Bill Text: IA HF2279 | 2023-2024 | 90th General Assembly | Amended

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: A bill for an act relating to public utilities, including energy production, public utility affiliates, and cable and video service. (Formerly HSB 555.) Effective date: 07/01/2024.

Spectrum: Committee Bill

Status: (Passed) 2024-05-01 - Signed by Governor. H.J. 936. [HF2279 Detail]

Download: Iowa-2023-HF2279-Amended.html

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House File 2279 - Reprinted
HOUSE FILE 2279
BY COMMITTEE ON COMMERCE
(SUCCESSOR TO HSB 555)
(As Amended and Passed by the House April 19, 2024 )
A BILL FOR
An Act relating to public utilities, including energy
production, public utility affiliates, and cable and video
service.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:
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DIVISION I
ENERGY PRODUCTION
Section 1. Section 364.2, subsection 4, Code 2024, is
amended by adding the following new paragraph:
NEW PARAGRAPH . h. (1) When a person requests a franchise
for a merchant line as defined in section 478.6A and that
requester possesses a franchise issued by the Iowa utilities
board outside of a city, and when the proposed merchant line
is more than fifty miles in total length within the state and
will be underground within the limits of the city, all of the
following apply:
(a) A person shall submit a written franchise request
including the proposed terms and conditions of the franchise.
(b) Upon receipt of the franchise request for a merchant
line, a city shall conduct a hearing pursuant to this
subsection. The city and the person may negotiate the terms
of a franchise prior to the approval of an ordinance. A city
may not unreasonably refuse to grant a franchise for a merchant
line. If the city denies the franchise request, the city shall
provide the person with a written denial of the franchise based
on substantial evidence in the record demonstrating that the
proposed transmission line would have a significant adverse
impact on the health or safety of the city’s residents or
public facilities that would not have been considered by the
Iowa utilities board.
(c) If the city has not held the required hearing or has not
acted on a request for a franchise for a merchant line within
ninety days of the receipt of the request, notwithstanding any
other terms of the Code, the franchise is deemed approved by
the city. If a request is timely denied, the person may seek a
certiorari judicial review by filing a petition either in Polk
county district court or in the district court for the county
in which the petitioner resides or the principal place of the
requester for the merchant line.
(d) This subsection applies to eligible merchant lines for
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which a franchise has been granted pursuant to chapter 478
prior to the effective date of this subsection.
(2) This paragraph is repealed effective January 1, 2026.
Sec. 2. Section 476.42, subsection 1, paragraph a,
subparagraph (1), Code 2024, is amended to read as follows:
(1) A solar, wind turbine, electric storage unit, nuclear,
waste management, resource recovery, refuse-derived fuel,
agricultural crops or residues, or woodburning facility. For
purposes of this definition only, “waste management” includes a
facility using plasma gasification to produce synthetic gas,
either as a stand-alone fuel or for blending with natural gas,
the output of which is used to generate electricity or steam.
For purposes of this definition only, “plasma gasification”
means the thermal dissociation of carbonaceous material into
fragments of compounds in an oxygen-starved environment.
Sec. 3. Section 476.48, subsection 6, Code 2024, is amended
by striking the subsection.
Sec. 4. Section 476A.1, subsection 5, Code 2024, is amended
to read as follows:
5. “Facility” means any electric power generating plant ,
electric storage unit, or a combination of plants or units
at a single site, owned by any person, with a total capacity
of twenty-five or more megawatts of electricity for plants
or twenty-five or more megawatt hours of electricity for
electric storage units, and those associated transmission lines
connecting the generating plant or electric storage unit to
either a power transmission system or an interconnected primary
transmission system or both. Transmission lines subject to the
provisions of this subchapter shall not require a franchise
under chapter 478 .
DIVISION II
PUBLIC UTILITY AFFILIATES
Sec. 5. Section 476.74, subsection 5, Code 2024, is amended
to read as follows:
5. Exemption. The provisions of this section requiring
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filing of contracts or agreements with the board shall not
apply to transactions with an affiliate where the amount of
consideration involved is not in excess of fifty thousand
dollars or five percent of the capital equity of the utility,
whichever is smaller two hundred fifty thousand dollars .
However, regularly recurring payments under a general or
continuing arrangement which that aggregate a greater annual
amount shall not be broken down into a series of transactions
to come within this exemption. In any proceeding involving
the rates, charges , or practices of the public utility, the
board may exclude from the accounts of the public utility any
unreasonable payment or compensation made pursuant to any
contract or arrangement which that is not required to be filed
under this subsection .
