its inherent police powers to regulate its public right-of-way and to protect the health, safety and welfare of its citizens. Management of the public right-of-way includes the authority to:

(a) Require communications service providers to file construction permit applications;

(b) Issue and process right-of-way construction permit applications filed by the communications service provider;

(c) Inspect job sites and restoration projects of a communications service provider;

(d) Determine the adequacy of right-of-way restoration undertaken by communications service providers and set standards for right-of-way restoration; and

(e) Revoke right-of-way construction permits issued to communications service providers.

(4) A political subdivision may require a permit fee to be paid by a communications service provider to cover administrative costs and expenses directly related to the management of the public right-of-way set forth in subsection (3) of this section with such permit fee not to exceed Twenty-five Dollars ($25.00) for each such permit issued.

(5) This section shall not apply to ad valorem taxes levied as provided by law or to emergency telephone surcharges levied pursuant to Chapter 5, Title 19, Mississippi Code of 1972.

SECTION 6. To the extent that a person or entity providing communications services that are regulated by the Mississippi Public Service Commission experiences a tax savings as a result of the provisions of this act, such saving shall inure to the benefit of the customers of such person or entity. Any local exchange telephone company that experiences a tax savings as a result of the provisions of this act shall reduce its rates by the amount of the tax saving.

(a) The savings shall be used to reduce rates for residential and business services proportionately, including reducing intrastate switched access charges to a level not to exceed Two Cents (2¢) per minute in exchanges served by local exchange carriers serving more than one hundred fifty thousand (150,000) local exchange access lines.

Any interexchange telecommunications company whose intrastate switched access rate is reduced as a result of the rate decreases made by a local exchange telephone company in accordance with this section shall decrease its intrastate long distances rates by the amount necessary to return the benefits of such reduction to its customers.

(b) The Mississippi Public Service Commission shall issue a rate reduction order implementing the provisions of this section on or before December 31, 1999.

SECTION 7. Upon every person operating a telegraph or telecommunications business for the transmission of messages or conversations originating in this state or terminating in this state which are charged to the customer's service address in this state, regardless of where such amount is billed or paid, via interstate telecommunications, there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the gross income received by such business from such interstate telecommunications. However, a person, upon proof that he has paid a tax in another state on such event, shall be allowed a credit against the tax imposed herein on interstate telecommunication charges to the extent that the amount of such tax is properly due and actually paid in such other state and to the extent that the rate of sales tax imposed by and paid to such other state does not exceed the rate of sales tax imposed by this section. Charges for services that are resold, including but not limited to access charges, are not subject to tax.

SECTION 8. Section 27-65-19, Mississippi Code of 1972, is amended as follows:

27-65-19. (1) (a) Except as otherwise provided in this subsection, upon every person selling to consumers, electricity, current, power, potable water, steam, coal, natural gas, liquefied petroleum gas or other fuel, there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the gross income of the business. Provided, gross income from sales to consumers of electricity, current, power, natural gas, liquefied petroleum gas or other fuel for residential heating, lighting or other residential noncommercial or nonagricultural use, and sales of potable water for residential, noncommercial or nonagricultural use shall be excluded from taxable gross income of the business. Provided further, upon every such seller using electricity, current, power, potable water, steam, coal, natural gas, liquefied petroleum gas or other fuel for nonindustrial purposes, there is hereby levied, assessed and shall be collected a tax equal to seven percent (7%) of the cost or value of the product or service used.

(b) There is hereby levied, assessed and shall be collected a tax equal to one and one-half percent (1-1/2%) of the gross income of the business when the electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel is sold to or used by a manufacturer, custom processor or public service company for industrial purposes, which shall include that used to generate electricity, to operate an electrical distribution or transmission system, to operate pipeline compressor or pumping stations or to operate railroad locomotives; provided, however, that:

(i) From and after July 1, 2000, through June 30, 2001, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of one and one-eighth percent (1.125%);

(ii) From and after July 1, 2001, through June 30, 2002, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of three-fourths of one percent (0.75%);

(iii) From and after July 1, 2002, through June 30, 2003, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be taxed at the rate of three-eighths of one percent (0.375%);

(iv) From and after July 1, 2003, sales of fuel used to produce electric power by a company primarily engaged in the business of producing, generating or distributing electric power for sale shall be exempt from sales tax as provided in Section 27-65-107.

