1.1                          A bill for an act 
  1.2             relating to communications; modifying, clarifying, and 
  1.3             recodifying cable and modem communications provisions; 
  1.4             amending Minnesota Statutes 1998, sections 272.01, 
  1.5             subdivision 3; and 473.129, subdivision 6; Minnesota 
  1.6             Statutes 1999 Supplement, section 297A.25, subdivision 
  1.7             11; proposing coding for new law as Minnesota 
  1.8             Statutes, chapter 238A; repealing Minnesota Statutes 
  1.9             1998, sections 238.01; 238.02; 238.03; 238.08; 
  1.10            238.081; 238.082; 238.083; 238.084; 238.086; 238.11; 
  1.11            238.12; 238.15; 238.16; 238.17; 238.18; 238.22, 
  1.12            subdivisions 1, 2, 4, 5, 6, 7, 8, and 9; 238.23; 
  1.13            238.24; 238.241; 238.242; 238.25; 238.26; 238.27; 
  1.14            238.35; 238.36; 238.37; 238.38; 238.39; 238.40; 
  1.15            238.41; 238.42; and 238.43; Minnesota Statutes 1999 
  1.16            Supplement, section 238.22, subdivision 3. 
  1.17  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.18     Section 1.  [238A.01] [DEFINITIONS.] 
  1.19     Subdivision 1.  [SCOPE.] The terms used in this chapter 
  1.20  have the meanings given them in this section.  [238.02, subd 1] 
  1.21     Subd. 2.  [BASIC CABLE SERVICE.] "Basic cable service" 
  1.22  means any service tier that includes the retransmission of local 
  1.23  television broadcast signals. 
  1.24     Subd. 3.  [CABLE SERVICE.] "Cable service" means: 
  1.25     (1) the one-way transmission to subscribers of (i) video 
  1.26  programming or (ii) other programming service; and 
  1.27     (2) subscriber interaction, if any, that is required for 
  1.28  the selection or use of the video programming or other 
  1.29  programming service.  [New] 
  1.30     Subd. 4.  [CABLE SERVICE PROVIDER.] "Cable service provider"
  1.31  means any person or group of persons who: 
  2.1      (1) provides cable service over a cable system and directly 
  2.2   or through one or more affiliates owns a significant interest in 
  2.3   the cable system; or 
  2.4      (2) otherwise controls or is responsible for, through any 
  2.5   arrangement, the management and operation of the cable system.  
  2.6   [New] 
  2.7      Subd. 5.  [FRANCHISE.] "Franchise" means an initial 
  2.8   authorization, or renewal of the authorization, issued by a 
  2.9   franchising authority, whether the authorization is designated a 
  2.10  franchise, permit, license, resolution, contract, certificate, 
  2.11  agreement, or otherwise, that authorizes the construction or 
  2.12  operation of a cable system.  [238.02, subd 5] 
  2.13     Subd. 6.  [FRANCHISE AREA.] "Franchise area" means the area 
  2.14  within the corporate boundaries of a local government unit as 
  2.15  now constituted or may in the future be constituted. [New] 
  2.16     Subd. 7.  [FRANCHISE FEE.] (a) "Franchise fee" includes any 
  2.17  tax, fee, or assessment of any kind imposed by a franchising 
  2.18  authority or other governmental authority on a cable service 
  2.19  provider or cable subscriber, or both, solely because of their 
  2.20  status as a provider or subscriber. 
  2.21     (b) Franchise fee does not include: 
  2.22     (1) a tax, fee, or assessment of general applicability, 
  2.23  including any generally applicable tax, fee, or assessment 
  2.24  imposed on both utilities and cable service providers or their 
  2.25  services; 
  2.26     (2) a tax, fee, or assessment that is unduly discriminatory 
  2.27  against cable service providers or cable subscribers; 
  2.28     (3) for a franchise in effect on the effective date of this 
  2.29  act, payments that are required by the franchise to be made by 
  2.30  the cable service provider during the term of the franchise for, 
  2.31  or in support of the use of, public, educational, or 
  2.32  governmental (PEG) access facilities; 
  2.33     (4) for a franchise granted after the effective date of 
  2.34  this act, capital costs that are required by the franchise to be 
  2.35  incurred by the cable service provider for public, educational, 
  2.36  or governmental access facilities; 
  3.1      (5) requirements or charges incidental to the awarding or 
  3.2   enforcing of the franchise, including payments for bonds, 
  3.3   security funds, letters of credit, insurance, indemnification, 
  3.4   penalties, or liquidated damages; or 
  3.5      (6) a fee imposed under United States Code, title 17. [New] 
  3.6      Subd. 8.  [LOCAL FRANCHISING AUTHORITY.] "Local franchising 
  3.7   authority" means a municipality or cable communications 
  3.8   commission empowered under this chapter to grant a franchise.  
  3.9   [New] 
  3.10     Subd. 9.  [MODEM SERVICE.] "Modem service" means a cable 
  3.11  service or telephone service as defined in federal law, that 
  3.12  uses switched, broadband capability (1) to enable users to 
  3.13  subscribe to an information service, or (2) to originate or 
  3.14  receive voice, data, graphics, and video information of the 
  3.15  subscriber's choosing, regardless of the technology employed, at 
  3.16  transmission speeds of 256 kilobits per second or greater. [New] 
  3.17     Subd. 10.  [MUNICIPALITY.] "Municipality" means any 
  3.18  organized town, statutory city, home rule charter city, or, with 
  3.19  respect to any unorganized territory within its boundaries, 
  3.20  county. [238.02, subd 8] 
  3.21     Subd. 11.  [PUBLIC, EDUCATIONAL, OR GOVERNMENTAL ACCESS 
  3.22  FACILITIES.] "Public, educational, or governmental access 
  3.23  facilities" (PEG) means: 
  3.24     (1) channel capacity designated for public, educational, or 
  3.25  governmental use; and 
  3.26     (2) facilities and equipment for the use of that channel 
  3.27  capacity. [New] 
  3.28     Subd. 12.  [PUBLIC UTILITY COMPANY POLES.] "Public utility 
  3.29  company poles" means poles owned by the public utility and poles 
  3.30  owned by others on which the public utility has the right to 
  3.31  permit others to attach in the communications space on the pole. 
  3.32  [238.36, subd 4] 
  3.33     Subd. 13.  [SUBSCRIBER.] "Subscriber" means a person 
  3.34  lawfully subscribing to a cable service provided by the cable 
  3.35  service provider. [New] 
  3.36     Sec. 2.  [238A.02] [PURPOSE.] 
  4.1      The purposes of this chapter are to: 
  4.2      (1) establish a state policy concerning cable 
  4.3   communications; 
  4.4      (2) establish franchise procedures and standards that 
  4.5   encourage the growth and development of cable systems and assure 
  4.6   that cable systems are responsive to the needs and interests of 
  4.7   the local community; 
  4.8      (3) establish guidelines for the exercise of local 
  4.9   authority with respect to the regulation of cable systems; 
  4.10     (4) ensure that cable communications provide and are 
  4.11  encouraged to provide the widest possible diversity of 
  4.12  information sources and services to the public; 
  4.13     (5) establish an orderly process for franchise renewal that 
  4.14  protects cable operators against unfair denials of renewal if 
  4.15  the operator's past performance and proposal for future 
  4.16  performance meet the standards established by this chapter; and 
  4.17     (6) promote competition in cable communications and 
  4.18  minimize unnecessary regulation that would impose an undue 
  4.19  economic burden on cable systems. [New] 
  4.20     Sec. 3.  [238A.03] [AUTHORITY TO GRANT AND ENFORCE 
  4.21  FRANCHISES.] 
  4.22     Subdivision 1.  [LOCAL FRANCHISING AUTHORITY.] (a) A 
  4.23  municipality or joint powers cable communications commission has 
  4.24  the exclusive authority to grant nonexclusive franchises to 
  4.25  cable service providers to provide cable service within one or 
  4.26  more franchise areas in Minnesota. 
