Bill Text: IN HB1382 | 2011 | Regular Session | Introduced
Bill Title: Video franchise and satellite service fees.
Spectrum: Slight Partisan Bill (Democrat 2-1)
Status: (Introduced - Dead) 2011-02-15 - Representative Welch added as coauthor [HB1382 Detail]
Download: Indiana-2011-HB1382-Introduced.html
Citations Affected: IC 6-8.1-1-1; IC 8-1.
Synopsis: Video franchise and satellite service fees. Reduces the
maximum franchise fee from 5% to 4% for providers of video service
that provide video programming and other programming service
through facilities located at least in part in a public right-of-way.
Imposes a direct broadcast satellite service fee on direct broadcast
satellite service providers at the same percentage rate of gross revenue
as the cable service franchise fee rate in effect in a local government
unit on December 31, 2010. Permits the fee to be passed through to
customers of the provider. Requires a provider to remit the fees
quarterly to the department of state revenue (department). Requires a
provider to submit a quarterly report to the department indicating a
provider's gross revenue and the amount of fees paid with respect to
each unit. Requires the department to publish the direct broadcast
satellite service fee rates before August 1, 2011. Requires the
department to distribute the fees quarterly to each unit.
Effective: July 1, 2011; January 1, 2012.
January 18, 2011, read first time and referred to Committee on Utilities and Energy.
PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
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A BILL FOR AN ACT to amend the Indiana Code concerning local
government and to make an appropriation.
(IC 6-6-5); the commercial vehicle excise tax (IC 6-6-5.5); the excise
tax imposed on recreational vehicles and truck campers (IC 6-6-5.1);
the hazardous waste disposal tax (IC 6-6-6.6); the cigarette tax
(IC 6-7-1); the beer excise tax (IC 7.1-4-2); the liquor excise tax
(IC 7.1-4-3); the wine excise tax (IC 7.1-4-4); the hard cider excise tax
(IC 7.1-4-4.5); the malt excise tax (IC 7.1-4-5); the petroleum
severance tax (IC 6-8-1); the various innkeeper's taxes (IC 6-9); the
various food and beverage taxes (IC 6-9); the county admissions tax
(IC 6-9-13 and IC 6-9-28); the direct broadcast satellite service
fee (IC 8-1-35); the regional transportation improvement income tax
(IC 8-24-17); the oil inspection fee (IC 16-44-2); the emergency and
hazardous chemical inventory form fee (IC 6-6-10); the penalties
assessed for oversize vehicles (IC 9-20-3 and IC 9-30); the fees and
penalties assessed for overweight vehicles (IC 9-20-4 and IC 9-30); the
underground storage tank fee (IC 13-23); the solid waste management
fee (IC 13-20-22); and any other tax or fee that the department is
required to collect or administer.
(1) the amount of gross revenue received from providing video service in the unit during the most recent calendar quarter, as determined under section 23 of this chapter; multiplied by
(2) a percentage equal to one (1) of the following:
(A) If a local franchise has never been in effect in the unit before July 1, 2006,
(B) If no local franchise is in effect in the unit on July 1, 2006, but one (1) or more local franchises have been in effect in the unit before July 1, 2006:
(i) except as provided in item (ii), the percentage of gross revenue paid by the holder of the most recent local franchise in effect in the unit,
(ii) if the unit elects to impose a different percentage, the percentage designated by the unit, which may not exceed
(C) If there is one (1) local franchise in effect in the unit on July 1, 2006:
(i) except as provided in item (ii), the percentage of gross
revenue paid by the holder of that local franchise as a
franchise fee to the unit, unless which may not exceed four
percent (4%); or
(ii) if the unit elects to impose a different percentage, the
percentage designated by the unit, which may not exceed
five four percent (5%). (4%).
Upon the expiration of a local franchise described in this
clause, the percentage shall be determined by the unit but may
not exceed five four percent (5%). (4%).
(D) If there is more than one (1) local franchise in effect with
respect to the unit on July 1, 2006, a percentage determined by
the unit, which may not exceed the greater of:
(i) five four percent (5%); (4%); or
(ii) the percentage paid by a holder of any local franchise in
effect in the unit on July 1, 2006.
Upon the expiration of a local franchise described in this
clause, the percentage shall be determined by the unit,
which may not exceed four percent (4%).