(c) The one and one-half percent (1-1/2%) industrial rate provided for in this subsection shall also apply when the electricity, current, power, steam, coal, natural gas, liquefied petroleum gas or other fuel is sold to a producer or processor for use directly in the production of poultry or poultry products, the production of livestock and livestock products, the production of plants or food by commercial horticulturists, the processing of milk and milk products, the processing of poultry and livestock feed, and the irrigation of farm crops.

(d) The one and one-half percent (1-1/2%) rate provided for in this subsection shall not apply to sales of fuel for automobiles, trucks, truck-tractors, buses, farm tractors or airplanes.

(e) Upon every person operating a telegraph or telephone business for the transmission of messages or conversations between points within this state, there is hereby levied, assessed and shall be collected, a tax equal to seven percent (7%) of the gross income of such business, with no deduction or allowance for any part of an intrastate rate charge because of routing across a state line. Charges for services that are resold, including but not limited to access charges, are not subject to tax. However, any sale of a prepaid telephone calling card or prepaid authorization number, or both, shall be deemed to be the sale of tangible personal property subject only to such taxes imposed by law on the sale of tangible personal property. If the sale of a prepaid telephone calling card or prepaid authorization number does not take place at the vendor's place of business, it shall be conclusively determined to take place at the customer's shipping address. The reauthorization of a prepaid telephone calling card or a prepaid authorization number shall be conclusively determined to take place at the customer's billing address.

(2) Persons making sales to consumers of electricity, current, power, natural gas, liquefied petroleum gas or other fuel for residential heating, lighting or other residential noncommercial or nonagricultural use or sales of potable water for residential, noncommercial or nonagricultural use shall indicate on each statement rendered to customers that such charges are exempt from sales taxes.

(3) There is hereby levied, assessed and shall be paid on transportation charges on shipments moving between points within this state when paid directly by the consumer, a tax equal to the rate applicable to the sale of the property being transported. Such tax shall be reported and paid directly to the State Tax Commission by the consumer.

SECTION 9. Section 27-65-75, Mississippi Code of 1972, is amended as follows:

27-65-75. On or before the fifteenth day of each month, the revenue collected under the provisions of this chapter during the preceding month shall be paid and distributed as follows:

(1) On or before August 15, 1992, and each succeeding month thereafter through July 15, 1993, eighteen percent (18%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation. On or before August 15, 1993, and each succeeding month thereafter, eighteen and one-half percent (18-1/2%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation.

A municipal corporation, for the purpose of distributing the tax under this subsection, shall mean and include all incorporated cities, towns and villages.

Monies allocated for distribution and credited to a municipal corporation under this subsection may be pledged as security for any loan received by the municipal corporation for the purpose of capital improvements as authorized under Section 57-1-303, or loans as authorized under Section 57-44-7, or water systems improvements as authorized under Section 41-3-16.

In any county having a county seat which is not an incorporated municipality, the distribution provided hereunder shall be made as though the county seat was an incorporated municipality; however, the distribution to such municipality shall be paid to the county treasury wherein the municipality is located and such funds shall be used for road, bridge and street construction or maintenance therein.

(2) On or before September 15, 1987, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month One Million One Hundred Twenty-five Thousand Dollars ($1,125,000.00) shall be allocated for distribution to municipal corporations as defined under subsection (1) of this section in the proportion that the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each such municipality during the preceding fiscal year bears to the total gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in municipalities statewide during the preceding fiscal year. The State Tax Commission shall require all distributors of gasoline and diesel fuel to report to the commission monthly the total number of gallons of gasoline and diesel fuel sold by them to consumers and retailers in each municipality during the preceding month. The State Tax Commission shall have the authority to promulgate such rules and regulations as is necessary to determine the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each municipality. In determining the percentage allocation of funds under this subsection for the fiscal year beginning July 1, 1987, and ending June 30, 1988, the State Tax Commission may consider gallons of gasoline and diesel fuel sold for a period of less than one (1) fiscal year. For the purposes of this subsection, the term "fiscal year" means the fiscal year beginning July 1 of a year.

