SB1403 - 502R

Be it enacted by the Legislature of the State of Arizona:

Section 1. Title 41, chapter 4, Arizona Revised Statutes, is amended by adding article 4, to read:

ARTICLE 4. DIGITAL ARIZONA INFRASTRUCTURE OFFICE

START_STATUTE41-751. Definitions

In this article, unless the context otherwise requires:

1. "Board" means the board of directors of the digital Arizona infrastructure office established by this article.

2. "Broadband infrastructure"

(a) Means facilities and equipment, including cables, fibers, conduits, ducts, poles, towers, cabinets, vaults, manholes, handholes and other associated equipment and appurtenances and related rights‑of‑way that are used directly or indirectly in providing broadband services, telecommunications, telecommunications services or other wire and wireless communications.

(b) Includes conduit, innerduct and microduct for fiber optic cables that are installed within a department of transportation right‑of‑way under its covered rural highway construction projects.

3. "Broadband infrastructure project" means constructing, acquiring, providing, developing, operating, maintaining, leasing or improving broadband infrastructure for providing broadband service in unserved, underserved and rural areas of this state.

4. "Broadband provider" means any entity that provides for sale or resale of wholesale or retail broadband services in this state and is recognized as an eligible telecommunications carrier or as a qualified broadband provider by the Arizona corporation commission or meets federal communications commission and industry carrier class service guidelines.

5. "Broadband service"

(a) Means providing access and transport to the internet, computer processing, information storage or protocol conversion at a rate of at least one megabit per second in either the upstream or downstream direction as established by the federal communications commission.

(b) Does not include information content or service applications provided over the access service or any intrastate service that was subject to a tariff as of January 1, 2012.

6. "Cost‑based Rate" means a lease rate that is only comprised of direct and associated indirect costs of obtaining and maintaining the associated right‑of‑way, broadband conduit and innerduct or microduct.

7. "Covered rural highway construction project"

(a) Means a project to construct a new rural highway or to construct or relocate an additional lane or shoulder for an existing rural highway that is started after the effective date of this section and that receives state or federal funding.

(b) Includes broadband conduit projects initiated separately from other highway construction, where the project connects a discontinuous segment of broadband conduit to another segment of broadband conduit or is a last resort to facilitate connecting to internet peering points or exchange points after the broadband provider has determined no existing broadband providers can provide necessary conduit.

8. "Governmental entity" means a county or special taxing district organized pursuant to title 48.

9. "Office" means the digital Arizona infrastructure office established by this article.

10. "Right‑of‑way"

(a) Means any area on, below or above a public highway, road, street, alley, building, public easement or other corridor or space dedicated for public travel or use, that is subject to the jurisdiction or control of a unit of government.

(b) Does not include municipal authority with respect to municipal rights‑of‑way, easements, permitting, licensing, regulations, inspections or other legitimate functions and responsibilities of incorporated communities.

11. "Rural area" means an area that is located either:

(a) Outside the municipal boundary of any city or town in this state with a population of ten thousand or more persons.

(b) Outside federal metropolitan and micropolitan statistical areas.

12. "Unserved Area" means an area that meets all of the following:

(a) Is outside federal metropolitan and micropolitan statistical areas.

(b) If in an incorporated city or town, the population of that city or town is ten thousand persons or less.

(c) Is not served by any fixed broadband provider providing broadband services in excess of the minimum speeds adopted in federal communications commission publication, 11-161, paragraph 146, 768 kbps downstream and 200 kbps upstream. END_STATUTE

START_STATUTE41-752. Digital Arizona infrastructure office; powers and duties

A. The digital Arizona infrastructure office is established in the department of administration. The office in carrying out the purposes of this article is not required to pay taxes or assessments on any property, activities or monies derived from the activities of the office.

B. The department of administration shall provide general administrative support, equipment and office and meeting space for the office. The department also shall provide staff support for the administrative and technical requirements of the office. The office shall reimburse the department for all direct costs incurred under this subsection.

C. The office shall have an official seal that is judicially noticed.

D. As necessary to carry out its responsibilities under this article, the office, through its board, may:

1. Sue and be sued.

2. Enter into contracts.

3. Employ, retain or contract for professional assistance.

4. Adopt and approve all policies and procedures of the office.

5. Lease broadband infrastructure under the jurisdiction of the office at cost‑based rates to broadband providers. END_STATUTE

START_STATUTE41-753. Board of directors; membership; conflicts of interest; advisory council

A. The office shall be governed by a board of directors consisting of the following members:

1. The state chief information officer or the officer's designee, who shall serve as the chairperson of the board.

2. A senior member of the Arizona commerce authority or the member's designee, who is appointed by the Arizona commerce authority.

3. Five members who are appointed by the governor pursuant to section 38‑211 to staggered five‑year terms of office, at least one of whom must be an enrolled member of an Indian tribe in this state and At least one of whom must be an official of a county.

B. Board members who are appointed pursuant to subsection A, paragraph 3 may not serve more than two consecutive five‑year terms, except that a partial term of less than three years does not count toward the two‑term limitation. Board members are not eligible to receive compensation for their services on the board but are eligible to receive reimbursement for expenses pursuant to title 38, chapter 4, article 2.

