Sen. John G. Mulroe

Filed: 4/4/2018

 

 


 

 


 
10000SB3464sam002LRB100 20847 AWJ 37828 a

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AMENDMENT TO SENATE BILL 3464

2    AMENDMENT NO. ______. Amend Senate Bill 3464 by replacing
3everything after the enacting clause with the following:
 
4    "Section 5. The Counties Code is amended by changing
5Section 5-1095.1 as follows:
 
6    (55 ILCS 5/5-1095.1)
7    Sec. 5-1095.1. County franchise fee or service provider fee
8review; requests for information.
9    (a) If pursuant to its franchise agreement with a community
10antenna television system (CATV) operator, a county imposes a
11franchise fee authorized by 47 U.S.C. 542 or if a community
12antenna television system (CATV) operator providing cable or
13video service in that county is required to pay the service
14provider fees imposed by the Cable and Video Competition Law of
152007, then the county may conduct an audit of that CATV
16operator's franchise fees or service provider fees derived from

 

 

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1the provision of cable and video services to subscribers within
2the franchise area to determine whether the amount of franchise
3fees or service provider fees paid by that CATV operator to the
4county was accurate. Any audit conducted under this subsection
5(a) shall determine, for a period of not more than 4 years
6after the date the franchise fees or service provider fees were
7due, any overpayment or underpayment to the county by the CATV
8operator, and the amount due to the county or CATV operator is
9limited to the net difference.
10    (b) Not more than once every 2 years, a county or its agent
11that is authorized to perform an audit as set forth in
12subsection (a) may, subject to the limitations and protections
13stated in the Local Government Taxpayers' Bill of Rights Act,
14request information from the CATV operator in the format
15maintained by the CATV operator in the ordinary course of its
16business that the county reasonably requires in order to
17perform an audit under subsection (a). The information that may
18be requested by the county includes without limitation the
19following:
20        (1) in an electronic format used by the CATV operator
21    in the ordinary course of its business, the database used
22    by the CATV operator to determine the amount of the
23    franchise fee or service provider fee due to the county;
24    and
25        (2) in a format used by the CATV operator in the
26    ordinary course of its business, summary data, as needed by

 

 

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1    the county, to determine the CATV operator's franchise fees
2    or service provider fees derived from the provision of
3    cable and video services to subscribers within the CATV
4    operator's franchise area.
5    (c) The CATV operator must provide the information
6requested under subsection (b) within:
7        (1) 60 days after the receipt of the request if the
8    population of the requesting county is 500,000 or less; or
9        (2) 90 days after the receipt of the request if the
10    population of the requesting county exceeds 500,000.
11    The time in which a CATV operator must provide the
12information requested under subsection (b) may be extended by
13written agreement between the county or its agent and the CATV
14operator.
15    (c-5) The county or its agent must provide an initial
16report of its audit findings to the CATV operator no later than
1790 days after the information set forth in subsection (b) of
18this Section has been provided by the CATV operator. This
1990-day timeline may be extended one time by written agreement
20between the county or its agent and the CATV operator. However,
21in no event shall an extension of time exceed 90 days. This
22initial report of audit findings shall detail the basis of its
23findings and provide, but not be limited to, the following
24information: (i) any overpayments of franchise fees or service
25provider fees, (ii) any underpayments of franchise fees or
26service provider fees, (iii) the complete list of all addresses

 

 

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1within the corporate limits of the county for which the audit
2is being conducted, (iv) all county addresses that should be
3included in the CATV operator's database and attributable to
4that county for determination of franchise fees or service
5provider fees, and (v) (iv) addresses that should not be
6included in the CATV operator's database and addresses that are
7not attributable to that county for determination of franchise
8fees or service provider fees. Generally accepted auditing
9standards shall be utilized by the county and its agents in its
10review of information provided by the CATV operator.
11    (c-10) In the event that the county or its agent does not
12provide the initial report of the audit findings to the CATV
13operator with the timeframes set forth in subsection (c-5) of
14this Section, then the audit shall be deemed completed and to
15have conclusively found that there was no overpayment or
16underpayment by the CATV operator for the audit period.
17Further, the county may not thereafter commence or conduct any
18such audit for the same audit period or for any part of that
19same audit period during the 24 months prior to the county or
20its agents requesting the information set forth in subsection
21(b) of this Section.
22    (d) If an audit by the county or its agents finds an error
23by the CATV operator in the amount of the franchise fees or
24service provider fees paid by the CATV operator to the county,
25then the county shall notify the CATV operator of the error.
26Any such notice must be given to the CATV operator by the

 

 