DIVISION III
CABLE OR VIDEO SERVICE
Sec. 6. Section 474.1, subsection 4, Code 2024, is amended
to read as follows:
4. As used in this chapter and chapters 475A , 476 , 476A ,
477A, 477C , 478 , 479 , 479A , and 479B , “board” and “utilities
board” mean the Iowa utilities board.
Sec. 7. Section 477A.1, Code 2024, is amended by adding the
following new subsections:
NEW SUBSECTION . 2A. “Cable or video service” includes the
terms “cable service” , “cable system” , and “video service” .
NEW SUBSECTION . 4A. “Competitive cable or video service
provider” includes the terms “competitive cable service provider”
and “competitive video service providers” .
Sec. 8. Section 477A.1, subsection 7, Code 2024, is amended
to read as follows:
7. “Franchise” means an initial authorization, or renewal
of an authorization, issued by the board or a municipality,
regardless of whether the authorization is designated as a
franchise, permit, license, resolution, contract, certificate,
agreement, or otherwise, that authorizes the construction and
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operation of a cable system person to erect, maintain, and
operate plants and systems for the provision of a cable or
video service provider’s network in a public right-of-way.
Sec. 9. Section 477A.1, subsection 9, paragraph a, Code
2024, is amended to read as follows:
a. “Gross revenues” means all consideration of any kind or
nature, including but not limited to cash, credits, property,
and in-kind contributions , received from subscribers for the
provision of cable service over a cable system by a competitive
cable service provider or for the provision of or video service
by a competitive cable or video service provider within a
municipality’s jurisdiction. Gross revenues are limited to the
following:
(1) Recurring charges for cable service or video service.
(2) Event-based charges for cable service or video service,
including but not limited to pay-per-view and video-on-demand
charges.
(3) Rental of set-top boxes and other cable service or video
service equipment.
(4) Service charges related to the provision of cable
service or video service, including but not limited to
activation, installation, and repair charges.
(5) Administrative charges related to the provision of
cable service or video service, including but not limited to
service order and service termination charges.
(6) A pro rata portion of all revenue derived, less refunds,
rebates, or discounts, by a cable service provider or a video
service provider for advertising over the cable service or
video service network to subscribers within the franchise area
where the numerator is the number of subscribers within the
franchise area, and the denominator is the total number of
subscribers reached by such advertising. This subparagraph
applies only to municipalities that include this provision in
their franchise agreements as of January 1, 2007.
Sec. 10. Section 477A.1, subsection 9, paragraph b,
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subparagraphs (2), (4), (5), (6), (7), (8), (9), and (11), Code
2024, are amended to read as follows:
(2) Revenues received by any affiliate or any other person
in exchange for supplying goods or services used by the person
providing cable service or video service.
(4) Regardless of whether the services are bundled,
packaged, or functionally integrated with cable service
or video service, any revenues derived by the holder of
a certificate of franchise authority from services not
classified as cable service or video service, including,
without limitation, revenue received from telecommunications
services, revenue received from information services, revenue
received in connection with home-shopping services, or any
other revenues attributed by the competitive cable service
provider or competitive video service provider to noncable
service or nonvideo service in accordance with the holder’s
books and records kept in the regular course of business and
any applicable rules, regulations, standards, or orders.
(5) Revenues paid by subscribers to home-shopping
programmers directly from the sale of merchandise through any
home-shopping channel offered as part of the cable services or
video services.
(6) Revenues from the sale of cable services or video
services for resale in which the purchaser is required to
collect the franchise fee from the purchaser’s customer.
(7) Revenues from any tax of general applicability imposed
upon the competitive cable service provider or competitive
video service provider or upon subscribers by a city, state,
federal, or any other governmental entity and required to
be collected by the competitive cable service provider or
competitive video service provider and remitted to the taxing
entity, including but not limited to sales or use tax, gross
receipts tax, excise tax, utility users tax, public service
tax, and communication taxes, and including the franchise fee
imposed under section 477A.7 .
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(8) Revenues forgone from the provision of cable services
or video services to public institutions, public schools, or
governmental entities at no charge.
(9) Revenues forgone from the competitive cable service
provider’s or competitive video service provider’s provision of
free or reduced-cost video service to any person, including,
without limitation, any municipality and other public
institutions or other institutions.
(11) Revenues from reimbursements by programmers of
marketing costs incurred by the competitive cable service
provider or competitive video service provider for the
introduction or promotion of new programming.
Sec. 11. Section 477A.2, Code 2024, is amended to read as
follows:
477A.2 Certificate of franchise authority requirement.