  4.27     (b) It is unlawful for a cable service provider to provide 
  4.28  cable service in a franchise area without a franchise. 
  4.29     (c) The local franchising authority shall not grant a 
  4.30  franchise to a cable service provider on terms that, when the 
  4.31  obligations and benefits of the franchises as a whole are 
  4.32  compared, is more favorable or less burdensome than a franchise 
  4.33  previously granted to a cable service provider within that 
  4.34  franchise area. 
  4.35     (d) The local franchising authority shall not grant a 
  4.36  franchise for a term longer than 15 years. 
  5.1      Subd. 2.  [FRANCHISE AREA.] A cable service provider shall 
  5.2   provide cable service to the entire franchise area designated by 
  5.3   the local franchising authority in a franchise. [New] 
  5.4      Sec. 4.  [238A.04] [CUSTOMER SERVICE OBLIGATIONS.] 
  5.5      Subdivision 1.  [SPECIAL TESTS.] A local franchising 
  5.6   authority may require special technical or operational testing 
  5.7   of a location within a franchise area and may otherwise 
  5.8   investigate and enforce allegations of noncompliance with the 
  5.9   franchise or this chapter. 
  5.10     Subd. 2.  [ENFORCING MINIMUM CUSTOMER SERVICE STANDARDS.] A 
  5.11  local franchising authority may enforce any minimum customer 
  5.12  service standards adopted by the Federal Communications 
  5.13  Commission or any stricter or additional customer service 
  5.14  standards adopted by a local government unit by ordinance or 
  5.15  regulation. 
  5.16     Subd. 3.  [CHANGE NOTICE.] A cable service provider shall 
  5.17  notify the local franchising authority and subscribers in 
  5.18  writing of any changes in rates, programming services, or 
  5.19  channel positions 30 days before the changes become effective. 
  5.20  [New] 
  5.21     Sec. 5.  [238A.05] [RATES REGULATION.] 
  5.22     Subdivision 1.  [REGULATORY SCOPE.] Local franchising 
  5.23  authorities shall regulate rates for the provision of cable 
  5.24  service and related equipment to the extent allowed under this 
  5.25  chapter and federal law. 
  5.26     Subd. 2.  [RATES ON FILE.] A list of current subscriber 
  5.27  rates and charges must be on file with the local franchising 
  5.28  authority at all times. [New] 
  5.29     Sec. 6.  [238A.06] [EMERGENCY ALERT.] 
  5.30     Cable service providers shall provide emergency alert 
  5.31  override capabilities for use in the event of an emergency or if 
  5.32  other vital public information must be communicated by federal, 
  5.33  state, or local governments.  A cable service provider shall 
  5.34  provide emergency alert override capabilities in a manner 
  5.35  consistent with the Federal Communications Commission's 
  5.36  emergency alert system (EAS) rules and consistent with any 
  6.1   applicable state and regional EAS plans adopted in response to 
  6.2   those rules. [New] 
  6.3      Sec. 7.  [238A.07] [REGIONAL CHANNEL.] 
  6.4      Subdivision 1.  [DEFINITION.] For the purposes of this 
  6.5   section "regional channel entity" means an independent, 
  6.6   nonprofit corporation to govern the operation of the regional 
  6.7   channel. 
  6.8      Subd. 2.  [LEGISLATIVE PURPOSE.] The purpose of this 
  6.9   section is to facilitate the activation of a metropolitan area 
  6.10  interconnected regional channel, to be uniformly carried on VHF 
  6.11  channel 6 on cable communications systems operating in the 
  6.12  metropolitan area in order to provide a broad range of 
  6.13  informational, educational, and public service programs and 
  6.14  materials to metropolitan area cable subscribers. 
  6.15     Subd. 3.  [VHF CHANNEL 6.] Franchises for cable services 
  6.16  operating wholly or partially within the metropolitan area must 
  6.17  contain a provision designating the standard VHF channel 6 for 
  6.18  uniform regional channel usage.  The designated regional channel 
  6.19  may be combined with the government access channel until the 
  6.20  video programming usage of the government access channel expands 
  6.21  to such point as it is in use during 80 percent of the time 
  6.22  between 8:00 a.m. and 10:00 p.m. during any consecutive six-week 
  6.23  period.  Use of time on the regional channel must be made 
  6.24  available without charge. 
  6.25     Subd. 4.  [USE.] The regional channel will provide a broad 
  6.26  range of informational, educational, and public service programs 
  6.27  and materials to metropolitan area cable service subscribers. 
  6.28     Subd. 5.  [REGIONAL CHANNEL ENTITY; MEMBERS.] The 
  6.29  metropolitan council shall appoint the governing body of the 
  6.30  regional channel entity, which must consist of 15 members 
  6.31  appointed to staggered, three-year terms.  In the case of a 
  6.32  vacancy the council shall appoint a person to fill the vacancy 
  6.33  for the remainder of the unexpired term. 
  6.34     Subd. 6.  [REGIONAL CHANNEL OPERATOR.] The regional channel 
  6.35  entity may operate the regional channel or designate the 
  6.36  operator of the regional channel.  If the regional channel 
  7.1   entity designates the operator of the regional channel, the 
  7.2   designation must be for an initial period not exceeding three 
  7.3   years.  Before the three-year period expires, the regional 
  7.4   channel entity shall review its designation and consider renewal 
  7.5   for a term not exceeding three years.  Nothing in this section 
  7.6   creates any right to renewal for the operator designated by the 
  7.7   regional channel entity.  [238.43] 
  7.8      Sec. 8.  [238A.08] [PUBLIC, EDUCATIONAL, OR GOVERNMENTAL 
  7.9   ACCESS CHANNELS.] 
  7.10     Subdivision 1.  [AUTHORITY TO ESTABLISH CHANNEL CAPACITY 
  7.11  REQUIREMENTS.] A local franchising authority may establish 
  7.12  requirements in a franchise with respect to the designation or 
  7.13  use of channel capacity for public, educational, or governmental 
  7.14  use only to the extent provided in this section. 
  7.15     Subd. 2.  [DESIGNATION FOR PUBLIC, EDUCATIONAL, OR 
  7.16  GOVERNMENTAL USE.] Subject to United States Code, title 47, 
  7.17  section 546, a local franchising authority may in its request 
  7.18  for proposals require as part of a franchise, and may require as 
  7.19  part of a cable service provider's proposal for a franchise 
  7.20  renewal, that (1) channel capacity be designated for public, 
  7.21  educational, or governmental use, and (2) channel capacity on 
  7.22  institutional networks be designated for educational or 
  7.23  governmental use.  The local franchising authority may adopt 
  7.24  rules and procedures for the use of the channel capacity 
  7.25  designated under this section.  