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1county or its agent within 90 days after the county or its
2agent discovers the error, and no later than 4 years after the
3date the franchise fee or service provider fee was due. Upon
4such a notice, the CATV operator must submit a written response
5within 60 days after receipt of the notice stating that the
6CATV operator has corrected the error on a prospective basis or
7stating the reason that the error is inapplicable or
8inaccurate. The county or its agent then has 60 days after the
9receipt of the CATV operator's response to review and contest
10the conclusion of the CATV operator. No legal proceeding to
11collect a deficiency or overpayment based upon an alleged error
12shall be commenced unless within 180 days after the county's
13notification of the error to the CATV operator the parties are
14unable to agree on the disposition of the audit findings.
15    Any legal proceeding to collect a deficiency as set forth
16in this subsection (d) shall be filed in the appropriate
17circuit court.
18    (e) No CATV operator is liable for any error in past
19franchise fee or service provider fee payments that was unknown
20by the CATV operator prior to the audit process unless (i) the
21error was due to negligence on the part of the CATV operator in
22the collection or processing of required data and (ii) the
23county had not failed to respond in writing in a timely manner
24to any written request of the CATV operator to review and
25correct information used by the CATV operator to calculate the
26appropriate franchise fees or service provider fees if a

 

 

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1diligent review of such information by the county reasonably
2could have been expected to discover such error.
3    (f) All account specific information provided by a CATV
4operator under this Section may be used only for the purpose of
5an audit conducted under this Section and the enforcement of
6any franchise fee or service provider fee delinquent claim. All
7such information must be held in strict confidence by the
8county and its agents and may not be disclosed to the public
9under the Freedom of Information Act or under any other similar
10statutes allowing for or requiring public disclosure.
11    (f-5) All contracts by and between a county and a third
12party for the purposes of conducting an audit as contemplated
13in this Code shall be disclosed to the public under the Freedom
14of Information Act or under similar statutes allowing for or
15requiring public disclosure.
16    (g) For the purposes of this Section, "CATV operator" means
17a person or entity that provides cable and video services under
18a franchise agreement with a county pursuant to Section 5-1095
19of the Counties Code and a holder authorized under Section
2021-401 of the Cable and Video Competition Law of 2007 as
21consistent with Section 21-901 of that Law.
22    (h) This Section does not apply to any action that was
23commenced, to any complaint that was filed, or to any audit
24that was commenced before the effective date of this amendatory
25Act of the 96th General Assembly. This Section also does not
26apply to any franchise agreement that was entered into before

 

 

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1the effective date of this amendatory Act of the 96th General
2Assembly unless the franchise agreement contains audit
3provisions but no specifics regarding audit procedures.
4    (h-5) The audit procedures set forth in this Section shall
5be the exclusive audit procedures for: (i) any franchise
6agreement entered into, amended, or renewed on or after the
7effective date of this amendatory Act of the 100th General
8Assembly; and (ii) any franchise fee or service provider fee
9audit of a CATV operator commenced on or after the effective
10date of this amendatory Act of the 100th General Assembly.
11    (i) The provisions of this Section shall not be construed
12as diminishing or replacing any civil remedy available to a
13county, taxpayer, or tax collector.
14    (j) If a contingent fee is paid to an auditor, then the
15payment must be based upon the net difference of the complete
16audit.
17    (k) A Within 90 days after the effective date of this
18amendatory Act of the 96th General Assembly, a county shall
19provide to each any CATV operator an updated a complete list of
20addresses within the corporate limits of the county and shall
21annually update the list. In addition, the county shall provide
22a CATV operator the updated address list within 90 days after
23the date of a written request by the CATV operator.
24    As a prerequisite to performing an audit of a CATV
25operator's franchise fees or service provider fees derived from
26the provision of cable and video services to subscribers within

 

 

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1the franchise area, a county shall provide to a CATV operator
2the complete list of addresses within the corporate limits of
3the county for each calendar year subject to the audit. If an
4address is not included in the list or if no list is provided,
5the CATV operator shall be held harmless for any franchise fee
6underpayments, including penalty and interest, from situsing
7errors if it used a reasonable methodology to assign the
8address or addresses to a county.
9    An address list provided by a county to a CATV operator
10shall be maintained as confidential by the CATV operator and
11shall only be used by the CATV operator for the purposes of
12determining the situs of any franchise fee or service provider
13fee. Any situs issues identified by a CATV operator as a result
14of the provision of an address list by a county to the CATV
15operator shall first be confirmed in writing to the county by
16the CATV operator prior to the CATV operator making any situs
17change that may result in a change of allocation of a franchise
18fee or service provider fee to the county.
19    (l) This Section is a denial and limitation of home rule
20powers and functions under subsection (h) of Section 6 of
21Article VII of the Illinois Constitution.
22(Source: P.A. 99-6, eff. 6-29-15.)
 