1. After July 1, 2007, a person providing cable service
or video service in this state shall not provide such service
without a franchise. The franchise may be issued by either the
board pursuant to section 477A.3 or by a municipality pursuant
to section 364.2 .
2. a. A person providing cable service or video service
under a franchise agreement with a municipality prior to July
1, 2007, is not subject to this section with respect to such
municipality until the franchise agreement expires or is
converted pursuant to subsection 6 .
b. Upon expiration of a franchise, a person may choose to
renegotiate a franchise agreement with a municipality or may
choose to obtain a certificate of franchise authority under
this chapter . An application for a certificate of franchise
authority pursuant to this subsection may be filed within
sixty days prior to the expiration of a municipal franchise
agreement. A certificate of franchise authority obtained
pursuant to an application filed prior to the expiration of
a municipal franchise agreement shall take effect upon the
expiration date of the municipal franchise agreement.
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c. A municipal utility that provides cable service or
video service in this state is not subject to this section and
shall not be required to obtain a certificate of franchise
authority pursuant to this chapter in the municipality in
which the provision of cable service or video service by that
municipality was originally approved.
3. For purposes of this section , a person providing
cable service or video service is deemed to have executed a
franchise agreement to provide cable service or video service
with a specific municipality if an affiliate or predecessor
of the person providing cable service or video service has
or had executed an unexpired franchise agreement with that
municipality as of May 29, 2007.
4. A competitive cable service provider or competitive
video service provider shall provide at least thirty days’
notice to each municipality with authority to grant a franchise
in the service area, and to the incumbent cable or video
provider, in which the competitive cable service provider or
competitive video service provider is granted authority to
provide service under a certificate of franchise authority that
the competitive cable service provider or competitive video
service provider will offer cable services or video services
within the jurisdiction of the municipality, and shall not
provide service without having provided such thirty days’
notice. A copy of the notice shall be filed with the board on
the date that the notice is provided. All notices required by
this subsection shall be sent by certified mail.
5. As used in this section , “affiliate” includes but is
not limited to a person that directly, or indirectly through
one or more intermediaries, controls, is controlled by, or is
under common control with a person receiving, obtaining, or
operating under a franchise agreement with a municipality to
provide cable service or video service through merger, sale,
assignment, restructuring, or any other type of transaction.
6. If a competitive cable service provider or a competitive
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video service provider applies for a certificate of franchise
authority to operate within a municipality, the incumbent
cable provider may, at its discretion, apply for a certificate
of franchise authority for that same municipality. Such
application shall be automatically granted on the same day
as a competitive cable service provider or competitive video
service provider files a thirty days’ notice of offering
service as required pursuant to subsection 4 . The franchise
agreement with the municipality is terminated on the date the
board issues the certificate of franchise authority to an
incumbent cable provider. The terms and conditions of the
certificate of franchise authority shall be the same as the
terms and conditions of a competitive cable service provider or
a competitive video service provider pursuant to this chapter
and shall replace the terms and conditions of the franchise
agreement previously granted by the municipality.
Sec. 12. Section 477A.3, subsection 1, paragraphs a, c, d,
and f, Code 2024, are amended to read as follows:
a. That the applicant has filed or will timely file with
the federal communications commission all forms required by
the commission in advance of offering cable service or video
service in this state.
c. That the applicant agrees to comply with all applicable
state laws and nondiscriminatory municipal ordinances and
regulations regarding the use and occupation of a public
right-of-way in the delivery of the cable service or video
service, to the extent consistent with this chapter , including
the police powers of the municipalities in which the service
is delivered.
d. A description of the service area to be served and the
municipalities to be served by the applicant , which may include
certain designations of unincorporated areas. This description
shall be updated by the applicant prior to the expansion of
cable service or video service to a previously undesignated
service area and, upon such expansion, notice shall be given to
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the board of the service area to be served by the applicant.
f. Documentation that the applicant possesses sufficient
managerial, technical, and financial capability to provide the
cable service or video service proposed in the service area.
Sec. 13. Section 477A.3, subsection 1, paragraph g, Code
2024, is amended by striking the paragraph.
Sec. 14. Section 477A.3, subsections 5 and 9, Code 2024, are
amended to read as follows:
5. The certificate of franchise authority issued by the
board shall contain all of the following:
a. A grant of authority to provide cable service or video
service in the service area designated in the application.
b. A grant of authority to use and occupy the public
right-of-way in the delivery for the purpose of erecting,
maintaining, and operating plants and systems for the provision
of cable service or video service, subject to the laws of this
state, including the police powers of the municipalities in
which the service is delivered.
c. A statement that the grant of authority provided by the
certificate is subject to the lawful operation of the cable
service or video service by the applicant or the applicant’s
successor.
d. A statement that the franchise is for a term of ten
twenty-five years, is renewable under the terms of this
section , and is nonexclusive.
