By: Paddie, et al. H.B. No. 1505
A BILL TO BE ENTITLED
AN ACT
relating to attachments for broadband service on utility poles
owned by an electric cooperative and establishing and funding a
pole replacement program for deployment of certain broadband
facilities.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Chapter 403, Government Code, is amended by
adding Subchapter R to read as follows:
SUBCHAPTER R. INFRASTRUCTURE AND BROADBAND FUNDING
Sec. 403.501. DEFINITIONS. In this subchapter:
(1) "Pole replacement fund" means the broadband pole
replacement fund established under Section 403.502.
(2) "Pole replacement program" means the Texas
Broadband Pole Replacement Program established under Section
403.503.
Sec. 403.502. BROADBAND POLE REPLACEMENT FUND. (a) The
broadband pole replacement fund is created as a fund in the state
treasury outside the general revenue fund.
(b) Notwithstanding any other law and except as provided by
federal law, the comptroller shall make a one-time transfer of $75
million from money received by this state from the federal
government from the Coronavirus Capital Projects Fund established
under Section 9901 of the American Rescue Plan Act of 2021 (Pub. L.
No. 117-2) to the credit of the pole replacement fund. The
comptroller shall make the transfer described by this subsection as
soon as practicable following receipt by this state of a sufficient
amount to make the transfer.
(c) Money deposited to the credit of the pole replacement
fund may be used only for the purpose of supporting the pole
replacement program under Section 403.503, including the costs of
program administration and operation. Money in the pole replacement
fund must be used in a manner consistent with federal law.
(d) Interest earned on money deposited to the credit of the
pole replacement fund is exempt from Section 404.071. Interest
earned on money in the fund shall be retained in the pole
replacement fund.
(e) The comptroller may issue guidelines for state agencies
regarding the implementation of this section.
Sec. 403.503. TEXAS BROADBAND POLE REPLACEMENT PROGRAM.
(a) In this section:
(1) "Eligible broadband facility" means a facility
used by a retail broadband service provider to provide qualifying
broadband service to residences or businesses in an unserved area,
including a facility owned by an affiliate of the provider and used
in the provision of service. The term does not include a facility
used only for the provision of wholesale service and not used by the
owner of the facility or the owner's affiliate to provide retail
qualifying broadband service directly to residences or businesses.
(2) "Eligible pole replacement cost" means the actual
and reasonable costs paid or incurred by a party after August 31,
2021, to remove and replace a pole, including the amount of any
expenditures to remove and dispose of the existing pole, purchase
and install a replacement pole, and transfer any existing
facilities to the new pole. The term includes costs paid or incurred
by the party responsible for the costs of a pole replacement to
reimburse the party that performs the pole replacement. The term
does not include costs that the party incurs initially that have
been reimbursed to the party by another party ultimately
responsible for the costs.
(3) "Qualifying broadband service" means retail
wireline or wireless broadband service capable of providing:
(A) a download speed of 25 megabits per second or
faster; and
(B) an upload speed of 3 megabits per second or
faster.
(4) "Unserved area" means a location that lacks access
to a retail fixed, terrestrial, wireline, or wireless Internet
service capable of providing:
(A) a download speed of 25 megabits per second or
faster; and
(B) an upload speed of three megabits per second
or faster.
(5) "Pole" means any pole used, wholly or partly, for
any wire communications or electric distribution, irrespective of
who owns or operates the pole.
(6) "Pole owner" means a person who owns or controls a
pole.
(b) The Texas Broadband Pole Replacement Program is
established for the purpose of speeding the deployment of broadband
to individuals in rural areas by reimbursing a portion of eligible
pole replacement costs incurred by certain persons.
(c) The comptroller shall administer, prescribe rules for,
and provide administrative support for the pole replacement
program. The comptroller may take any action necessary or
convenient to implement the pole replacement program.
