Senate Study Bill 1037
SENATE FILE
BY (PROPOSED COMMITTEE ON
COMMERCE BILL BY
CHAIRPERSON ANGELO)
Passed Senate, Date Passed House, Date
Vote: Ayes Nays Vote: Ayes Nays
Approved
A BILL FOR
1 An Act relating to provision of telecommunications services by
2 municipal utilities, including the burden of proof for
3 disclosure of business information, and limiting cross=
4 subsidization of telecommunications systems and services from
5 other funding sources.
6 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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PAG LIN
1 1 Section 1. Section 388.9, subsection 2, Code 2003, is
1 2 amended to read as follows:
1 3 2. a. Notwithstanding section 22.2, subsection 1, public
1 4 records of a city utility or combined utility system, or a
1 5 city enterprise or combined city enterprise as defined in
1 6 section 384.80, which shall not be examined or copied as of
1 7 right, include proprietary information, records of customer
1 8 names and accounts, records associated with marketing or
1 9 pricing strategies, preliminary working papers, and
1 10 spreadsheet scenarios, and cost data, if the competitive
1 11 position of the city utility, combined utility system, city
1 12 enterprise, or combined city enterprise would be harmed by
1 13 public disclosure not required of a potential or actual
1 14 competitor, and if no public purpose would be served by such
1 15 disclosure. The city utility, combined utility system, city
1 16 enterprise, or combined city enterprise shall have the burden
1 17 of establishing that harm would result from public disclosure
1 18 and that no public purpose would be served by disclosure in
1 19 any court or administrative action regarding disclosure.
1 20 b. This subsection shall not apply to financial statements
1 21 or records, whether audited or unaudited, showing or relating
1 22 to the financial information as of any historical date or for
1 23 any historical period which are public records available under
1 24 the terms and conditions of chapter 22.
1 25 c. A public record not subject to examination or copying
1 26 under this subsection shall be available for public
1 27 examination and copying at that point in time when public
1 28 disclosure would no longer harm the competitive position of
1 29 the city utility, combined utility system, city enterprise, or
1 30 combined city enterprise.
1 31 Sec. 2. Section 388.10, Code 2003, is amended to read as
1 32 follows:
1 33 388.10 CITY OR MUNICIPAL UTILITY PROVIDING LOCAL EXCHANGE
1 34 TELECOMMUNICATIONS SERVICES.
1 35 1. a. A city providing or that owns or operates a
2 1 municipal utility providing local exchange services pursuant
2 2 to chapter 476 any telecommunications service or the municipal
2 3 utility shall not do, directly or indirectly, any of the
2 4 following:
2 5 (1) Use general fund moneys for the ongoing support or
2 6 subsidy or other moneys derived from tax revenues, directly or
2 7 indirectly, to finance or in any way to otherwise support
2 8 either of the following:
2 9 (a) The establishment, construction, reconstruction,
2 10 upgrade, maintenance, or operation of a telecommunications
2 11 system.
2 12 (b) The provision of any telecommunications service.
2 13 (2) Provide any city or utility facilities, equipment, or
2 14 services to provide a telecommunications systems system or
2 15 services any telecommunications service at a cost for such
2 16 facilities, equipment, or services which that is less than the
2 17 reasonable cost of providing such city facilities, equipment,
2 18 or services.
2 19 (3) Provide any other city service, other than a
2 20 communications service, to a telecommunications customer at a
2 21 cost which is less than would be paid by the same person
2 22 receiving such other city service if the person was not a
2 23 telecommunications customer.
2 24 (4) Use funds or revenue generated from electric, gas,
2 25 water, sewage, or garbage services provided by the city for
2 26 the ongoing support of that portion of a system or service
2 27 used to provide local exchange services or the utility,
2 28 directly or indirectly, to finance or in any way to otherwise
2 29 support either of the following:
2 30 (a) The establishment, construction, reconstruction,
2 31 upgrade, maintenance, or operation of any telecommunications
2 32 system.
2 33 (b) The provision of any telecommunications service.
2 34 b. For purposes of this section, "telecommunications
2 35 unless the context otherwise requires:
3 1 (1) "Cost" of any facilities, equipment, services, or
3 2 other goods or services shall include all attributable cost
3 3 and expenses, whether direct or indirect, fixed or variable,
3 4 including without limitation, a fair and equitable allocation
3 5 of all of the following:
3 6 (a) Taxes.
3 7 (b) The costs of any necessary capital for the
3 8 construction or acquisition of the item or the facilities by
3 9 which the service is provided.
3 10 (c) Amortization of any capital that is required to be
3 11 repaid.
3 12 (d) Depreciation.
3 13 (e) Amortization of capitalized costs.
3 14 (2) "Support" means to provide financial support in any
3 15 form, whether temporary or permanent, including but not
3 16 limited to transfers of money or other assets, purchases of
3 17 securities, capital contributions or other investments, loans
3 18 or other extensions of credit, leases, payment of money,
3 19 guarantees, pledges, or hypothecations or property or
3 20 indemnities or other arrangements by which there is recourse
3 21 to the revenues or other assets of the city or municipal
3 22 utility other than any revenues derived solely from the
3 23 operations of a telecommunications service or assets of the
3 24 related telecommunications system.
