1     
MUNICIPAL UTILITIES AMENDMENTS

2     
2016 GENERAL SESSION

3     
STATE OF UTAH

4     
Chief Sponsor: Jerry W. Stevenson

5     
House Sponsor: Brad R. Wilson

6     

7     LONG TITLE
8     General Description:
9           This bill allows a municipality to call an election on proposed public communications
10     service facilities.
11     Highlighted Provisions:
12          This bill:
13          ▸      defines terms;
14          ▸     clarifies that a municipality may create public communications service facilities;
15     and
16          ▸     allows a municipality to call an election on proposed public communications service
17     facilities.
18     Money Appropriated in this Bill:
19          None
20     Other Special Clauses:
21          None
22     Utah Code Sections Affected:
23     AMENDS:
24          10-8-14, as last amended by Laws of Utah 2014, Chapter 55
25          10-18-102, as enacted by Laws of Utah 2001, Chapter 83
26          10-18-105, as last amended by Laws of Utah 2004, Chapter 270
27          10-18-204, as enacted by Laws of Utah 2001, Chapter 83
28     

29     Be it enacted by the Legislature of the state of Utah:
30          Section 1. Section 10-8-14 is amended to read:
31          10-8-14. Utility and telecommunications services -- Service beyond municipal
32     limits -- Retainage -- Notice of service and agreement.
33          (1) As used in this section, "public telecommunications service facilities" means the
34     same as that term is defined in Section 10-18-102.
35          [(1)] (2) A municipality may:
36          (a) construct, maintain, and operate waterworks, sewer collection, sewer treatment
37     systems, gas works, electric light works, telecommunications lines, cable television lines, [or]
38     public transportation systems , or public telecommunications service facilities ;
39          (b) authorize the construction, maintenance and operation of the works or systems
40     listed in Subsection [(1)] (2)(a) by others;
41          (c) purchase or lease the works or systems listed in Subsection (1)(a) from any person
42     or corporation; and
43          (d) sell and deliver the surplus product or service capacity of any works or system
44     listed in Subsection [(1)] (2)(a), not required by the municipality or the municipality's
45     inhabitants, to others beyond the limits of the municipality, except the sale and delivery of:
46          (i) retail electricity beyond the municipal boundary is governed by Subsections (3)
47     through (8); and
48          (ii) cable television services or public telecommunications services is governed by
49     Subsection [(11)] (12).
50          [(2)] (3) If any payment on a contract with a private person, firm, or corporation to
51     construct waterworks, sewer collection, sewer treatment systems, gas works, electric works,
52     telecommunications lines, cable television lines, [or] public transportation systems , or public
53     telecommunications service facilities is retained or withheld, it shall be retained or withheld
54     and released as provided in Section 13-8-5.
55          [(3)] (4) (a) Except as provided in Subsection [(3)] (4)(b), [(5)] (6), or [(9)] (10), a
56     municipality may not sell or deliver the electricity produced or distributed by its electric works
57     constructed, maintained, or operated in accordance with Subsection [(1)] (2) to a retail
58     customer located beyond its municipal boundary.
59          (b) A municipality that provides retail electric service to a customer beyond its
60     municipal boundary on or before June 15, 2013, may continue to serve that customer if:
61          (i) on or before December 15, 2013, the municipality provides the electrical
62     corporation, as defined in Section 54-2-1, that is obligated by its certificate of public
63     convenience and necessity to serve the customer with an accurate and complete verified written
64     notice described in Subsection [(3)] (4)(c) that identifies each customer served by the
65     municipality beyond its municipal boundary;
66          (ii) no later than June 15, 2014, the municipality enters into a written filing agreement
67     for the provision of electric service with the electrical corporation; and
68          (iii) the Public Service Commission approves the written filing agreement in
69     accordance with Section 54-4-40.
70          (c) The municipality shall include in the written notice required in Subsection [(3)]
71     (4)(b)(i) for each customer:
72          (i) the customer's meter number;
73          (ii) the location of the customer's meter by street address, global positioning system
74     coordinates, metes and bounds description, or other similar method of meter location;
75          (iii) the customer's class of service; and
76          (iv) a representation that the customer was receiving service from the municipality on
77     or before June 15, 2013.
