Text: SF00403 Text: SF00405 Text: SF00400 - SF00499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
PAG LIN 1 1 Section 1. Section 388.9, Code 2003, is amended by adding 1 2 the following new subsection: 1 3 NEW SUBSECTION. 3. The restrictions and limitations 1 4 applicable under subsections 1 and 2 to public disclosure, 1 5 examination, and copying of competitive information of a city 1 6 utility, a combined utility system, a city enterprise, or 1 7 combined city enterprise shall not apply when discovery of 1 8 such information is sought by a person during civil 1 9 litigation. A person seeking to protect the material from 1 10 disclosure shall not succeed on the grounds that the 1 11 information constitutes a trade secret or other confidential 1 12 research, development, or commercial information not to be 1 13 disclosed or to be disclosed only in a designated way, or that 1 14 the information otherwise falls within the general category of 1 15 protection for proprietary information. 1 16 Sec. 2. Section 388.10, Code 2003, is amended to read as 1 17 follows: 1 18 388.10 CITY OR MUNICIPAL UTILITY PROVIDINGLOCAL EXCHANGE1 19 TELECOMMUNICATIONS SERVICES. 1 20 1. a. A city providing or that owns or operates a 1 21 municipal utility providinglocal exchange services pursuant1 22to chapter 476any telecommunications service or the municipal 1 23 utility shall not do, directly or indirectly, any of the 1 24 following: 1 25 (1)UseExcept for a permitted loan, use general fund 1 26 moneysfor the ongoing support or subsidyor other moneys 1 27 derived from tax revenues, directly or indirectly, to finance 1 28 or in any way to otherwise support either of the following: 1 29 (a) The establishment, construction, reconstruction, 1 30 upgrade, maintenance, or operation of a telecommunications 1 31 system. 1 32 (b) The provision of any telecommunications service. 1 33 (2) Provide any city or utility facilities, equipment, or 1 34 services to provide a telecommunicationssystemssystem or 1 35servicesany telecommunications service at a cost for such 2 1 facilities, equipment, or serviceswhichthat is less than the 2 2 reasonable cost of providing such city facilities, equipment, 2 3 or services. 2 4 (3) Provide any other city service, other than a 2 5 communications service, to a telecommunications customer at a 2 6 cost which is less than would be paid by the same person 2 7 receiving such other city service if the person was not a 2 8 telecommunications customer. 2 9 (4)UseExcept for a permitted loan, use funds or revenue 2 10 generated from electric, gas, water, sewage, or garbage 2 11 services provided by the cityfor the ongoing support of that2 12portion of a system or service used to provide local exchange2 13servicesor the utility, directly or indirectly, to finance or 2 14 in any way to otherwise support either of the following: 2 15 (a) The establishment, construction, reconstruction, 2 16 upgrade, maintenance, or operation of any telecommunications 2 17 system. 2 18 (b) The provision of any telecommunications service. 2 19 b. For purposes of this section,"telecommunications2 20 unless the context otherwise requires: 2 21 (1) "Combined utility system" means the same as defined in 2 22 section 384.80. 2 23 (2) "Cost" of any facilities, equipment, services, or 2 24 other goods or services shall include all attributable cost 2 25 and expenses, whether direct or indirect, fixed or variable, 2 26 including without limitation, a fair and equitable allocation 2 27 of all of the following: 2 28 (a) Taxes. 2 29 (b) The costs of any necessary capital for the 2 30 construction or acquisition of the item or the facilities by 2 31 which the service is provided. 2 32 (c) Amortization of any capital that is required to be 2 33 repaid. 2 34 (d) Depreciation. 2 35 (e) Amortization of capitalized costs. 3 1 (3) "Permitted loan" means any borrowing or transfer of 3 2 moneys or funds from a municipality or a nontelecommunications 3 3 municipal utility to a separate telecommunications utility of 3 4 the municipality that meets the requirements of paragraphs "c" 3 5 through "e". 3 6 (4) "Support" means to provide financial support in any 3 7 form, whether temporary or permanent, including but not 3 8 limited to transfers of money or other assets, purchases of 3 9 securities, capital contributions or other investments, loans 3 10 or other extensions of credit, leases, payment of money, 3 11 guarantees, pledges, or hypothecations or property or 3 12 indemnities or other arrangements by which there is recourse 3 13 to the revenues or other assets of the city or municipal 3 14 utility other than any revenues derived solely from the 3 15 operations of a telecommunications service or assets of the 3 16 related telecommunications system. 3 17 (5) "Telecommunications system" meansonly that portion of3 18a system or facilities which is used to provide local exchange3 19servicesa system that provides any telecommunications 3 20 service. 3 21 (6) "Telecommunications service" means the provision of 3 22 any of the following services: 3 23 (a) Cable television service. 3 24 (b) Internet service. 3 25 (c) Local exchange telephone service. 3 26 (d) Long distance telephone service. 3 27 (e) Retail data transmission. 3 28 c. (1) A permitted loan may not be made to or within a 3 29 combined utility system that provides any telecommunications 3 30 service. 