§ 138-62. Franchise fees.

A. 

Any MCS provider, specifically including but not necessarily limited to any MCS provider classified as a cable operator, that is granted a franchise, other agreement, license or permit, or a franchise renewal, or renewal of an other agreement, license or permit, after the date this chapter becomes effective, shall, if permitted by federal law or rule, have the choice of paying to the Town itself, or collecting from others and remitting to the Town, a sum equal to five 5% of the annual gross revenue of such MCS provider. Such amount is intended in part to recompense the Town for the cost of administering and enforcing the franchise other agreement, license or permit, and for the cost of maintaining the public property and rights-of-way occupied by the multichannel system.

B. 

The Town Board recognizes that, with respect to MCS providers classified as cable operators, those MCS providers may have to remit an annual fee to the PSC. Therefore, to the extent that the remittance of the PSC annual fee, when computed together with any franchise fee paid by the MCS provider, or collected from other and remitted by the MCS provider, or that is owed, is greater than 5% of the cable operator's annual gross revenues, the payment of the PSC annual fee shall be deducted from and credited as an offset against any franchise fee actually paid to the Town by the MCS provider, provided that the MCS provider has not elected merely to collect the fee from others, including subscribers, and remit the amount collected to the PSC.

C. 

If the FCC, Congress or any other governmental entity with authority to establish the maximum allowable franchise fee, ever allows franchising authorities to increase the franchise fee beyond 5% of gross revenue, then the Town shall have the authority to increase the franchise fee to the maximum percentage and/or amount allowable.

D. 

An MCS provider subject to the collection and remittance of a franchise fee, or its functional equivalent under an other agreement, a permit or a license, shall, automatically and without further notification, pass through to subscribers the amount of any decrease in the franchise fee that is attributable to or calculated on subscriber revenues, in the next monthly bill or periodic invoice, so that the bill or invoice reflects the decrease in the franchise fee on subscriber revenues.

E. 

An MCS provider that is subject to the remittance of a franchise fee, or its functional equivalent, shall file with the Town, within 45 days after the expiration of each of the MCS provider's fiscal quarters, a detailed financial and revenue report and statement clearly showing the franchise fee or functional equivalent due for the preceding quarter, together with the basis of the calculations thereof. Such statement shall be certified by a certified public accountant or officer of the MCS provider attesting to the accuracy, completeness, and veracity of the revenue figures. Such report and statement shall be in the form and format determined necessary by the Town Board, or its designee, to reasonably ascertain the accuracy and completeness of the total remittance, as well as the accuracy and completeness of all types, categories and sources of revenue, individually. Further, said report and statement shall show all revenue from whatever source, that is directly or indirectly derived from, or caused to be derived from, or that is attributable to the operation of the multichannel system or the provision of any service by or using the multichannel system. The revenue shall, at least, be reported by service category, type, and level, individually, showing appropriate computations and individual and incremental rates for all sources, levels, tiers, clusters, and types of service, and other revenue sources by kind and type.

F. 

Remittance of the quarterly portion of the franchise fee, or its functional equivalent, shall be rendered to the Town at the time the financial and revenue statement is filed.

G. 

In the event that remittance is not made by the due date, then such franchised MCS provider may be declared in default of the franchise, other agreement, license or permit, and should the amount owed remain unremitted for an additional 60 days after the date of notification of nonremittance or late remittance, then the franchise, other agreement, license or permit may be revoked, terminated, or canceled as noted elsewhere in this chapter.

H. 

The Town reserves the right to audit a franchised MCS provider's books, if the Town Board deems it necessary. If such audit discovers an under-remittance of the franchise fee or its functional equivalent of greater than 2% of the actual amount owed, then the MCS provider shall reimburse the Town for the cost of such audit, unless such cost is waived by the Town Board. It is specifically understood that the right of audit and recomputation of any, and all, amounts remitted under a franchise, other agreement, license or permit fee, shall always be accorded to the Town Board.

I. 

