Text: HF02569 Text: HF02571 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. SALE OF IOWA COMMUNICATIONS NETWORK ASSETS – 1 2 FINDINGS AND PURPOSE AND DEFINITIONS. 1 3 1. FINDINGS AND PURPOSE. The Iowa communications network 1 4 is a valuable state telecommunications asset and has provided 1 5 fair, reasonable, and predictable access to advanced 1 6 telecommunications technology for authorized users for the 1 7 past ten years. With over seven hundred seventy video 1 8 classrooms located statewide and three thousand one hundred 1 9 miles of owned fiber, the more than one thousand two hundred 1 10 authorized users are able to equally access state-of-the-art 1 11 voice, video, data, and internet services at comparable prices 1 12 statewide, regardless of location. At a time when budgets are 1 13 strained and there is a shortage in the availability of 1 14 educators, it is essential that the educational content 1 15 carried over the Iowa communications network be preserved and 1 16 enhanced. It is also vital that secure telecommunications 1 17 services provided by the Iowa communications network to 1 18 homeland security and public defense providers be retained. 1 19 The state desires to remain a credible business partner to all 1 20 current authorized network users. To ensure that the 1 21 utilization of the Iowa communications network resource is 1 22 maximized while minimizing further investment by the state to 1 23 maintain the infrastructure, it is in the best interest of the 1 24 citizens of this state to offer some of the assets of the Iowa 1 25 communications network for sale, while retaining ample 1 26 capacity to provide authorized users required 1 27 telecommunications services now and in the future. Through a 1 28 sale of most of the fiberoptic cable and optronics, or light- 1 29 passing equipment, and retaining capacity through long-term 1 30 indefeasible right-of-use agreements, or through a sale which 1 31 guarantees the continued provision of telecommunications 1 32 services by the purchaser, telecommunications services and 1 33 adequate capacity would continue to be provided into the 1 34 future. Selling the Iowa communications network assets using 1 35 an intermediary professional agent specializing in 2 1 telecommunications resources to market the assets will 2 2 strengthen the ability of the state to receive a fair price 2 3 for the assets while allowing an impartial third party using 2 4 predetermined sales criteria to determine the most qualified 2 5 buyer. By using the sales proceeds to prepay remaining 2 6 construction debt and provide revenue for an equipment 2 7 replacement fund, or by providing for the transition to 2 8 provision of telecommunications services by the purchaser if 2 9 the alternative purchase option pursuant to section 5 of this 2 10 Act is approved by the governor, state-provided funding for 2 11 network maintenance and upgrade will be minimized. Continued 2 12 provision of the full array of network services will appear 2 13 seamless to current authorized users when the sales process is 2 14 completed. 2 15 2. DEFINITIONS. As used in sections 1 through 6 of this 2 16 Act, unless the context otherwise requires: 2 17 a. "Advanced telecommunications services" means high- 2 18 quality voice, data, graphics, and video telecommunications 2 19 services using any technology with regard to transmission 2 20 media that utilizes high-speed, switched, broadband 2 21 telecommunications capability. 2 22 b. "Authority" means the Iowa communications network sales 2 23 authority established to oversee the sale of backbone assets 2 24 pursuant to this Act. 2 25 c. "Authorized user" means a private or public agency, as 2 26 defined in section 8D.2, except for a public or private agency 2 27 which was required pursuant to section 8D.9, subsection 1, to 2 28 certify to the commission not later than July 1, 1994, the 2 29 agency's intent to become a part of the network and which did 2 30 not provide such certification. Agencies that obtained 2 31 legislative approval to join the network after July 1, 1994, 2 32 will be treated as a public or private agency for purposes of 2 33 this definition and all provisions of chapter 8D. 2 34 d. "Backbone assets" means the backbone fiber comprising 2 35 the five fiber optic rings located outside of the Des Moines 3 1 metropolitan area and the optronic equipment associated with 3 2 those rings. 3 3 e. "Capacity" means the information-carrying ability of a 3 4 telecommunications facility. The measurement of capacity is 3 5 determined by the purpose of the facility. 3 6 f. "Certificates of participation" means the two issuances 3 7 of certificates of participation issued by the state in 1992 3 8 and 1993 to fund the construction of the owned fiber and 3 9 equipment for Parts I and II of the network as defined in 3 10 chapter 8D. 3 11 g. "Commission" means the Iowa telecommunications and 3 12 technology commission as defined in section 8D.2. 3 13 h. "Indefeasible right of use" means an indefeasible right 3 14 to use fiber, including an entire cable or a portion of the 3 15 capacity of a cable, or channels of a given bandwidth for a 3 16 defined period of time. The holder of an indefeasible right 3 17 of use has a property right to the specified wavelengths in 3 18 the fiber identified in the indefeasible right-of-use 3 19 agreement for the period of time defined in the indefeasible 3 20 right-of-use agreement. 3 21 i. "Iowa communications network hub" means the 3 22 telecommunications facility located in the joint forces 3 23 headquarters armory, Johnston, Iowa, where the main switching 3 24 and maintenance operations of the network take place. 3 25 j. "Network" means the Iowa communications network. 3 26 k. "Network operations center" means the maintenance and 3 27 network diagnostic equipment that manages the network 3 28 infrastructure. 3 29 l. "Optronics" means the fiberoptic equipment that 3 30 activates the fiber and allows light to traverse. 3 31 m. "Professional agent" means any person having 3 32 specialized expertise required in the process of selling the 3 33 Iowa communications network including but not limited to 3 34 expertise regarding brokerage, contracting, asset valuation, 3 35 sales, or negotiation services. 4 1 n. "Prospective purchaser" means an entity that the 4 2 professional agent has identified as a potential purchaser of 4 3 the network backbone assets. 4 4 o. "Qualified purchaser" means a prospective purchaser 4 5 that the professional agent has verified is able to adequately 4 6 operate and maintain the backbone network and recommended to 4 7 the authority to purchase the network assets as provided in 4 8 section 4 of this Act. 4 9 p. "Right-of-way accommodation agreement" means a twenty- 4 10 year agreement between the network and the department of 4 11 transportation that includes an option to extend the agreement 4 12 for an additional ten years, which is definitive with respect 4 13 to the use of interstate rights-of-way and gives the 4 14 department of transportation the sole right to approve or deny 4 15 other users of the sheath, trench, or any of the ducts. 4 16 q. "Telecommunications facility" means a collection of 4 17 fibers which originates at an access point and ends at the 4 18 fiberoptic termination connector attached to the electronic 4 19 and optronic equipment necessary to transmit voice, video, or 4 20 data transmissions across the fiberoptic network. 4 21 r. "Telecommunications services" means the provision of 4 22 any of the following services: 4 23 (1) Local exchange telephone services. 4 24 (2) Long distance telephone services. 4 25 (3) Internet access services. 4 26 (4) Cable television services. 4 27 (5) Video services. 4 28 Sec. 2. IOWA COMMUNICATIONS NETWORK SALES AUTHORITY 4 29 ESTABLISHED. 