HF 3605

1st Engrossment - 92nd Legislature (2021 - 2022) Posted on 05/05/2022 03:52pm

A bill for an act
relating to broadband; establishing a program of financial assistance to extend
broadband service to unserved areas; establishing a process to allow existing
easements to be used for broadband service; amending Minnesota Statutes 2020,
sections 116J.395, subdivision 8; 116J.396, subdivision 2; proposing coding for
new law in Minnesota Statutes, chapter 116J.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA:

Section 1.

Minnesota Statutes 2020, section 116J.395, subdivision 8, is amended to read:

Subd. 8.

Application evaluation report.

By June 30 of each year, the Office of
Broadband Development shall publish on the Department of Employment and Economic
Development's website and provide to the chairs and ranking minority members of the
senate and house of representatives committees with primary jurisdiction over broadband:

(1) a list of all applications for grants under this section received during the previous
year and, for each application:

(1) (i) the results of any quantitative weighting scheme or scoring system the
commissioner used to award grants or rank the applications;

(2) (ii) the grant amount requested; and

(3) (iii) the grant amount awarded, if any.; and

(2) with respect to the line extension program under section 116J.3951:

(i) the number of addresses submitted to the portal;

(ii) the number of addresses served or to be served under the line extension program;

(iii) the average cost to the state per address served under the line extension program;
and

(iv) the total amount expended under the line extension program.

Sec. 2.

[116J.3951] BROADBAND LINE EXTENSION PROGRAM.

Subdivision 1.

Program established.

A broadband line extension grant program is
established in the Department of Employment and Economic Development. The purpose
of the broadband line extension grant program is to award grants to eligible applicants in
order to extend existing broadband infrastructure to unserved locations.

Subd. 2.

Portal.

No later than November 1, 2022, the department must develop and
implement a portal on the department's website that allows a person to report (1) that
broadband service is unavailable at the physical address of the person's residence or business,
and (2) any additional information the department deems necessary to ensure the broadband
line extension grant program functions effectively. The department must develop a form
that allows the information identified in this subdivision to be submitted on paper.

Subd. 3.

Data sharing.

(a) Beginning no later than six months after the date the portal
is implemented and every six months thereafter, the department must send via e-mail to
each broadband service provider serving Minnesota customers (1) a list of addresses
submitted to the portal under subdivision 2 during the previous six months, and (2) any
additional information the department deems necessary to ensure the broadband line extension
grant program functions effectively.

(b) No later than ten days after the date the list in paragraph (a) is provided, a broadband
service provider may notify the department of any posted address at which the broadband
service provider's broadband service is available. The department must provide persons
residing or doing business at those addresses with contact information for:

(1) a broadband service provider whose broadband service is available at that address;
and

(2) programs administered by government agencies, nonprofit organizations, or the
applicable broadband service provider that reduce the cost of broadband service and for
which the persons may be eligible.

Subd. 4.

Reverse auction process.

(a) No later than ten days after the date the notice
requirement in subdivision 3, paragraph (b), expires, the department must notify each
broadband service provider that the broadband service provider may participate in the reverse
auction process established under this subdivision. Within 60 days of the date the notification
is received, a broadband service provider may submit a bid to the department to extend the
broadband service provider's existing broadband infrastructure to one or more addresses
where broadband service is currently unavailable.

(b) A bid submitted under this subdivision must include:

(1) a proposal to extend broadband infrastructure to one or more of the addresses on the
list sent by the department to the broadband service provider under subdivision 3, paragraph
(a), at which broadband service is unavailable;

(2) the amount of the broadband infrastructure extension's total cost that the broadband
service provider proposes to pay;

(3) the amount of the broadband infrastructure extension's total cost that the broadband
service provider proposes that the department is responsible for paying; and

(4) any additional information required by the department.

(c) Financial assistance that the department provides under this section must be in the
form of a grant issued to the broadband service provider. A grant issued under this section
must not exceed $25,000 per line extension.