23    Section 10. The Illinois Municipal Code is amended by
24changing Section 11-42-11.05 as follows:
 

 

 

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1    (65 ILCS 5/11-42-11.05)
2    Sec. 11-42-11.05. Municipal franchise fee or service
3provider fee review; requests for information.
4    (a) If pursuant to its franchise agreement with a community
5antenna television system (CATV) operator, a municipality
6imposes a franchise fee authorized by 47 U.S.C. 542 or if a
7community antenna television system (CATV) operator providing
8cable or video service in that municipality is required to pay
9the service provider fees imposed by the Cable and Video
10Competition Law of 2007, then the municipality may conduct an
11audit of that CATV operator's franchise fees or service
12provider fees derived from the provision of cable and video
13services to subscribers within the franchise area to determine
14whether the amount of franchise fees or service provider fees
15paid by that CATV operator to the municipality was accurate.
16Any audit conducted under this subsection (a) shall determine,
17for a period of not more than 4 years after the date the
18franchise fees or service provider fees were due, any
19overpayment or underpayment to the municipality by the CATV
20operator, and the amount due to the municipality or CATV
21operator is limited to the net difference.
22    (b) Not more than once every 2 years, a municipality or its
23agent that is authorized to perform an audit as set forth in
24subsection (a) of this Section may, subject to the limitations
25and protections stated in the Local Government Taxpayers' Bill
26of Rights Act, request information from the CATV operator in

 

 

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1the format maintained by the CATV operator in the ordinary
2course of its business that the municipality reasonably
3requires in order to perform an audit under subsection (a). The
4information that may be requested by the municipality includes
5without limitation the following:
6        (1) in an electronic format used by the CATV operator
7    in the ordinary course of its business, the database used
8    by the CATV operator to determine the amount of the
9    franchise fee or service provider fee due to the
10    municipality; and
11        (2) in a format used by the CATV operator in the
12    ordinary course of its business, summary data, as needed by
13    the municipality, to determine the CATV operator's
14    franchise fees or service provider fees derived from the
15    provision of cable and video services to subscribers within
16    the CATV operator's franchise area.
17    (c) The CATV operator must provide the information
18requested under subsection (b) within:
19        (1) 60 days after the receipt of the request if the
20    population of the requesting municipality is 500,000 or
21    less; or
22        (2) 90 days after the receipt of the request if the
23    population of the requesting municipality exceeds 500,000.
24    The time in which a CATV operator must provide the
25information requested under subsection (b) may be extended by
26written agreement between the municipality or its agent and the

 

 

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1CATV operator.
2    (c-5) The municipality or its agent must provide an initial
3report of its audit findings to the CATV operator no later than
490 days after the information set forth in subsection (b) of
5this Section has been provided by the CATV operator. This
690-day timeline may be extended one time by written agreement
7between the municipality or its agents and the CATV operator.
8However, in no event shall an extension of time exceed 90 days.
9This initial report of audit findings shall detail the basis of
10its findings and provide, but not be limited to, the following
11information: (i) any overpayments of franchise fees or service
12provider fees, (ii) any underpayments of franchise fees or
13service provider fees, (iii) the complete list of all addresses
14within the corporate limits of the municipality for which the
15audit is being conducted, (iv) all municipal addresses that
16should be included in the CATV operator's database and
17attributable to that municipality for determination of
18franchise fees or service provider fees, and (v) (iv) addresses
19that should not be included in the CATV operator's database and
20addresses that are not attributable to that municipality for
21determination of franchise fees or service provider fees.
22Generally accepted auditing standards shall be utilized by the
23municipality and its agents in its review of information
24provided by the CATV operator.
25    (c-10) In the event that the municipality or its agent does
26not provide the initial report of the audit findings to the

 

 

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1CATV operator with the timeframes set forth in subsection (c-5)
2of this Section, then the audit shall be deemed completed and
3to have conclusively found that there was no overpayment or
4underpayment by the CATV operator for the audit period.
5Further, the municipality may not thereafter commence or
6conduct any such audit for the same audit period or for any
7part of that same audit period during the 24 months prior to
8the municipality or its agents requesting the information set
9forth in subsection (b) of this Section.
10    (d) If an audit by the municipality or its agents finds an
11error by the CATV operator in the amount of the franchise fees
12or service provider fees paid by the CATV operator to the
13municipality, then the municipality shall notify the CATV
14operator of the error. Any such notice must be given to the
15CATV operator by the municipality or its agent within 90 days
16after the municipality or its agent discovers the error, and no
17later than 4 years after the date the franchise fee or service
18provider fee was due. Upon such a notice, the CATV operator
19must submit a written response within 60 days after receipt of
20the notice stating that the CATV operator has corrected the
21error on a prospective basis or stating the reason that the
22error is inapplicable or inaccurate. The municipality or its
23agent then has 60 days after the receipt of the CATV operator's
24response to review and contest the conclusion of the CATV
25operator. No legal proceeding to collect a deficiency or
26overpayment based upon an alleged error shall be commenced

