(1) To the fullest extent permitted by law or the MCS provider’s franchise agreement, any non-exempt franchised MCS provider (specifically including any MCS provider classified as a cable operator) awarded a franchise or renewal franchise after the date this Chapter becomes effective, shall pay to the City for the privilege and use of the streets, rights-of-way, easements, and public ways, of the City in the operation of the multi-channel system, and for the City’s supervision thereof during the term of the franchise, a sum equal to five per cent (5%) of the MCS provider’s annual gross revenues derived in such period from the operation of such non-exempt franchised MCS provider’s system in Provo City.

(2) If the FCC, Congress or other governmental entity with authority over multi-channel service ever allows a governmental entity or Council/franchising authority to increase the franchise fee beyond five percent (5%), then the Council/franchising authority shall have the authority to increase the franchise fee to the maximum rate allowable, subject to applicable franchise provisions.

(3) It is intended that the franchise fees will promote the health, safety, and welfare of the citizens of the City. Therefore, the five percent (5%) franchise fee shall be deposited into the general revenues of the City, unless specifically authorized elsewhere.

(4) A non-exempt franchised MCS provider shall file with the Council/franchising authority, within forty-five (45) days after the expiration of each of the franchised MCS provider’s fiscal quarters, a detailed financial and revenue statement clearly showing the gross revenues received by such franchised MCS provider during the preceding quarter and certified by a certified public accountant or officer of a franchised MCS provider attesting to the accuracy, completeness, and veracity of the revenue figures. Such statement shall be in the form and format acceptable to the Mayor. Such statement shall include revenue from whatever source, directly or indirectly derived from, or allowed, or caused to be derived from, or applicable to the operation of the multi-channel system, or the provision of any multi-channel service by or to the multi-channel system. Revenue will be reported by service category, type, and level showing computations and using incremental billing rates for all sources, levels, tiers, and types of service and other revenue sources of all kinds and types.

(5) Payment of the quarterly portion of the franchise fee shall be rendered to the City at the time the financial statement is filed.

(6) In the event that payment is not made within forty-five (45) days after the date specified in this Section, then such franchised MCS provider may be declared in default of the franchise, and the franchise may be suspended, revoked, terminated, or canceled in the manner prescribed by this chapter. In addition, the franchised MCS provider shall be subject all other penalties set forth in this ordinance and in the franchising agreement.

(7) The Mayor or the Mayor’s designee reserves the right to audit a franchised MCS provider books consistent with Section 6.22.240 of this Chapter, if the Council/franchising authority deems it necessary. All annual reports due and pertaining to the payment of franchise fees, will be certified by an officer of the franchised MCS provider, and such provider shall maintain records used in the preparation of said report, to be produced in their originality and totality upon request or demand by the Council/franchising authority.

(8) The right of audit and recomputation of any and all amounts paid under a franchise shall always be accorded to the Council/franchising authority.

(9) No acceptance of any payment shall be construed as a release of, waiver, or an accord, or satisfaction of, any claim that the City might have for further or additional sums payable under the terms of this chapter, or for any other performance or obligation of a franchised MCS provider hereunder.

(10) Payments of compensation made by a franchised MCS provider to the City, 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 which tax, fee, levy, or assessment is of general applicability and which is not unduly discriminatory against MCS operators.

(11) A franchise fee does not include any items excluded by Section 622(g)(2)(D) of the CCPA (codified at 47 USC 542(g)(2)(D), as amended).

(12) Nothing in this Section shall be construed to limit the authority of the Council/franchising authority to impose a tax, fee or other assessment of any kind, on any person (other than a franchised MCS provider) with respect to multi-channel service or other programming or communications service provided by such person over a multi-channel 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 premium service directly bills a subscriber, or the franchised MCS provider merely acts as collection agent for a premium service billing directly to a subscriber.

(13) Except as permitted by Federal law, no federal agency may regulate the amount of franchise fees paid by franchised MCS providers, or regulate the use of funds derived from franchise fees.

(14) For any twelve (12) month period, the fees paid by any person subject to subsection (12) with respect to any such multi-channel service shall not exceed five percent (5%) or the maximum percentage amount allowable as implemented under Subsection (2) of such person’s gross revenues derived in such period from the provision of such service over the multi-channel system.

(15) If at any time, the highest court of the nation, or the highest court of the State, invalidates, voids, or rules as unconstitutional the concept of franchise fees, then the Council/franchising authority may impose an alternative user charge on the franchised MCS provider, in the manner set forth in this Chapter.