(3) On or before September 15, 1987, and on or before the fifteenth day of each succeeding month, until the date specified in Section 65-39-35, the proceeds derived from contractors' taxes levied under Section 27-65-21 on contracts for the construction or reconstruction of highways designated under the Four-Lane Highway Program created under Section 65-3-97 shall be deposited into the State Treasury to the credit of the State Highway Fund to be used to fund such Four-Lane Highway Program. The Mississippi Department of Transportation shall provide to the State Tax Commission such information as is necessary to determine the amount of proceeds to be distributed under this subsection.

(4) On or before August 15, 1994, and on or before the fifteenth day of each succeeding month, from the proceeds of gasoline, diesel fuel or kerosene taxes as provided in Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) shall be deposited in the State Treasury to the credit of a special fund designated as the "State Aid Road Fund," created by Section 65-9-17. Such funds shall be pledged to pay the principal of and interest on state aid road bonds heretofore issued under Sections 19-9-51 through 19-9-77, in lieu of and in substitution for the funds heretofore allocated to counties under this section. Such funds may not be pledged for the payment of any state aid road bonds issued after April 1, 1981; however, this prohibition against the pledging of any such funds for the payment of bonds shall not apply to any bonds for which intent to issue such bonds has been published, for the first time, as provided by law prior to March 29, 1981. From the amount of taxes paid into the special fund pursuant to this subsection and subsection (9) of this section, there shall be first deducted and paid the amount necessary to pay the expenses of the Office of State Aid Road Construction, as authorized by the Legislature for all other general and special fund agencies. The remainder of the fund shall be allocated monthly to the several counties in accordance with the following formula:

(a) One-third (1/3) shall be allocated to all counties in equal shares;

(b) One-third (1/3) shall be allocated to counties based on the proportion that the total number of rural road miles in a county bears to the total number of rural road miles in all counties of the state; and

(c) One-third (1/3) shall be allocated to counties based on the proportion that the rural population of the county bears to the total rural population in all counties of the state, according to the latest federal decennial census.

For the purposes of this subsection, the term "gasoline, diesel fuel or kerosene taxes" means such taxes as defined in paragraph (f) of Section 27-5-101.

The amount of funds allocated to any county under this subsection for any fiscal year after fiscal year 1994 shall not be less than the amount allocated to such county for fiscal year 1994. Monies allocated to a county from the State Aid Road Fund for fiscal year 1995 or any fiscal year thereafter that exceed the amount of funds allocated to that county from the State Aid Road Fund for fiscal year 1994, first must be expended by the county for replacement or rehabilitation of bridges on the state aid road system that have a sufficiency rating of less than twenty-five (25), according to National Bridge Inspection standards before such monies may be approved for expenditure by the State Aid Road Engineer on other projects that qualify for the use of state aid road funds.

Any reference in the general laws of this state or the Mississippi Code of 1972 to Section 27-5-105 shall mean and be construed to refer and apply to subsection (4) of Section 27-65-75.

(5) One Million Six Hundred Sixty-six Thousand Six Hundred Sixty-six Dollars ($1,666,666.00) each month shall be paid into the special fund known as the "State Public School Building Fund" created and existing under the provisions of Sections 37-47-1 through 37-47-67. Such payments into said fund are to be made on the last day of each succeeding month hereafter.

(6) An amount each month beginning August 15, 1983, through November 15, 1986, as specified in Section 6 of Chapter 542, Laws of 1983, shall be paid into the special fund known as the Correctional Facilities Construction Fund created in Section 6 of Chapter 542, Laws of 1983.

(7) On or before August 15, 1992, and each succeeding month thereafter, two and two hundred sixty-six one-thousandths percent (2.266%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2) shall be deposited by the commission into the School Ad Valorem Tax Reduction Fund created pursuant to Section 37-61-35.

(8) On or before August 15, 1992, and each succeeding month thereafter, nine and seventy-three one-thousandths percent (9.073%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2) shall be deposited into the Education Enhancement Fund created pursuant to Section 37-61-33.

(9) On or before August 15, 1994, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month, Two Hundred Fifty Thousand Dollars ($250,000.00) shall be paid into the State Aid Road Fund.