(d) A pole owner or a provider of qualifying broadband
service who pays or incurs the costs of removing and replacing an
existing pole in an unserved area for the purpose of accommodating
the attachment of an eligible broadband facility may apply to the
comptroller for a reimbursement award for an amount equal to:
(1) 50 percent of the eligible pole replacement costs
paid or incurred by the applicant or $5,000, whichever is less, for
the pole replaced; and
(2) the documented and reasonable administrative
expenses incurred by the applicant in preparing and submitting the
reimbursement application, including expenses charged by a pole
owner under Subsection (m).
(e) The amount reimbursed under Subsection (d)(2) may not
exceed five percent of the eligible pole replacement costs in the
application.
(f) For purposes of Subsection (d), a pole is considered to
be located in an unserved area if:
(1) at the time of the request by a retail broadband
service provider to attach facilities to the pole, the pole is in a
location that, according to the latest broadband availability data
made available by the Federal Communications Commission, is in an
unserved area; or
(2) the pole is located in an area that is the subject
of a federal or state grant to deploy broadband service, the
conditions of which limit the availability of a grant to unserved
areas.
(g) The comptroller shall require each applicant for
reimbursement to provide:
(1) information sufficient to establish the number,
cost, and eligibility of pole replacements and the identity of the
retail broadband service provider attaching the eligible broadband
facilities;
(2) documentation sufficient to establish that the
pole replacements have been completed or will be completed not
later than the 90th day after the award of program reimbursement;
(3) the amount of reimbursement requested and any
grant funding or accounting information required to justify the
amount of the request;
(4) a notarized statement from an officer or agent of
the applicant that the contents of the application are true and
accurate and that the applicant accepts the requirements of
Subsections (j), (k), and (l) as a condition of receiving an award
of program reimbursement; and
(5) any other information the comptroller considers
necessary for final review, award, and payment of program
reimbursements.
(h) Not later than the 60th day after the date that the
comptroller receives a completed application for reimbursement,
the comptroller shall review the application and, if the pole
replacement fund includes enough money to pay the award amount,
shall issue a reimbursement award. The award must be paid not later
than 30 days after the date of issuance.
(i) The comptroller must provide notice of a reimbursement
award to the pole owner and the retail broadband service provider
attaching the eligible broadband facility.
(j) As a condition of receiving an award of program
reimbursement, an applicant must certify the applicant's
compliance with the requirements of this section.
(k) If a pole owner receives a reimbursement award under
this section, the owner may not include in any rates or fees charged
for the owner's services an eligible pole replacement cost:
(1) reimbursed by the program;
(2) paid for by a qualifying broadband provider; or
(3) funded by another grant source.
(l) If the comptroller finds on substantial evidence after
notice and opportunity to respond that a recipient of funds under
this section has materially violated the requirements of this
section with respect to reimbursements or portions of
reimbursements, the comptroller may direct the recipient to refund
the reimbursement or a portion of the reimbursement with interest
at the applicable federal funds rate as specified by Section
4A.506(b), Business & Commerce Code, to the pole replacement fund
or the state general fund.
(m) If a retail broadband service provider incurs eligible
pole replacement costs relating to a pole replacement performed by
the pole owner, the owner shall coordinate with the provider to
supply all information necessary for the provider to promptly
complete and submit an application under this section. A pole owner
may charge the provider the documented and reasonable
administrative expenses incurred by the pole owner for assistance,
in an amount not to exceed five percent of eligible pole replacement
costs. The provider may seek reimbursement of costs in accordance
with Subsection (d)(2).
(n) If the pole replacement fund does not have money
sufficient to pay an award, the application for the award is
considered denied. The application may be refiled if sufficient
funds are later made available in the pole replacement fund.
(o) Not later than the 60th day after the date the pole
replacement fund receives money for the pole replacement program,
the comptroller shall maintain and publish on the comptroller's
Internet website:
(1) statistics on the number of applications received,
processed, and rejected by the program;
(2) statistics on the size, number, and status of
reimbursements awarded by the program, including the retail
broadband service providers and pole owners receiving
reimbursements; and
(3) the estimated amount of money remaining in the
pole replacement fund.