4 30 1. AUTHORITY ESTABLISHED – PURPOSE – POWERS. An Iowa 4 31 communications network sales authority is established with the 4 32 sole authority to oversee the sales process regarding transfer 4 33 of ownership of the network's backbone assets to a qualified 4 34 purchaser pursuant to this Act. Subject to final approval of 4 35 the selection of the qualified purchaser and terms of sale by 5 1 the governor, the authority's operation shall not be subject 5 2 to the jurisdiction or control of any other state agency, and 5 3 the authority shall possess full and sole authority over the 5 4 Iowa communications network backbone asset sales process. 5 5 However, the authority is subject to the general operations 5 6 practices and procedures which are generally applicable to 5 7 other state agencies during the period of its operation. The 5 8 authority shall be in existence from the effective date of 5 9 this Act until a qualified purchaser has been approved by the 5 10 governor, and all sales agreements necessary to complete the 5 11 sale have been negotiated and entered into. 5 12 2. MEMBERSHIP. Membership of the authority shall consist 5 13 of the treasurer of state, the auditor of state, two members 5 14 of the Iowa telecommunications and technology commission, and 5 15 one member of the Iowa utilities board. Three members of the 5 16 authority shall constitute a quorum, and the members shall 5 17 elect a chairperson, vice chairperson, secretary, and other 5 18 officers as determined necessary. Meetings of the authority 5 19 shall be held at the call of the chairperson or when a 5 20 majority of the members so requests. The members of the 5 21 authority shall not receive compensation by reason of their 5 22 membership. 5 23 Sec. 3. PROFESSIONAL AGENT RETENTION. The authority shall 5 24 issue a request for proposals to retain a professional agent 5 25 with telecommunications asset sales experience to market and 5 26 coordinate the sales process of the backbone assets. 5 27 The governor, in consultation with the treasurer of state 5 28 and the department of management, shall be authorized to 5 29 negotiate fair and equitable terms of compensation for the 5 30 professional agent. The described backbone assets shall only 5 31 be available for a single private purchaser, or a consortium 5 32 acting as a single private purchaser, to purchase and the 5 33 state, unless the alternative purchase option pursuant to 5 34 section 5 of this Act is proposed and approved, shall retain 5 35 an indefeasible right of use with respect to certain amounts 6 1 of backbone capacity in optical wavelengths for a negotiated 6 2 period of seven to twenty-five years, and two optional renewal 6 3 periods of ten years each. As part of the sale, unless the 6 4 alternative purchase option pursuant to section 5 of this Act 6 5 is proposed and approved, the purchaser shall enter into 6 6 indefeasible right-of-use agreements with the state in which 6 7 the purchaser shall grant the state an indefeasible right of 6 8 use with respect to backbone capacity and optical wavelengths 6 9 and Part II facilities and the dark fiber connecting various 6 10 Part III aggregation points to network backbone-switching 6 11 points. During the term of an indefeasible right-of-use 6 12 agreement, the state as holder of the indefeasible right of 6 13 use will have complete and total ownership of the fiber or 6 14 channels identified in the indefeasible right-of-use 6 15 agreement, may use the fiber or channels as if they were a 6 16 physically owned asset of the state, and the state's interest 6 17 in the fiber or channels cannot be annulled or made void by 6 18 the grantor of the indefeasible right of use or any other 6 19 party. At the end of the term of an indefeasible right-of-use 6 20 agreement and any renewal periods, title to the equipment and 6 21 fiber assets and optical wavelength capacities covered by the 6 22 agreement shall pass completely to the purchaser. The terms 6 23 of the sale of the assets shall also include provisions 6 24 committing the commission to purchase field services, 6 25 including maintenance, provisioning, and build out, from the 6 26 purchaser and committing the commission to pay a monthly fee 6 27 for fiber maintenance and field services for the assets that 6 28 are sold. The request for proposals shall be issued no later 6 29 than six months from the date of enactment of this Act. The 6 30 request for proposals may include: 6 31 1. A detailed list of the network assets for sale. 6 32 2. A detailed description of the unfettered and 6 33 unrestricted use of specified capacities of optical 6 34 wavelengths occupying a portion of the backbone assets. 6 35 3. A procedure to determine the compensation for the 7 1 successful professional agent. 7 2 4. Parameters surrounding the sale, to be determined by 7 3 the governor, which shall include but not be limited to the 7 4 following: 7 5 a. The amount of time the state would allow the 7 6 professional agent to market the assets. 7 7 b. A provision that the governor or the governor's 7 8 designee shall have the ultimate discretion to accept or 7 9 reject an offer from a qualified purchaser. 7 10 c. A detailed framework for the indefeasible right-of-use 7 11 agreement between the state and the successful purchaser as 7 12 well as indefeasible right-of-use agreements for Part II 7 13 facilities, unless the alternative purchase option pursuant to 7 14 section 5 of this Act is proposed and approved. The 7 15 indefeasible right-of-use agreements and any other agreements 7 16 necessary to complete the sale shall clearly provide that the 7 17 network and the state shall be held harmless in the event the 7 18 purchaser suffers a loss of revenue due to a failure of any 7 19 assets sold to the purchaser or to a failure of any portion of 7 20 the network being shared by the network. 7 21 d. A detailed process and procedures for routing capacity 7 22 from the backbone termination points in public buildings to 7 23 sites owned by the purchaser and sharing of alternating 7 24 current power, direct current power, and high-voltage 7 25 alternating current power needed to operate the purchaser's 7 26 equipment and related expenses in the public buildings. 7 27 e. A detailed framework for the standards required 7 28 regarding network maintenance. 7 29 f. A requirement that the purchaser offer advanced 7 30 telecommunications services equitably across the state, 7 31 specifically serving areas where those types of services are 7 32 not yet available. 7 33 g. A requirement that the purchaser grant the network the 7 34 right to participate in future upgrades of the backbone 7 35 electronics statewide in the fiberoptic network outside the 8 1 Des Moines metropolitan area. 8 2 h. The criteria to be used as a basis for determining the 8 3 successful purchaser. 8 4 i. An analysis of a prospective purchaser's financial 8 5 stability with particular attention to assessing the 8 6 prospective purchaser's potential vulnerability to bankruptcy. 8 7 j. A requirement that during the negotiations process, the 8 8 prospective purchaser shall offer the state reasonable surety 8 9 of long-term economic viability. Such surety may include a 8 10 requirement of posting bond or some other financial 8 11 compensation to guard against the purchaser's inability to 8 12 meet the financial terms of the agreement. The purchaser 8 13 shall guarantee that the state's indefeasible right-of-use 8 14 agreements shall be protected in the case of the bankruptcy of 8 15 the purchaser. 8 16 The authority shall select the professional agent 8 17 submitting the proposal that provides the best overall value 8 18 to the state. The public interest requires that the 8 19 authority's ability to enter into a contract with a 8 20 professional agent not be delayed; therefore, the decision of 8 21 the authority shall be final. Notwithstanding the provisions 8 22 of chapter 17A a professional agent not selected by the 8 23 authority shall not be entitled to a contested case hearing or 8 24 to otherwise challenge the decision of the authority. 