9. The certificate of franchise authority issued by the
board may be terminated by a person providing cable service or
video service by submitting written notice to the board and
any affected municipality. Neither the board nor an affected
municipality shall have authority to review or require approval
of such termination.
Sec. 15. Section 477A.3, subsection 6, paragraph a, Code
2024, is amended to read as follows:
a. If the holder of a certificate of franchise authority
fails to commence operation of a cable system or video service
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network within twelve months from the date the application is
granted, the board may determine that the applicant is not in
compliance with the certificate of franchise authority and may
revoke the certificate.
Sec. 16. Section 477A.3, subsection 7, paragraph a, Code
2024, is amended to read as follows:
a. In the event that an applicant granted a certificate
of franchise authority subsequently ceases to engage in
construction or operation of a cable system or video service
network and is no longer providing service, the applicant
shall notify the municipality, the board, and the incumbent
cable provider on the date that construction or service is
terminated.
Sec. 17. Section 477A.4, Code 2024, is amended to read as
follows:
477A.4 Applicability to federal law.
To the extent required by applicable law, a certificate of
franchise authority issued under this chapter shall constitute
a “franchise” for the purposes of 47 U.S.C. §541(b)(1). To
the extent required for the purposes of 47 U.S.C. §521 –
561, only the state of Iowa shall constitute the exclusive
franchising authority for competitive cable service providers
and competitive video service providers in this state.
Sec. 18. Section 477A.6, subsections 1 and 2, Code 2024, are
amended to read as follows:
1. Not later than one hundred eighty days after a request by
a municipality in which a competitive cable service provider or
a competitive video service provider is providing cable service
or video service, the holder of the certificate of authority
for that municipality shall designate a sufficient amount of
capacity on the certificate holder’s communications network
to allow the provision of a comparable number of public,
educational, and governmental channels that the incumbent cable
provider in the municipality has activated and provided in the
municipality under the terms of a franchise agreement with a
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municipality prior to July 1, 2007. If no such channels are
active, the municipality may request a maximum of three public,
educational, and governmental channels for a municipality
with a population of at least fifty thousand, and a maximum
of two public, educational, and governmental channels for a
municipality with a population of less than fifty thousand.
a. The public, educational, and governmental content to
be provided pursuant to this section and the operation of
the public, educational, and governmental channels shall be
the responsibility of the municipality receiving the benefit
of such capacity. The holder of a certificate of franchise
authority shall be responsible only for the transmission of
such content, subject to technological restraints.
b. The municipality receiving capacity under this section
shall ensure that all transmissions, content, or programming to
be transmitted by the holder of the certificate of franchise
authority are provided or submitted to the competitive
cable service provider or competitive video service provider
in a manner or form that is capable of being accepted and
transmitted by the competitive cable service provider or
competitive video service provider, without requirement for
additional alteration or change in the content, over the
particular network of the competitive cable service provider
or competitive video service provider, which is compatible
with the technology or protocol utilized by the competitive
cable service provider or competitive video service provider
to deliver services. At its election the municipality may
reasonably request any cable service provider or video service
provider to make any necessary change to the form of any
programming, furnished for transmission, which shall be charged
to the municipality, not to exceed the provider’s incremental
costs. The municipality shall have up to twelve months to
reimburse the cable service provider or video service provider.
The provision of such transmissions, content, or programming
to the competitive cable service provider or competitive video
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service provider shall constitute authorization for such
holder to carry such transmissions, content, or programming,
at the holder’s option, beyond the jurisdictional boundaries
stipulated in any franchise agreement.
2. Where technically feasible, a competitive cable service
provider or competitive video service provider that is a holder
of a certificate of franchise authority and an incumbent
cable provider shall use reasonable efforts to interconnect
the cable or video communications network systems of the
certificate holder and incumbent cable provider for the purpose
of providing public, educational, and governmental programming.
Interconnection may be accomplished by direct cable, microwave
link, satellite, or other reasonable method of connection. A
holder of a certificate of franchise authority and an incumbent
cable provider shall negotiate in good faith and an incumbent
cable provider shall not withhold interconnection of public,
educational, or governmental channels.
