Senate File 8 - IntroducedA Bill ForAn Act 1providing for the sale or lease of the Iowa
2communications network.
3BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
1   Section 1.  SALE OR LEASE OF IOWA COMMUNICATIONS NETWORK.
   21.  The Iowa telecommunications and technology commission
3shall implement a request for proposals process to sell
4or lease the Iowa communications network. The request for
5proposals shall provide for the sale to be concluded or the
6lease to commence during the fiscal year beginning July 1,
72019.
   82.  a.  Prior to a sale or lease of the Iowa communications
9network, the state auditor shall conduct a comprehensive
10audit and accounting of the network to include the following
11components:
   12(1)  A complete financial audit of the network for the period
13beginning July 1, 2016, and ending July 1, 2019, to identify
14the revenues and expenses of the network and verify that
15charges were properly made to all existing authorized users and
16booked accurately by such authorized users and the network.
   17(2)  A complete inventory audit of all components included
18in the network, including telecommunications-related and
19non-telecommunications-related property or equipment. Such
20inventory shall identify the age and condition of property
21or equipment purchased or leased by the commission for the
22operation of the network and verify physical connections to
23current authorized users.
   24(3)  Information identifying and quantifying the value of
25services provided by the network to current authorized users.
   26(4)  Information identifying all current authorized users
27and business units of the network.
   28b.  Following the completion of the comprehensive audit and
29accounting required pursuant to paragraph “a”, an independent
30appraisal firm shall conduct an appraisal of the network to
31determine the current market value of the assets listed in the
32audit and accounting. The independent appraisal firm shall be
33selected through a competitive bidding process not associated
34with the network or any of its vendors.
   35c.  The results of the audit, accounting, and appraisal of
-1-1the network conducted pursuant to this subsection shall be made
2available to the public on an internet site maintained by the
3commission.
   43.  A sale or lease of the Iowa communications network
5pursuant to this section shall be conditioned as follows:
   6a.  Public funds shall not be used to secure the purchase of
7the network.
   8b.  If the commission seeks outside assistance to implement
9the request for proposals process, such assistance shall be
10provided by an independent professional firm selected through a
11competitive bidding process not associated with the network or
12any of its vendors.
   13c.  The request for proposals shall include a complete list
14of all assets subject to the sale or lease, as identified
15pursuant to subsection 2, which shall not be materially altered
16after the request for proposals is released for bids.
   17d.  The request for proposals shall allow a bidder to
18purchase the network’s assets relating to the Iowa national
19guard.
   20e.  The request for proposals shall not require a bidder to
21subsidize the network’s services that are operating at a loss,
22maintain the network’s billing and procurement system, maintain
23or employ the network’s employees, or segregate the network’s
24fiber operations from the bidder’s operations.
   25f.  The winning bidder selected pursuant to the request
26for proposals shall demonstrate a commitment to serving the
27citizens of this state and facilitating rural broadband service
28throughout the state at or above twenty-five megabits per
29second of download speed and three megabits per second of
30upload speed.
   314.  The commission shall submit periodic status reports to
32the general assembly at three-month intervals, beginning on
33October 1, 2019, regarding progress made toward selling or
34leasing the network.
35EXPLANATION
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1The inclusion of this explanation does not constitute agreement with
2the explanation’s substance by the members of the general assembly.
   3This bill directs the Iowa telecommunications and technology
4commission to implement a request for proposals (RFP) process
5to sell or lease the Iowa communications network, with the sale
6or lease to commence during the fiscal year beginning July 1,
72019.
   8The bill provides that prior to the sale or lease of the
9network, the state auditor shall conduct a comprehensive audit
10and accounting of the network, including a complete financial
11audit, a complete inventory audit, information relating to the
12value of services provided by the network, and information
13identifying all current authorized users of the network, as
14specified in the bill. The bill further provides that an
15independent appraisal firm shall conduct an appraisal of the
16network to determine the current market value of the network’s
17assets. Such firm shall be selected through a competitive
18bidding process not associated with the network or any of
19its vendors. The bill requires the results of the audit,
20accounting, and appraisal to be made available to the public.
   21The bill conditions the sale or lease of the network as
22follows: public funds shall not be used to secure the purchase
23of the network; if the commission seeks outside assistance to
24implement the RFP process, such assistance shall be provided by
25an independent professional firm selected through a competitive
26bidding process not associated with the network or any of
27its vendors; the RFP shall include a complete list of all of
28the assets subject to the sale or lease, which shall not be
29materially altered after the RFP is released; the RFP shall
30allow a bidder to purchase the network’s assets relating to
31the Iowa national guard; the RFP shall not require a bidder to
32subsidize the network’s services that are operating at a loss,
33maintain the network’s billing and procurement system, maintain
34or employ the network’s employees, or segregate operations; and
35the winning bidder shall demonstrate a commitment to serving
-3-1the citizens of Iowa and facilitating rural broadband service
2as specified in the bill.
   3The bill requires the commission to submit status reports
4to the general assembly every three months, beginning October
51, 2019, regarding progress made toward selling or leasing the
6network.
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