8 25 Sec. 4. MARKETING OF THE NETWORK ASSETS. Using the 8 26 parameters included in the request for proposals, the selected 8 27 professional agent shall develop a process to market and sell 8 28 the assets designed to maximize the state's proceeds from the 8 29 sale. During the marketing period, using the predetermined 8 30 parameters, including meeting financial qualifications, the 8 31 professional agent shall identify a prospective purchaser and 8 32 submit the prospective purchaser to a qualification process 8 33 designed to verify the purchaser's ability to adequately 8 34 operate and maintain the backbone network. This verification 8 35 process shall include the following: 9 1 1. Verifying that the purchaser has proven experience 9 2 operating a telecommunications network. 9 3 2. Verifying that the purchaser has the ability to 9 4 purchase the backbone assets outright or has the collateral to 9 5 secure financing of a loan to purchase the backbone assets. 9 6 3. Verifying that the purchaser is aware of its 9 7 obligations pursuant to chapter 476. In any complaint 9 8 proceeding initiated by the Iowa utilities board, upon receipt 9 9 of a written complaint by the purchaser, the board shall 9 10 render a decision within ninety days of the filing of the 9 11 complaint. The board, for good cause shown, may extend the 9 12 deadline for decision. Such extensions may not exceed an 9 13 additional ninety days unless the parties agree to a longer 9 14 extension. 9 15 Upon verification by the professional agent of the 9 16 purchaser's ability to adequately operate and maintain the 9 17 backbone network, the authority shall make a recommendation 9 18 regarding a purchaser and the terms of sale to the governor. 9 19 The governor shall have the right of final approval of the 9 20 purchaser and the terms of sale, with the concurrence of the 9 21 legislative council. 9 22 If the professional agent is unable to identify a qualified 9 23 purchaser able to adequately operate and maintain the backbone 9 24 network, the professional agent shall submit a report to the 9 25 authority explaining the reasons supporting this conclusion. 9 26 Sec. 5. TERMS OF SALE – ALTERNATIVE PURCHASE OPTION. 9 27 1. As an alternative to the sale of backbone assets with 9 28 the retention by the state of an indefeasible right-of-use, a 9 29 prospective purchaser may submit an offer to purchase which 9 30 includes the provision by the purchaser of all 9 31 telecommunications services to authorized users, except for 9 32 authorized users based in Polk county. An offer to purchase 9 33 pursuant to this option shall be subject to the following 9 34 terms and conditions: 9 35 a. Telecommunications services shall be provided by the 10 1 purchaser to all existing authorized users served by the 10 2 purchaser, and the transition from the provision of such 10 3 services by the state to provision by the purchaser shall 10 4 appear seamless to authorized users. Existing authorized 10 5 users shall not be required to continue purchasing 10 6 telecommunications services after a sale pursuant to this 10 7 section. 10 8 b. The purchaser may increase or decrease the price of the 10 9 telecommunications services offered to authorized users only 10 10 to the extent that any annual increase in any price does not 10 11 exceed the most recent annual change in the gross domestic 10 12 product price index as published by the federal government. 10 13 c. The purchaser shall agree to provide telecommunications 10 14 services to the authorized users that the purchaser serves for 10 15 a minimum of seven years following the date of purchase, and 10 16 may submit an offer which provides for such services for 10 17 fifteen or twenty-five years. 10 18 d. The purchaser shall guarantee that telecommunications 10 19 services shall continue to be provided at a level of 10 20 technological advancement and reliability at least equivalent 10 21 to that provided by the state prior to the date of purchase, 10 22 and shall accommodate the needs of authorized users regarding 10 23 upgrades, changes, and network maintenance to the same extent 10 24 as provided by the state prior to the date of purchase. The 10 25 Iowa utilities board shall possess service regulation 10 26 authority regarding telecommunications services provided by 10 27 the purchaser. 10 28 e. A purchaser submitting an offer pursuant to this 10 29 section shall be subject to qualification and verification 10 30 pursuant to section 4 of this Act. An offer may be submitted 10 31 by a prospective purchaser which would provide for the 10 32 retention of an indefeasible right-of-use by the state as 10 33 provided in this Act, for the purchase of backbone assets with 10 34 provision of telecommunications services by the purchaser 10 35 pursuant to this section, or which offers both purchasing 11 1 options with alternative purchase prices for the options. 11 2 2. In the event that the governor approves a purchase 11 3 offer incorporating an alternative purchase option pursuant to 11 4 this section, with the concurrence of the legislative council, 11 5 the department of management, in consultation with the 11 6 authority and the executive director of the commission, shall 11 7 propose rules and submit a recommendation to the general 11 8 assembly specifying all procedures necessary for the 11 9 transition of responsibility for the provision of 11 10 telecommunications services to the purchaser and a proposed 11 11 timeline for the transition. 11 12 3. Proceeds from a sale of the backbone assets pursuant to 11 13 the alternative purchase option as provided in this section 11 14 shall be deposited in the general fund of the state. 11 15 Sec. 6. POSTSELECTION PROCEDURES. 11 16 1. Once the governor has approved a purchaser and the 11 17 terms of sale, the authority shall enter into a contract with 11 18 the purchaser for sale of the assets. The authority shall 11 19 enter into a memorandum of understanding regarding procedures 11 20 for operation of the network until the sale is finalized with 11 21 the proposed purchaser. The memorandum shall indicate that 11 22 the purchaser, in good faith, intends to finalize the purchase 11 23 and shall pay a termination penalty if the purchaser does not 11 24 finalize the purchase. 11 25 2. Any outstanding debt or liens upon the network assets, 11 26 including the certificates of participation, shall be 11 27 discharged out of the state's proceeds of closing, so that the 11 28 purchaser receives marketable title to the assets. Prepayment 11 29 of the certificates of participation shall be made prior to 11 30 closing the sale of assets or as part of closing the sale, and 11 31 shall be accomplished in a way that does not jeopardize the 11 32 tax-exempt status of the certificates of participation. 11 33 3. The state and the purchaser shall also negotiate their 11 34 relevant interest in right-of-way accommodation agreements and 11 35 leases and easements for uses of rights-of-way. The right-of- 12 1 way fee charged by the department of transportation shall be 12 2 no more favorable than provided for the use of the rights-of- 12 3 way by any other telecommunications utility. 12 4 4. The purchaser shall immediately establish points of 12 5 presence near the existing network switching centers and 12 6 establish fiber extensions and connectivity between them. The 12 7 purchaser shall physically locate in the vicinity of the joint 12 8 forces headquarters armory in Johnston, Iowa, and establish 12 9 fiber connectivity between the network hub and the purchaser's 12 10 location. Duplicate racks of backbone core equipment shall be 12 11 provided by the purchaser and installed by the network to 12 12 carry traffic while the network backbone is transferred to the 12 13 purchaser. The purchaser shall purchase the equipment 12 14 required in this process for the network and pay any and all 12 15 related expenses associated with this conversion effort. 