Sec. 19. Section 477A.7, subsections 1 and 3, Code 2024, are
amended to read as follows:
1. a. In any service area in which a competitive cable
service provider or a competitive video service provider
holding a certificate of franchise authority offers or provides
cable service or video service, the competitive cable service
provider or competitive video service provider shall calculate
and pay a franchise fee to the municipality with authority to
grant a certificate of franchise authority in that service area
upon the municipality’s written request. If the municipality
makes such a request, the franchise fee shall be due and paid
to the municipality on a quarterly basis, not later than
forty-five days after the close of the quarter, and shall be
calculated as a percentage of gross revenues. The municipality
shall not demand any additional franchise fees from the
competitive cable service provider or competitive video service
provider, and shall not demand the use of any other calculation
method for the franchise fee.
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b. All cable service providers and video service providers
shall pay a franchise fee at the same percent of gross revenues
as had been assessed on the incumbent cable provider by the
municipality as of January 1, 2007, and such percentage shall
continue to apply for the period of the remaining term of the
existing franchise agreement with the municipality. Upon
expiration of the period of the remaining term of the agreement
with the incumbent cable service provider, a municipality may
request an increase in the franchise fee up to five percent of
gross revenues.
c. A provider who is both a competitive cable service
provider and a competitive video service provider shall be
subject to and only be required to pay one franchise fee to a
municipality under this subsection regardless of whether the
provider provides both cable service and video service.
d. At the request of a municipality and not more than once
per year, an independent auditor may perform reasonable audits
of the competitive cable service provider’s or competitive
video service provider’s calculation of the franchise fee under
this subsection . The municipality shall bear the costs of
any audit requested pursuant to this subsection , unless the
audit discloses that the competitive cable service provider or
competitive video service provider has underpaid franchise fees
by more than five percent, in which case the competitive cable
service provider or competitive video service provider shall
pay all of the reasonable and actual costs of the audit.
e. A competitive cable service provider or competitive video
service provider may identify and collect the amount of the
franchise fee as a separate line item on the regular bill of
each subscriber.
3. a. If an incumbent cable provider is required by
a franchise agreement as of January 1, 2007, to provide
institutional network capacity to a municipality for use by
the municipality for noncommercial purposes, the incumbent
cable provider and any subsequent holder of a certificate of
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franchise authority shall provide support only for the existing
institutional network on a pro rata basis per customer. Any
financial support provided for an institutional network shall
be limited to ongoing maintenance and support of the existing
institutional network. This subsection shall be applicable
only to a cable service provider’s or video service provider’s
first certificate of franchise authority issued under this
chapter , and shall not apply to any subsequent renewals. For
the purposes of this subsection , maintenance and support shall
only include the reasonable incremental cost of moves, changes,
and restoring connectivity of the fiber or coaxial cable lines
up to a demarcation point at the building.
b. For purposes of this subsection , the number of customers
of a cable service provider or video service provider shall
be determined based on the relative number of subscribers in
that municipality at the end of the prior calendar year as
reported to the municipality by all incumbent cable providers
and holders of a certificate of franchise authority. Any
records showing the number of subscribers shall be considered
confidential records pursuant to section 22.7 . The incumbent
cable provider shall provide to the municipality, on an annual
basis, the maintenance and support costs of the institutional
network, subject to an independent audit. A municipality
acting under this subsection shall notify and present a bill
to competitive cable service providers or competitive video
service providers for the amount of such support on an annual
basis, beginning one year after issuance of the certificate of
franchise authority. The annual institutional network support
shall be due and paid by the providers to the municipality in
four quarterly payments, not later than forty-five days after
the close of each quarter. The municipality shall reimburse
the incumbent cable provider for the amounts received from
competitive cable service providers or competitive video
service providers.
c. This subsection shall not apply if the incumbent
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cable service provider is a municipal utility providing
telecommunications services under section 388.10 .
Sec. 20. Section 477A.10, subsection 2, Code 2024, is
amended to read as follows:
2. A competitive cable service provider or competitive
video service provider holding a certificate of franchise
authority shall not deny access to any group of potential
residential subscribers because of the income of residents in
the local area in which such group resides.
Sec. 21. Section 477A.10, subsection 3, paragraph a,
subparagraph (3), Code 2024, is amended to read as follows:
(3) These dwelling units do not have cable or video service
available from another cable service provider or video service
provider.
Sec. 22. Section 477A.10, subsection 3, paragraph b, Code
2024, is amended to read as follows:
b. This subsection shall be applicable only after the first
date on which the video service provider operating under a
certificate of franchise authority is providing cable service
or video service to more than fifty percent of all cable and
video subscribers receiving cable or video service from the
holders of certificates of franchise authority and any other
providers of cable or video services operating under franchise
agreements with a municipality.
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