3 31 (2) The amount of a permitted loan shall not exceed the 3 32 lesser of any amount approved in a public referendum or the 3 33 cost of initial construction of the physical 3 34 telecommunications system plus an allowance for working 3 35 capital not to exceed the highest three months of revenue from 4 1 recurring monthly customer charges reasonably forecast to 4 2 occur during the first twelve months of operation of the 4 3 telecommunications system. 4 4 (3) The annual rate of interest charges on a permitted 4 5 loan shall not be less than the rate established by the 4 6 federal communications commission, from time to time, as the 4 7 presumptively reasonable cost of capital rate used to compute 4 8 regulated service rates for the provision of cable television 4 9 services or, if no such rate exists, then the interest rate 4 10 shall be no less than the prevailing prime interest rate plus 4 11 five hundred basis points. Interest payments shall be 4 12 remitted in full to the lender no less frequently than 4 13 annually. The principal of a permitted loan shall be repaid 4 14 no less frequently than in annual installments, beginning not 4 15 later than three years after the first draw of loan proceeds 4 16 and the principal shall be fully repaid within fifteen years 4 17 of the date of the first draw of loan proceeds. Annual 4 18 principal payments shall be in amounts not less than the 4 19 outstanding principal amount divided by the number of annual 4 20 payments to be made. The lending agreement for a permitted 4 21 loan shall contain loan covenants and nonfinancial terms and 4 22 conditions no more favorable than those typically found in a 4 23 comparable senior loan financing made in the cable or 4 24 telecommunications industries. 4 25 (4) In the event that a municipality or its utility should 4 26 default on any payment, material covenant, or other term or 4 27 condition of a permitted loan, the municipality or its utility 4 28 shall promptly publish a public notice of the default and have 4 29 sixty days to cure the default. A repeated default of the 4 30 same requirement, covenant, or other term or condition shall 4 31 not be subject to cure. The municipality or municipal utility 4 32 shall not waive a default or noncompliance. If the default is 4 33 not cured within the prescribed time, the municipality or its 4 34 utility shall sell or cease operation of the 4 35 telecommunications systems no later than twelve months 5 1 following the default. 5 2 d. This section shall not apply to a municipality or its 5 3 utility with respect to the provision of cable television 5 4 services within municipal boundaries if either of the 5 5 following circumstances exist within the municipality: 5 6 (1) A private provider of cable television services does 5 7 not offer cable television service in the municipality. 5 8 (2) A private provider of cable television services offers 5 9 cable television service within the municipality, but the 5 10 provider has not begun offering internet access within the 5 11 municipality by October 1, 2004, at a speed equal to the 5 12 minimum requirements for advanced telecommunications services 5 13 as determined by the federal communications commission. 5 14 e. This section shall not restrict any of the following 5 15 actions: 5 16 (1) The procurement of telecommunications service by a 5 17 municipality or its utility to the extent the 5 18 telecommunications services are to be used solely for the 5 19 internal operations of the municipality or its utility and 5 20 such services will not be made available for resale or to the 5 21 general public. 5 22 (2) The procurement of feasibility studies related to the 5 23 provision of telecommunications services by a municipality or 5 24 its utility. 5 25 (3) Funding from any source the costs of litigation when a 5 26 competing utility is a party to the litigation. 5 27 f. (1) This section shall not affect the validity of 5 28 borrowings or loans outstanding as of December 31, 2002, that 5 29 complied with and continue to comply with the provisions of 5 30 this section that were in effect on December 31, 2002, which 5 31 loans shall also be known as "grandfathered loans". 5 32 (2) In the event a grandfathered loan is extended in term, 5 33 increased in amount, or modified in any substantive manner, 5 34 all of the terms and conditions of the grandfathered loan 5 35 shall comply fully with the requirements of a permitted loan. 6 1 (3) A municipality or municipal utility shall not waive 6 2 compliance with any requirement of a grandfathered loan. 6 3 2. A city providing or that owns or operates a municipal 6 4 utility providinglocal exchange services pursuant to chapter6 5476telecommunications service, whether or not pursuant to 6 6 chapter 476, or the municipal utility shall do the following: 6 7 a. Prepare and maintain records which record the full cost 6 8 accounting of providinglocal exchangetelecommunications 6 9 service. The records shall show the amount,andsource, and 6 10 cost of capital for initial construction or acquisition of the 6 11local exchangetelecommunications system or facilities. This 6 12 section shall not prohibit a municipal utility from utilizing 6 13 capital from any lawful source, provided that the reasonable 6 14 cost of such capital is accounted for as a cost of providing 6 15 the service and no violation of subsection 1, paragraph "a", 6 16 subparagraph (1) or (4), would result. 6 17 b. Adopt rates for the provision oflocal exchange6 18servicestelecommunications service that reflect the actual 6 19 cost of providingthe local exchangetelecommunications 6 20 service. However, this paragraph shall not prohibit the 6 21 municipal utility from establishing market-based prices for 6 22 competitivelocal exchange servicestelecommunications 6 23 services, provided that no violation of subsection 1, 6 24 paragraph "a", subparagraph (1) or (4), would result. 