  7.26     Subd. 3.  [ENFORCEMENT AUTHORITY.] A local franchising 
  7.27  authority may enforce any requirement in any franchise regarding 
  7.28  the provision or use of that channel capacity.  Its enforcement 
  7.29  authority includes the authority to enforce any provision of the 
  7.30  franchise for services, facilities, or equipment proposed by the 
  7.31  cable services operator that relate to public, educational, or 
  7.32  governmental use of channel capacity, whether or not required by 
  7.33  the local franchising authority under subdivision 2. 
  7.34     Subd. 4.  [RULES AND PROCEDURES.] For any franchise under 
  7.35  which channel capacity is designated under subdivision 2, the 
  7.36  franchising authority shall prescribe: 
  8.1      (1) rules and procedures under which the cable services 
  8.2   provider is permitted to use that channel capacity for providing 
  8.3   other services if the channel capacity is not being used for the 
  8.4   purposes designated; and 
  8.5      (2) rules and procedures under which this permitted use 
  8.6   must cease. 
  8.7      Subd. 5.  [EDITORIAL CONTROL BY CABLE SERVICE 
  8.8   PROVIDER.] Subject to United States Code, title 47, section 544, 
  8.9   subsection (d), a cable service provider shall not exercise any 
  8.10  editorial control over a public, educational, or governmental 
  8.11  use of channel capacity provided under this section, except a 
  8.12  cable service provider may refuse to transmit any public access 
  8.13  program or portion of a public access program that contains 
  8.14  obscenity, indecency, or nudity. 
  8.15     Subd. 6.  [INSTITUTIONAL NETWORK DEFINED.] For purposes of 
  8.16  this section, "institutional network" means a communication 
  8.17  network that is constructed or operated by the cable service 
  8.18  provider and that is generally available only to subscribers who 
  8.19  are not residential subscribers. [New] 
  8.20     Sec. 9.  [238A.09] [FRANCHISE FEES.] 
  8.21     For any 12-month period, the franchise fees paid by a cable 
  8.22  service provider for any cable system must not exceed five 
  8.23  percent of the cable service provider's gross revenues derived 
  8.24  in that period from the operation of the cable system to provide 
  8.25  cable services.  For purposes of this section, the 12-month 
  8.26  period must be the 12-month period applicable under the 
  8.27  franchise for accounting purposes.  Nothing in this section 
  8.28  prohibits a franchising authority and a cable service provider 
  8.29  from agreeing that franchise fees that lawfully could be 
  8.30  collected for the 12-month period must be paid on a prepaid or 
  8.31  deferred basis, except that the sum of the fees paid during the 
  8.32  term of the franchise may not exceed the amount, including the 
  8.33  time value of money, that would have lawfully been collected if 
  8.34  the fees had been paid per annum. [New] 
  8.35     Sec. 10.  [238A.10] [REPORTING REQUIREMENTS.] 
  8.36     Every cable service provider shall make reports to the 
  9.1   local franchising authority as the local franchising authority 
  9.2   shall from time to time require.  All books, records, and files 
  9.3   of the cable service provider are subject at all times to 
  9.4   inspection by the local franchising authority. [New] 
  9.5      Sec. 11.  [238A.11] [FRANCHISE OR STATUTORY VIOLATION; 
  9.6   REVOCATION.] 
  9.7      If a local franchising authority determines after a public 
  9.8   hearing that a cable service provider is in default of any 
  9.9   material provision of a franchise, has attempted to evade any of 
  9.10  the material provisions of a franchise, or has practiced fraud 
  9.11  or deceit upon a subscriber or a local franchising authority, 
  9.12  the local franchising authority may revoke the franchise or 
  9.13  order any other relief it deems appropriate to remedy the 
  9.14  violation.  The local franchising authority may require special 
  9.15  technical or operational testing of a location within a 
  9.16  franchise area and may otherwise investigate and enforce 
  9.17  allegations of noncompliance with the franchise or this chapter. 
  9.18  [New] 
  9.19     Sec. 12.  [238A.12] [FRANCHISE TRANSFERS.] 
  9.20     All franchise transfers must be reviewed by the local 
  9.21  franchising authority in accordance with federal law. [New] 
  9.22     Sec. 13.  [238A.13] [FRANCHISE RENEWAL.] 
  9.23     All franchise renewal proceedings must be conducted in 
  9.24  accordance with federal and local laws and procedures. [New] 
  9.25     Sec. 14.  [238A.14] [AMENDMENT OF FRANCHISE.] 
  9.26     The local franchising authority may amend a franchise upon 
  9.27  the petition of the local franchising authority or the cable 
  9.28  service provider holding the franchise and upon a determination 
  9.29  by the local franchising authority that the amendment will be in 
  9.30  the public interest or is required due to changes in federal or 
  9.31  state law. [New] 
  9.32     Sec. 15.  [238A.15] [FRANCHISE CONTENT REQUIREMENTS, 
  9.33  GENERALLY.] 
  9.34     Every franchise granted by the local franchising authority 
  9.35  must contain: 
  9.36     (1) a provision regarding any required specifications of a 
 10.1   cable system that are necessary to meet the cable-related needs 
 10.2   and interests of subscribers within a franchise area; 
 10.3      (2) a provision addressing the schedule for any cable 
 10.4   system upgrades or rebuilds required by the local franchising 
 10.5   authority under a franchise; 
 10.6      (3) a provision setting forth the number of public, 
 10.7   educational, and governmental access channels to be provided, 
 10.8   any facilities to be provided by a cable provider, and any 
 10.9   financial or in-kind support to be provided to a local 
 10.10  franchising authority for public, educational, and governmental 
 10.11  access facilities and equipment; and 
 10.12     (4) provisions relating to the management of public 
 10.13  rights-of-way by local government units, if not already provided 
 10.14  under state or local law. [New] 
 10.15     Sec. 16.  [238A.16] [FRANCHISE CONTENT REQUIREMENTS, 
 10.16  SPECIFICALLY.] 
 10.17     Subdivision 1.  [APPLICABILITY.] The requirements of this 
 10.18  section apply to all cable communications franchisees. [New] 
 10.19     Subd. 2.  [STATE AND FEDERAL CABLE FRANCHISE STANDARDS.] (a)
 10.20  The franchise must comply with the Minnesota franchise standards 
 10.21  contained in this section. 
 10.22     (b) The franchise must contain a provision requiring the 
 10.23  franchisee and the franchising authority to conform to state 
 10.24  laws and rules regarding cable communications not later than one 
 10.25  year after they become effective, unless otherwise stated, and 
 10.26  to conform to federal laws and regulations regarding cable as 
 10.27  they become effective. [238.084, subd 1, clauses (a), (b)] 
 10.28     Subd. 3.  [FRANCHISE TERM.] The franchise must contain a 
 10.29  provision limiting the initial and renewal franchise term to not 
 10.30  more than 15 years each. [238.084, subd 1, clause (c)] 
 10.31     Subd. 4.  [FRANCHISE IS NOT EXCLUSIVE.] The franchise must 
 10.32  contain a provision specifying that the franchise is 
 10.33  nonexclusive. [238.084, subd 1, clause (d)] 
 10.34     Subd. 5.  [SALE OR TRANSFER OF STOCK.] The franchise must 
 10.35  contain a provision prohibiting sale or transfer of the 
 10.36  franchise or sale or transfer of stock so as to create a new 
 11.1   controlling interest, except at the approval of the franchising 
 11.2   authority.  Approval by the franchising authority must not be 
 11.3   unreasonably withheld. [238.084, subd 1, clause (e)] 
 11.4      Subd. 6.  [AUDIT.] The franchise must contain a provision 
 11.5   granting the franchising authority collecting a franchise fee 
 11.6   the authority to audit the franchisee's accounting and financial 
 11.7   records upon reasonable notice.  It must also require that the 
 11.8   franchisee file with the franchising authority annually reports 
 11.9   of gross subscriber revenues and other information as the 
 11.10  franchising authority deems appropriate. [238.084, subd 1, 
 11.11  clause (f)] 
 11.12     Subd. 7.  [SUBSCRIBER-RELATED PROVISIONS.] (a) The 
 11.13  franchise must also contain provisions specifying the length and 
 11.14  terms of residential subscriber contracts, if they exist, or 
 11.15  that the current length and terms of residential subscriber 
 11.16  contracts are available for public inspection in the 
 11.17  municipality. 