If an audit, or other research, discovers that the franchise fee or its functional equivalent has been either under-remitted or not remitted for a period exceeding six months from the original due date notwithstanding Subsection G of this section, then the Town Board may seek full recovery of the under-remitted or not remitted fees, plus interest not to exceed 15% per year, or if greater than 15% the maximum allowable under state law.

J. 

All annual reports due and pertaining to the remittance of the franchise fee, or its functional equivalent, will be certified by an officer of the MCS provider or its parent, and will be provided in the form, format and detail applicable to quarterly reports under Subsection E of this section. Such MCS provider shall maintain records used in the preparation of said reports, to be produced in their totality upon request or demand by the Town Board.

K. 

No acceptance of any remittance shall be construed as a release of, or an accord, or satisfaction of, any claim that the Town might have for further or additional sums payable under the terms of this chapter or a franchise, other agreement, license or permit, or for any other performance or obligation of a franchised MCS provider hereunder.

L. 

Payments of compensation made by a franchised MCS provider to the Town, or remittances of amounts collected, pursuant to the provisions of this chapter, shall be considered in addition to, and exclusive of, any and all authorized taxes, business license fees, other fees, other levies or assessments presently in effect, or subsequently adopted.

M. 

A franchise fee or its functional equivalent, shall not include any items excluded by Section 622(g)(2)(D) of the Cable Act [codified at 47 U.S.C. § 542(g)(2)(D)].

N. 

Nothing in this section shall be construed to limit the authority of the Town to require the payment, or the collection and remittance, of a fee or other assessment of any kind, on any person (other than a franchised MCS provider, or an MCS provider operating under another form of agreement, or a license or permit) with respect to multichannel service or other programming or communications service provided by such person over a multichannel system, for which charges are assessed to subscribers, but not received by a franchised MCS provider. For purposes of illustration only, this subsection shall include the situation(s) where a provider of a particular service directly bills a subscriber, or the MCS provider acts as collection agent for a provider of a particular service who directly bills a subscriber(s), or where a person leases a channel for commercial use and sells advertising or goods on that channel, and receives the money directly or through a third party.

O. 

For any twelve-month period, the fees paid by or remitted by any person who provides any such multichannel service pursuant to Subsection N of this section, shall not exceed 5% of such person's gross revenue derived in such period from the provision of such service over the multichannel system, or such higher percentage as may be authorized by the FCC, Congress, or other governmental entity with authority to increase the percentage or amount of such fees.

P. 

If, at any time, the highest court of the nation or the highest court of the state invalidates, voids, or rules as unconstitutional or unenforceable the concept of franchise fees, then the Town Board may impose an alternative user charge on the franchised MCS provider, as provided in this chapter.

Q. 

In light of Subsection P of this section, in the event the applicable provision of the franchise, other agreement, license or permit were to be ruled unconstitutional or unenforceable, so that the Town's source of recompense for the cost of administering this chapter and any franchise agreement, other agreement, license or permit, and the cost of maintaining the public property and rights-of-way, may be protected, the MCS operator providing service under a franchise, other agreement, license or permit may be required to collect and remit to the Town a fee using a different method and manner for the computation and collection of the fee as provided for in this chapter.

R. 

Subject to federal law, and notwithstanding anything preceding in this section, nothing shall limit the authority of the Town to assess and impose a franchise fee, or its functional equivalent, on any portion, category or type of revenue, or to exempt any portion, category or type of revenue from inclusion in the computational base used to calculate the franchise fee or its functional equivalent, so long as such is done in a nondiscriminatory and competitively neutral manner with respect to competitive MCS providers in the Town.

S. 

Notwithstanding anything in this section, in the event an MCS provider does not pay the franchise fee itself, but instead, if permitted by federal law or rule, chooses to pass the franchise fee through to subscribers, incrementally and in addition to the amount owed for service, so that the effect is that the franchise fee is paid by the subscribers and not the MCS provider, and is merely collected and remitted by the MCS provider, then in such an instance the MCS provider shall not be permitted to deduct the franchise fee from what is owed for property taxes, or any other taxes or money, due the Town.