(p) Not later than the first anniversary after the pole
replacement fund receives funds for the purpose of providing pole
replacement reimbursements, the state auditor shall audit the fund
and the administration of the pole replacement program.
(q) Not later than one year after the date that the amount
transferred to the pole replacement fund under Section 403.502(b)
is exhausted, the comptroller shall identify, examine, and report
on the deployment of broadband infrastructure and technology
facilitated by the pole reimbursements the comptroller has awarded.
SECTION 2. The heading to Chapter 252, Utilities Code, is
amended to read as follows:
CHAPTER 252. CABLE ATTACHMENTS TO ELECTRIC COOPERATIVE'S
DISTRIBUTION POLES
SECTION 3. Title 5, Utilities Code, is amended by adding
Chapter 253 to read as follows:
CHAPTER 253. BROADBAND ATTACHMENTS TO ELECTRIC COOPERATIVE'S
DISTRIBUTION POLES
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 253.0001. DEFINITIONS. In this chapter:
(1) "Broadband provider" means an entity that provides
broadband service either directly or through an affiliate that uses
the entity's communications facilities, regardless of whether the
entity:
(A) provides additional services in addition to
broadband service; or
(B) uses its facilities in whole or in part to
provide broadband service.
(2) "Broadband service" means Internet service with
the capability of providing:
(A) a download speed of 25 megabits per second or
faster; and
(B) an upload speed of three megabits per second
or faster.
(3) "Pole" has the meaning assigned by Section
252.001.
(4) "Pole attachment" means an affixture of cables,
strands, wires, and associated equipment used in the provision of a
broadband provider's services attached to a pole directly or
indirectly or placed in a right-of-way owned or controlled by an
electric cooperative.
Sec. 253.0002. APPLICABILITY. This chapter applies to a
pole attachment that is used wholly or partly to provide broadband
service and affixed by a broadband provider to a pole owned and
controlled by an electric cooperative. This chapter does not apply
to a pole attachment regulated by the Federal Communications
Commission under 47 U.S.C. Section 224.
Sec. 253.0003. CONSTRUCTION OF CHAPTER. (a) This chapter
does not abrogate or affect a right or obligation of a party to a
pole attachment contract entered into by a broadband provider and
an electric cooperative before September 1, 2021.
(b) This chapter does not limit a right of a party to a pole
attachment contract to request modification, amendment, or renewal
of such contract to conform it to the provisions of this chapter.
Sec. 253.0004. NO STATE CERTIFICATION; NO REGULATORY
AUTHORITY. (a) This chapter does not constitute state
certification under 47 U.S.C. Section 224. If a court determines
that this chapter constitutes certification under that section,
this chapter is not enforceable and has no effect.
(b) This chapter may not be construed to subject an electric
cooperative to regulation by the Federal Communications Commission
under 47 U.S.C. Section 224.
(c) This chapter does not authorize a department, agency, or
political subdivision of this state to exercise enforcement or
regulatory authority over attachments to electric cooperative
poles.
Sec. 253.0005. CONSTRUCTION OF TERMS AND PHRASES.
Technical terms and phrases in this chapter, other than those
defined by Section 253.0001, shall be construed using the term's or
phrase's usual and customary meanings in the electric and broadband
industries.
Sec. 253.0006. COST-BASED NONRECURRING CHARGES.
Nonrecurring charges authorized by this chapter must be cost-based.
SUBCHAPTER B. ACCESS TO POLES
Sec. 253.0101. APPLICATION FOR POLE ACCESS. A broadband
provider may not access a pole owned by an electric cooperative for
the purpose of placing a pole attachment unless the provider
applies for that access.
Sec. 253.0102. USE OF POLE ATTACHMENTS FOR MULTIPLE
SERVICES. A broadband provider that attaches a pole attachment
under this chapter may use the attachment for any service delivered
over the provider's facilities, including cable service.
