Text: H01583 Text: H01585 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
PAG LIN
1 1 Amend House File 700 as follows:
1 2 #1. Page 51, by inserting after line 11 the
1 3 following:
1 4 "DIVISION
1 5 Sec. 201. PURPOSE AND DEFINITIONS.
1 6 1. PURPOSE. The general assembly finds that the
1 7 Iowa communications network is a valuable state asset
1 8 that has served the people of the state well, but
1 9 which requires significant ongoing financial support
1 10 from the state in the form of annual appropriations.
1 11 The operation of a telecommunications network is a
1 12 function that can be and generally is conducted by
1 13 private enterprise. It is in the public interest to
1 14 sell the Iowa communications network to a qualified
1 15 private business enterprise that will commit to
1 16 provide the same secure low-cost high-quality service
1 17 to state and federal agencies and military
1 18 installations now provided by the network. Through
1 19 such a sale, the state would eliminate the need for
1 20 ongoing annual appropriations while preserving the key
1 21 benefits enjoyed by the state under the present state
1 22 ownership of the network. The state also expects to
1 23 obtain sufficient proceeds from such a sale to cover
1 24 existing obligations and to realize additional
1 25 proceeds above the level of such obligations. Given
1 26 the current depressed state of the telecommunications
1 27 industry, the state can reasonably be expected to
1 28 maximize sales proceeds by allowing a purchaser a
1 29 period of time in which to assemble financing for its
1 30 purchase. During the interim between enactment of
1 31 this division of this Act and completion of a sale,
1 32 the services of a private-enterprise manager with
1 33 experience operating telecommunications networks can
1 34 reasonably be expected to reduce the costs of
1 35 operating the Iowa communications network, thereby
1 36 lowering or possibly eliminating annual
1 37 appropriations.
1 38 2. DEFINITIONS. As used in this division of this
1 39 Act, unless the context otherwise requires:
1 40 a. "Board" means the state network privatization
1 41 board.
1 42 b. "Commission" means the Iowa telecommunications
1 43 and technology commission established in section 8D.3
1 44 to oversee the operations of the network.
1 45 c. "Management contract" means an agreement
1 46 between the board and the manager for services to
1 47 oversee and operate the network on behalf of the
1 48 state.
1 49 d. "Manager" means the private entity selected by
1 50 the board to oversee and operate the network on behalf
2 1 of the state.
2 2 e. "Network" means the Iowa or state
2 3 communications network as defined in section 8D.2.
2 4 f. "Out-of-pocket expenses" means moneys paid to
2 5 an unaffiliated third party for engineering, legal,
2 6 consulting, or other services or goods by a manager or
2 7 purchaser.
2 8 g. "Purchaser" means the entity that is selected
2 9 by the board to purchase the network from the state.
2 10 h. "Required third-party approval" means any
2 11 consent, conveyance, approval, or waiver that must be
2 12 granted by a private, governmental, or quasi-
2 13 governmental third party in order for the purchaser to
2 14 receive clear title to all network assets and the
2 15 right to use the network assets free of adverse
2 16 claims. Required third-party approvals include but
2 17 are not limited to all of the following:
2 18 (1) Approvals of assignments to the purchaser of
2 19 the state's rights under leases or contracts between
2 20 the state and the third party.
2 21 (2) Conveyance to the purchaser of property that
2 22 the third party currently leases to the state on a
2 23 term with less than fifteen years remaining.
2 24 (3) Release of restrictions in contracts that
2 25 require that the state operate the network.
2 26 i. "Sales contract" means the contract between the
2 27 state as seller, represented by the board, and the
2 28 purchaser, for sale of the network to the purchaser.
2 29 Sec. 202. STATE NETWORK PRIVATIZATION BOARD
2 30 CREATED – DUTIES.
2 31 1. A state network privatization board is created.
2 32 The board shall consist of the following members:
2 33 a. A chairperson member appointed by the
2 34 legislative council, subject to confirmation by the
2 35 senate.
2 36 b. A member, who shall not be of the same
2 37 political party as the chairperson, appointed by the
2 38 governor subject to confirmation by the senate.
2 39 c. The adjutant general or the adjutant general's
2 40 designee.
2 41 2. The board shall do all of the following:
2 42 a. Issue a request for proposals from qualified
2 43 entities interested in serving as the manager of the
2 44 network. This request for proposals shall be issued
2 45 by July 1, 2004, and responses to the request for
2 46 proposals shall be due by August 1, 2004.
