ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fourth Legislature

Second Regular Session

Senate: NRE DP 6-0-1-0 | 3rd Read 28-0-2-0


SB 1460: electric cooperatives; broadband service

Sponsor:  Senator Borrelli, LD 5

Committee on Natural Resources, Energy & Water

Overview

Authorizes electric cooperative nonprofit membership corporations (electric cooperatives) and nonprofit electric generation and transmission cooperative corporations (generation and transmission cooperative) to provide broadband service. Directs these cooperatives to notify property owners when expanding broadband service and prescribes a process for cooperatives and property owners to address just compensation claims.

History

Statute authorizes certain cooperative membership organizations which are governed by articles of incorporation and created for specific purposes:

·         Electric cooperatives are created by five or more individuals or two cooperatives to:

o   supply, purchase, market, sell, transmit or distribute electric energy and promote and extend the use of this energy;

o   provide services related to supplying, providing or transmitting electric energy; and

o   engage in activities designed to promote rural economic development or for any lawful purpose (A.R.S. §§ 10-2052 and 10-2053).

·         Generation and transmission cooperatives are formed by two or more electric utilities to produce and generate, purchase, market, sell or transmit electric energy and provide related services (A.R.S. §§ 10-2122 and 10-2123).

Six electric cooperatives and three generation and transmission cooperatives operate in Arizona.

Provisions

Authority to Provide Broadband Service

1.    Authorizes electric cooperatives and generation and transmission cooperatives, directly or through an affiliate, to:

a)    Be organized to provide broadband service to areas where these cooperatives provide electric energy services (Sec. 2 and 6); and

b)    Construct, operate, maintain, lease and license fiber optic cables and other facilities to provide broadband service over, under, across, on or along real property, personal property, rights-of-way, easements and licenses and other property rights owned, held or used by the cooperative to provide electricity and other services. (Sec. 3 and 7)

Notice and Compensation for Property Owners

2.    Entitles a property owner to just compensation if a cooperative, directly or through its affiliate:

a)    Expands the use of an existing easement or other property right that it owns, holds or uses to provide electricity or other services; and

b)    The expanded use reduces the fair market value of the owner's property. (Sec. 4 and 8)

3.    Instructs the property owner to seek just compensation in superior court within 18 months of being notified by the cooperative of the expanded use for broadband service. (Sec. 4 and 8)

4.    Stipulates that the notice is effective if the cooperative either:

a)    Sent it by first class mail to the property owner's last known address;

b)    Included it as an insertion in the property owner's electric bill, in the case of electric cooperatives; or

c)    Employed other commonly used publication or communication channels. (Sec. 4 and 8)

5.    Declares that if the owner does not seek just compensation within 18 months, the expanded use is considered full vested in the cooperative and its affiliate without the need to pay this compensation. (Sec. 4 and 8)

6.    Specifies that the following apply in an action for just compensation based on a claim of expanded use for broadband service:

a)    The court or jury must evaluate any decrease in property value based on the difference between the entire parcel's fair market value before and after the expanded use;

b)    Fair market value does not include evidence of revenues or profits derived from or the rental value of an assembled communications corridor; and

c)    When just compensation is paid, the expanded use for broadband service is considered fully vested in the cooperative and its affiliate. (Sec. 4 and 8)

7.    Prohibits a class action against a cooperative or its affiliate in any just compensation action based on a claim of expanded use for broadband service. (Sec. 4 and 8)

8.    Specifies that just compensation actions include trespass, inverse condemnation and other similar causes of action. (Sec. 4 and 8)

9.    Declares that this act does not prohibit a cooperative or its affiliate from reaching an agreement with a property owner to waive just compensation claims related to expanded use for broadband service by other lawful means. (Sec. 4 and 8)

Electric Cooperative Excavation Notice to Property Owners

10.  Instructs the electric cooperative or its affiliate to provide written notice to the property owner if excavation is required to install fiber optic cables or other underground facilities to provide broadband service. (Sec. 4)

11.  Requires an electric cooperative or it affiliate to provide this notice by either:

a)    First class mail to the property owner's last known address;

b)    Printed insertion in the property owner's electric bill; or

c)    Other commonly used publication or communication channels. (Sec. 4)

12.  Prescribes requirements for what this notice must include. (Sec. 4)

13.  Clarifies notice is not required before the electric cooperative or its affiliate uses an easement or other property right that includes an authorization for excavation to provide broadband service. (Sec. 4)

14.  Stipulates that failure to provide this notice:

a)    Prohibits the electric cooperative or its affiliate from beginning excavation until notice is provided.

b)    Does not invalidate or prevent the electric cooperative or its affiliate from expanding the use of easement or property right. (Sec. 4)

Miscellaneous

15.  ☐ Prop 105 (45 votes)	     ☐ Prop 108 (40 votes)      ☐ Emergency (40 votes)	☐ Fiscal NoteDefines affiliate and broadband service. (Sec. 1 and 5)

16.  Makes technical and conforming changes (Sec. 1, 2, 3, 5, 7)

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20.                    SB 1460

21.  Initials PAB           Page 0 Natural Resources, Energy & Water

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