(d) Within 60 days of the date the bidding period closes, the department must review
the bids submitted and select the broadband service provider bids that request the least
amount of financial support from the department, provided that the department determines
that the selected bids represent a cost-effective expenditure of state resources.

Subd. 5.

Line extension agreement; requirement.

The department must enter into a
line extension agreement with each winning bidder identified under subdivision 4, except
that the department may not enter into a line extension agreement to serve any customer
who is to be served under a grant previously awarded by the department under section
116J.395.

Subd. 6.

Line extension agreement.

A line extension agreement under subdivision 5
must contain the following terms:

(1) the broadband service provider agrees to extend broadband infrastructure to support
broadband service scalable to speeds of at least 100 megabits per second download and 100
megabits per second upload to each address included in the broadband service provider's
winning bid;

(2) the department agrees to pay the portion of the line extension cost proposed by the
broadband service provider in subdivision 4 in a grant issued to the broadband service
provider upon the completion of the broadband infrastructure extension to each address in
the broadband service provider's winning bid; and

(3) the winning bidder has an exclusive right to apply the grant to the cost of the
broadband infrastructure extension for a period of one year after the date the agreement is
executed.

Subd. 7.

Expenditure limit.

The department may expend no more than $5,000,000 per
fiscal year on the line extension program under this section in fiscal years 2023, 2024, and
2025.

EFFECTIVE DATE.

This section is effective the day following final enactment.

Sec. 3.

Minnesota Statutes 2020, section 116J.396, subdivision 2, is amended to read:

Subd. 2.

Expenditures.

Money in the account may be used only:

(1) for grant awards made under section sections 116J.395 and 116J.3951, including
costs incurred by the Department of Employment and Economic Development to administer
that section those sections;

(2) to supplement revenues raised by bonds sold by local units of government for
broadband infrastructure development; or

(3) to contract for the collection of broadband deployment data from providers and the
creation of maps showing the availability of broadband service.

Sec. 4.

[116J.399] BROADBAND EASEMENTS.

Subdivision 1.

Definitions.

For the purposes of this section, the following terms have
the meanings given:

(1) "broadband infrastructure" has the meaning given in section 116J.394, paragraph
(c);

(2) "broadband service" has the meaning given in section 116J.394, paragraph (b); and

(3) "provider" means a broadband service provider, but does not include an electric
cooperative association organized under chapter 308A that provides broadband service.

Subd. 2.

Use of existing easements for broadband services.

(a) A provider or provider's
affiliate, or another entity that has entered into an agreement with a provider, may use the
provider, affiliate, or entity's existing or subsequently acquired easement to install broadband
infrastructure and provide broadband service, which may include an agreement to lease
fiber capacity.

(b) Before exercising rights granted under this subdivision, a provider must provide
notice to the owner of the property on which the easement is located, as described in
subdivision 3.

(c) Use of an easement to install broadband infrastructure and provide broadband service
vests and runs with the land beginning six months after the first notice is provided under
subdivision 3, unless a court action challenging the use of the easement has been filed before
that time by the property owner, as provided under subdivision 4. The provider must also
file copies of the notices with the county recorder.

Subd. 3.

Notice to property owner.

(a) A provider must send two written notices to
impacted property owners declaring that the provider intends to use the easements to install
broadband infrastructure and provide broadband service. The notices must be sent by first
class mail and at least two months apart to the last known address of the owner of the
property on which the easement is located or, if the property owner is an existing customer
of the provider, by separate printed insertion in the property owner's monthly invoice or
included as a separate page on the property owner's electronic invoice.

(b) The notice must include:

(1) the provider's name and mailing address;

(2) a narrative describing the nature and purpose of the intended easement use;

(3) a description of any trenching or other underground work expected to be required
to install broadband infrastructure and provide broadband service, and the anticipated time
frame for the work;

(4) a phone number for an employee of the provider that the property owner may contact
regarding the easement; and

(5) the following statement, in bold red lettering: "It is important to make any challenge
by the deadline to preserve any legal rights you may have."