 11.18     (b) The franchise must also contain a provision stating 
 11.19  that no signals of a class IV cable communications channel may 
 11.20  be transmitted from a subscriber terminal for purposes of 
 11.21  monitoring individual viewing patterns or practices without the 
 11.22  express written permission of the subscriber.  The request for 
 11.23  permission must be contained in a separate document with a 
 11.24  prominent statement that the subscriber is authorizing the 
 11.25  permission in full knowledge of its provisions.  The written 
 11.26  permission must be for a limited period of time not to exceed 
 11.27  one year which is renewable at the option of the subscriber.  No 
 11.28  penalty may be invoked for a subscriber's failure to provide or 
 11.29  renew the authorization.  The authorization is revocable at any 
 11.30  time by the subscriber without penalty of any kind.  The 
 11.31  permission must be required for each type or classification of 
 11.32  class IV cable communications activity planned for the purpose. 
 11.33     (c) No information or data obtained by monitoring 
 11.34  transmission of a signal from a subscriber terminal, including 
 11.35  but not limited to lists of the names and addresses of the 
 11.36  subscribers or lists that identify the viewing habits of 
 12.1   subscribers, may be sold or otherwise made available to any 
 12.2   party other than to the company and its employees for internal 
 12.3   business use, or to the subscriber who is the subject of that 
 12.4   information, unless the company has received specific written 
 12.5   authorization from the subscriber to make the data available. 
 12.6      (d) Written permission from the subscriber must not be 
 12.7   required for the systems conducting systemwide or individually 
 12.8   addressed electronic sweeps for the purpose of verifying system 
 12.9   integrity or monitoring for the purpose of billing. 
 12.10  Confidentiality of this information is subject to paragraph (c). 
 12.11     (e) For purposes of this subdivision, a "class IV cable 
 12.12  communications channel" means a signaling path provided by a 
 12.13  cable communications system to transmit signals of any type from 
 12.14  a subscriber terminal to another point in the communications 
 12.15  system. [238.084, subd 1, clauses (g), (u)] 
 12.16     Subd. 8.  [ADMINISTRATOR.] The franchise must also contain 
 12.17  a provision indicating by title the office or officer of the 
 12.18  franchising authority that is responsible for the continuing 
 12.19  administration of the franchise. [238.084, subd 1, clause (h)] 
 12.20     Subd. 9.  [INDEMNITY, LIABILITY, INSURANCE, BOND.] (a) The 
 12.21  franchise must contain provisions requiring the franchisee to: 
 12.22     (1) indemnify and hold harmless the franchising authority 
 12.23  during the term of the franchise; and 
 12.24     (2) maintain throughout the term of the franchise, 
 12.25  liability insurance in the amount required by the franchising 
 12.26  authority to insure both the franchising authority and the 
 12.27  franchisee with regard to damages and penalties that they may 
 12.28  legally be required to pay as a result of the exercise of the 
 12.29  franchise. 
 12.30     (b) The franchise must also contain a provision that at the 
 12.31  time the franchise becomes effective and thereafter until the 
 12.32  franchisee has liquidated all of its obligation with the 
 12.33  franchising authority, the franchisee shall furnish a 
 12.34  performance bond, certificate of deposit, or other type of 
 12.35  instrument, or combination of any or all of them, approved by 
 12.36  the franchising authority in an amount as the franchising 
 13.1   authority deems to be adequate compensation for damages 
 13.2   resulting from the franchisee's nonperformance.  The franchising 
 13.3   authority may, from year to year and in its sole discretion, 
 13.4   reduce the amount of the performance bond or instrument. 
 13.5      (c) The franchise must also contain a provision that 
 13.6   nothing contained in the franchise relieves a person from 
 13.7   liability arising out of the failure to exercise reasonable care 
 13.8   to avoid injuring the franchisee's facilities while performing 
 13.9   work connected with grading, regrading, or changing the line of 
 13.10  a street or public place or with the construction or 
 13.11  reconstruction of a sewer or water system. [238.084, subd 1, 
 13.12  clauses (i), (j), (k)] 
 13.13     Subd. 10.  [PUBLIC PROCEEDING.] The franchise must contain 
 13.14  a provision that the franchisee's technical ability, financial 
 13.15  condition, and legal qualification were considered and approved 
 13.16  by the franchising authority in a full public proceeding that 
 13.17  afforded reasonable notice and a reasonable opportunity to be 
 13.18  heard. [238.084, subd 1, clause (l)] 
 13.19     Subd. 11.  [DESCRIPTION OF SYSTEM.] The franchise must 
 13.20  contain a provision in initial franchises that there be a full 
 13.21  description of the system proposed for construction. [238.084, 
 13.22  subd 1, clause (n)] 
 13.23     Subd. 12.  [CONSTRUCTION, MAINTENANCE, AND RELOCATION.] (a) 
 13.24  Unless otherwise already provided for by local law, a franchise 
 13.25  must contain a provision that the franchisee shall obtain a 
 13.26  permit from the proper municipal authority before commencing 
 13.27  construction of a cable communications system, including the 
 13.28  opening or disturbance of a street, sidewalk, driveway, or 
 13.29  public place.  The provision must specify remedies available to 
 13.30  the franchising authority in cases where the franchisee fails to 
 13.31  meet the conditions of the permit. 
 13.32     (b) Unless otherwise already provided for by local law, a 
 13.33  franchise must also contain a provision that wires, conduits, 
 13.34  cable, and other property and facilities of the franchisee be 
 13.35  located, constructed, installed, and maintained in compliance 
 13.36  with applicable codes.  The provision must also specify that the 
 14.1   franchisee keep and maintain its property so as not to 
 14.2   unnecessarily interfere with the usual and customary trade, 
 14.3   traffic, or travel upon the streets and public places of the 
 14.4   franchise area or endanger the life or property of any person. 
 14.5      (c) Unless otherwise already provided for by local law, the 
 14.6   franchise must also contain a provision that the franchising 
 14.7   authority and the franchisee shall establish a procedure in the 
 14.8   franchise for the relocation or removal of the franchisee's 
 14.9   wires, conduits, cables, and other property located in the 
 14.10  street, right-of-way, or public place, at no cost to the local 
 14.11  franchising authority, whenever the franchising authority 
 14.12  undertakes public improvements that affect the cable equipment. 