 

 

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1unless within 180 days after the municipality's notification of
2the error to the CATV operator the parties are unable to agree
3on the disposition of the audit findings.
4    Any legal proceeding to collect a deficiency as set forth
5in this subsection (d) shall be filed in the appropriate
6circuit court.
7    (e) No CATV operator is liable for any error in past
8franchise fee or service provider fee payments that was unknown
9by the CATV operator prior to the audit process unless (i) the
10error was due to negligence on the part of the CATV operator in
11the collection or processing of required data and (ii) the
12municipality had not failed to respond in writing in a timely
13manner to any written request of the CATV operator to review
14and correct information used by the CATV operator to calculate
15the appropriate franchise fees or service provider fees if a
16diligent review of such information by the municipality
17reasonably could have been expected to discover such error.
18    (f) All account specific information provided by a CATV
19operator under this Section may be used only for the purpose of
20an audit conducted under this Section and the enforcement of
21any franchise fee or service provider fee delinquent claim. All
22such information must be held in strict confidence by the
23municipality and its agents and may not be disclosed to the
24public under the Freedom of Information Act or under any other
25similar statutes allowing for or requiring public disclosure.
26    (f-5) All contracts by and between a municipality and a

 

 

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1third party for the purposes of conducting an audit as
2contemplated in this Article shall be disclosed to the public
3under the Freedom of Information Act or under similar statutes
4allowing for or requiring public disclosure.
5    (g) For the purposes of this Section, "CATV operator" means
6a person or entity that provides cable and video services under
7a franchise agreement with a municipality pursuant to Section
811-42-11 of the Municipal Code and a holder authorized under
9Section 21-401 of the Cable and Video Competition Law of 2007
10as consistent with Section 21-901 of that Law.
11    (h) This Section does not apply to any action that was
12commenced, to any complaint that was filed, or to any audit
13that was commenced before the effective date of this amendatory
14Act of the 96th General Assembly. This Section also does not
15apply to any franchise agreement that was entered into before
16the effective date of this amendatory Act of the 96th General
17Assembly unless the franchise agreement contains audit
18provisions but no specifics regarding audit procedures.
19    (h-5) The audit procedures set forth in this Section shall
20be the exclusive audit procedures for: (i) any franchise
21agreement entered into, amended, or renewed on or after the
22effective date of this amendatory Act of the 100th General
23Assembly; and (ii) any franchise fee or service provider fee
24audit of a CATV operator commenced on or after the effective
25date of this amendatory Act of the 100th General Assembly.
26    (i) The provisions of this Section shall not be construed

 

 

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1as diminishing or replacing any civil remedy available to a
2municipality, taxpayer, or tax collector.
3    (j) If a contingent fee is paid to an auditor, then the
4payment must be based upon the net difference of the complete
5audit.
6    (k) A Within 90 days after the effective date of this
7amendatory Act of the 96th General Assembly, a municipality
8shall provide to each any CATV operator an updated a complete
9list of addresses within the corporate limits of the
10municipality and shall annually update the list. In addition,
11the municipality shall provide a CATV operator the updated
12address list within 90 days after the date of a written request
13by the CATV operator.
14    As a prerequisite to performing an audit of a CATV
15operator's franchise fees or service provider fees derived from
16the provision of cable and video services to subscribers within
17the franchise area, a municipality shall provide to a CATV
18operator the complete list of addresses within the corporate
19limits of the municipality for each calendar year subject to
20the audit. If an address is not included in the list or if no
21list is provided, the CATV operator shall be held harmless for
22any franchise fee underpayments, including penalty and
23interest, from situsing errors if it used a reasonable
24methodology to assign the address or addresses to a
25municipality.
26    An address list provided by a municipality to a CATV

 

 

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1operator shall be maintained as confidential by the CATV
2operator and shall only be used by the CATV operator for the
3purposes of determining the situs of any franchise fee or
4service provider fee. Any situs issues identified by a CATV
5provider as a result of the provision of an address list by a
6municipality to the CATV operator shall first be confirmed in
7writing to the municipality by the CATV operator prior to the
8CATV operator making any situs change that may result in a
9change of allocation of a franchise fee or service provider fee
10to the municipality.
11    (l) This Section is a denial and limitation of home rule
12powers and functions under subsection (h) of Section 6 of
13Article VII of the Illinois Constitution.
14    (m) This Section does not apply to any municipality having
15a population of more than 1,000,000.
16(Source: P.A. 99-6, eff. 6-29-15.)
 
17    Section 99. Effective date. This Act takes effect upon
18becoming law.".