Bill Summaries: H957 AUTHORIZE BROADBAND COOPERATIVES.

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  • Summary date: May 13 2021 - More information

    Enacts new GS Chapter 117A, Broadband Rural and Unserved Areas, organized into four Articles.

    Article 1 creates a nine-member North Carolina Rural Broadband Authority (Authority), consisting of four legislative appointments and five gubernatorial appointments for four-year terms. Sets forth the Chapter's defined terms. States the purpose of the Authority is to secure broadband service for areas where service is not being rendered or is inadequate. Grants 12 powers to the Authority, including the power (1) to investigate all applications from communities unserved or inadequately served by broadband and to determine the feasibility of obtaining service for such communities; (2) to contact telecommunications providers contiguous to areas desiring service to facilitate extension of service by such providers or other agencies in that community as feasible; (3) to estimate the service charges to which a community would be subject in addition to the rates for broadband as necessary to make extension self-liquidating; (3) of eminent domain to condemn rights-of-ways necessary for broadband infrastructure, in its own name or on behalf of the broadband membership corporations to be formed; (4) to investigate all applications from communities for the formation of broadband membership corporations, make determinations on eligibility, and grant authority to form such corporations; (5) to prescribe rules and regulations for the broadband membership corporations in making federal grant or loan applications; and (6) to receive and investigate complaints from members of broadband membership corporations. Explicitly provides that the Authority is not a rate-making body and does not have the power to fix rates or service charges, or to order the extension of broadband by telecommunication providers. Provides for Authority meetings, selection of a qualified secretary, and member compensation and expenses.

    Establishes a quarterly regulatory fee for broadband membership corporations, set at the greater of (1) the legislatively established rate for that fiscal year based on the number of customer connections for broadband service for each broadband membership corporation, or (2) 25 cents for each customer connection for broadband service for each broadband membership corporation. Provides for the Authority to propose a rate for the fee in its budget request as specified; requires the NCGA, if it decides to set rates higher than the request, to do so by law. Caps fees at amounts necessary to defray the costs of the Authority's annual operation with a reasonable margin for a reserve fund as specified. Details quarterly reporting and fee payment by broadband membership corporations. Creates the North Carolina Rural Broadband Authority Fund (NCRBA Fund), consisting of fees collected and other funds received by the Authority, and restricts expenditures to those legislatively appropriated. Details parameters of the NCRBA Fund, including that no unexpended surplus reverts to the General Fund. 

    Article 2, cited as the "Broadband Membership Corporation Act," allows for one or more persons in an unserved area desiring to form a broadband membership corporation to apply with the Authority for permission to form the corporation, whereby the Authority must survey the area and determine feasibility of formation and issue privilege for formation if it determines the area is unserved and formation to provide service is feasible. Defines person to include natural persons, firms, associations, corporations, business trusts, partnerships, and bodies politic. Authorizes execution and recording of a certificate of incorporation by at least three natural persons upon issuance of a privilege and details required content of the certificate. Deems a broadband membership corporation eligible to receive a franchise from any city or town pursuant to GS 160A-319. Provides restrictions regarding service in municipalities. Details further requirements for the execution and filing of the certificate of incorporation with the Secretary of State.

    Requires each corporation to have a board of directors and provides parameters for member qualification, election, terms, and compensation. Enumerates five powers of the board, including the power to appoint agents and employees, execute instruments, and promulgate governing rules and procedures. Allows for issuance of member certificates. Describes the purposes of the corporations. Prohibits discrimination as to rates or services of members. Includes a general grant of powers necessary to accomplish the corporate purpose. Grants 12 specific powers to a corporation, including (1) the power to acquire and dispose of property; (2) to provide broadband service and to acquire, own, operate, maintain, and improve broadband infrastructure; (3) to enter into contracts; (4) to contract debts, borrow money, and to issue or assume the payment of bonds; and (5) to fix, maintain, and collect fees, rents, tolls, and other charges for service rendered. Requires payment of all State and local taxes and assessments applicable to telecommunications providers, except income tax. Places restrictions on disposing of or encumbering the corporation's property. Grants corporations the authority to issue bonds in anticipation of its revenue for any corporate purpose, by resolution of the board, with maturity not to exceed 40 years. Provides for covenants or agreements of the board for security of bonds. Allows for purchase and cancellation of issued bonds by the corporation. Details the procedures for amending a certificate of incorporation and corporate dissolution. Explicitly requires applying for federal grants or loans through the Authority. 

    Article 3 authorizes any two or more organized broadband membership corporations to consolidate into a new corporation, subject to member approval of the proposed articles of consolidation as specified. Additionally authorizes one or more organized corporations to merge into another like corporation, subject to member approval of the proposed articles of merger as specified. Requires filing and recording articles of consolidation or merger with the Secretary of State and applicable register of deeds. Describes the effect of consolidation or merger. 

    Article 4 provides for the powers, authority, and requirements as to indemnification, payment of expenses, and purchase of liability insurance for directors, officers, employees, and agents as that of nonprofit corporation officers and directors pursuant to Part 5 of Article 8 of GS Chapter 55 apply. 

    Makes conforming changes to GS 160A-319, regarding local authority to grant a utility franchise for a broadband service provided by a broadband membership corporation. 


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