S2053

An Act authorizing county and municipal sewerage and utilities authorities to provide broadband telecommunications service, and amending and supplementing P.L.1946, c.138 and P.L.1957, c.183.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. Section 3 of P.L.1946, c.138 (C.40:14A-3) is amended to read as follows:

3. As used in this act, unless a different meaning clearly appears from the context:

(1) "Municipality" shall mean any city of any class, any borough, village, town, township, or any other municipality other than a county or a school district, and except when used in section 4 or 21 of this act, any agency thereof or any two or more thereof acting jointly or any joint meeting or other agency of any two or more thereof;

(2) "County" shall mean any county of any class;

(3) "Governing body" shall mean, in the case of a county, the board of chosen freeholders, or in the case of those counties organized pursuant to the provisions of the "Optional County Charter Law," P.L.1972, c.154 (C.40:41A-1 et seq.), the board of chosen freeholders and the county executive, the county supervisor or the county manager, as appropriate, and, in the case of a municipality, the commission, council, board or body, by whatever name it may be known, having charge of the finances of the municipality;

(4) "Person" shall mean any person, association, corporation, nation, State or any agency or subdivision thereof, other than a county or municipality of the State or a sewerage authority;

(5) "Sewerage or water reclamation authority" shall mean a public body created pursuant to section 4 of this act;

(6) Subject to the exceptions provided in section 4 of this act, "district" shall mean the area within the territorial boundaries of the county, or of the municipality or municipalities, which created or joined in the creation of a sewerage authority;

(7) "Local unit" shall mean the county, or any municipality, which created or joined in the creation of a sewerage authority;

(8) "Sewerage system" shall mean the plants, structures, on-site waste-water systems, and other real and personal property acquired, constructed, maintained or operated or to be acquired, constructed, maintained or operated by a sewerage authority for the purposes of the sewerage authority, including sewers, conduits, pipe lines, mains, pumping and ventilating stations, sewage treatment or disposal systems, plants and works, connections, and outfalls, compensating reservoirs, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the collection, treatment, purification or disposal in a sanitary manner of any sewage, liquid or solid wastes, night soil or industrial wastes;

(9) "Cost" shall mean, in addition to the usual connotations thereof, the cost of acquisition or construction of all or any part of a sewerage system and of all or any property, rights, easements, privileges, agreements and franchises deemed by the sewerage authority to be necessary or useful and convenient therefor or in connection therewith and the cost of retiring the present value of the unfunded accrued liability due and owing by a sewerage authority, as calculated by the system actuary for a date certain upon the request of a sewerage authority, for early retirement incentive benefits granted by the sewerage authority pursuant to P.L.1991, c.230 and P.L.1993, c.181, including interest or discount on bonds, cost of issuance of bonds, engineering and inspection costs and legal expenses, costs of financial, professional and other estimates and advice, organization, administrative, operating and other expenses of the sewerage authority prior to and during such acquisition or construction, and all such other expenses as may be necessary or incident to the financing, acquisition, construction and completion of said sewerage system or part thereof and the placing of the same in operation, and also such provision or reserves for working capital, operating, maintenance or replacement expenses or for payment or security of principal of or interest on bonds during or after such acquisition or construction as the sewerage authority may determine, and also reimbursements to the sewerage authority or any county, municipality or other person of any moneys theretofore expended for the purposes of the sewerage authority or to any county or municipality of any moneys theretofore expended for in connection with sanitation facilities;

(10) "Real property" shall mean lands both within and without the State, and improvements thereof or thereon, or any rights or interests therein;

(11) "Construct" and "construction" shall connote and include acts of construction, reconstruction, replacement, extension, improvement and betterment of a sewerage system;

(12) "Industrial wastes" shall mean liquid or other wastes resulting from any processes of industry, manufacture, trade or business or from the development of any natural resource;

(13) "Sewage" shall mean the water-carried wastes created in and carried, or to be carried, away from, or to be processed by on-site wastewater systems, residences, hotels, apartments, schools, hospitals, industrial establishments, or any other public or private building, together with such surface or ground water and industrial wastes as may be present;

(14) "On-site wastewater system" means any of several works, facilities, septic tanks or other devices, used to collect, treat, reclaim, or dispose of wastewater or sewage on or adjacent to the property on which the wastewater or sewage is produced, or to convey such wastewater or sewage from said property to such facilities as the authority may establish for its disposal;

(15) "Pollution" means the condition of water resulting from the introduction therein of substances of a kind and in quantities rendering it detrimental or immediately or potentially dangerous to the public health, or unfit for public or commercial use;