C. Board members are public officers for the purposes of title 38, chapter 3, article 8, relating to conflict of interest. Board members, employees of the office and persons retained or under contract with the office may not participate in any direct discussions or actions related to any project financed under this article in which the person has any direct personal financial interest.

D. Meetings of the board are subject to the requirements of title 38, chapter 3, article 3.1.

E. The board shall appoint a digital Arizona council that will serve as an advisory council to the office. The digital Arizona council shall be representative of broadband interests in the broadband provider, government and user communities. The chairperson of the board may appoint other persons to act in an advisory capacity to assist the board as necessary.END_STATUTE

START_STATUTE41-754. Powers and duties; rule making; fee authority

A. The office, through its board, may:

1. Apply for, accept and administer grants and other financial assistance from the United States government and from all other public and private sources to carry out its responsibilities under this article.

2. Recommend guidelines and best practices under applicable law for broadband infrastructure, permits, rights‑or‑way and easements relating to governmental entities and private rights‑of‑way holders.

3. Recommend guidelines and best practices under applicable law for fairly sharing and pricing broadband infrastructure enabled by the use of public rights‑of‑way relating to governmental entities and private rights‑of‑way holders.

4. Provide non‑binding mediation service to help resolve disputes relating to broadband infrastructure, permits, rights‑of‑way or easements among voluntarily participating broadband providers, governmental entities and private rights‑of‑way holders. The office shall establish alternative dispute resolution procedures for mediating, arbitrating and resolving disputes under this article.

B. The board shall:

1. Develop, prioritize and adopt selection criteria for broadband infrastructure projects pursuant to this article and with consideration for recommendations submitted by governmental and educational entities, telecommunications businesses, information services, medical services and statewide trade and business organizations.

2. Impose administrative fees that are necessary to provide services under this article, including application fees. The board shall not collect any administrative fees from municipal or county governments unless there is a specific agreement with that municipal or county government. All monies collected under this article shall be deposited in the digital Arizona infrastructure fund established by section 41‑756.

3. Adopt administrative rules pursuant to title 41, chapter 6 to carry out the requirements of this article.

4. On or before June 30 of each year, hold a public hearing to adopt a budget for the following fiscal year.END_STATUTE

START_STATUTE41-755. State rights‑of‑way and easements; access; application process

A. The office, through its board, shall adopt policies for the use of state‑owned rights‑of‑way for broadband infrastructure requirements.

B. All state agencies shall allow the use of any rights‑of‑way and easements it controls at cost, including administrative cost recovery, for the installation of broadband infrastructure for serving unserved and underserved areas of this state as determined by the office. This subsection does not apply to state trust land.

c. The office shall:

1. Establish forms for broadband providers to apply for access to and leasing of broadband infrastructure, permits, rights‑of‑way and easements under the jurisdiction of the office.

2. Establish a procedure for receiving, reviewing, evaluating and approving or disapproving on its merits each administratively complete and correct application for access to broadband infrastructure, permits, rights‑of‑way and easements under the jurisdiction of the office.

D. The board shall:

1. Adopt rules to establish criteria by which access to broadband infrastructure, permits, rights‑of‑way and easements will be determined. The criteria must include an assessment of the technical and financial applications on a fair and equitable basis.

2. Adopt rules for establishing priority of applications for access to broadband infrastructure, permits, rights‑of‑way and easements under the jurisdiction of the office.

3. Approve or disapprove applications for broadband infrastructure, permits, rights‑of‑way and easements and notify the applicant of the action within a reasonable period after the date of the application.

4. Determine order and priority of the applications under this article based on merits of the applications.

E. If an application is approved, the board may condition the approval on assurances it considers necessary for ensuring that the broadband infrastructure, permits, rights‑of‑way or easements will be used consistent with the applicable law and terms of the approved application.

F. Nothing in this article diminishes, impinges on or otherwise affects existing municipal authority with respect to rights‑of‑way, easements, permitting, licensing, regulations, inspections or other legitimate functions and responsibilities of incorporated communities. END_STATUTE

START_STATUTE41-756. Digital Arizona infrastructure fund; exemption

A. The digital Arizona infrastructure fund is established consisting of the fees collected under this article. The digital Arizona infrastructure office shall administer the fund. Monies in the fund are continuously appropriated.

B. On notice from the office, the state treasurer shall invest and divest monies in the fund as provided by section 35‑313, and monies earned from investment shall be credited to the fund.

C. Monies in the fund are exempt from the provisions of section 35‑190 relating to lapsing of appropriations.END_STATUTE

Sec. 2. Section 41-3016.06, Arizona Revised Statutes, is amended to read:

START_STATUTE41-3016.06. Department of administration; termination July 1, 2016

A. The department of administration terminates on July 1, 2016.

B. Title 41, chapter 4, articles 1, 2, 3, 4, 5 and 7 and chapter 32 are repealed on January 1, 2017. END_STATUTE

Sec. 3. Initial terms of members of the digital Arizona infrastructure office board of directors

A. Notwithstanding section 41‑753, Arizona Revised Statutes, as added by this act, the initial terms of the members of the digital Arizona infrastructure office board of directors who are appointed pursuant to section 41‑753, subsection A, paragraph 3, Arizona Revised Statutes, as added by this act, are:

1. Two terms ending January 1, 2015.

2. Three terms ending January 1, 2017.

B. The governor shall make all subsequent appointments as prescribed by statute.