CHAPTER 225
HB 653-FN-LOCAL – FINAL VERSION
18Jan2006… 0181h
11May2006… 1421eba
2006 SESSION
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
This bill, for areas not served by an existing broadband carrier or provider:
I. Authorizes a county or municipality to issue bonds for broadband infrastructure.
II. Exempts broadband infrastructure bonds from municipal debt limits.
III. Authorizes municipalities to charge broadband access tariffs, to be kept in broadband funds and expended only for broadband infrastructure.
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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Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
18Jan2006… 0181h
11May2006… 1421eba
05-0714
06/10
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Six
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:
225:1 Bonds for Broadband Infrastructure Added to Permissible Bonds for Counties and Municipalities. Amend RSA 33:3 to read as follows:
33:3 Purpose of Issue of Bonds or Notes. A municipality or county may issue its bonds or notes for the acquisition of land, for planning relative to public facilities, for the construction, reconstruction, alteration, and enlargement or purchase of public buildings, for other public works or improvements of a permanent nature including broadband infrastructure as defined in RSA 38:38, I(e), to be purchased or constructed in areas not served by an existing broadband carrier or provider, for the purchase of departmental equipment of a lasting character, for the payment of judgments, and for purposes of economic development which shall include public-private partnerships involving capital improvements, loans, and guarantees. The public benefit in any public-private partnership must outweigh any benefit accruing to a private party. Bonds or notes for the purposes of economic development may be issued only after the governing body of the municipality or county has held hearings and presented the public benefit findings to the public and after such issuance has been approved by the legislative body. A municipality or county shall not issue bonds or notes to provide for the payment of expenses for current maintenance and operation except as otherwise specifically provided by law.
225:2 Issue of Bonds for Certain Preliminary Expenses. RSA 33:3-c is repealed and reenacted to read as follows:
33:3-c Issue of Bonds for Preliminary Expenses.
I. A municipality or county may issue its bonds or notes for the purpose of defraying the cost of preliminary or final plans and specifications or other preliminary expenses incidental to, or connected with, any proposed public work or improvement of a permanent nature consisting of the construction, reconstruction, alteration, enlargement, or improvement of the following:
(a) A public building.
(b) A water works.
(c) A sewerage system or sewage or waste treatment facility.
(d) A solid waste disposal or resource recovery facility.
(e) Broadband infrastructure as defined in RSA 38:38 to be purchased or constructed in areas not served by an existing broadband carrier or provider.
II. Bonds or notes shall mature over a period of not more than 5 years from the date of issue unless they are issued at the same time as bonds or notes for the public work or improvement for which such expenses were incurred, in which case said bonds or notes shall mature over a period not exceeding the expected useful life of such public work or improvement. A municipality or county may issue its bonds or notes in accordance with this section for planning and other preliminary expenses relating to solid waste disposal or resource recovery facilities to serve the municipality or county, notwithstanding that the facilities may later be owned by a private entity, but only for such expenses incurred prior to any binding contractual commitment to a proposed private owner, and only if such bonds or notes do not constitute “private activity bonds” as defined in section 103(n)(7) of the United States Internal Revenue Code of 1954, as amended.
225:3 New Section; Broadband Infrastructure Bonds Authorized. Amend RSA 33 by inserting after section 3-f the following new section:
33:3-g Broadband Infrastructure Bonds.
I. A municipality may issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure in areas not served by an existing broadband carrier or provider that would be provided at a fee to broadband carriers that provide broadband services. Without limiting the foregoing, broadband infrastructure may be the subject of public-private partnerships established in accordance with the provisions of RSA 33:3.
II. Bonds issued under 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 a separate and distinct loan.
III. A municipality shall not issue bonds for the purpose of financing the development, construction, reconstruction, renovation, improvement, and acquisition of broadband infrastructure in areas not served by an existing broadband carrier or provider unless a request for proposals has been issued and no broadband carrier or provider has responded positively within 2 months or deployed broadband service within 14 months of the issuance of the request for proposals.
225:4 New Section; Extension From Debt Limit; Broadband Infrastructure. Amend RSA 33 by inserting after section 6-e the following new section:
33:6-f Exclusion From Debt Limit; Broadband Infrastructure. Municipalities may incur debt for broadband infrastructure as defined in RSA 38:38, I(e) by the issue of bonds or notes authorized under this chapter. Any debt incurred for this purpose shall be outside the debt limit prescribed in this chapter. Such debt shall at no time be included in the net indebtedness of any municipality for the purposes of determining its borrowing capacity.