12 16 5. The authority shall enter into indefeasible right-of- 12 17 use agreements with the purchaser, unless the alternative 12 18 purchase option pursuant to section 5 of this Act is approved, 12 19 in which the purchaser shall grant the state an indefeasible 12 20 right of use with respect to the backbone optical wavelengths 12 21 and Part II facilities and the dark fiber connecting various 12 22 Part III aggregation points to network backbone-switching 12 23 points. The indefeasible right-of-use agreements and any 12 24 other agreements necessary to complete the sale shall clearly 12 25 provide that the network and the state shall not be held 12 26 liable in any manner in the event the purchaser suffers a loss 12 27 of revenue due to a failure of any portion of the network 12 28 being shared by the network. 12 29 6. The authority shall enter into any other agreements 12 30 necessary to complete the sale. Unless the alternative 12 31 purchase option pursuant to section 5 of this Act is approved, 12 32 these agreements shall include agreements committing the 12 33 commission to purchase field services, including maintenance 12 34 provisioning, and build out, from the purchaser and committing 12 35 the commission to pay a monthly fee for fiber maintenance and 13 1 field services for the assets that are sold. 13 2 Sec. 7. PROGRESS REPORTS. The authority, in consultation 13 3 with the governor, shall submit to the general assembly 13 4 periodic progress reports at three-month intervals from the 13 5 effective date of this Act. The reports shall indicate the 13 6 extent of progress, during the reporting period, in issuing 13 7 the request for proposals; retaining a professional agent; 13 8 marketing efforts by the professional agent; identification, 13 9 qualification, and selection of a purchaser; and the 13 10 postselection process of finalizing the sale, entering into 13 11 indefeasible right-of-use agreements and maintaining the 13 12 network, or providing for the transition of the provision of 13 13 telecommunications services provided by the purchaser if the 13 14 alternative purchase option pursuant to section 5 of this Act 13 15 is approved. 13 16 Sec. 8. Section 8D.2, Code Supplement 2003, is amended by 13 17 adding the following new subsection: 13 18 NEW SUBSECTION. 2A. "Indefeasible right of use" means an 13 19 indefeasible right to use fiber, including an entire cable or 13 20 a portion of the capacity of a cable, or channels of a given 13 21 bandwidth for a defined period of time. 13 22 Sec. 9. Section 8D.3, subsection 3, paragraph i, Code 13 23 Supplement 2003, is amended to read as follows: 13 24 i. Evaluate existing and projected rates for use of the 13 25 system and ensure that rates are sufficient to pay for the 13 26 operation and required equipment upgrade and replacement of 13 27 the system excluding the cost of construction and lease costs 13 28 for Parts I, II, and III. The commission shall establish all 13 29 hourly rates to be charged to all authorized users for the use 13 30 of the network. A fee established by the commission to be 13 31 charged to a hospital licensed pursuant to chapter 135B, a 13 32 physician clinic, or the federal government shall be at an 13 33 appropriate rate so that, at a minimum, there is no state 13 34 subsidy related to the costs of the connection or use of the 13 35 network related to such user. 14 1 Sec. 10. Section 8D.9, subsection 2, Code Supplement 2003, 14 2 is amended by striking the subsection. 14 3 Sec. 11. Section 8D.11, subsection 1, Code 2003, is 14 4 amended to read as follows: 14 5 1. The commission may purchase, lease, and improve 14 6 property, equipment, and services for telecommunications for 14 7 public and private agencies and may dispose of property and 14 8 equipment when not necessary for its purposes.However, the14 9commission shall not enter into a contract for the purchase,14 10lease, or improvement of property, equipment, or services for14 11telecommunications pursuant to this subsection in an amount14 12greater than one million dollars without prior authorization14 13by a constitutional majority of each house of the general14 14assembly, or approval by the legislative council if the14 15general assembly is not in session.The commission may use 14 16 indefeasible right-of-use agreements to acquire and dispose of 14 17 property, equipment, and services. The commission shall not 14 18 issue any bonding or other long-term financing arrangements as 14 19 defined in section 12.30, subsection 1, paragraph "b". Real 14 20 or personal property to be purchased by the commission through 14 21 the use of a financing agreement shall be done in accordance 14 22 with the provisions of section 12.28, provided, however, that14 23the commission shall not purchase property, equipment, or14 24services for telecommunications pursuant to this subsection in14 25an amount greater than one million dollars without prior14 26authorization by a constitutional majority of each house of14 27the general assembly, or approval by the legislative council14 28if the general assembly is not in session. 14 29 Sec. 12. Section 8D.13, subsection 2, Code Supplement 14 30 2003, is amended to read as follows: 14 31 2. For purposes of this section, unless the context 14 32 otherwise requires: 14 33 a. "Part I" means the communications connectionsbetween14 34 to central switching and institutions under the control of the 14 35 board of regents, nonprofit institutions of higher education 15 1 eligible for tuition grants, and the regional switching 15 2 centers for the remainder of the network. 15 3 b. "Part II" means the communications connectionsbetween15 4 to the regional switching centers and the secondary switching 15 5 centers. 15 6 c. "Part III" means the communications connectionbetween15 7 to the secondary switching centers and the agencies defined in 15 8 section 8D.2, subsections 4 and 5, excluding state agencies, 15 9 institutions under the control of the board of regents, 15 10 nonprofit institutions of higher education eligible for 15 11 tuition grants, and the judicial branch, judicial district 15 12 departments of correctional services, hospitals and physician 15 13 clinics, agencies of the federal government, and post offices. 15 14 Sec. 13. Section 8D.13, subsection 3, Code Supplement 15 15 2003, is amended to read as follows: 15 16 3. The financing for the procurement costs for the 15 17 entirety of Part I except for the communications connections 15 18betweento central switching and institutions under the 15 19 control of the board of regents, and nonprofit institutions of 15 20 higher education eligible for tuition grants, and for the 15 21 video, data, and voice capacity for state agencies and for 15 22 Part II and Part III, shall be provided by the state. The 15 23 financing for the procurement and maintenance costs for Part 15 24 III shall be provided by the state.A local school board,15 25governing authority of a nonpublic school, or an area15 26education agency board may elect to provide one hundred15 27percent of the financing for the procurement and maintenance15 28costs for Part III to become part of the network. The basis15 29for the amount of state financing is one hundred percent of a15 30single interactive audio and interactive video connection for15 31Part III, and such data and voice capacity as is necessary.15 32 If a school board, governing authority of a nonpublic school, 15 33 or area education agency board elects to provide one hundred 15 34 percent of the financing for the leasing costs for Part III, 15 35 the school district or area education agency may become part 16 1 of the network as soon as the network can reasonably connect 16 2 the district or agency. A local school board, governing 16 3 authority of a nonpublic school, or an area education agency 16 4 board may also elect not to become part of the network. 16 5 Construction of Part III, related to a school board, governing 16 6 authority of a nonpublic school, or area education agency 16 7 board which provides one hundred percent of the financing for 16 8 the leasing costs for Part III, may proceed as determined by 16 9 the commission and consistent with the purpose of this 16 10 chapter. 