3 25 (3) "Telecommunications system" means only that portion of
3 26 a system or facilities which is used to provide local exchange
3 27 services a system that provides any telecommunications
3 28 service.
3 29 (4) "Telecommunications service" means the provision of
3 30 any of the following services:
3 31 (a) Cable television service.
3 32 (b) Internet service.
3 33 (c) Local exchange telephone service.
3 34 (d) Long distance telephone service.
3 35 (e) Retail data transmission..
4 1 2. A city providing or that owns or operates a municipal
4 2 utility providing local exchange services pursuant to chapter
4 3 476 telecommunications service, whether or not pursuant to
4 4 chapter 476, or the municipal utility shall do the following:
4 5 a. Prepare and maintain records which record the full cost
4 6 accounting of providing local exchange telecommunications
4 7 service. The records shall show the amount, and source, and
4 8 cost of capital for initial construction or acquisition of the
4 9 local exchange telecommunications system or facilities. This
4 10 section shall not prohibit a municipal utility from utilizing
4 11 capital from any lawful source, provided that the reasonable
4 12 cost of such capital is accounted for as a cost of providing
4 13 the service and no violation of subsection 1, paragraph "a",
4 14 subparagraph (1) or (4), would result.
4 15 b. Adopt rates for the provision of local exchange
4 16 services telecommunications service that reflect the actual
4 17 cost of providing the local exchange telecommunications
4 18 service. However, this paragraph shall not prohibit the
4 19 municipal utility from establishing market=based prices for
4 20 competitive local exchange services telecommunications
4 21 services, provided that no violation of subsection 1,
4 22 paragraph "a", subparagraph (1) or (4), would result.
4 23 c. Be subject to all requirements of the city which that
4 24 would apply to any other provider of local exchange
4 25 telecommunications services in the same manner as such
4 26 requirements would apply to such other provider.
4 27 3. This section shall not prohibit the marketing or
4 28 bundling of other products or services, in addition to local
4 29 exchange by the municipal utility as well as any
4 30 telecommunications services. However, a city shall include on
4 31 a billing statement sent to a person receiving services from
4 32 the city, a separate charge for each individual service
4 33 provided to the person, such as electricity, local exchange,
4 34 or internet access. This subsection does not prohibit the
4 35 city from also including on the billing statement a total
5 1 amount to be paid by the person.
5 2 Sec. 3. Section 427.1, subsection 2, Code 2003, is amended
5 3 to read as follows:
5 4 2. MUNICIPAL AND MILITARY PROPERTY. The property of a
5 5 county, township, city, school corporation, levee district,
5 6 drainage district, or the Iowa national guard, when devoted to
5 7 public use and not held for pecuniary profit, except property
5 8 of a municipally owned electric utility held under joint
5 9 ownership and property of an electric power facility financed
5 10 under chapter 28F or 476A that shall be subject to taxation
5 11 under chapter 437A and facilities of a municipal utility or a
5 12 city that are used for the provision of local exchange
5 13 services pursuant to chapter 476, but only to the extent such
5 14 facilities are used to provide such services,
5 15 telecommunications services as defined in section 388.10 which
5 16 shall be subject to taxation under chapter 433, except that
5 17 section 433.11 shall not apply, and subject to taxation under
5 18 chapter 441, as applicable. The exemption for property owned
5 19 by a city or county also applies to property which is operated
5 20 by a city or county as a library, art gallery or museum,
5 21 conservatory, botanical garden or display, observatory or
5 22 science museum, or as a location for holding athletic
5 23 contests, sports or entertainment events, expositions,
5 24 meetings or conventions, or leased from the city or county for
5 25 any such purposes, or leased from the city or county by the
5 26 Iowa national guard or by a federal agency for the benefit of
5 27 the Iowa national guard when devoted for public use and not
5 28 for pecuniary profit. Food and beverages may be served at the
5 29 events or locations without affecting the exemptions, provided
5 30 the city has approved the serving of food and beverages on the
5 31 property if the property is owned by the city or the county
5 32 has approved the serving of food and beverages on the property
5 33 if the property is owned by the county.
5 34 EXPLANATION
5 35 This bill pertains to municipal utility systems, primarily
6 1 under Code chapter 388.
6 2 The bill amends Code section 388.9 to provide that certain
6 3 competitive business information of a city utility or city
6 4 enterprise may be withheld from public disclosure only after
6 5 the city utility or enterprise establishes the burden that
6 6 harm would result from public disclosure of the information,
6 7 and that no public purpose would be served by the disclosure.
6 8 Currently under the Code, no party bears the burden of proof.
6 9 The bill also amends Code section 388.10 to provide that a
6 10 city utility is prohibited from using general fund tax
6 11 revenues to maintain or operate telecommunications systems or
6 12 services, and from using revenues generated from a utility
6 13 service such as electric, gas, or water to pay for the
6 14 maintenance or operation of telecommunications service. The
6 15 bill also defines "cost", "support", "telecommunications
6 16 service", and "telecommunications system".
6 17 The bill also changes language that requires a city that
6 18 owns a municipal utility providing telecommunications services
6 19 to perform certain activities, consistent with other changes
6 20 in the bill.
6 21 The bill also amends Code section 427.1 to make similar
6 22 language changes, and adds a reference to assessment and
6 23 valuation of property pursuant to Code chapter 441.
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