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.