Section 50-3007 - VIDEO SERVICE PROVIDER FEE(1) A system operator providing video service within a political subdivision pursuant to a certificate of franchise authority shall pay to the political subdivision in which it provides video service a video service provider fee as may be required by the political subdivision pursuant to this section. For the purposes of this section, subscribers whose service address is within the jurisdictional limits of a city shall be deemed city subscribers and those subscribers whose service address is outside the jurisdictional limits of a city shall be deemed county subscribers.(2) The obligation to pay such a fee shall commence upon commencement of the provision of video service to subscribers. The video service provider's fee shall be paid to the political subdivision in which it provides video service on a quarterly basis, forty-five (45) days after the close of each calendar quarter, and shall be calculated as a percentage of gross revenues, as defined in subsection (4) of this section. Except as provided in section 50-3006, Idaho Code, the political subdivision may not require any additional fees or charges from the system operator and may not require the use of any other calculation method.(3) The fee authorized by this section shall be a percentage of gross revenue, as defined in this section, and shall be determined by the political subdivision. If there is an incumbent cable service provider providing cable service in the political subdivision, the system operator shall pay an amount equal to the percentage of gross revenue paid by an incumbent cable service provider or five percent (5%), whichever is less. If there is no incumbent cable service provider having a franchise agreement with the political subdivision, or if a political subdivision has not previously established and assessed such fee to an incumbent cable service provider, the fee shall be established by the political subdivision, in an amount not in excess of five percent (5%) of the gross revenue, which fee shall be applicable to all video service providers within the political subdivision, regardless of whether they provide video service pursuant to a local franchise or a certificate of franchise authority.(4)(a) For purposes of this section: (i) "Gross revenues" means all revenues, calculated in accordance with generally accepted accounting principles (GAAP), that are received by the system operator from subscribers for the provision of video service to subscribers within the jurisdictional limits of the political subdivision. Gross revenues shall include the following: 1. All recurring charges and fees paid by subscribers for the provision of video service; equipment rental charges, late fees and insufficient funds fees; and fees attributable to video service when sold individually or as part of a package or bundle, or functionally integrated with services other than video services. The term "gross revenues" shall not include any charges resulting from action by a federal agency or taxes or surcharges imposed by a governmental body which are separately itemized and billed by a video service provider to its subscribers;2. Event-based charges for video service, including pay-per-view and video-on-demand; and3. Any other consideration a system operator receives from its subscribers for providing video service when it is received in a transaction that would evade imposition of a franchise fee if such consideration is not included in revenue.(ii) Notwithstanding any provision of this chapter, if a franchise agreement between a political subdivision and an incumbent cable service provider in effect on July 1, 2012, defines the term "gross revenues," which definition includes revenues in addition to the revenues set forth in the definition of gross revenues in subsection (4)(a) of this section, the video service provider fee paid by any system operator providing service within a political subdivision pursuant to a certificate of franchise authority issued on or after July 1, 2012, pursuant to this chapter, shall be calculated based upon the definition of gross revenues set forth in the franchise agreement between a political subdivision and an incumbent cable provider in effect on July 1, 2012.(b) In the case of a video service that is bundled or integrated functionally with other services, capabilities or applications, the portion of the system operator's revenue attributable to the other services, capabilities or applications shall be included in gross revenues unless the provider can reasonably identify the division or exclusion of the revenue from its books and records, which may include the provider's tax billing records, that are kept in the regular course of business.(c) Revenue of an affiliate shall be included in the calculation of gross revenues to the extent the treatment of the revenue as revenue of the affiliate would have the effect of evading the payment of the video service provider fee that would otherwise be paid for video service.(5) Payment of the fees as required in this section shall be accompanied by a written report identifying the amount of revenues received from subscribers for the provision of video services to the subscribers and identifying exclusions from gross revenues, if any. A political subdivision may, upon reasonable advance written notice, but not more frequently than once in any calendar year, review the business records of a system operator to the extent necessary to ensure proper and accurate payment of the video service provider fee. A system operator shall provide sufficient information about such revenues to a political subdivision to allow a proper compliance review by such political subdivision. The system operator shall keep all business records reflecting any gross revenues, even if there is a change in ownership, for at least three (3) years after those revenues are recognized by the system operator in its books and records. All records reasonably necessary for the audit shall, at the discretion of the political subdivision, be made available by the system operator at the location within the jurisdiction where the records are kept in the ordinary course of business, or may be provided electronically to the political subdivision with its consent. The political subdivision and the system operator shall each be responsible for their respective costs of the audit, unless the audit discloses that the system operator has underpaid the video service provider fee by more than seven percent (7%) during the examination period, in which case the system operator shall pay all of the reasonable and actual costs of the audit. Any undisputed amount or refund due to the political subdivision or the system operator shall be paid within sixty (60) days, plus interest at the statutory rate on civil judgments.(6) A system operator may identify and collect the amount of the video service provider fee as a separate line item on the regular bill of each subscriber.(7) Any city annexing lands shall notify a system operator in writing of any such annexation, including a description of the territory annexed. Beginning the first day of the calendar quarter occurring after the system operator has received at least forty-five (45) days' notice of annexation of customers into the city's corporate limits, subscribers within such annexed territory shall, for purposes of this section, be considered to be city subscribers.[50-3007, added 2012, ch. 207, sec. 1, p. 557.]Added by 2012 Session Laws, ch. 207,sec. 1, eff. 7/1/2012.