78          [(4)] (5) The written filing agreement entered into in accordance with Subsection
79     (3)(b)(ii) shall require the following:
80          (a) The municipality shall provide electric service to a customer identified in
81     accordance with Subsection [(3)] (4)(b)(i) unless the municipality and the electrical corporation
82     subsequently agree in writing that the electrical corporation will provide electric service to the
83     customer.
84          (b) If a customer who is located outside the municipal boundary and who is not
85     identified in accordance with Subsection [(3)] (4)(b)(i) requests service from the municipality
86     after June 15, 2013, the municipality may not provide that customer electric service unless the
87     municipality submits a request to and enters into a written agreement with the electric
88     corporation in accordance with Subsection [(5)] (6).
89          [(5)] (6) (a) A municipality may submit to the electrical corporation a request to
90     provide electric service to an electric customer described in Subsection [(4)] (5)(b).
91          (b) If a municipality submits a request, the electrical corporation shall respond to the
92     request within 60 days.
93          (c) If the electrical corporation agrees to allow the municipality to provide electric
94     service to the customer:
95          (i) the electrical corporation and the municipality shall enter into a written agreement;
96          (ii) the municipality shall agree in the written agreement to subsequently transfer
97     service to the customer described in Subsection [(4)] (5)(b) if the electrical corporation notifies,
98     in writing, the municipality that the electrical corporation has installed a facility capable of
99     providing electric service to the customer; and
100          (iii) the municipality may provide the service if:
101          (A) except as provided in Subsection [(5)] (6)(c)(iii)(B), the Public Service
102     Commission approves the agreement in accordance with Section 54-4-40; or
103          (B) for an electrical cooperative that meets the requirements of Subsection 54-7-12(7),
104     the governing board of the electrical cooperative approves the agreement.
105          (d) The municipality or the electrical corporation may terminate the agreement for the
106     provision of electric service if the Public Service Commission imposes a condition authorized
107     in Section 54-4-40 that is a material change to the agreement.
108          [(6)] (7) If the municipality and electrical corporation make a transfer described in
109     Subsection [(5)] (6)(c)(ii):
110          (a) (i) the municipality shall transfer the electric service customer to the electrical
111     corporation; and
112          (ii) the electrical corporation shall provide electric service to the customer; and
113          (b) the municipality shall transfer a facility in accordance with and for the value as
114     provided in Section 10-2-421.
115          [(7)] (8) (a) In accordance with Subsection [(7)] (8)(b), the municipality shall establish
116     a reasonable mechanism for resolving potential future complaints by an electric customer
117     located outside its municipal boundary.
118          (b) The mechanism shall require:
119          (i) that the rates and conditions of service for a customer outside the municipality's
120     boundary are at least as favorable as the rates and conditions of service for a similarly situated
121     customer within the municipality's boundary; and
122          (ii) if the municipality provides a general rebate, refund, or other payment to a
123     customer located within the municipality's boundary, that the municipality also provide the
124     same general rebate, refund, or other payment to a similarly situated customer located outside
125     the municipality's boundary.
126          [(8)] (9) The municipality is relieved of any obligation to transfer a customer described
127     in Subsection [(4)] (5)(b) or facility used to serve the customer in accordance with Subsection
128     [(5)] (6)(c)(ii) if the municipality annexes the property on which the customer is being served.
129          [(9)] (10) (a) A municipality may provide electric service outside of its municipal
130     boundary to a facility that is solely owned and operated by the municipality for municipal
131     service.
132          (b) A municipality's provision of electric service to a facility that is solely owned and
133     operated by the municipality does not expand the municipality's electric service area.
134          [(10)] (11) Nothing in this section expands or diminishes the ability of a municipality
135     to enter into a wholesale electrical sales contract with another municipality that serves electric
136     customers to sell and deliver wholesale electricity to the other municipality.
137          [(11)] (12) A municipality's actions under this section related to works or systems