(10) On or before August 15, 1994, and each succeeding month thereafter through August 15, 1995, from the revenue collected under this chapter during the preceding month, Two Million Dollars ($2,000,000.00) shall be deposited into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(11) Notwithstanding any other provision of this section to the contrary, on or before February 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(2) and the corresponding levy in Section 27-65-23 on the rental or lease of private carriers of passengers and light carriers of property as defined in Section 27-51-101 shall be deposited, without diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(12) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(1) on retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101 and the corresponding levy in Section 27-65-23 on the rental or lease of these vehicles, shall be deposited, after diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(13) On or before July 15, 1994, and on or before the fifteenth day of each succeeding month thereafter, that portion of the avails of the tax imposed in Section 27-65-22, which is derived from activities held on the Mississippi state fairgrounds complex, shall be paid into a special fund hereby created in the State Treasury and shall be expended pursuant to legislative appropriations solely to defray the costs of repairs and renovation at such Trade Mart and Coliseum.

(14) On or before August 15, 1998, and each succeeding month thereafter through July 15, 2005, that portion of the avails of the tax imposed in Section 27-65-23 which is derived from sales by cotton compresses or cotton warehouses and which would otherwise be paid into the General Fund, shall be deposited in an amount not to exceed Two Million Dollars ($2,000,000.00) into the special fund created pursuant to Section 69-37-39.

(15) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1999, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 7 of House Bill No. 1581, 1999 Regular Session, shall be deposited, without diversion, into the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund established in Section 4 of House Bill No. 1581, 1999 Regular Session.

(16) The remainder of the amounts collected under the provisions of this chapter shall be paid into the State Treasury to the credit of the General Fund.

(17) It shall be the duty of the municipal officials of any municipality which expands its limits, or of any community which incorporates as a municipality, to notify the commissioner of such action thirty (30) days before the effective date. Failure to so notify the commissioner shall cause such municipality to forfeit the revenue which it would have been entitled to receive during this period of time when the commissioner had no knowledge of the action. If any funds have been erroneously disbursed to any municipality or any overpayment of tax is recovered by the taxpayer, the commissioner may make correction and adjust the error or overpayment with such municipality by withholding the necessary funds from any subsequent payment to be made to the municipality.

27-65-75. On or before the fifteenth day of each month, the revenue collected under the provisions of this chapter during the preceding month shall be paid and distributed as follows:

(1) On or before August 15, 1992, and each succeeding month thereafter through July 15, 1993, eighteen percent (18%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation. On or before August 15, 1993, and each succeeding month thereafter, eighteen and one-half percent (18-1/2%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Sections 27-65-15, 27-65-19(3) and 27-65-21, on business activities within a municipal corporation shall be allocated for distribution to such municipality and paid to such municipal corporation.

A municipal corporation, for the purpose of distributing the tax under this subsection, shall mean and include all incorporated cities, towns and villages.

Monies allocated for distribution and credited to a municipal corporation under this subsection may be pledged as security for any loan received by the municipal corporation for the purpose of capital improvements as authorized under Section 57-1-303, or loans as authorized under Section 57-44-7, or water systems improvements as authorized under Section 41-3-16.

In any county having a county seat which is not an incorporated municipality, the distribution provided hereunder shall be made as though the county seat was an incorporated municipality; however, the distribution to such municipality shall be paid to the county treasury wherein the municipality is located and such funds shall be used for road, bridge and street construction or maintenance therein.

(2) On or before September 15, 1987, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month One Million One Hundred Twenty-five Thousand Dollars ($1,125,000.00) shall be allocated for distribution to municipal corporations as defined under subsection (1) of this section in the proportion that the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each such municipality during the preceding fiscal year bears to the total gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in municipalities statewide during the preceding fiscal year. The State Tax Commission shall require all distributors of gasoline and diesel fuel to report to the commission monthly the total number of gallons of gasoline and diesel fuel sold by them to consumers and retailers in each municipality during the preceding month. The State Tax Commission shall have the authority to promulgate such rules and regulations as is necessary to determine the number of gallons of gasoline and diesel fuel sold by distributors to consumers and retailers in each municipality. In determining the percentage allocation of funds under this subsection for the fiscal year beginning July 1, 1987, and ending June 30, 1988, the State Tax Commission may consider gallons of gasoline and diesel fuel sold for a period of less than one (1) fiscal year. For the purposes of this subsection, the term "fiscal year" means the fiscal year beginning July 1 of a year.