(b) If the holder provides video service to an unincorporated area in
Indiana, as described in section 23(e) of this chapter, the holder shall:
(1) calculate the franchise fee with respect to the unincorporated
area in accordance with subsection (a); and
(2) remit the franchise fee to the county in which the
unincorporated area is located.
If an unincorporated area served by the provider is located in one (1)
or more contiguous counties, the provider shall remit part of the
franchise fee calculated under subdivision (1) to each county having
territory in the unincorporated area served. The part of the franchise fee
remitted to a county must bear the same proportion to the total
franchise fee for the area, as calculated under subdivision (1), that the
number of subscribers in the county bears to the total number of
subscribers in the unincorporated area served.
(c) With each payment of a franchise fee to a unit under this section,
the holder shall include a statement explaining the basis for the
calculation of the franchise fee. A unit may review the books and
records of:
(1) the holder; or
(2) an affiliate of the holder, if appropriate;
to the extent necessary to ensure the holder's compliance with section
23 of this chapter in calculating the gross revenue upon which the
remitted franchise fee is based. Each party shall bear the party's own
costs of an examination under this subsection. If the holder and the unit
cannot agree on the amount of gross revenue on which the franchise fee
should be based, either party may petition the commission to determine
the amount of gross revenue on which the franchise fee should be
based. A determination of the commission under this subsection is
final, subject to the right of direct appeal by either party.
(d) A franchise fee owed by a holder to a unit under this section may
be passed through to, and collected from, the holder's subscribers in the
unit. To the extent allowed under 43 U.S.C. 542(c), the holder may
identify as a separate line item on each regular bill issued to a
subscriber:
(1) the amount of the total bill assessed as a franchise fee under
this section; and
(2) the identity of the unit to which the franchise fee is paid.
(e) A holder that elects under section 21(b)(1) of this chapter to
continue providing video service under a local franchise is not required
to pay the franchise fee prescribed under this section, but shall pay any
franchise fee imposed under the terms of the local franchise.
Chapter 35. Direct Broadcast Satellite Service Fee
Sec. 1. As used in this chapter, "department" means the department of state revenue.
Sec. 2. (a) As used in this chapter, "direct broadcast satellite service" means distributing or broadcasting video programming or services by satellite directly to receiving equipment located at an end user subscriber's or an end user customer's premises.
(b) The term includes but is not limited to the following:
(1) Renting receiving or recording equipment used by a subscriber or customer to obtain or use the service.
(2) Providing premium channels.
(3) Installing or repairing receiving or recording equipment used by a subscriber or customer to obtain or use the service.
(4) Providing music or other audio services or channels.
(5) Any other service provided in connection with the provision of direct broadcast satellite service.
Sec. 3. As used in this chapter, "direct broadcast satellite service provider" means any person that is transmitting, broadcasting, or otherwise providing direct broadcast satellite service to subscribers in Indiana.
Sec. 4. (a) As used in this chapter, "gross revenue" means all consideration of any kind or nature, including cash, credits,
property, and in kind contributions received by a direct broadcast
satellite service provider or an affiliate of the provider.
(b) For purposes of subsection (a), gross revenue includes the
following fees and charges to subscribers for direct broadcast
satellite service:
(1) Recurring monthly charges for direct broadcast satellite
service.
(2) Event based charges for direct broadcast satellite service,
including pay per view and video on demand charges.
(3) Charges for the rental of equipment related to providing
direct broadcast satellite service.
(4) Service charges related to providing direct broadcast
satellite service, including activation, installation, repair, and
maintenance charges.
(5) Administrative charges related to providing direct
broadcast satellite service, including service order and service
termination charges.
(6) Any other fee or charge that would be included in gross
revenue as determined under IC 8-1-34-23, regardless of
whether the direct broadcast satellite service provider, or an
affiliate of the provider, is subject to IC 8-1-34.
(c) For purposes of subsection (a), gross revenue does not
include the following received by a direct broadcast satellite service
provider or an affiliate of the provider:
(1) Revenue not actually received, regardless of whether it is
billed, including bad debts.
(2) Revenue received by an affiliate or any other person in
exchange for supplying goods and services used by a direct
broadcast satellite service provider.
(3) Refunds, rebates, or discounts made to a subscriber,
advertiser, or other person.
(4) Revenue from a service other than direct broadcast
satellite service, including:
(A) telecommunications service (as defined in 47 U.S.C.
153(46));
(B) information service (as defined in 47 U.S.C. 153(20));
or
(C) any other service that is not direct broadcast satellite
service.