16 11 Sec. 14. Section 8D.13, Code Supplement 2003, is amended 16 12 by adding the following new subsection: 16 13 NEW SUBSECTION. 3A. If the state sells assets of the 16 14 network pursuant to sections 1 through 5 of this Act, and 16 15 retains backbone capacity from another telecommunications 16 16 provider, publicly owned facilities that house primary and 16 17 secondary switching facilities shall provide access to that 16 18 provider in the geographical area to the primary and secondary 16 19 switching facilities housing the fiberoptics termination 16 20 equipment by means of established fiber entry ducts, and to 16 21 the building grounding system. The provider's access to the 16 22 primary and secondary switching facilities shall be 16 23 coordinated through the network's staff. 16 24 Sec. 15. Section 8D.13, subsection 4, Code Supplement 16 25 2003, is amended to read as follows: 16 26 4. The commissionshall develop the requests for proposals16 27 may enter into contracts and indefeasible right-of-use 16 28 agreements that are needed for the Iowa communications network 16 29 to function with sufficient capacity to serve the video, data, 16 30 and voice requirements of state agencies and for educational 16 31 telecommunications applications.The commission shall develop16 32a request for proposals for each of the systems that will make16 33up the network. The commission may develop a request for16 34proposals for each definitive component of the network or the16 35commission may provide in the request for proposals for each17 1such system that separate contracts may be entered into for17 2each definitive component covered by the request for17 3proposals.Therequests for proposalscontracts entered into 17 4 by the commission may be for the purchase, lease-purchase, or 17 5 lease of the component parts of the network consistent with 17 6 the provisions of this chapter, may require maintenance costs 17 7 to be identified, and the resulting contract may provide for 17 8 maintenance for parts of the network. The master contract may 17 9 provide for electronic classrooms, satellite equipment, 17 10 receiving equipment, studio and production equipment, and 17 11 other associated equipment as required. The indefeasible 17 12 right-of-use agreements entered into by the commission may be 17 13 long-term agreements and may retain the right to use portions 17 14 of capacity of any fiberoptic cable that the commission sells 17 15 to a third party. The indefeasible right-of-use agreements 17 16 may include provisions requiring the commission to contribute 17 17 to the cost of maintenance and upgrades of the network. 17 18 During the term of an indefeasible right-of-use agreement, the 17 19 state as a party to the indefeasible right-of-use agreement 17 20 shall have complete and total ownership of the fiber or 17 21 channels identified in the indefeasible right-of-use 17 22 agreement, may use the fiber or channels as if they were a 17 23 physically owned asset of the state, and the state's interest 17 24 in the fiber or channels cannot be annulled or made void by 17 25 the grantor of the indefeasible right of use or any other 17 26 party. At the end of the term of an indefeasible right-of-use 17 27 agreement and any renewal periods, title to the equipment and 17 28 fiber assets and optical wavelength capacities covered by the 17 29 agreement shall pass completely to the purchaser. 17 30 Sec. 16. Section 8D.13, subsection 5, unnumbered paragraph 17 31 1, Code Supplement 2003, is amended to read as follows: 17 32 The state shall lease all fiberoptic cable facilities or 17 33 facilities with DS-3 capacity for Part III connections for 17 34 which state funding is provided. The state shall lease all 17 35 fiberoptic cable facilities or facilities with DS-3 or DS-1 18 1 capacity for the judicial branch, judicial district department 18 2 of correctional services, and state agency connections for 18 3 which state funding is provided. Such facilities shall be 18 4 leased from qualified providers. The state shall not own such 18 5 facilities, except for those facilities owned by the state as 18 6 of January 1, 1994. Notwithstanding any other provision of 18 7 this section, the state may negotiate the acquisition of a 18 8 Part III connection following the termination of a lease with 18 9 a qualified provider if offered by the vendor for such a Part 18 10 III connection, if the commission determines it to be in the 18 11 best interest of the network. 18 12 Sec. 17. Section 8D.13, subsection 6, Code Supplement 18 13 2003, is amended by striking the subsection. 18 14 Sec. 18. Section 8D.13, subsection 11, Code Supplement 18 15 2003, is amended to read as follows: 18 16 11. The fees charged for use of the networkand state18 17communicationsshall be based on the ongoing operational and 18 18 depreciation costs of the network and of providing state 18 19 communications only. For the services rendered to state 18 20 agencies by the commission, the commission shall prepare a 18 21 statement of services rendered and the agencies shall pay in a 18 22 manner consistent with procedures established by the 18 23 department of administrative services. 18 24 Sec. 19. Section 8D.13, subsection 12, Code Supplement 18 25 2003, is amended to read as follows: 18 26 12. The commission, on its own or as recommended by an 18 27 advisory committee of the commission and approved by the 18 28 commission, shall permit a fee to be charged by a receiving 18 29 site to the originator of the communication provided on the 18 30 network. The fee charged shall be for the purpose of 18 31 recovering the operating costs of a receiving site. The fee 18 32 charged shall be reduced by an amount received by the 18 33 receiving site pursuant to a state appropriation for such 18 34 costs, or federal assistance received for such costs. Fees 18 35 established under this subsection shall be paid by the 19 1 originator of the communication directly to the receiving 19 2 site. In the event that an entity requests a receiving site 19 3 location in a video classroom facility which is authorized by, 19 4 but not funded by, the originator of the communication, the 19 5 requesting entity shall be directly billed by the video 19 6 classroom facility for operating costs relating to the 19 7 communication. For purposes of this section, "operating 19 8 costs" include the costs associated with the management or 19 9 coordination, operations, utilities, classroom, equipment, 19 10 maintenance, and other costs directly related to providing the 19 11 receiving site. 19 12 Sec. 20. Section 8D.14, Code 2003, is amended to read as 19 13 follows: 19 14 8D.14 IOWA COMMUNICATIONS NETWORK FUND. 19 15ThereAn Iowa communications network fund is created in the 19 16 office of the treasurer of statea fund to be known as the19 17Iowa communications network fundunder the control of the Iowa 19 18 telecommunications and technology commission.There shall be19 19deposited into theThe fund shall be comprised of Iowa 19 20 communications network fund proceeds from bonds issued for 19 21 purposes of projects authorized pursuant to section 8D.13, 19 22 funds received from leases pursuant to section 8D.11, and 19 23 other moneys by law credited to or designated by a person for 19 24 deposit into the fund. Interest received by the state as a 19 25 result of investing the contents of the fund shall be credited 19 26 to the fund for use by the commission. 19 27 Sec. 21. NEW SECTION. 