TMEPA Legislative Update - February 2017

 

With all the bills for the legislative session filed, everyone knows the fights before them. Some bills will require us to play offense, some to play defense, and others to keep an eye because sometimes you just never know what might happen with them. This year an issue TMEPA has been fighting on for many years has been taken up by the governor and more legislators than ever: broadband expansion. Below is a breakdown of a few of the most important bills and issues affecting Tennessee’s municipal electric utilities. 

This year there are at least six substantive bills (and several caption bills filed as placeholders) dealing with increasing access to broadband, a strong indication this may finally be the year this issue gets more than just lip service. The highest profile bill is Governor Haslam’s bill (HB1215). The House Business and Utilities Subcommittee is scheduled to take up Governor Haslam’s broadband legislation this week. The highest profile part of the bill gives electric cooperatives the authority to offer broadband service. The governor’s bill has several parts:

• It sets up a grant program to focus on getting broadband service to unserved areas. Municipal broadband providers would be eligible for the grants, but the focus is on private providers and cooperatives. The fund would receive $30 million over three years. Establishes a tax credit to private providers on the purchase of broadband equipment. The credit will be funded at $15 million over three years. 
• Gives electric cooperatives the authority to provide broadband service to its members. A cooperative must offer broadband in its entire electric service area if it offers retails service. It would have the ability to offer broadband service in the electric service area of another electric cooperative or municipal electric system with that system’s permission. An electric cooperative can buy broadband wholesale from a municipal provider. The bill does not allow an electric cooperative to offer cable television service. 
• Sets criteria for a county or city to be deemed a "broadband-ready community" determined by how it handles broadband applications, permits and projects. 
• Sets up grant funding opportunities for local libraries to help with digital literacy. 
• The only expansion or opportunities for partnerships for municipal broadband in the bill is allowing municipal providers to sell broadband wholesale to electric cooperatives. The TACIR report recommended giving electric cooperatives the authority to offer broadband with the ability to freely partner with other entities: a private provider, telephone cooperative, or municipal electric provider. In the TACIR report (see pages 6-8), it recommended that the principle limitation on a municipal electric provider partnering should be to prohibit bonds backed by electric rates and tax revenues from being used to build broadband service outside its electric footprint.

Here is a more detailed breakdown the many other broadband bills:

• SB1058 by Sen. Janice Bowling and Rep. Dan Howell is TMEPA’s municipal broadband expansion bill which allows municipal electrics to provide cable service and internet services outside its service area with the permission of the municipal electric system, electric cooperative or telephone cooperative whose service territory the municipal provider would enter.
• SB126 by Sen. Mark Green which would create a program to make broadband expansion grants for the purpose of funding the construction, expansion, or operation of broadband infrastructure in underserved areas. 
• SB301 by Sen. Ferrell Haile which allows electric cooperatives to offer broadband service. 
• SB247 by Rep. John Forgety requires each Tennessee school system to survey its students to determine internet availability. Rep Forgety has also filed a caption bill (HB158) which he intends to propose substantive language shortly.
• SB1045 by Sen. Bowling authorizes municipal electrics and electrical cooperatives to provide broadband service either on its own or by joint venture geographical areas that are inside and outside the electric plant's service area.
• SB1057 by Sen. Bowling and Rep. Dan Howell allows anyone that has provided fiber-to-the-premises to at least 1,000 customers for a period of at least one year to be eligible for a statewide franchise. Includes electric cooperatives and municipal electric systems.

Beyond municipal broadband expansion (SB1058), TMEPA is asking the legislature to pass two other pieces of legislation this year. The first (SB1087 by Sen. John Stevens and Rep. Bill Sanderson) we discussed last week. It permits all municipal electric systems, including those with multiple utilities services, to become an energy authority by expanding a state law passed last year which allows electric utilities of home rule cities to go through a local process to restructure as a municipal energy authority. The second bill (SB801 by Sen. Steve Dickerson and Rep. Bill Dunn) clarifies the current statute that requires a referendum when a city disposes of or sells its municipal electric so that it’s clear it applies to all of Tennessee’s municipal electric utilities. The bill also requires the city’s governing body to hold two separate public hearings 180 days apart so city officials and the public are fully informed as the process moves forward. 

This year two bills are attempting to require municipal utilities to add board members. HB489 requires the creation of additional seats on a municipal utility board to provide representation for customers of the utility located outside the boundaries of the city. According to the bill, a board member would have to be added if it serves outside of utility’s city and into the county. Additionally, a board member would have to be added for any other county it serves. HB269 requires every municipal utility board to have at least one board member from every county they serve outside the county their municipality is in, with new seats added to the board if necessary. Both bills give the county mayor the authority to nominate and essentially appoint the board member. The bills were filed by the sponsors to affect the boards of specific municipal utilities, but they have statewide application to dozens of municipal utilities. TMEPA is strongly opposed to both bills due to the enormous impact it would have on our members’ utility boards.

There are several bills this year dealing with dealing with government records. SB464 would allow requests for viewing or for copies of public records to be made by email, and it would require the requestor for every public records request to present a valid form of identification. A government entity is only required to provide public records to Tennessee citizens. Currently, not every government entity asks for identification of Tennessee citizenship, and this bill would require every entity to request proof of Tennessee residency for every request. SB39 enhances the penalty for destruction or alteration of governmental records from a Class A misdemeanor to a Class E felony. SB1179 allows a county or city mayor to make public records unavailable for public inspection for up to five years if he or she, and the city/county attorney agrees, the document or information is of such a sensitive nature that its disclosure or release would seriously harm the city to compete for or execute agreements or contracts for economic or community development. SB1201 makes confidential the identities of vendors providing the state with goods and services used to protect certain data storage systems, and it authorizes a local governmental entity receiving such goods and services to vote to make the identities of such vendors confidential. We’ll keep you posted on how they advance.

One of the first bills to pass the Senate this year was SB128, which updates state law so that the electrical safety code adheres to the August 2016 edition of the American National Standard Electrical Safety Code, which is the most recent version. Currently the August 2011 edition serves as the state’s electrical safety code. The bill is already working through committees in the House.

The battle over allowing parts of cities to deannex and return to being part of the county returns this year. SB641 allows voters residing within an area annexed by a municipality to petition the county election commission to hold an election to deannex such territory. The bill specifies the taxes that may continue to be levied on a deannexed area, and it prohibits the extension or continuation of utility services outside municipal boundaries from being used, implicitly or explicitly, to obtain consent to annexation. The bill already includes language TMEPA requested be included in last year’s bill which clarifies a municipal utility would not be required to cease providing electrical service, sanitary sewer service, other utility services, or street lighting in the territory deannexed from the city. 

Two bills were filed this year in response to TVA’s decision to use water from underground aquifers at the gas plant it is building in Memphis. SB776 creates the Memphis sands aquifer regional management board to as the oversight body over the aquifer, and it also prohibits the drilling of wells designed to pump more than 10,000 gallons of water from the aquifer per day without the board's approval. As drafted, the second bill, SB886, requires anyone who intends to drill a water well to provide at least 14 days advance notice to the commissioner of environment and conservation or the local government with jurisdiction over wells in the area where the well will be located. This bill is likely a caption bill and serves as a placeholder on potential legislative language to come later that goes further. Caption bills are always common, and this year there is even one (SB1336) filed on wind farms by some Cumberland County legislators in response to the proposed project there.