225:5 Definitions; “Broadband Infrastructure” Added to Definition of “Revenue-Producing Facilities.” Amend RSA 33-B:1, VI to read as follows:
VI. “Revenue-producing facilities” means water works, broadband infrastructure as defined in RSA 38:38, I(e), purchased or constructed in areas not served by an existing broadband carrier or provider, 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.
225:6 New Subdivision; Broadband Access. Amend RSA 38 by inserting after section 37 the following new subdivision:
Broadband Access
38:38 Broadband Access.
I. In this subdivision:
(a) “Access tariff” means the fee charged on a monthly or annual basis to broadband carriers for access to the broadband infrastructure.
(b) “Areas not served” means any part of a municipality without a wireless or facilities based broadband service or a wireless or facilities based broadband service provider. Wireless shall not include subscription satellite service.
(c) “Broadband” means the transmission of information, between or among points specified by the user, with or without change in the form or content of the information as sent and received, at rates of transmission defined by the Federal Communications Commission as “broadband.”
(d) “Broadband carrier” means any provider of broadband services, except aggregators of broadband services, as defined in section 226 of the 1996 Telecommunications Act.
(e) “Broadband infrastructure” means all equipment and facilities, including all changes, modifications, and expansions to existing facilities, as well as the customer premises equipment used to provide broadband, and any software integral to or related to the operations, support, facilitation, or interconnection of such equipment, including upgrades, and any installation, operations and support, maintenance, and other functions required to support the delivery of broadband.
(f) “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.
(g) “Open network” means any broadband infrastructure which is open to any third party users in a nondiscriminatory manner on a fair and equitable basis using publicly available access tariffs for services.
(h) “Open network interfaces” means the technical and operational means, manners, and methods for any third party access to the broadband infrastructure, which shall be provided on the basis of generally acceptable industry standards available at the time of access.
II. A municipality may use its broadband infrastructure for the purpose of providing an open network and assuring that third party access is available in accordance with current state and federal regulations.
38:39 Broadband Access Tariffs. For defraying the cost of acquisition, construction, payment of the interest on any debt incurred, management, maintenance, operation, and repair of broadband infrastructure, or the construction, enlargement, or improvement of such systems, the governing body may establish a scale of rates called access tariffs, may prescribe the manner and the time for the payment of such tariffs, and may change such tariffs when it deems advisable.
38:40 Broadband Fund.
I. The funds received from the collection of access tariffs shall be kept as a separate fund to be known as the broadband fund. Such fund shall be allowed to accumulate from year to year, shall not be commingled with town or city tax revenues, and shall not be deemed part of the municipality’s general fund accumulated surplus. Such fund may be expended only for the purposes specified in RSA 38:38, or for the previous expansion or replacement of broadband infrastructure.
II. Except when a capital reserve fund is established pursuant to paragraph III, all broadband funds shall be held in the custody of the municipal treasurer. Estimates of anticipated revenues and anticipated expenditures from the broadband fund shall be prepared and submitted to the governing body as a special warrant article as set forth in RSA 32, if applicable, and shall be included as part of the municipal budget submitted to the local legislative body for approval. Expenditures shall be within amounts appropriated by the local legislative body.
III. At the option of the local governing body, all or part of any surplus in the broadband fund may be placed in one or more capital reserve funds held in the custody of the trustees of trust funds pursuant to RSA 35:10. If such a reserve fund is created, then the governing body, may expend such funds pursuant to RSA 35:15 without prior approval or appropriation by the local legislative body, but all such expenditures shall be reported to the municipality pursuant to RSA 38:41. This paragraph shall not be construed to prohibit the establishment of other capital reserve funds for any lawful purpose relating to broadband access.
38:41 Broadband Fund Report. The governing body shall annually make a report of the broadband fund to the municipality showing the expenses and income of the fund, and all other material facts. This report shall be published in the annual report of the municipality.
225:7 Effective Date. This act shall take effect 60 days after its passage.
Approved: June 1, 2006
Effective: July 31, 2006