8D.15 IOWA COMMUNICATIONS NETWORK 19 28 EQUIPMENT UPGRADE AND REPLACEMENT TRUST FUND. 19 29 An Iowa communications network equipment upgrade and 19 30 replacement trust fund is established, separate and apart from 19 31 all other public moneys or funds of the state, under the 19 32 control of the treasurer of state and the department of 19 33 management. The fund shall be comprised of the proceeds from 19 34 the sale of Iowa communications network assets, including 19 35 certain state-owned fiberoptic cable and related equipment 20 1 located outside the Des Moines metropolitan area, and the 20 2 portion of the fees charged to authorized users for 20 3 depreciation. Contents of this fund shall only be used to 20 4 replace failed or obsolete network equipment owned by the 20 5 state, equipment included in indefeasible right-of-use 20 6 agreements in which the network obtains statewide transport 20 7 capacity, and failed or obsolete endpoint equipment, and shall 20 8 not be used for any other purpose. The treasurer of state and 20 9 the department of management shall jointly verify an annual 20 10 estimate by the commission of the amount needed for equipment 20 11 replacement pursuant to this section, and releases of moneys 20 12 pursuant thereto, except funds to replace failed equipment, 20 13 shall require an annual appropriation by the general assembly 20 14 to the commission. The commission may solicit or accept 20 15 gifts, including donations and bequests, to be deposited into 20 16 the fund for use in accordance with the purposes of the fund. 20 17 Interest received by the state as a result of investing the 20 18 contents of the fund shall be credited to the fund for use by 20 19 the commission. If the alternative purchase option pursuant 20 20 to section 5 of this Act is utilized, the Iowa communications 20 21 network equipment upgrade and replacement trust fund shall not 20 22 be established and the proceeds from the sale shall be 20 23 deposited as provided in section 5 of this Act. 20 24 Sec. 22. Section 21.5, subsection 1, paragraph j, Code 20 25 2003, is amended to read as follows: 20 26 j. To discuss the purchase or sale of particular real 20 27 estate or other state-owned assets only where premature 20 28 disclosure could be reasonably expected to increase the price 20 29 the governmental body would have to pay forthatthe property 20 30 or decrease the proceeds the governmental body may receive for 20 31 sale of the property. The minutes and the tape recording of a 20 32 session closed under this paragraph shall be available for 20 33 public examination when the transaction discussed is 20 34 completed. 20 35 Sec. 23. EFFECTIVE DATE. This Act, being deemed of 21 1 immediate importance, takes effect upon enactment. 21 2 EXPLANATION 21 3 This bill provides a mechanism for the sale of Iowa 21 4 communications network (ICN) assets with specified retained 21 5 rights by the state, and provides for related technical and 21 6 substantive changes to the provisions of Code chapter 8D. 21 7 FINDINGS AND PURPOSE. The bill contains a statement of 21 8 findings and purpose section relating to legislative intent 21 9 regarding the sale, noting that the ICN is a valuable state 21 10 telecommunications asset, that it provides equal access to 21 11 users of state-of-the-art voice, video, data, and internet 21 12 services at comparable prices statewide, and that it is 21 13 essential that the educational content it carries, and the 21 14 public defense functions it serves, be retained. The bill 21 15 provides that in order to ensure that ICN utilization is 21 16 maximized while minimizing further investment by the state to 21 17 maintain infrastructure, it is in the best interest of the 21 18 citizens of the state to offer some ICN assets for sale, while 21 19 retaining the capacity to provide services to users. The bill 21 20 provides that this would be accomplished through the sale of 21 21 most of the fiberoptic cable and optronics, or light-passing 21 22 equipment, while retaining capacity through long-term 21 23 indefeasible right-of-use agreements, thereby continuing to 21 24 provide telecommunications services and adequate capacity into 21 25 the future. 21 26 The bill also provides an alternative process involving a 21 27 sale to a purchaser which guarantees the continued provision 21 28 of telecommunications services by the purchaser. 21 29 DEFINITIONS. The bill provides a definitions section. 21 30 Included among the defined terms are definitions of 21 31 "authority" as referring to an Iowa communications network 21 32 sales authority established to oversee the sale of the 21 33 backbone assets; "indefeasible right of use" (IRU) as an 21 34 indefeasible right to use fiber, including an entire cable or 21 35 a portion of the capacity of a cable, or channels of a given 22 1 bandwidth for a defined period of time; a "professional agent" 22 2 as a person having specialized expertise required in the 22 3 process of selling the Iowa communications network including 22 4 but not limited to expertise regarding brokerage, contracting, 22 5 asset valuation, sales, or negotiation services; a 22 6 "prospective purchaser" as an entity that the professional 22 7 agent has identified as a potential purchaser of the network 22 8 backbone assets; and a "qualified purchaser" as a prospective 22 9 purchaser that the professional agent has verified is able to 22 10 adequately operate and maintain the backbone network and 22 11 recommended to the authority to purchase the network assets. 22 12 AUTHORITY ESTABLISHED. The bill provides that the Iowa 22 13 communications network sales authority is the sole authority 22 14 to oversee the sales process regarding transfer of ownership 22 15 of the network's backbone assets to a qualified purchaser. 22 16 The bill provides that subject to final approval of the 22 17 selection of the qualified purchaser and the terms of sale by 22 18 the governor, the authority's operation shall not be subject 22 19 to the jurisdiction or control of any other state agency. The 22 20 bill provides, however, that the authority is subject to the 22 21 general operations practices applicable to other state 22 22 agencies during the period of its operation, and that this 22 23 period of operation shall be from the effective date of the 22 24 bill until a qualified purchaser has been approved by the 22 25 governor, and all sales agreements necessary to complete the 22 26 sale have been negotiated and entered into. The bill provides 22 27 that membership of the authority shall consist of the 22 28 treasurer of state, the auditor of state, two members of the 22 29 Iowa telecommunications and technology commission, and one 22 30 member of the Iowa utilities board. 22 31 PROFESSIONAL AGENT RETENTION. The bill provides that the 22 32 authority shall issue a request for proposals to retain a 22 33 professional agent with telecommunications asset sales 22 34 experience to market and coordinate the sales process of the 22 35 backbone assets. The bill provides that the governor, in 23 1 consultation with the treasurer of state and the department of 23 2 management, shall be authorized to negotiate fair and 23 3 equitable terms of compensation for the professional agent. 23 4 The bill provides that the backbone assets shall only be 23 5 available for a single private purchaser, or a consortium 23 6 acting as a single private purchaser, to purchase and that the 23 7 state shall retain an indefeasible right of use with respect 23 8 to certain amounts of backbone capacity in optical wavelengths 23 9 for a negotiated period of seven to 25 years, and two optional 23 10 renewal periods of 10 years each unless the alternative 23 11 purchase option is approved. The bill provides that as a part 23 12 of the sale, unless the alternative purchase option is 23 13 approved, the purchaser shall enter into indefeasible right- 23 14 of-use agreements with the state in which the purchaser shall 23 15 grant the state an indefeasible right of use with respect to 23 16 backbone capacity and optical wavelengths and Part II 23 17 facilities and the dark fiber connecting various Part III 23 18 aggregation points to network backbone-switching points. The 23 19 bill provides that during the term of an indefeasible right- 23 20 of-use agreement, the state as the holder will have complete 23 21 and total ownership of the fiber or channels identified in the 23 22 indefeasible right-of-use agreement, may use the fiber or 23 23 channels as if they were a physically owned asset of the 23 24 state, and that the state's interest in the fiber or channels 23 25 cannot be annulled or made void by the grantor of the 23 26 indefeasible right of use or any other party. The bill 23 27 provides that at the end of the indefeasible right-of-use 23 28 agreement and any renewal periods, title to the equipment and 23 29 fiber assets and optical wavelength capacities covered by the 23 30 agreement shall pass completely to the purchaser. The bill 23 31 provides that the terms of sale shall include provisions 23 32 committing the commission to purchase field services, 23 33 including maintenance, provisioning, and build out, from the 23 34 purchaser and committing the commission to pay a monthly fee 23 35 for fiber maintenance and field services for the assets that 24 1 are sold, unless the alternative purchase option is proposed 24 2 and approved. The bill provides that the request for 24 3 proposals shall be issued no later than six months from the 24 4 bill's date of enactment. 