 14.13  [238.084, subd 1, clauses (o), (p), (q)] 
 14.14     Subd. 13.  [TECHNICAL STANDARDS; TESTING.] (a) The 
 14.15  franchise must contain a provision incorporating by reference as 
 14.16  a minimum the technical standards promulgated by the Federal 
 14.17  Communications Commission relating to cable communications 
 14.18  systems contained in subpart K of part 76 of the Federal 
 14.19  Communications Commission's rules and regulations relating to 
 14.20  cable communications systems and found in Code of Federal 
 14.21  Regulations, title 47, sections 76.601 to 76.617.  Upon request 
 14.22  of the local franchising authority, the results of tests 
 14.23  required by the Federal Communications Commission must be filed 
 14.24  within ten days of the conduct of the tests with the franchising 
 14.25  authority. 
 14.26     (b) The franchise must also contain a provision 
 14.27  establishing how the franchising authority and the cable 
 14.28  communications company shall determine who is to bear the costs 
 14.29  of required special testing. [238.084, subd 1, clauses (r), (s)] 
 14.30     Subd. 14.  [SERVICE COMPLAINTS; INVESTIGATION, 
 14.31  RESPONSE.] (a) The franchise must contain a provision specifying 
 14.32  the procedure for the investigation and resolution by the 
 14.33  franchisee of complaints regarding quality of service, equipment 
 14.34  malfunction, billing disputes, and other matters. 
 14.35     (b) The franchise must also contain a provision requiring 
 14.36  that at least a toll-free or collect telephone number for the 
 15.1   reception of complaints be provided to the subscriber and that 
 15.2   the franchisee maintain a repair service capable of responding 
 15.3   to subscriber complaints or requests for service within 24 hours 
 15.4   after receipt of the complaint or request.  The provision must 
 15.5   also state who will bear the costs included in making these 
 15.6   repairs, adjustments, or installations. [238.084, subd 1, 
 15.7   clauses (v), (w)] 
 15.8      Subd. 15.  [FRANCHISE TERMINATION.] (a) The franchise must 
 15.9   contain a provision granting the franchising authority the right 
 15.10  to terminate and cancel the franchise and the rights and 
 15.11  privileges of the franchise if the franchisee substantially 
 15.12  violates a provision of the franchise ordinance, attempts to 
 15.13  evade the provisions of the franchise ordinance, or practices 
 15.14  fraud or deceit upon the franchising authority.  
 15.15     (b) The municipality shall provide the franchisee with a 
 15.16  written notice of the cause for termination and its intention to 
 15.17  terminate the franchise and shall allow the franchisee a minimum 
 15.18  of 30 days after service of the notice in which to correct the 
 15.19  violation. 
 15.20     (c) The franchisee must be provided with an opportunity to 
 15.21  be heard at a public meeting before the governing body of the 
 15.22  municipality before the termination of the franchise. 
 15.23     (d) The franchise must contain a provision that no cable 
 15.24  communications company, notwithstanding any provision in a 
 15.25  franchise, may abandon a cable communications system or a 
 15.26  portion of it without having given three months prior written 
 15.27  notice to the franchising authority.  No cable communications 
 15.28  company may abandon a cable communications system or a portion 
 15.29  of it without compensating the franchising authority for damages 
 15.30  resulting to it from the abandonment. 
 15.31     (e) The franchise must contain a provision requiring that 
 15.32  upon termination or forfeiture of a franchise, the franchisee 
 15.33  remove its cable, wires, and appliances from the streets, 
 15.34  alleys, and other public places within the franchise area if the 
 15.35  franchising authority so requests, and a procedure to be 
 15.36  followed in the event the franchisee fails to remove its cable, 
 16.1   wires, and appliances from the streets, alleys, and other public 
 16.2   places within the franchise area. [238.084, subd 1, clauses (x), 
 16.3   (y), (z)] 
 16.4      Subd. 16.  [RIGHT OF FIRST REFUSAL.] The franchise must 
 16.5   contain a provision that when a franchise or cable system is 
 16.6   offered for sale, the franchising authority shall have the right 
 16.7   to purchase the system. [238.084, subd 1, clause (aa)] 
 16.8      Subd. 17.  [ACCESS CHANNELS.] (a) The franchise must 
 16.9   contain a provision establishing the minimum number of public, 
 16.10  educational, governmental, and leased access channels that the 
 16.11  franchisee shall make available.  
 16.12     (b) The provision must require that the franchisee, to the 
 16.13  extent of the system's available channel capacity, shall provide 
 16.14  to each of its subscribers who receives some or all of the 
 16.15  services offered on the system, reception on at least one 
 16.16  specially designated noncommercial public access channel 
 16.17  available for use by the general public on a first-come, 
 16.18  first-served, nondiscriminatory basis; at least one specially 
 16.19  designated access channel for use by local educational 
 16.20  authorities; at least one specially designated access channel 
 16.21  available for local government use; and at least one specially 
 16.22  designated access channel available for lease on a first-come, 
 16.23  first-served, nondiscriminatory basis by commercial and 
 16.24  noncommercial users.  The VHF spectrum must be used for at least 
 16.25  one of the specially designated noncommercial public access 
 16.26  channels required in this subdivision.  The provision must 
 16.27  require that no charges may be made for channel time or playback 
 16.28  of prerecorded programming on at least one of the specially 
 16.29  designated noncommercial public access channels required by this 
 16.30  subdivision.  Personnel, equipment, and production costs may be 
 16.31  assessed, however, for live studio presentations exceeding five 
 16.32  minutes in length.  Charges for those production costs and fees 
 16.33  for use of other public access channels must be consistent with 
 16.34  the goal of affording the public a low-cost means of television 
 16.35  access. 
 16.36     (c) The provision must require that whenever the specially 
 17.1   designated noncommercial public access channel, the specially 
 17.2   designated education access channel, the specially designated 
 17.3   local government access channel, or the specially designated 
 17.4   leased access channel required in paragraph (b) is in use during 
 17.5   80 percent of the weekdays, Monday to Friday, for 80 percent of 
 17.6   the time during any consecutive three-hour period for six weeks 
 17.7   running, and there is demand for use of an additional channel 
 17.8   for the same purpose, the franchisee shall then have six months 
 17.9   in which to provide a new specially designated access channel 
 17.10  for the same purpose, provided that provision of the additional 
 17.11  channel or channels must not require the cable system to install 
 17.12  converters.  However, nothing in this section precludes the 
 17.13  installation of converters by the system on a voluntary basis, 
 17.14  or as a result of an agreement arrived at through negotiation 
 17.15  between the parties to a franchise, or by a potential access 
 17.16  user who wishes to install converters in order to make use of an 
 17.17  additional channel or channels. 
 17.18     (d) The provision must also require that the franchisee 
 17.19  establish rules pertaining to the administration of the 
 17.20  specially designated noncommercial public access channel, the 
 17.21  specially designated educational access channel, and the 
 17.22  specially designated leased access channel required in this 
 17.23  section. 
 17.24     (e) Those systems that offer subscribers the option of 
 17.25  receiving programs on one or more special service channels 
 17.26  without also receiving the regular subscriber services may 
 17.27  comply with this section by providing the subscribers who 
 17.28  receive the special service only, at least one specially 
 17.29  designated composite access channel composed of the programming 
 17.30  on the specially designated noncommercial public access channel, 
 17.31  the specially designated education access channel, and the 
 17.32  specially designated local government access channel required in 
 17.33  this section. 
 17.34     (f) On those systems without sufficient available channel 
 17.35  capacity to allow for activation of all specially designated 
 17.36  access channels required in this section, or when demand for use 
 18.1   of the channels does not warrant activation of all specially 
 18.2   designated access channels required in this section, public, 
 18.3   educational, governmental, and leased access channel programming 
 18.4   may be combined on one or more cable channels.  To the extent 
 18.5   time is available, access channels may also be used for other 
 18.6   broadcast and nonbroadcast services; provided that these 
 18.7   services are subject to immediate displacement if there is 
 18.8   demand to use the channel for its specially designated purpose.  