138     involving public telecommunications services or cable television services are subject to the
139     requirements of Chapter 18, Municipal Cable Television and Public Telecommunications
140     Services Act.
141          Section 2. Section 10-18-102 is amended to read:
142          10-18-102. Definitions.
143          As used in this chapter:
144          (1) "Cable television service" means:
145          (a) the one-way transmission to subscribers of:
146          (i) video programming; or
147          (ii) other programming service; and
148          (b) subscriber interaction, if any, that is required for the selection or use of:
149          (i) the video programming; or
150          (ii) other programming service.
151          (2) "Capital costs" means all costs of providing a service that are capitalized in
152     accordance with generally accepted accounting principles.
153          (3) "Cross subsidize" means to pay a cost included in the direct costs or indirect costs
154     of providing a service that is not accounted for in the full cost of accounting of providing the
155     service.
156          (4) "Direct costs" means those expenses of a municipality that:
157          (a) are directly attributable to providing:
158          (i) a cable television service; or
159          (ii) a public telecommunications service; and
160          (b) would be eliminated if the service described in Subsection (4)(a) were not provided
161     by the municipality.
162          (5) "Feasibility consultant" means an individual or entity with expertise in the
163     processes and economics of providing:
164          (a) cable television service; and
165          (b) public telecommunications service.
166          (6) (a) "Full-cost accounting" means the accounting of all costs incurred by a
167     municipality in providing:
168          (i) a cable television service; or
169          (ii) a public telecommunications service.
170          (b) The costs included in a full-cost accounting include all:
171          (i) capital costs;
172          (ii) direct costs; and
173          (iii) indirect costs.
174          (7) (a) "Indirect costs" means any costs:
175          (i) identified with two or more services or other functions; and
176          (ii) that are not directly identified with a single service or function.
177          (b) "Indirect costs" may include cost factors for:
178          (i) administration;
179          (ii) accounting;
180          (iii) personnel;
181          (iv) purchasing;
182          (v) legal support; and
183          (vi) other staff or departmental support.
184          (8) "Private provider" means a person that:
185          (a) provides:
186          (i) cable television services; or
187          (ii) public telecommunications services; and
188          (b) is a private entity.
189          (9) "Public telecommunications service" means the two-way transmission of signs,
190     signals, writing, images, sounds, messages, data, or other information of any nature by wire,
191     radio, lightwaves, or other electromagnetic means offered to the public generally.
192          (10) "Public telecommunications service facilities" means a facility described in
193     Subsection 10-18-105(2).
194          [(10)] (11) "Subscribers" means a person that lawfully receives:
195          (a) cable television services; or
196          (b) public telecommunications services.
197          Section 3. Section 10-18-105 is amended to read:
198          10-18-105. Scope of chapter.
199          (1) Nothing in this chapter authorizes any county or other political subdivision of this
200     state to:
201          (a) provide:
202          (i) a cable television service; or
203          (ii) a public telecommunications service; or
204          (b) purchase, lease, construct, maintain, or operate a facility for the purpose of
205     providing:
206          (i) a cable television service; or
207          (ii) a public telecommunications service.
208          (2) Except as provided in [Subsection] Subsections (3) and (4), this chapter does not
209     apply to a municipality purchasing, leasing, constructing, or equipping facilities:
210          (a) that are designed to provide services within the municipality ; and
211          (b) that the municipality:
212          (i) uses for internal municipal government purposes; or
213          (ii) by written contract, leases, sells capacity in, or grants other similar rights to a
214     private provider to use the facilities in connection with a private provider offering:
215          (A) cable television services; or
216          (B) public telecommunications services.
217          (3) (a) As used in this Subsection (3), "municipal entity" means:
218          (i) a municipality; or
219          (ii) an entity created pursuant to an agreement:
220          (A) under Title 11, Chapter 13, Interlocal Cooperation Act; and
221          (B) to which a municipality is a party.
222          (b) Notwithstanding Subsection (2), a municipal entity shall comply with Subsection
