This bill was held over in committee for more work this year. Text as of March, 2005 is below.
HB 653-FN-LOCAL – AS INTRODUCED
2005 SESSION
05-0714
06/10
HOUSE BILL 653-FN-LOCAL
AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.
SPONSORS: Rep. Maxfield, Merr 6; Rep. Osborne, Merr 12; Sen. Gallus, Dist 1
COMMITTEE: Municipal and County Government
ANALYSIS
This bill grants municipalities the ability to issue bonds for the development of broadband services.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05-0714
06/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Five
AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Section; Broadband Infrastructure Bonds. Amend RSA 33 by inserting after section 3-f the following new section:
33:3-g Broadband Infrastructure Bonds Authorized.
I. In this section:
(a) “Broadband” means the transmission, between or among points specified by the user, of information of the user’s choosing, with or without change in the form or content of the information as sent and received, at rates of transmission as defined by the Federal Communications Commission as “Broadband”.
(b) “Broadband carrier” means any provider of broadband services, except that such term shall not include aggregators of broadband services, as defined in section 226 of the 1996 Telecommunications Act.
(c) “Broadband infrastructure” means any and all equipment and facilities, including any and all changes and modifications and expansions to existing facilities as well as the customer premises equipment, used to provide broadband, and includes any and all software integral to or related to the operations, support, facilitation, or interconnection of such equipment, including upgrades, and includes any and all installation, operations and support, maintenance and other functions as may be required to support the delivery of broadband.
(d) “Broadband service” means the offering of broadband for a fee directly to the public, or to such classes of users as to be effectively available directly to the public, regardless of the facilities used.
(e) “Municipal broadband facility” means any municipality that through a separate entity owns, operates, manages, or controls any plant or equipment, or that wholly owns, operates, manages, or controls any entity that owns, operates, manages, or controls any plant or equipment, used to furnish broadband services within the state directly or indirectly to the public.
(f) “Municipality” means any city, town, county, or state entity or creation of such entities or affiliates of such entities.
(g) “Open network” means any broadband infrastructure which is open to any and all third party users in a non-discriminatory manner and on a fair and equitable basis using publicly available rates for services.
(h) “Open network interfaces” means that the technical and operational means, manners, and methods for any third party access to the broadband infrastructure shall be provided on the basis of generally acceptable industry standards as may be available at the time of access.
(i) “Separate entity” means a separate company, corporation, or other similar corporate entity established to conduct business.
II. A municipality may issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure for the purpose of public educational and governmental access channels.
III. A municipality may issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure for the purpose of providing third party access only though a separate entity. The separate entity shall be subject to same laws, rules, and regulations governing similar competitive communication carriers. The separate entity shall have separate and distinct facilities, support, operations, and any and all other elements necessary for the provision of its services and shall not use in any manner, a computer network used for municipal purposes.
IV. Repayment of the bonds issued under paragraph II shall be in accordance with applicable law for municipal bonds.
V. Repayment of the bonds issued under paragraph III shall be paid solely from revenue received from the separate entity for services provided by that entity.
VI. No municipality may enact an ordinance or adopt a resolution authorizing the municipality to construct, own, or operate any facility for providing cable service, telecommunications service, or Internet access service, directly or indirectly, to the public, unless all of the following are satisfied:
(a) The municipality holds a public hearing on the proposed ordinance or resolution.
(b) Notice of the public hearing is published in a newspaper of general circulation in the area affected by the proposed ordinance or resolution.
(c) No fewer than 30 days prior to public hearing, the municipality shall prepare and make available for public inspection a report estimating the total cost of, and revenue received from, constructing, owning, or operating the facility and including a cost–benefit analysis of the facility for a period of no fewer than 3 years. The costs that are subject to this paragraph include personnel costs and costs of acquiring, installing, maintaining, repairing, or operating any plant or equipment, and include an appropriate allocated portion of costs of personnel, plant, or equipment that are used to provide jointly both telecommunications services and other services. The costs of the separate entity shall be those normally incurred by any third party commercial communications provider in the normal course of their business, including but not limited to franchise fees, pole attachment fees, make ready fees, and similar fees. The separate entity shall not be subsidized in any manner by the municipality.
VII. Debt incurred under this section shall not be included in the debt limit prescribed in this chapter. No such debt shall be included in the net indebtedness of any municipality for the purposes of determining its borrowing capacity. Such debt shall be the sole liability of the separate entity.
VIII. Negotiations between a separate entity and a municipality shall be performed at arms length. Negotiations not performed at arms length shall be void.
IX. Pricing, selling, bundling, promoting, selling, representing in a public or private manner by the separate entity shall be performed at arms length. In addition any pricing mechanisms of the separate entity shall be based on the total costs of the entity independent of the sponsoring municipality.
X. Services provided by the separate entity shall comply with open network requirements.
XI. Notwithstanding RSA 33:2, bonds issued under the authority of this section shall be payable in annual payments so that the amount of annual payment of principal and interest in any year on account of any bond shall be not less than the amount of principal and interest payable in any subsequent year by more than 5 percent of the principal of the entire bond. The total amount of payments shall be sufficient to extinguish the entire bond at such bond’s maturity. The first payment of principal on any bond shall be made no later than 5 years and the last payment not later than 30 years after the date issued. Each authorized issue of bonds shall be separate and distinct.
2 Definition. Amend RSA 33-B:1, VI to read as follows:
VI. “Revenue-producing facilities” means water works, broadband infrastructure as defined in RSA 33:3-g, sewerage systems, sewage treatment or disposal facilities, solid waste disposal or resource recovery facilities, parking facilities, facilities for the production, generation, transmission, or distribution of electricity or gas and any other real or personal property or interests in a municipality or regional water district owned or controlled by the municipality or regional water district, from the operation of which revenues are or are expected to be derived by the municipality, or regional water district.
3 Effective Date. This act shall take effect 60 days after its passage.
LBAO
05-0714
Revised 2/4/05
HB 653 FISCAL NOTE
AN ACT relative to bonds for construction, development, improvement, and acquisition of broadband facilities.
FISCAL IMPACT:
The New Hampshire Municipal Association and Department of Revenue Administration state this bill may increase local expenditures by an indeterminable amount in FY 2005 and each year thereafter. There will be no fiscal impact on state, county, and local revenue or state and county expenditures.
METHODOLOGY:
The New Hampshire Municipal Association states this bill would allow municipalities to issue bonds for the development of broadband services. Repayment of bonds would depend on how the infrastructure is to be used. If the infrastructure is to be used for public education and government access channels, repayment is the responsibility of the municipality in accordance with “applicable law” for municipal bonds. However, if the infrastructure is to be used for the purpose of providing third party access to broadband, the repayment would be made from revenues received by the separate entity required to provide such access and the municipality would have no responsibility to repay the bonds. Debt incurred for that broadband purpose would be considered outside the municipality’s debt limit since the way it is structured, it is not a debt of the municipality and repayment is solely the responsibility of the separate entity’s revenue stream. The Association is unable to determine the exact fiscal impact at this time since it is dependent on what municipalities opt to use this bonding authority and how many would be responsible for repaying the debt.
The Department of Revenue Administration states they are unable to determine the fiscal impact of this bill on local expenditures at this time. There would be no fiscal impact on state and county revenue and expenditures.