 18.9   The system shall, in any case, provide at least one full channel 
 18.10  on the VHF spectrum for shared access programming. 
 18.11     (g) Franchisees providing only alarm services or only data 
 18.12  transmission services for computer-operated functions do not 
 18.13  need to provide access channel reception to alarm and data 
 18.14  service subscribers. [238.084, subd 3, para (a)] 
 18.15     Sec. 17.  [238A.17] [OTHER FRANCHISE TERMS AND CONDITIONS 
 18.16  PERMITTED.] 
 18.17     A franchise may contain additional terms and conditions as 
 18.18  the municipality and the franchisee deem appropriate, provided 
 18.19  the additional terms and conditions are consistent with federal 
 18.20  and state law. [238.084, subd 4] 
 18.21     Sec. 18.  [238A.18] [USE OF EXISTING UTILITY EASEMENT; 
 18.22  RESTRICTIONS.] 
 18.23     Subdivision 1.  [UTILITY EASEMENT DEFINED.] For purposes of 
 18.24  this section, "utility easement" includes all utility easements 
 18.25  dedicated for compatible uses on a recorded plat to the public 
 18.26  or to the state or to any political subdivision of the state; 
 18.27  all deeded easements to the public or to the state or to any 
 18.28  political subdivision of the state that are for compatible uses; 
 18.29  all easements acquired by condemnation or prescription by the 
 18.30  state or any political subdivision of the state that are 
 18.31  dedicated for compatible uses; and all easements in favor of any 
 18.32  public service corporation for telecommunications or electric 
 18.33  transmission purposes. [238.35, subd 2] 
 18.34     Subd. 2.  [AUTHORITY TO USE EXISTING UTILITY EASEMENT.] The 
 18.35  state or any local government unit, individual, or entity, 
 18.36  however organized, that is licensed, franchised, or authorized 
 19.1   to establish and provide cable services may utilize any existing 
 19.2   utility easement in accordance with this section to install, 
 19.3   maintain, and remove equipment and facilities without the 
 19.4   payment of additional compensation to the owners or occupants of 
 19.5   the real estate subject to the easement, other than the owner of 
 19.6   the utility easement or its successors or assigns.  [238.35, 
 19.7   subd 3] 
 19.8      Subd. 3.  [RESTRICTIONS ON USE.] (a) As a condition of 
 19.9   using any utility easement, a cable services provider is subject 
 19.10  to any burdens, duties, or obligations specified in the easement 
 19.11  of the grantee of the easement. 
 19.12     (b) A cable services provider shall restore the real 
 19.13  estate, and any landscaping on or improvements to it, to the 
 19.14  condition they were in before entry within 30 days of completing 
 19.15  the installation of, and making changes to, the facilities for 
 19.16  providing cable services upon that real estate.  Restoration 
 19.17  that cannot be completed during the winter months must be 
 19.18  accomplished as promptly as weather conditions permit. [238.35, 
 19.19  subd 4] 
 19.20     Sec. 19.  [238A.19] [PERMIT TO ATTACH TO POLE OR CONDUIT 
 19.21  SYSTEM.] 
 19.22     Every pole, duct, and conduit agreement must contain a 
 19.23  provision that before attaching to the public utility company's 
 19.24  poles or occupying any part of the public utility's conduit 
 19.25  system, the cable service provider shall apply and receive a 
 19.26  permit for that purpose on a form provided by the public utility 
 19.27  company.  If the cable service provider accepts the permit, it 
 19.28  may attach its equipment to the poles covered by the permit or 
 19.29  occupy the conduit system of the public utility to the extent 
 19.30  authorized by the permit, subject to sections 238A.19 and 
 19.31  238A.20 and the terms of the agreement between the contracting 
 19.32  parties.  In granting or denying a permit, the public utility 
 19.33  has the right to determine whether a grant of a permit would 
 19.34  adversely affect its public services, duties, and obligations or 
 19.35  have an adverse effect on the economy, safety, and future needs 
 19.36  of the public utility.  [238.38] 
 20.1      Sec. 20.  [238A.20] [LIABILITY; INDEMNIFY PUBLIC UTILITY.] 
 20.2      Subdivision 1.  [PROVISION IN AGREEMENT.] Every pole, duct, 
 20.3   and conduit agreement must contain a provision that the cable 
 20.4   service provider shall defend, indemnify, protect, and save 
 20.5   harmless the public utility from and against any and all claims 
 20.6   and demands for damages to property and injury or death to 
 20.7   persons, including payments made under any worker's compensation 
 20.8   law or under any plan for employees' disability and death 
 20.9   benefits, which may arise out of or be caused by (1) the 
 20.10  erection, maintenance, presence, use, or removal of the cable 
 20.11  service provider's cable, equipment, and facilities, (2) the 
 20.12  proximity of the cables, equipment, and facilities of the 
 20.13  parties to the agreement, or (3) any act of the cable service 
 20.14  provider on or in the vicinity of the public utility company's 
 20.15  poles and conduit system, in the performance of the agreement.  
 20.16     Subd. 2.  [ADDITIONAL PROTECTION FROM CLAIMS AND 
 20.17  DEMANDS.] The cable service provider shall also indemnify, 
 20.18  protect, and save harmless the public utility from and against 
 20.19  any and all claims and demands: 
 20.20     (1) that arise directly or indirectly from the operation of 
 20.21  the cable service provider's facilities including taxes and 
 20.22  special charges by others; 
 20.23     (2) for damages or loss for infringement of copyright, for 
 20.24  libel and slander, for unauthorized use of television broadcast 
 20.25  programs, and for unauthorized use of other program material; 
 20.26  and 
 20.27     (3) for infringement of patents with respect to the 
 20.28  manufacture, use, and operation of the cable communications 
 20.29  equipment in combination with the public utility company's 
 20.30  poles, conduit system, or otherwise. 
 20.31     Subd. 3.  [LIABILITY FOR NEGLIGENCE.] Nothing contained in 
 20.32  this section relieves the public utility company from liability 
 20.33  for the negligence of the public utility company or anyone 
 20.34  acting under its direction and control.  [238.40] 
 20.35     Sec. 21.  [238A.21] [INSURANCE FOR PARTIES TO POLE 
 20.36  AGREEMENT.] 
 21.1      The cable service provider shall carry insurance to protect 
 21.2   the parties to a pole attachment agreement from and against any 
 21.3   and all claims, demands, actions, judgments, costs, expenses, 
 21.4   and liabilities that may arise or result, directly or 
 21.5   indirectly, from or by reason of the loss, injury, claim, or 
 21.6   damage.  The amount of the insurance must be agreed to by the 
 21.7   parties to this agreement.  Insurance required must remain in 
 21.8   effect for the entire term of the agreement. [238.41] 
 21.9      Sec. 22.  [238A.22] [MUNICIPAL CABLE SERVICE PROVIDER.] 
 21.10     Subject to this chapter, a municipality may, by itself or 
 21.11  in partnership with other government and nongovernment entities, 
 21.12  own and operate a cable system to provide cable and modem 
 21.13  services to public and private customers within its own borders 
 21.14  or the service territory of its partner.  A municipality may not 
 21.15  use tax revenues or revenues from other municipal operations to 
 21.16  subsidize cable or modem services provided under authority of 
 21.17  this section. 