223     (3)(c) if the municipal entity purchases, leases, constructs, or equips facilities that the
224     municipal entity by written contract leases, sells capacity in, or grants other similar rights to a
225     private provider to use the facilities in connection with a private provider offering:
226          (i) cable television services; or
227          (ii) public telecommunications services.
228          (c) A municipal entity described in Subsection (3)(b) shall, with respect to an action
229     described in Subsection (3)(b), comply with the obligations imposed on a municipality
230     pursuant to:
231          (i) Section 10-18-302; and
232          (ii) Subsections 10-18-303(3) and (4).
233          (4) A municipality described in Subsection 10-18-105(2) may call an election under
234     Section 10-18-204 with respect to the provision of public telecommunications service facilities.
235          Section 4. Section 10-18-204 is amended to read:
236          10-18-204. Vote permissible -- Referendum.
237          (1) (a) (i) A legislative body of a municipality may, by a majority vote [may], call an
238     election on whether [or not] the municipality shall provide [the] proposed:
239          [(i)] (A) cable television services; or
240          [(ii)] (B) public telecommunications services.
241          (ii) A municipal legislative body that, before July 1, 2016, approves the provision of
242     public telecommunications service facilities may, by a majority vote, call an election on
243     whether the municipality shall provide proposed public telecommunications service facilities.
244          (b) If under Subsection (1)(a) the legislative body calls an election, the election shall be
245     held:
246          (i) (A) at the next municipal general election; or
247          (B) as provided in Subsection 20A-1-203(1), at a local special election the purpose of
248     which is authorized by this section; and
249          (ii) in accordance with Title 20A, Election Code, except as provided in this section.
250          (c) (i) The notice of the election called under Subsection (1)(a)(i) shall include with
251     any other information required by law:
252          [(i)] (A) a summary of the cable television services or public telecommunications
253     services that the legislative body of the municipality proposes to provide to subscribers residing
254     within the boundaries of the municipality;
255          [(ii)] (B) the feasibility study summary under Section 10-18-203;
256          [(iii)] (C) a statement that a full copy of the feasibility study is available for inspection
257     and copying; and
258          [(iv)] (D) the location in the municipality where the feasibility study may be inspected
259     or copied.
260          (ii) The notice of an election called under Subsection (1)(a)(ii) shall include a summary
261     prepared by the municipality describing the proposed public communications service facilities.
262          (d) [The ballot at] (i) For an election called under Subsection (1)(a)(i), the ballot for the
263     election shall pose the question substantially as follows:
264          "Shall the [name of the municipality] provide [cable television service or public
265     telecommunications service] to the inhabitants of the [municipality][.]?"
266          (ii) For an election called under Subsection (1)(a)(ii), the ballot for the election shall
267     pose the question substantially as follows:
268          "Shall the [name of the municipality] provide public telecommunications service
269     facilities within [name of the municipality] by [brief description of the method or means and
270     financing terms, including total principal and interest costs, by which the public
271     communications service facilities will be provided]?"
272          (e) The ballot proposition may not take effect until submitted to the electors and
273     approved by the majority of those voting on the ballot.
274          (2) In accordance with Title 20A, Chapter 7, Issues Submitted to the Voters, a
275     [municipality] municipal legislative body's action to have the municipality over which the
276     legislative body presides provide cable television services or public telecommunications
277     services is subject to local referenda.
278          (3) (a) The results of an election called under Subsection (1)(a)(ii) are not binding and
279     do not:
280          (i) require the municipality that called the election to take, or refrain from taking, any
281     action; or
282          (ii) limit the municipality that called the election from taking any action authorized
283     under Section 10-8-14 or 10-18-105.
284          (b) An election called under Subsection (1)(a)(ii) does not exempt a municipality from
285     the applicable requirements of this Title 10, Chapter 18, Municipal Cable Television and
286     Public Telecommunications Services Act.