(3) On or before September 15, 1987, and on or before the fifteenth day of each succeeding month, until the date specified in Section 65-39-35, the proceeds derived from contractors' taxes levied under Section 27-65-21 on contracts for the construction or reconstruction of highways designated under the Four-Lane Highway Program created under Section 65-3-97 shall be deposited into the State Treasury to the credit of the State Highway Fund to be used to fund such Four-Lane Highway Program. The Mississippi Department of Transportation shall provide to the State Tax Commission such information as is necessary to determine the amount of proceeds to be distributed under this subsection.

(4) On or before August 15, 1994, and on or before the fifteenth day of each succeeding month from the proceeds of gasoline, diesel fuel or kerosene taxes as provided in Section 27-5-101(a)(ii)1, Four Million Dollars ($4,000,000.00) shall be deposited in the State Treasury to the credit of a special fund designated as the "State Aid Road Fund," created by Section 65-9-17. Such funds shall be pledged to pay the principal of and interest on state aid road bonds heretofore issued under Sections 19-9-51 through 19-9-77, in lieu of and in substitution for the funds heretofore allocated to counties under this section. Such funds may not be pledged for the payment of any state aid road bonds issued after April 1, 1981; however, this prohibition against the pledging of any such funds for the payment of bonds shall not apply to any bonds for which intent to issue such bonds has been published, for the first time, as provided by law prior to March 29, 1981. From the amount of taxes paid into the special fund pursuant to this subsection and subsection (9) of this section, there shall be first deducted and paid the amount necessary to pay the expenses of the Office of State Aid Road Construction, as authorized by the Legislature for all other general and special fund agencies. The remainder of the fund shall be allocated monthly to the several counties in accordance with the following formula:

(a) One-third (1/3) shall be allocated to all counties in equal shares;

(b) One-third (1/3) shall be allocated to counties based on the proportion that the total number of rural road miles in a county bears to the total number of rural road miles in all counties of the state; and

(c) One-third (1/3) shall be allocated to counties based on the proportion that the rural population of the county bears to the total rural population in all counties of the state, according to the latest federal decennial census.

For the purposes of this subsection, the term "gasoline, diesel fuel or kerosene taxes" means such taxes as defined in paragraph (f) of Section 27-5-101.

The amount of funds allocated to any county under this subsection for any fiscal year after fiscal year 1994 shall not be less than the amount allocated to such county for fiscal year 1994. Monies allocated to a county from the State Aid Road Fund for fiscal year 1995 or any fiscal year thereafter that exceed the amount of funds allocated to that county from the State Aid Road Fund for fiscal year 1994, first must be expended by the county for replacement or rehabilitation of bridges on the state aid road system that have a sufficiency rating of less than twenty-five (25), according to National Bridge Inspection standards before such monies may be approved for expenditure by the State Aid Road Engineer on other projects that qualify for the use of state aid road funds.

Any reference in the general laws of this state or the Mississippi Code of 1972 to Section 27-5-105 shall mean and be construed to refer and apply to subsection (4) of Section 27-65-75.

(5) One Million Six Hundred Sixty-six Thousand Six Hundred Sixty-six Dollars ($1,666,666.00) each month shall be paid into the special fund known as the "State Public School Building Fund" created and existing under the provisions of Sections 37-47-1 through 37-47-67. Such payments into said fund are to be made on the last day of each succeeding month hereafter.

(6) An amount each month beginning August 15, 1983, through November 15, 1986, as specified in Section 6 of Chapter 542, Laws of 1983, shall be paid into the special fund known as the Correctional Facilities Construction Fund created in Section 6 of Chapter 542, Laws of 1983.

(7) On or before August 15, 1992, and each succeeding month thereafter, two and two hundred sixty-six one-thousandths percent (2.266%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2), not to exceed the fiscal year 1997 appropriated level shall be deposited by the commission into the School Ad Valorem Tax Reduction Fund created pursuant to Section 37-61-35, with the balance to be transferred to the Education Enhancement Fund created under Section 37-61-33 for appropriation by the Legislature as other education needs and not subject to the percentage set asides set forth in Section 37-61-33.