 21.18     Sec. 23.  [238A.23] [JOINT CABLE COMMUNICATIONS 
 21.19  COMMISSION.] 
 21.20     Municipalities may by ordinance or resolution create a 
 21.21  joint cable communications commission under section 471.59, to 
 21.22  which each member municipality may delegate authority vested in 
 21.23  the municipality by statute or charter to prepare, adopt, grant, 
 21.24  administer, and enforce a cable communications franchise, and 
 21.25  establish rates under the franchise.  The adoption, granting, 
 21.26  administration, and enforcement of a cable communications 
 21.27  franchise, and the establishment of rates under the franchise by 
 21.28  a joint cable communications commission, under this subdivision, 
 21.29  is deemed to comply with procedural requirements of a statute or 
 21.30  charter for the adoption, granting, administration, and 
 21.31  enforcement of a franchise, and establishment of rates.  A 
 21.32  member of the commission may, by ordinance adopted in the manner 
 21.33  provided by section 412.191, subdivision 4, adopt by reference 
 21.34  the joint cable communication franchise in the manner provided 
 21.35  under section 471.62. [238.08, subd 5] 
 21.36     Sec. 24.  [238A.24] [ACCESS CHANNEL; CENSORSHIP 
 22.1   PROHIBITED.] 
 22.2      No cable service provider or local franchising authority 
 22.3   may prohibit or limit a program or class or type of program 
 22.4   presented over a leased channel or a channel made available for 
 22.5   public, educational, or governmental access purposes.  Neither a 
 22.6   local franchising authority nor a cable service provider, 
 22.7   including its officers, directors, or employees, is liable for 
 22.8   any penalties or damages arising from programming content not 
 22.9   originating from or produced by the cable communications company 
 22.10  and shown on any public access channel, educational access 
 22.11  channel, governmental access channel, leased access channel, or 
 22.12  regional channel. [238.11, subd 2] 
 22.13     Sec. 25.  [238A.25] [CONDUIT.] 
 22.14     In order to further promote competition in providing cable 
 22.15  services, a local franchising authority may require that all 
 22.16  cable wires be placed in conduit at the time of installation.  
 22.17  Unless otherwise agreed to, all conduit must be paid for by the 
 22.18  local franchising authority or credited against the franchise 
 22.19  fee.  The local franchising authority is responsible for only 
 22.20  the actual cost of the conduit.  Installation costs and the 
 22.21  costs of other material and labor must be paid by the cable 
 22.22  service provider.  All conduit is the property of the local 
 22.23  franchising authority and may be leased to competing cable 
 22.24  service providers at fair market value. 
 22.25     Sec. 26.  [238A.26] [INTERCONNECTION.] 
 22.26     Cable service providers shall interconnect, at their cost, 
 22.27  their cable system with all adjoining cable systems, regardless 
 22.28  of ownership of the system.  A cable service provider may pass 
 22.29  through its cost to its subscribers.  No cable service provider 
 22.30  shall withhold consent to interconnection. [New] 
 22.31     Sec. 27.  [238A.70] [SERVICE TO PUBLIC INSTITUTIONS.] 
 22.32     Cable service providers and modem service providers shall 
 22.33  provide all services offered to all public buildings, upon 
 22.34  request of the local franchising authority, at no charge to any 
 22.35  local franchising authority, municipality or other government 
 22.36  entity, school system, or other public entity using the service. 
 23.1   [New] 
 23.2      Sec. 28.  [238A.80] [MODEM SERVICES.] 
 23.3      (a) Modem service is exempt from jurisdiction or regulation 
 23.4   by any form of state or local government except that a local 
 23.5   government unit may subject a modem service provider to section 
 23.6   238A.09. 
 23.7      (b) All modem service providers shall provide 
 23.8   nondiscriminatory access to independent Internet service 
 23.9   providers under federal law. 
 23.10     Sec. 29.  Minnesota Statutes 1998, section 272.01, 
 23.11  subdivision 3, is amended to read: 
 23.12     Subd. 3.  The provisions of subdivision 2 shall not apply 
 23.13  to: 
 23.14     (a) Federal property for which payments are made in lieu of 
 23.15  taxes in amounts equivalent to taxes which might otherwise be 
 23.16  lawfully assessed; 
 23.17     (b) Real estate exempt from ad valorem taxes and taxes in 
 23.18  lieu thereof which is leased, loaned, or otherwise made 
 23.19  available to telephone companies or electric, light and power 
 23.20  companies upon which personal property consisting of 
 23.21  transmission and distribution lines is situated and assessed 
 23.22  pursuant to sections 273.37, 273.38, 273.40 and 273.41, or upon 
 23.23  which are situated the communication lines of express, railway, 
 23.24  telephone or telegraph companies, or pipelines used for the 
 23.25  transmission and distribution of petroleum products, or the 
 23.26  equipment items of a cable communications company subject to 
 23.27  sections 238.35 to 238.42 238A.17 to 238A.21; 
 23.28     (c) Property presently owned by any educational institution 
 23.29  chartered by the territorial legislature; 
 23.30     (d) Indian lands; 
 23.31     (e) Property of any corporation organized as a tribal 
 23.32  corporation under the Indian Reorganization Act of June 18, 
 23.33  1934, (Statutes at Large, volume 48, page 984); 
 23.34     (f) Real property owned by the state and leased pursuant to 
 23.35  section 161.23 or 161.431, and acts amendatory thereto; 
 23.36     (g) Real property owned by a seaway port authority on June 
 24.1   1, 1967, upon which there has been constructed docks, 
 24.2   warehouses, tank farms, administrative and maintenance 
 24.3   buildings, railroad and ship terminal facilities and other 
 24.4   maritime and transportation facilities or those directly related 
 24.5   thereto, together with facilities for the handling of passengers 
 24.6   and baggage and for the handling of freight and bulk liquids, 
 24.7   and personal property owned by a seaway port authority used or 
 24.8   usable in connection therewith, when said property is leased to 
 24.9   a private individual, association or corporation, but only when 
 24.10  such lease provides that the said facilities are available to 
 24.11  the public for the loading and unloading of passengers and their 
 24.12  baggage and the handling, storage, care, shipment, and delivery 
 24.13  of merchandise, freight and baggage and other maritime and 
 24.14  transportation activities and functions directly related 
 24.15  thereto, but not including property used for grain elevator 
 24.16  facilities; it being the declared policy of this state that such 
 24.17  property when so leased is public property used exclusively for 
 24.18  a public purpose, notwithstanding the one-year limitation in the 
 24.19  provisions of section 273.19; 