2 47 b. Select a manager and enter into a management
2 48 contract with the manager by October 1, 2004. The
2 49 management contract shall provide for the continuation
2 50 of all services currently being provided to state and
3 1 federal agencies and military installations pursuant
3 2 to chapter 8D, at the rates specified therein, for the
3 3 duration of the contract. The contract shall also
3 4 specify the manager's authority in relation to the
3 5 duties of the commission during the period between
3 6 execution of the management contract and closing of
3 7 the sale of the network. The commission shall
3 8 establish a dispute resolution process regarding rate
3 9 increases, quality of service issues, and other areas
3 10 of dispute involving network subscribers. The
3 11 commission shall also make recommendations regarding
3 12 imposition of an ongoing dispute resolution and
3 13 appeals process commencing with the closing of the
3 14 sale of the network.
3 15 c. Issue a request for proposals from qualified
3 16 entities for the purchase of the network. This
3 17 request for proposals shall be issued by January 1,
3 18 2005, and responses to the request for proposals shall
3 19 be due by May 1, 2005.
3 20 d. Utilizing the criteria set forth in sections
3 21 203 and 204 of this Act, select a purchaser and enter
3 22 into a sales contract with the purchaser by October 1,
3 23 2005.
3 24 e. Immediately upon execution of the management
3 25 contract and the sales contract by the majority of the
3 26 board, transmit the executed contract to the general
3 27 assembly and to the governor. The board shall have
3 28 full authority to enter into the management contract
3 29 and the sales contract on behalf of the state,
3 30 provided that the general assembly by legislation
3 31 enacted regarding the specific purchase and approved
3 32 by the governor, within thirty days after transmittal
3 33 to the general assembly and the governor in the case
3 34 of the management contract, and within sixty days
3 35 after transmittal to the general assembly and the
3 36 governor in the case of the sales contract, may
3 37 disapprove the board's action, in which case the
3 38 disapproved contract shall have no force and effect.
3 39 In the event of such disapproval, the state shall pay
3 40 the manager or the purchaser, as the case may be,
3 41 reasonable out-of-pocket expenses incurred in
3 42 preparing a proposal and performing prior to
3 43 disapproval, but such expenses shall not exceed two
3 44 hundred thousand dollars in the case of disapproval of
3 45 the management contract and five hundred thousand
3 46 dollars in the case of disapproval of the sales
3 47 contract. In the event that multiple management
3 48 contracts or sales contracts have been executed, the
3 49 two hundred thousand dollars and five hundred thousand
3 50 dollars shall be distributed pro rata among all
4 1 management contracts and sales contracts executed.
4 2 f. Cause the sales contract to require closing by
4 3 October 1, 2007, allowing time for the state to obtain
4 4 third-party approvals as required by section 206 of
4 5 this Act, including the filing of any necessary
4 6 eminent domain actions, and for the purchaser to
4 7 secure financing.
4 8 g. Execute all necessary documents relating to the
4 9 closing of the sale of the network. The board may
4 10 direct any other applicable official to assist in the
4 11 execution of necessary documents relating to the
4 12 closing.
4 13 h. Require by written directive that all state
4 14 officials provide information and records concerning
4 15 the network to the board, to the manager, or to a
4 16 person submitting a proposal to purchase the network,
4 17 whenever the board requires such provision of such
4 18 records and other information.
4 19 i. Take all other steps necessary and proper as
4 20 needed to carry out its responsibilities enumerated in
4 21 this subsection. The board may adopt necessary rules
4 22 pursuant to chapter 17A to administer this division of
4 23 this Act.
4 24 Sec. 203. MINIMUM QUALIFICATIONS OF PURCHASER.
4 25 The purchaser shall meet the following requirements:
4 26 1. The principal place of business of the
4 27 purchaser and any parent of the purchaser shall be
4 28 located in the state of Iowa.
4 29 2. For national security reasons, and because of
4 30 the extensive military use of the network, the
4 31 purchaser shall possess national security approval.
4 32 Sec. 204. CRITERIA FOR SELECTION OF PURCHASER.
4 33 After issuing a request for proposals for the purchase
4 34 of the network and considering the proposals received,
4 35 the board shall select the highest and best offer for
4 36 purchase of the network from those persons submitting
4 37 proposals which meet all of the following criteria:
4 38 1. Satisfy the minimum qualifications of this
4 39 division of this Act.