24 5 The bill provides a list of potential subject areas for 24 6 incorporation into the request for proposals, including, among 24 7 others, a procedure to determine the compensation for the 24 8 successful professional agent. The bill provides that the 24 9 parameters surrounding the sale, to be determined by the 24 10 governor, shall include, but not be limited to, the amount of 24 11 time the state would allow the professional agent to market 24 12 the assets, a provision that the governor or the governor's 24 13 designee shall have ultimate discretion to accept or reject an 24 14 offer, and a detailed framework for IRU agreements between the 24 15 state and a qualified purchaser, including the provision that 24 16 the state shall be held harmless in the event the purchaser 24 17 suffers a loss of revenue due to a failure of any assets or 24 18 any portion of the network being shared by the network. The 24 19 bill provides that the framework shall also include a process 24 20 and procedures for routing capacity and sharing of power 24 21 currents needed to operate the purchaser's equipment and 24 22 related expenses, a framework for the standards required 24 23 regarding network maintenance, a requirement that the 24 24 purchaser offer advanced telecommunications services equitably 24 25 across the state and specifically serving areas where those 24 26 types of services are not yet available, a requirement that 24 27 the purchaser grant the network the right to participate in 24 28 future upgrades, purchaser selection criteria, an analysis of 24 29 a prospective purchaser's financial stability, and a 24 30 requirement that during the negotiations process, the 24 31 prospective purchaser shall offer the state specified 24 32 reasonable surety of long-term economic viability and shall 24 33 guarantee that the state's IRUs shall be protected in the case 24 34 of the bankruptcy of the purchaser. 24 35 SELECTION PROCESS FOR QUALIFIED PURCHASER. The bill 25 1 provides that the authority shall select the professional 25 2 agent submitting the proposal that provides the best overall 25 3 value to the state, and that using the parameters included in 25 4 the request for proposals, the selected professional agent 25 5 shall develop a process to market and sell the assets designed 25 6 to maximize the state's proceeds from the sale. The bill 25 7 provides that during the marketing period, using the 25 8 predetermined parameters, the professional agent shall 25 9 identify a prospective purchaser and submit the prospective 25 10 purchaser to a qualification process designed to verify the 25 11 purchaser's ability to adequately operate and maintain the 25 12 backbone network. The bill provides that the verification 25 13 process shall include verifying that the purchaser has proven 25 14 experience operating a telecommunications network, and has the 25 15 ability to purchase the backbone assets outright or has the 25 16 collateral to secure financing. The bill also provides that 25 17 there shall be verification that the purchaser is aware of its 25 18 obligations pursuant to chapter 476, and specifies time frames 25 19 for decisions by the Iowa utilities board in response to 25 20 written complaints by purchasers. 25 21 The bill provides that after verification by the 25 22 professional agent of the purchaser's ability to adequately 25 23 operate and maintain the backbone network is given, the 25 24 authority shall make a recommendation regarding a purchaser 25 25 and the terms of sale to the governor, and that the governor 25 26 has the right of final approval of the purchaser and the terms 25 27 of sale, with the concurrence of the legislative council. The 25 28 bill provides that if the professional agent is unable to 25 29 identify a qualified purchaser able to adequately operate and 25 30 maintain the backbone network, the professional agent shall 25 31 submit a report to the authority explaining the reasons 25 32 supporting this conclusion. 25 33 The bill provides that as an alternative to the sale of 25 34 backbone assets with the retention by the state of an IRU 25 35 agreement, a prospective purchaser may submit an offer to 26 1 purchase which includes the provision of all 26 2 telecommunications services to authorized users, except 26 3 authorized users based in Polk county, by the purchaser. The 26 4 bill provides that existing authorized users shall not be 26 5 required to continue purchasing telecommunications services 26 6 from the purchaser, and that the purchaser may change the 26 7 price of services offered only to the extent that any annual 26 8 increase in price does not exceed the most recent annual 26 9 change in the gross domestic product price index as published 26 10 by the federal government. The bill provides that the 26 11 purchaser shall provide telecommunications services pursuant 26 12 to this alternative for a minimum of seven years, and may 26 13 submit an offer which provides for such services for 15 or 25 26 14 years. The bill provides that the Iowa utilities board shall 26 15 possess services regulation authority regarding 26 16 telecommunications services provided by the purchaser, and 26 17 that the qualification and verification process shall apply. 26 18 The bill provides that a purchaser may submit an offer 26 19 providing for retention by the state of an IRU, or based upon 26 20 this alternative purchase option, or may submit offers 26 21 involving both purchase options. The bill provides that if 26 22 the governor approves a purchase offer incorporating the 26 23 alternative purchase option, with the concurrence of the 26 24 legislative council, the department of management, in 26 25 consultation with the authority and the executive director of 26 26 the Iowa telecommunications and technology commission, shall 26 27 propose rules and submit a recommendation to the general 26 28 assembly specifying procedures and a time line necessary for 26 29 the transition of responsibility for the provision of 26 30 telecommunications services to the purchaser. The bill 26 31 provides that proceeds from the sale pursuant to the 26 32 alternative purchase option would be deposited into the 26 33 general fund of the state. 26 34 NETWORK OPERATION PENDING SALE. The bill provides that the 26 35 authority shall enter into a memorandum of understanding 27 1 regarding procedures for operation of the network until the 27 2 sale is finalized with the prospective purchaser, which shall 27 3 include a provision that the purchaser in good faith intends 27 4 to finalize the purchase and shall pay a termination penalty 27 5 if the purchase is not finalized. 