Sec. 253.0103. NONDISCRIMINATORY ACCESS; MODIFICATION OR
REPLACEMENT TO ACCOMMODATE ATTACHMENT. (a) Except as provided by
this chapter, an electric cooperative shall provide a broadband
provider with nondiscriminatory access to a pole that the
cooperative owns or controls.
(b) Except as provided by Subsection (c), an electric
cooperative may deny a broadband provider access to a pole:
(1) if there is insufficient capacity; or
(2) for reasons of safety, reliability, and generally
applicable engineering purposes.
(c) An electric cooperative may not deny a broadband
provider access to a pole if the basis for denial may be remedied by
rearranging facilities on the pole through reasonable make-ready
activities.
(d) Except as provided by Subsection (e), if a pole must be
replaced to accommodate a new pole attachment applied for by a
broadband provider:
(1) the electric cooperative and broadband provider
shall determine, through good faith negotiations, a reasonable date
by which the pole replacement will occur; and
(2) the broadband provider shall pay the actual costs
of replacing the pole, including the cost to:
(A) remove and dispose of the existing pole;
(B) purchase and install a replacement pole; and
(C) transfer any existing facilities to the new
pole.
(e) An electric cooperative is responsible for the costs of
removing and replacing under Subsection (d) a pole:
(1) with recorded conditions or defects that would
reasonably be expected to endanger human life or property and which
should be promptly corrected; or
(2) that must be replaced for safety or reliability as
a result of normal wear and tear or other natural causes and not on
account of a pole attachment or the action of a broadband provider
or third party.
SUBCHAPTER C. POLE ATTACHMENT CONTRACTS
Sec. 253.0201. CONTRACTS FOR POLE ATTACHMENTS. (a) An
electric cooperative that owns a pole may require a broadband
provider that attaches a pole attachment to the pole under this
chapter to enter into a contract for access to the pole.
(b) The terms and conditions of a contract under Subsection
(a) must be consistent with this chapter.
Sec. 253.0202. RATES, TERMS, AND CONDITIONS FOR POLE
ATTACHMENT. (a) A broadband provider and an electric cooperative
shall establish the rates, terms, and conditions for pole
attachments by a written pole attachment contract executed by both
parties.
(b) The rates, terms, and conditions of a contract under
this chapter must:
(1) be just, reasonable, and nondiscriminatory; and
(2) comply with this chapter.
(c) In determining whether rates, terms, and conditions are
just and reasonable, the following factors must be considered:
(1) the interests of and benefits to the consumers and
potential consumers of the electric cooperative's services;
(2) the interests of and benefits to the subscribers
and potential subscribers to broadband services offered through the
pole attachments;
(3) the interests of and benefits to third parties
from the availability of electric services and broadband services
offered through the pole attachments;
(4) compliance with applicable safety standards; and
(5) the maintenance and reliability of both electric
distribution and broadband services.
(d) A broadband provider and an electric cooperative shall
negotiate a pole attachment contract and any amendment,
modification, or renewal thereof in good faith.
(e) A request to negotiate a new pole attachment contract or
to amend, modify, or renew a contract pertaining to pole
attachments by a broadband provider or an electric cooperative must
be made in writing.
Sec. 253.0203. CONTRACT NEGOTIATIONS AND MEDIATION. (a)
If a broadband provider and an electric cooperative are unable to
agree to a new pole attachment contract before the expiration date
of an existing contract, the rates, terms, and conditions of the
existing contract and the terms and conditions of the electric
cooperative's application and permitting processes remain in
force:
(1) during the 90-day negotiation period described by
Subsection (b) and during the period of any agreed extension;
(2) during the 60-day mediation period described by
Subsection (b) and during the period of any agreed extension; and
(3) pending final disposition of any litigation
commenced under Subsection (c).
(b) If a broadband provider and an electric cooperative are
unable to agree to a new pole attachment contract before the 91st
day after the expiration date of an existing contract, and are
unable to agree to an extension of the negotiation period for a
certain number of days, the broadband provider and electric
cooperative shall attempt to resolve any disagreement over the
rates, terms, or conditions by submitting the contract negotiations
to a mediation process. The mediation process may not extend later
than the 60th day after the end of the initial 90-day negotiation
period and any agreed extension of that period unless the broadband
provider and electric cooperative agree to an extension of the
mediation period for a certain number of days. The mediation
process must be conducted in a county in which the electric
cooperative has distribution poles. The broadband provider and
electric cooperative must share equally the expenses for the
mediator.