4 40 2. Submit a proposal in compliance with the
4 41 request for proposals.
4 42 3. Demonstrate a likelihood of being able to
4 43 obtain any financing necessary to close the
4 44 transaction. However, the board shall not require
4 45 that the purchaser have a commitment for financing to
4 46 award the contract, but shall allow the purchaser at
4 47 least one year to obtain any necessary financing. The
4 48 board may also in its discretion consider proposals
4 49 involving financing of the sale by the state.
4 50 4. Agree to continue all services currently being
5 1 provided to state and federal agencies and military
5 2 installations for the next ten years, with any annual
5 3 rate increase not to exceed five percent per year,
5 4 provided that the purchaser shall not be required to
5 5 supply at such restricted prices a quantity or quality
5 6 of service greater than that provided by the network
5 7 as of execution of the contract for sale of the
5 8 network.
5 9 Sec. 205. CLOSING OF SALE. Any debt of the state
5 10 related to the network or other liens against network
5 11 assets shall be discharged out of the state's proceeds
5 12 of closing, so that the purchaser receives marketable
5 13 title to the network. The purchaser shall receive
5 14 bills of sale, in the case of personal property, and
5 15 deeds, in the case of real property, transferring all
5 16 network assets to the purchaser. The state shall also
5 17 transfer its interest in right-of-way and leases and
5 18 easements for uses of rights-of-way.
5 19 Sec. 206. THIRD-PARTY APPROVALS.
5 20 1. The state shall exercise all reasonable efforts
5 21 to obtain each required third-party approval,
5 22 including where necessary by use of eminent domain
5 23 proceedings. To the extent feasible, the state may
5 24 pay the costs of obtaining required third-party
5 25 approvals out of the proceeds of sale rather than from
5 26 the general fund of the state. In the event the state
5 27 fails to obtain a required third-party approval, the
5 28 purchaser may terminate the sales contract without
5 29 penalty and shall be reimbursed by the state for
5 30 reasonable out-of-pocket expenses incurred in
5 31 preparing its proposal and fulfilling its obligations
5 32 under the sales contract, not to exceed two million
5 33 dollars.
5 34 2. The board and the purchaser shall develop a
5 35 list of required third-party approvals and persons who
5 36 may have claims that would constitute required third-
5 37 party approvals if valid. The board shall mail to
5 38 each person on the list at their last known address a
5 39 notice that provides a description of the sale and
5 40 invites the recipient to submit a claim on a form
5 41 developed by the board by a deadline set by the board.
5 42 The claim or interest of any person who fails to
5 43 timely file a claim shall be deemed discharged and
5 44 forfeited, and such person shall be forever barred and
5 45 estopped from taking any action against the state or
5 46 purchaser that would in any way interfere with the
5 47 purchaser's use of the network. In addition, the
5 48 board shall publish the notice in newspapers of
5 49 general circulation in the state of Iowa, and failure
5 50 to file a timely claim shall bar all persons whose
6 1 rights could constitutionally be affected by such
6 2 notice, just as if such person had been mailed notice.
6 3 3. Any eminent domain or other proceeding to
6 4 obtain a required third-party approval shall be
6 5 promptly filed by the attorney general at the request
6 6 of the board and shall be added to the calendar of any
6 7 trial or appellate court of this state so that the
6 8 deadline in section 202 of this Act for closing the
6 9 sale can be met.
6 10 Sec. 207. REMOVAL OF RESTRICTIONS – REPEAL OF
6 11 CHAPTER 8D. Chapter 8D is repealed, effective as of
6 12 the date of the closing of the sale of the network
6 13 under this division of this Act, as certified by the
6 14 chairperson of the board to the governor.
6 15 Sec. 208. ASSISTANCE OF OTHER STATE AGENCIES.
6 16 1. The attorney general shall provide legal advice
6 17 to the board.
6 18 2. All other state agencies shall provide whatever
6 19 assistance may reasonably be required by the board in
6 20 carrying out its duties under this division of this
6 21 Act."
6 22 #2. By renumbering as necessary.
6 23
6 24
6 25
6 26 DIX of Butler
6 27
6 28
6 29
6 30 JENKINS of Black Hawk
6 31 HF 700.707 80
6 32 rn/cl
Text: H01583 Text: H01585 Text: H01500 - H01599 Text: H Index Bills and Amendments: General Index Bill History: General Index
© 2003 Cornell College and League of Women Voters of Iowa
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