(8) On or before August 15, 1992, and each succeeding month thereafter, nine and seventy-three one-thousandths percent (9.073%) of the total sales tax revenue collected during the preceding month under the provisions of this chapter, except that collected under the provisions of Section 27-65-17(2) shall be deposited into the Education Enhancement Fund created pursuant to Section 37-61-33.

(9) On or before August 15, 1994, and each succeeding month thereafter, from the revenue collected under this chapter during the preceding month, Two Hundred Fifty Thousand Dollars ($250,000.00) shall be paid into the State Aid Road Fund.

(10) On or before August 15, 1994, and each succeeding month thereafter through August 15, 1995, from the revenue collected under this chapter during the preceding month, Two Million Dollars ($2,000,000.00) shall be deposited into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(11) Notwithstanding any other provision of this section to the contrary, on or before February 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(2) shall be deposited, without diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(12) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1995, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 27-65-17(1) on retail sales of private carriers of passengers and light carriers of property, as defined in Section 27-51-101, shall be deposited, after diversion, into the Motor Vehicle Ad Valorem Tax Reduction Fund established in Section 27-51-105.

(13) On or before July 15, 1994, and on or before the fifteenth day of each succeeding month thereafter, that portion of the avails of the tax imposed in Section 27-65-22, which is derived from activities held on the Mississippi state fairgrounds complex, shall be paid into a special fund hereby created in the State Treasury and shall be expended pursuant to legislative appropriations solely to defray the costs of repairs and renovation at such Trade Mart and Coliseum.

(14) On or before August 15, 1998, and each succeeding month thereafter through July 15, 2005, that portion of the avails of the tax imposed in Section 27-65-23 which is derived from sales by cotton compresses or cotton warehouses and which would otherwise be paid into the General Fund, shall be deposited in an amount not to exceed Two Million Dollars ($2,000,000.00) into the special fund created pursuant to Section 69-37-39.

(15) Notwithstanding any other provision of this section to the contrary, on or before August 15, 1999, and each succeeding month thereafter, the sales tax revenue collected during the preceding month under the provisions of Section 7 of House Bill No. 1581, 1999 Regular Session, shall be deposited, without diversion, into the Telecommunications Ad Valorem Tax Reduction and Local Distribution Fund established in Section 4 of House Bill No. 1581, 1999 Regular Session.

(16) The remainder of the amounts collected under the provisions of this chapter shall be paid into the State Treasury to the credit of the General Fund.

(17) It shall be the duty of the municipal officials of any municipality which expands its limits, or of any community which incorporates as a municipality, to notify the commissioner of such action thirty (30) days before the effective date. Failure to so notify the commissioner shall cause such municipality to forfeit the revenue which it would have been entitled to receive during this period of time when the commissioner had no knowledge of the action. If any funds have been erroneously disbursed to any municipality or any overpayment of tax is recovered by the taxpayer, the commissioner may make correction and adjust the error or overpayment with such municipality by withholding the necessary funds from any subsequent payment to be made to the municipality.

SECTION 10. Section 27-35-319, Mississippi Code of 1972, is amended as follows:

27-35-319. * * * Notwithstanding the provisions of Sections 27-35-31, 27-35-309, 27-35-317 and 27-35-323, when all the property of a telephone company is located in not more than six (6) counties, it shall be assessed and taxed as that of a person; and the laws, providing for the assessment and collection of taxes on the property of persons, shall apply to the assessment and collection of taxes on the property of such companies. All shares or certificates of stock issued by any such corporation or company shall be exempt from taxation and shall not be returned for assessment. Its land and tangible personal property shall be assessed and taxed where situated on the first day of January of the year.

SECTION 11. Sections 8 and 9 of this act shall be effective with respect to taxable services reflected on bills submitted by communications service providers to their customers which are dated on or after July 1, 1999, regardless of when such services are provided. Section 12 of this act shall take effect on January 1, 2000. The remaining provisions of this act shall take effect and be in force from and after July 1, 1999.