(c) If the mediation process under Subsection (b) does not
resolve the disagreement over the rates, terms, or conditions of a
new pole attachment agreement, the broadband provider or electric
cooperative may file suit in a district court to resolve the
disagreement or dispute.
SUBCHAPTER D. ADDITIONAL POLE ATTACHMENT REQUIREMENTS
Sec. 253.0401. TRANSFER OF ATTACHMENTS. (a) Before an
electric cooperative installs a new pole to replace an existing
pole due to the rerouting, maintenance, or upgrading of the
electric distribution system, the cooperative shall provide notice
of the replacement to each broadband provider with a pole
attachment on the existing pole.
(b) The notice required under Subsection (a) must specify a
date by which the broadband provider must remove the pole
attachment from the existing pole and transfer the attachment to
the new pole.
(c) If a broadband provider does not transfer a pole
attachment to the new pole before the 31st day after the date
specified in the notice, the electric cooperative may transfer the
pole attachment to the new pole at the broadband provider's
expense, including the cost for the electric cooperative to return
to the site.
(d) A broadband provider shall indemnify, defend, and hold
harmless an electric cooperative and the cooperative's members,
directors, officers, agents, and employees from and against all
liability for the removal and transfer of a pole attachment subject
to this section, except for personal injury or property damage
arising from the gross negligence or wilful misconduct of the
electric cooperative during the removal and transfer process.
Sec. 253.0402. ABANDONED POLE ATTACHMENTS; REMOVAL. (a) A
broadband provider that receives a written request from an electric
cooperative to remove an abandoned pole attachment owned by the
provider from a pole owned by the cooperative shall remove the
attachment not later than the 60th day after the date the provider
receives the request.
(b) Before the deadline under Subsection (a), a broadband
provider may request, and an electric cooperative may grant, a
reasonable extension of that deadline. A request for an extension
under this subsection must be in writing.
(c) If a broadband provider does not remove a pole
attachment by the deadline under Subsection (a) or an extended
deadline under Subsection (b), the electric cooperative may remove,
use, sell, or dispose of the pole attachment at the broadband
provider's expense.
(d) An electric cooperative may require that a broadband
provider post a security instrument in an amount reasonably
sufficient to cover the potential cost to the electric cooperative
of removal and disposal of abandoned pole attachments.
(e) A broadband provider shall indemnify, defend, and hold
harmless an electric cooperative and the cooperative's members,
directors, officers, agents, and employees from and against all
liability for the removal, use, sale, or disposal of abandoned pole
attachments, except for personal injury or property damage arising
from the gross negligence or wilful misconduct of the electric
cooperative during the removal and disposal process.
Sec. 253.0403. EASEMENTS; INDEMNITY. (a) A broadband
provider is responsible for obtaining all rights-of-way and
easements necessary for the installation, operation, and
maintenance of the provider's pole attachments.
(b) An electric cooperative is not required to obtain or
expand a right-of-way or easement to accommodate a pole attachment
requested by a broadband provider.
(c) An electric cooperative is not liable if a broadband
provider is prevented from placing or maintaining a pole attachment
because the broadband provider did not obtain a necessary
right-of-way or easement.
(d) A broadband provider shall indemnify, defend, and hold
harmless the electric cooperative and the cooperative's members,
directors, officers, agents, and employees from and against any
liability resulting from the broadband provider's failure to obtain
a necessary right-of-way or easement for a pole attachment.
SECTION 4. The comptroller of public accounts shall
establish rules for the Texas Broadband Pole Replacement Program,
as established by Section 403.503, Government Code, as added by
this Act, not later than March 1, 2022.
SECTION 5. This Act takes effect September 1, 2021.