27 6 ADDITIONAL CONDITIONS OF SALE. The bill provides than any 27 7 outstanding debt or liens upon the network assets shall be 27 8 discharged out of the state's proceeds so that the purchaser 27 9 receives marketable title to the assets, and that prepayment 27 10 of certificates of participation, defined in the bill, shall 27 11 be made prior to closing the sale of assets or as part of 27 12 closing the sale, and accomplished in a manner not 27 13 jeopardizing the certificate's tax-exempt status. The bill 27 14 provides that the state and the purchaser shall negotiate 27 15 their relevant interest in rights-of-way and leases and 27 16 easements for uses of rights-of-way, that the right-of-way fee 27 17 charged by the department of transportation shall be no more 27 18 favorable than provided for the use of the rights-of-way by 27 19 any other telecommunications utility, and that the purchaser 27 20 shall immediately establish points of presence near the 27 21 existing network switching centers and establish fiber 27 22 extensions and connectivity between them. The bill provides 27 23 that the purchaser shall physically locate in the vicinity of 27 24 the joint forces headquarters armory in Johnston, Iowa, and 27 25 establish fiber connectivity between the ICN hub and the 27 26 purchaser's location, and that duplicate racks of backbone 27 27 core equipment shall be provided by the purchaser and 27 28 installed by the network to carry traffic while the network 27 29 backbone is transferred to the purchaser. The bill provides 27 30 that the purchaser shall purchase the equipment required in 27 31 this process for the network and pay any and all related 27 32 expenses associated with the conversion effort. The bill 27 33 provides that the authority, in consultation with the 27 34 treasurer of state and the governor, shall submit to the 27 35 general assembly periodic progress reports at three-month 28 1 intervals from the effective date of the bill indicating 28 2 progress in issuing the request for proposals; retaining a 28 3 professional agent; marketing efforts by the professional 28 4 agent; identification, qualification, and selection of a 28 5 purchaser; and the postselection process of finalizing the 28 6 sale, entering into indefeasible right-of-use agreements and 28 7 maintaining the network, or providing for the transition of 28 8 the provision of telecommunications services provided by the 28 9 purchaser if the alternative purchase option is approved. 28 10 CODE CHAPTER 8D AMENDMENTS. The bill provides for a 28 11 conforming definition and references to IRUs in Code chapter 28 12 8D and conforming terminology changes and provisions regarding 28 13 changes in ownership of the network. The bill also provides 28 14 for the deletion of Code section 8D.9, subsection 2, which 28 15 requires a private or public agency which had certified to the 28 16 Iowa telecommunications and technology commission that the 28 17 agency is a part of or intended to become a part of the 28 18 network to use the network for all video, data, and voice 28 19 requirements of the agency unless a waiver was obtained. 28 20 LEGISLATIVE AUTHORIZATION ELIMINATED. The bill deletes a 28 21 provision that prohibited the commission from entering into a 28 22 contract for the purchase, lease, or improvement of property, 28 23 equipment, or services for telecommunications in an amount 28 24 greater than $1 million without prior authorization by a 28 25 constitutional majority of each house of the general assembly, 28 26 or approval by the legislative council if the general assembly 28 27 is not in session. The bill also deletes outdated language 28 28 regarding a local school board, governing authority of a 28 29 nonpublic school, or area education agency board elections to 28 30 provide financing costs for Part III of the network. 28 31 NETWORK ACQUISITIONS, DISPOSAL, AND ACCESS. The bill adds 28 32 a provision that the commission may use IRU agreements to 28 33 acquire and dispose of property, equipment, and services. The 28 34 bill provides that if the state sells assets of the network 28 35 pursuant to the procedure specified in the bill and retains 29 1 backbone capacity from another telecommunications provider, 29 2 publicly owned facilities that house primary and secondary 29 3 switching facilities shall provide access to that provider in 29 4 the geographic area to the primary and secondary switching 29 5 facilities housing the fiberoptics termination equipment in 29 6 established fiber entry ducts, and to the building grounding 29 7 system. The bill provides that the provider's access to the 29 8 primary and secondary switching facilities will be coordinated 29 9 through the network's staff. The bill provides that the state 29 10 may negotiate the acquisition of a Part III connection 29 11 following the termination of a lease with a qualified provider 29 12 if offered by the vendor for such a Part III connection if the 29 13 commission determines it to be in the best interest of the 29 14 network. 29 15 NETWORK COSTS AND BILLINGS. The bill provides that in 29 16 situations where an entity requests a receiving site location 29 17 in a video classroom facility which is authorized by, but not 29 18 funded by, the originator of the communication, the requesting 29 19 entity shall be directly billed by the video classroom 29 20 facility for operating costs relating to the communication. 29 21 The bill also provides for the inclusion of depreciation costs 29 22 in the determination of rates for use of the system. The bill 29 23 deletes outdated language which had required reports relating 29 24 to the impact of changing technology on potential costs and 29 25 capabilities of the system, and relating to a department of 29 26 education study of new techniques in distant teaching. 29 27 IOWA COMMUNICATIONS NETWORK FUND INTEREST AND UPGRADE AND 29 28 REPLACEMENT TRUST FUND. The bill further provides for the 29 29 retention of interest received by the state from the Iowa 29 30 communications network fund established in Code section 8D.14, 29 31 and for the establishment of an Iowa communications network 29 32 equipment upgrade and replacement trust fund. The bill 29 33 provides that the new trust fund shall be separate and apart 29 34 from all other public moneys or funds of the state, and shall 29 35 be under the control of the treasurer of state and the 30 1 department of management. The bill provides that the trust 30 2 fund will be comprised of the proceeds from the sale of ICN 30 3 assets, including certain state-owned fiberoptic cable and 30 4 related equipment located outside the Des Moines metropolitan 30 5 area, and the portion of the fees charged to authorized users 30 6 for depreciation. The bill provides that contents of the fund 30 7 shall only be used to replace failed or obsolete network 30 8 equipment owned by the state, equipment included in IRU 30 9 agreements in which the network obtains statewide transport 30 10 capacity, and failed or obsolete endpoint equipment. The bill 30 11 provides that the treasurer of state and the department of 30 12 management shall jointly verify an annual estimate by the 30 13 commission of the amount needed for equipment replacement 30 14 pursuant to new Code section 8D.15, and that releases of 30 15 moneys pursuant to the estimate, except funds to replace 30 16 failed equipment, shall require an annual appropriation by the 30 17 general assembly to the commission. The bill provides that 30 18 the commission may solicit or accept gifts, including 30 19 donations and bequests, to be deposited into the fund for use 30 20 in accordance with the purposes of the fund, and that interest 30 21 received by the state as a result of investing the contents of 30 22 the fund shall be credited to the fund for use by the 30 23 commission. The bill provides that the fund shall not be 30 24 established in the event that the alternative purchase option 30 25 is approved. 30 26 The bill modifies provisions providing for closed sessions 30 27 in Code section 21.5 to include discussions involving the sale 30 28 of real estate or other state-owned assets where premature 30 29 disclosure could decrease the proceeds a governmental body may 30 30 receive for the sale of the property. 30 31 The bill takes effect upon enactment. 30 32 LSB 5450HZ 80 30 33 rn/pj/5
Text: HF02569 Text: HF02571 Text: HF02500 - HF02599 Text: HF Index Bills and Amendments: General Index Bill History: General Index
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