(5) The tax imposed under IC 6-2.5-4-11.
(6) Any tax of general applicability imposed on a direct
broadcast satellite service provider, or a purchaser of direct
broadcast satellite service, by a federal, state, or local
governmental entity and required to be collected by a person
and remitted to the taxing entity, including the state gross
retail and use taxes (IC 6-2.5) and the utility receipts tax
(IC 6-2.3).
(7) Any foregone revenue from providing free or reduced cost
direct broadcast satellite service to any person, including
employees of the direct broadcast satellite service provider or
any governmental entity as required or permitted by federal,
state, or local law, except revenue foregone in exchange for
the goods or services through a trade or barter arrangement.
(8) Revenue from the sale of capital assets or surplus
equipment not used by the purchaser to receive direct
broadcast satellite service from the direct broadcast satellite
service provider.
(9) Reimbursements made by programmers to the direct
broadcast satellite service provider for marketing costs
incurred by the direct broadcast satellite service provider for
the introduction of new programming that exceed the actual
costs incurred by the direct broadcast satellite service
provider.
(10) Late payment fees collected from customers.
(11) Charges, other than those charges described in subsection
(b), that are aggregated or bundled with charges described in
subsection (b) on a customer's bill, if the direct broadcast
satellite service provider can reasonably identify the charges
in its books and records kept in the regular course of business.
Sec. 5. As used in this chapter, "person" includes an
administrator, an assignee, an association, a bank, a bureau, a club,
a commissioner, a consignee, a cooperative association, a
corporation, an estate, an executor, a fiduciary, a firm, a fraternity,
an Indiana political subdivision engaged in private or proprietary
activities, an individual, an institution, a joint venture, a limited
liability company, a lodge, a national bank, a partnership, a pool,
a receiver, a society, a sorority, a syndicate, a trust, or a trustee.
Sec. 6. As used in this chapter, "unit" has the meaning set forth
in IC 36-1-2-23.
Sec. 7. (a) Beginning January 1, 2012, a fee, known as the direct
broadcast satellite service fee, is imposed upon any direct
broadcast satellite service provider for the privilege of selling
direct broadcast satellite service in Indiana and based on gross
revenue derived each calendar quarter from selling, transmitting,
distributing, or otherwise providing direct broadcast satellite
service in each unit included in the provider's service area.
(b) The direct broadcast satellite service fee is imposed at a
percentage equal to the franchise fee percentage authorized under
IC 8-1-34-24 in the unit that is in effect as of December 31, 2010,
and paid to the unit by a holder of a certificate issued under
IC 8-1-34-17. The direct broadcast satellite service fee percentage
must be based on the billing address of the direct broadcast
satellite service subscriber at the time of the sale of the direct
broadcast satellite service. The department shall determine the
franchise fee percentage authorized under IC 8-1-34-24 in each
unit in effect as of December 31, 2010, and paid to each unit by a
holder of a certificate issued under IC 8-1-34-17. The department
of state revenue shall publish a report setting forth the applicable
direct broadcast satellite service fee percentages before August 1,
2011.
(c) The direct broadcast satellite service fee is in addition to the
state gross retail tax and use tax imposed by IC 6-2.5.
(d) The direct broadcast satellite service fee may be passed
through to, and collected from, the direct broadcast satellite
service provider's customers in Indiana. To the extent allowed
under federal or state law, a direct broadcast satellite service
provider may identify as a separate line item on each regular bill
issued to a customer the amount of the total bill assessed as a direct
broadcast satellite service fee under this section.
Sec. 8. (a) Each direct broadcast satellite service provider liable
for the direct broadcast satellite service fee shall file a report for
each calendar quarter and pay to the department the fee imposed
by this chapter for each calendar quarter. A direct broadcast
satellite service provider shall file a report for each calendar
quarter with the department and pay the direct broadcast satellite
service fee for that calendar quarter to the department not later
than twenty (20) days after the end of that calendar quarter. The
report must include a summary of gross revenue and fees
categorized by unit. This subsection does not create a liability of
the direct broadcast satellite service provider directly to a unit.
(b) The department shall prescribe the form of the direct
broadcast satellite service fee report required under subsection (a).
(c) The money received from the fees collected by the
department shall be credited to a special account to make
distributions to each unit before the last business day in January,
April, July, and October, based on the amount of fees received in
that month for the most recent calendar quarter from each provider that provides direct broadcast satellite service in the unit. The money in each special account is appropriated to make the distributions.