6 25 c. Be subject to all requirements of the citywhichthat 6 26 would apply to any other provider oflocal exchange6 27 telecommunications services in the same manner as such 6 28 requirements would apply to such other provider. 6 29 3. This section shall not prohibit the marketing or 6 30 bundling of other products or services,in addition to local6 31exchangeby the municipal utility as well as any 6 32 telecommunications services. However, a city shall include on 6 33 a billing statement sent to a person receiving services from 6 34 the city, a separate charge for each individual service 6 35 provided to the person, such as electricity, local exchange, 7 1 or internet access. This subsection does not prohibit the 7 2 city from also including on the billing statement a total 7 3 amount to be paid by the person. 7 4 Sec. 3. Section 427.1, subsection 2, Code 2003, is amended 7 5 to read as follows: 7 6 2. MUNICIPAL AND MILITARY PROPERTY. The property of a 7 7 county, township, city, school corporation, levee district, 7 8 drainage district, or the Iowa national guard, when devoted to 7 9 public use and not held for pecuniary profit, except property 7 10 of a municipally owned electric utility held under joint 7 11 ownership and property of an electric power facility financed 7 12 under chapter 28F or 476A that shall be subject to taxation 7 13 under chapter 437A and facilities of a municipal utility or a 7 14 city that are used for the provision oflocal exchange7 15services pursuant to chapter 476, but only to the extent such7 16facilities are used to provide such services,7 17 telecommunications services as defined in section 388.10 which 7 18 shall be subject to taxation under chapter 433, except that 7 19 section 433.11 shall not apply, and subject to taxation under 7 20 chapter 441, as applicable. However, notwithstanding anything 7 21 in this subsection to the contrary, the electric lines of a 7 22 municipally owned electric utility are subject to property 7 23 taxation to the extent such electric lines are used to provide 7 24 telecommunications services. The exemption for property owned 7 25 by a city or county also applies to property which is operated 7 26 by a city or county as a library, art gallery or museum, 7 27 conservatory, botanical garden or display, observatory or 7 28 science museum, or as a location for holding athletic 7 29 contests, sports or entertainment events, expositions, 7 30 meetings or conventions, or leased from the city or county for 7 31 any such purposes, or leased from the city or county by the 7 32 Iowa national guard or by a federal agency for the benefit of 7 33 the Iowa national guard when devoted for public use and not 7 34 for pecuniary profit. Food and beverages may be served at the 7 35 events or locations without affecting the exemptions, provided 8 1 the city has approved the serving of food and beverages on the 8 2 property if the property is owned by the city or the county 8 3 has approved the serving of food and beverages on the property 8 4 if the property is owned by the county. 8 5 Sec. 4. APPLICABILITY. A municipal utility shall not be 8 6 subject to this Act if it engages exclusively in the provision 8 7 of wholesale services under an open-access tariff without 8 8 facility-based competition. 8 9 EXPLANATION 8 10 This bill pertains to municipal utility systems, primarily 8 11 under Code chapter 388. 8 12 The bill amends Code section 388.9 to provide that certain 8 13 competitive business information of a city utility or city 8 14 enterprise that otherwise may be withheld from public 8 15 disclosure may not be shielded from disclosure in litigation 8 16 on the basis of the provisions of Code section 388.9, or that 8 17 the information constitutes a trade secret or other 8 18 confidential research, development, or commercial information 8 19 not to be disclosed. 8 20 The bill also amends Code section 388.10 to provide that a 8 21 city utility is prohibited from using general fund tax 8 22 revenues, except for permitted loans, to maintain or operate 8 23 telecommunications systems or services, and from using 8 24 revenues generated from a utility service such as electric, 8 25 gas, or water to pay for the maintenance or operation of 8 26 telecommunications service. The bill details the use of 8 27 permitted loans, provides for grandfathering of loans in 8 28 effect prior to December 31, 2002, and includes exceptions for 8 29 municipal utilities where no cable television services are 8 30 offered by private providers, or private providers have not 8 31 begun offering broadband services by October 1, 2004. The 8 32 bill also defines "combined utility system", "cost", 8 33 "support", "permitted loan", "telecommunications service", and 8 34 "telecommunications system". 8 35 The bill also changes language that requires a city that 9 1 owns a municipal utility providing telecommunications services 9 2 to perform certain activities, consistent with other changes 9 3 in the bill. 9 4 The bill also amends Code section 427.1 to make similar 9 5 language changes and provide for a property tax on electric 9 6 lines of a municipal utility that are used to provide 9 7 telecommunications services, and adds a reference to 9 8 assessment and valuation of property pursuant to Code chapter 9 9 441. 9 10 LSB 1757SV 80 9 11 jj/sh/8
Text: SF00403 Text: SF00405 Text: SF00400 - SF00499 Text: SF Index Bills and Amendments: General Index Bill History: General Index
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