 24.20     (h) Notwithstanding the provisions of clause (g), when the 
 24.21  annual rental received by a seaway port authority in any 
 24.22  calendar year for such leased property exceeds an amount 
 24.23  reasonably required for administrative expense of the authority 
 24.24  per year, plus promotional expense for the authority not to 
 24.25  exceed the sum of $100,000 per year, to be expended when and in 
 24.26  the manner decided upon by the commissioners, plus an amount 
 24.27  sufficient to pay all installments of principal and interest 
 24.28  due, or to become due, during such calendar year and the next 
 24.29  succeeding year on any revenue bonds issued by the authority, 
 24.30  plus 25 percent of the gross annual rental to be retained by the 
 24.31  authority for improvement, development, or other contingencies, 
 24.32  the authority shall make a payment in lieu of real and personal 
 24.33  property taxes of a reasonable portion of the remaining annual 
 24.34  rental to the county treasurer of the county in which such 
 24.35  seaway port authority is principally located.  Any such payments 
 24.36  to the county treasurer shall be disbursed by the treasurer on 
 25.1   the same basis as real estate taxes are divided among the 
 25.2   various governmental units, but if such port authority shall 
 25.3   have received funds from the state of Minnesota and funds from 
 25.4   any city and county pursuant to Laws 1957, chapters 648, 831, 
 25.5   and 849 and acts amendatory thereof, then such disbursement by 
 25.6   the county treasurer shall be on the same basis as real estate 
 25.7   taxes are divided among the various governmental units, except 
 25.8   that the portion of such payments which would otherwise go to 
 25.9   other taxing units shall be divided equally among the state of 
 25.10  Minnesota and said county and city. 
 25.11     Sec. 30.  Minnesota Statutes 1999 Supplement, section 
 25.12  297A.25, subdivision 11, is amended to read: 
 25.13     Subd. 11.  [SALES TO GOVERNMENT.] The gross receipts from 
 25.14  all sales, including sales in which title is retained by a 
 25.15  seller or a vendor or is assigned to a third party under an 
 25.16  installment sale or lease purchase agreement under section 
 25.17  465.71, of tangible personal property to, and all storage, use 
 25.18  or consumption of such property by, the United States and its 
 25.19  agencies and instrumentalities, the University of Minnesota, 
 25.20  state universities, community colleges, technical colleges, 
 25.21  state academies, the Perpich center for arts education, an 
 25.22  instrumentality of a political subdivision that is accredited as 
 25.23  an optional/special function school by the North Central 
 25.24  Association of Colleges and Schools, school districts, public 
 25.25  libraries, public library systems, multicounty, multitype 
 25.26  library systems as defined in section 134.001, county law 
 25.27  libraries under chapter 134A, the state library under section 
 25.28  480.09, and the legislative reference library are exempt. 
 25.29     As used in this subdivision, "school districts" means 
 25.30  public school entities and districts of every kind and nature 
 25.31  organized under the laws of the state of Minnesota, including, 
 25.32  without limitation, school districts, intermediate school 
 25.33  districts, education districts, service cooperatives, secondary 
 25.34  vocational cooperative centers, special education cooperatives, 
 25.35  joint purchasing cooperatives, telecommunication cooperatives, 
 25.36  regional management information centers, and any instrumentality 
 26.1   of a school district, as defined in section 471.59. 
 26.2      Sales exempted by this subdivision include sales under 
 26.3   section 297A.01, subdivision 3, paragraph (f).  
 26.4      Sales to hospitals and nursing homes owned and operated by 
 26.5   political subdivisions of the state are exempt under this 
 26.6   subdivision.  
 26.7      Sales of supplies and equipment used in the operation of an 
 26.8   ambulance service owned and operated by a political subdivision 
 26.9   of the state are exempt under this subdivision provided that the 
 26.10  supplies and equipment are used in the course of providing 
 26.11  medical care.  Sales to a political subdivision of repair and 
 26.12  replacement parts for emergency rescue vehicles and fire trucks 
 26.13  and apparatus are exempt under this subdivision.  
 26.14     Sales to a political subdivision of machinery and 
 26.15  equipment, except for motor vehicles, used directly for mixed 
 26.16  municipal solid waste management services at a solid waste 
 26.17  disposal facility as defined in section 115A.03, subdivision 10, 
 26.18  are exempt under this subdivision.  
 26.19     Sales to political subdivisions of chore and homemaking 
 26.20  services to be provided to elderly or disabled individuals are 
 26.21  exempt. 
 26.22     Sales to political subdivisions acting as local franchising 
 26.23  authorities, as defined in section 238A.01, of any cable 
 26.24  communications-related machinery, equipment, and supplies used 
 26.25  directly and primarily for its cable communications operations 
 26.26  or responsibilities are exempt. 
 26.27     Sales to a town of gravel and of machinery, equipment, and 
 26.28  accessories, except motor vehicles, used exclusively for road 
 26.29  and bridge maintenance, and leases of motor vehicles exempt from 
 26.30  tax under section 297B.03, clause (10), are exempt. 
 26.31     Sales of telephone services to the department of 
 26.32  administration that are used to provide telecommunications 
 26.33  services through the intertechnologies revolving fund are exempt 
 26.34  under this subdivision. 
 26.35     This exemption shall not apply to building, construction or 
 26.36  reconstruction materials purchased by a contractor or a 
 27.1   subcontractor as a part of a lump-sum contract or similar type 
 27.2   of contract with a guaranteed maximum price covering both labor 
 27.3   and materials for use in the construction, alteration, or repair 
 27.4   of a building or facility.  This exemption does not apply to 
 27.5   construction materials purchased by tax exempt entities or their 
 27.6   contractors to be used in constructing buildings or facilities 
 27.7   which will not be used principally by the tax exempt entities. 
 27.8      This exemption does not apply to the leasing of a motor 
 27.9   vehicle as defined in section 297B.01, subdivision 5, except for 
 27.10  leases entered into by the United States or its agencies or 
 27.11  instrumentalities.  
 27.12     The tax imposed on sales to political subdivisions of the 
 27.13  state under this section applies to all political subdivisions 
 27.14  other than those explicitly exempted under this subdivision, 
 27.15  notwithstanding section 115A.69, subdivision 6, 116A.25, 
 27.16  360.035, 458A.09, 458A.30, 458D.23, 469.101, subdivision 2, 
 27.17  469.127, 473.448, 473.545, or 473.608 or any other law to the 
 27.18  contrary enacted before 1992. 
 27.19     Sales exempted by this subdivision include sales made to 
 27.20  other states or political subdivisions of other states, if the 
 27.21  sale would be exempt from taxation if it occurred in that state, 
 27.22  but do not include sales under section 297A.01, subdivision 3, 
 27.23  paragraphs (c) and (e). 
 27.24     Sec. 31.  Minnesota Statutes 1998, section 473.129, 
 27.25  subdivision 6, is amended to read: 
 27.26     Subd. 6.  [ON METRO AGENCIES.] (a) The metropolitan council 
 27.27  shall appoint from its membership a member to serve with each 
 27.28  metropolitan agency.  Each member of the metropolitan council so 
 27.29  appointed on each of such agencies shall serve without a vote. 
 27.30     (b) The metropolitan council shall also appoint individuals 
 27.31  to the governing body of the cable communications metropolitan 
 27.32  interconnected regional channel entity under section 238.43, 
 27.33  subdivision 5 238A.07. 
 27.34     Sec. 32.  [REPEALER.] 
 27.35     (a) Minnesota Statutes 1998, sections 238.01; 238.02; 
 27.36  238.03; 238.08; 238.081; 238.082; 238.083; 238.084; 238.086; 
 28.1   238.11; 238.12; 238.15; 238.16; 238.17; 238.18; 238.22, 
 28.2   subdivisions 1, 2, 4, 5, 6, 7, 8, and 9; 238.23; 238.24; 
 28.3   238.241; 238.242; 238.25; 238.26; 238.27; 238.35; 238.36; 
 28.4   238.37; 238.38; 238.39; 238.40; 238.41; 238.42; and 238.43, are 
 28.5   repealed. 
 28.6      (b) Minnesota Statutes 1999 Supplement, section 238.22, 
 28.7   subdivision 3, is repealed.