(c) The provider must file copies of the notices with the county recorder.

Subd. 4.

Action for damages.

(a) Notwithstanding any other law to the contrary, this
subdivision governs an action under this section and is the exclusive means to bring a claim
for compensation with respect to a notice of intent to use a provider's existing easement to
install broadband infrastructure and provide broadband service.

(b) Within six months after the date the first notice is sent under subdivision 3, a property
owner may file an action seeking to recover damages for a provider's proposed use of an
existing easement to install broadband infrastructure and provide broadband service. Claims
for damages under $15,000 may be brought in conciliation court.

(c) To initiate an action under this subdivision, a property owner must serve a complaint
upon the provider in the same manner as in a civil action and must file the complaint with
the district court for the county in which the easement is located. The complaint must state
whether the property owner:

(1) challenges the provider's right to use the easement to install broadband infrastructure
and provide broadband service, as provided under subdivision 5, paragraph (a);

(2) seeks damages as provided under subdivision 5, paragraph (b); or

(3) seeks to proceed under both clauses (1) and (2).

Subd. 5.

Deposit and hearing required.

(a) If a property owner files a complaint
challenging a provider's right to use an easement to install broadband infrastructure and
provide broadband service, after the provider answers the complaint, the district court must
promptly hold a hearing on the complaint. If the district court denies the property owner's
complaint, the provider may proceed to use the easement to install broadband infrastructure
and provide broadband service, unless the complaint also seeks damages. If the complaint
seeks damages, the provider may proceed under paragraph (b).

(b) If a property owner files a claim for damages, a provider may, after answering the
complaint, deposit with the court administrator an amount equal to the provider's estimate
of damages. A provider's estimate of damages must be no less than $1. After the estimated
damages are deposited, the provider may use the existing easement to install broadband
infrastructure and provide broadband service, conditioned on an obligation, filed with the
court administrator, to pay the amount of damages determined by the court.

Subd. 6.

Calculation of damages; burden of proof.

(a) In an action under this section
involving a property owner's claim for damages:

(1) the property owner has the burden to prove the existence and amount of any net
reduction in the fair market value of the property, considering the existence, installation,
construction, maintenance, modification, operation, repair, replacement, or removal of
broadband infrastructure in the easement, adjusted to reflect any increase in the property's
fair market value resulting from access to broadband service;

(2) a court is prohibited from awarding consequential or special damages; and

(3) evidence of estimated revenue, profits, fees, income, or similar benefits accruing to
the provider, the provider's affiliate, or a third party as a result of use of the easement is
inadmissible.

(b) Any fees or costs incurred as a result of an action under this subdivision must be
paid by the party that incurred the fees or costs, except that a provider is responsible for a
property owner's attorney fees if the final judgment or award of damages by the court exceeds
140 percent of the provider's damage deposit made under subdivision 5, if applicable.

Subd. 7.

No limits on existing easement.

Nothing in this section limits in any way a
provider's existing easement rights.

Subd. 8.

Local governmental right-of-way management preserved.

The placement
of broadband infrastructure to provide broadband service under subdivisions 2 to 7 is subject
to local government permitting and right-of-way management authority under section
237.163, and must be coordinated with the relevant local government unit in order to
minimize potential future relocations. The provider must notify a local government unit
prior to placing infrastructure for broadband service in an easement that is in or adjacent to
the local government unit's public right-of-way.

Subd. 9.

Railroad rights-of-way crossings.

The placement of broadband infrastructure
to provide broadband service under this section or section 308A.201, subdivision 12, in any
portion of an existing easement located in a railroad right-of-way is subject to sections
237.04 and 237.045.

EFFECTIVE DATE.

This section is effective the day following final enactment.