(16) "Ordinance" means a written act of the governing body of a municipality adopted and otherwise approved and published in the manner or mode of procedure prescribed for ordinances tending to obligate such municipality pecuniarily;

(17) "Resolution" means a written act of the governing body of a local unit adopted and otherwise approved in the manner or mode of procedure prescribed for resolutions tending to obligate such local unit pecuniarily;

(18) "Bonds" shall mean bonds or other obligations issued pursuant to this act; [and]

(19) "Compensating reservoir" shall mean the structures, facilities and appurtenances for the impounding, transportation and release of water for the replenishment in periods of drought or at other necessary times of all or a part of waters in or bordering the State diverted into a sewer, sewage treatment or sewage disposal system operated by the sewerage authority;

(20) “Broadband telecommunications infrastructure” means any equipment used for the purpose of providing broadband telecommunications service, including, but not limited to, fiber optic, digital subscriber lines, digital wireline or wireless cable transmission, broadband wireless, and broadband satellite mediums;

(21) “Broadband telecommunications service” means any telecommunications service that uses broadband telecommunications infrastructure for the purpose of offering high speed, switched, broadband, wireline or wireless telecommunications capability that enables users to originate and receive high-quality voice, data, graphics or video telecommunications through the Internet and using any technology;

(22) "Local Finance Board" means the Local Finance Board, in the Division of Local Government Services, in the Department of Community Affairs, as constituted pursuant to section 1 of P.L.1974, c.35 (C.52:27D-18.1); and

(23) "Related competitive business segment" means a structurally separate business unit established by a sewerage authority that offers to install, construct, maintain, repair, renew, relocate, or remove broadband telecommunications infrastructure, or offers to provide or provides broadband telecommunications service.

(cf: P.L.2002, c.42, s.4)

2. (New section) Every sewerage authority is hereby authorized to provide the local units and their inhabitants within the district with broadband telecommunications service by:

a. contracting with a private entity to install, construct, maintain, repair, renew, relocate, or remove broadband telecommunications infrastructure and to provide broadband telecommunications service; or

b. establishing a related competitive business segment.

3. (New section) If a sewerage authority offers broadband telecommunications service, whether by contracting with a private entity or by establishing a related competitive business segment, then:

a. the costs of providing broadband telecommunications service shall not adversely impact the ability of the sewerage authority to offer the services of the sewerage system to customers in a safe, adequate and proper manner;

b. in all instances in which resources are jointly deployed by the sewerage authority to provide broadband telecommunications service and the services of the sewerage system and resource constraints arise, the provision of the services of the sewerage system shall receive a higher priority;

c. the price which the sewerage authority charges for broadband telecommunications service shall not be less than the fully allocated cost of providing broadband telecommunications service, as subject to review and approval of the local finance board, which cost shall include an allocation of the cost of all equipment, vehicles, labor, related fringe benefits and overheads, and administration utilized, and all other assets utilized and costs incurred, directly or indirectly, in providing broadband telecommunications service;

d. the provision of broadband telecommunications service shall be subject to the provisions of the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.) and the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.);

e. the sewerage authority shall not use the rates of the services of the sewerage system, or any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue, to subsidize broadband telecommunications service offered by the sewerage authority, and expenses incurred in conjunction with broadband telecommunications service shall not be borne by customers of the services of the sewerage system;

f. the rates of the services of the sewerage system shall be subject to the review and approval of the local finance board to determine that there is no subsidization of broadband telecommunications service by the rates of the services of the sewerage system, or by any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue; and

g. each such sewerage authority shall maintain books and records, and provide accounting entries of its services of the sewerage system to such local unit as may be required by the local finance board, to show that there is strict separation and allocation of the sewerage authority's revenues, costs, assets, risks and functions, between the services of the sewerage system and broadband telecommunications service.

4. Section 3 of P.L.1957, c.183 (C.40:14B-3) is amended to read as follows:

3. As used in this act, unless a different meaning clearly appears from the context:

(1) "Municipality" shall mean any city of any class, any borough, village, town, township, or any other municipality other than a county or a school district, and except when used in section 4, 5, 6, 11, 12, 13, 42 or 45 of this act, any agency thereof or any two or more thereof acting jointly or any joint meeting or other agency of any two or more thereof;

(2) "County" shall mean any county of any class;

(4) "Person" shall mean any person, association, corporation, nation, state or any agency or subdivision thereof, other than a county or municipality of the State or a municipal authority;

(5) "Municipal or water reclamation authority" shall mean a public body created or organized pursuant to section 4, 5 or 6 of this act and shall include a municipal utilities authority created by one or more municipalities and a county utilities authority created by a county;

(6) Subject to the exceptions provided in section 10, 11 or 12 of this act, "district" shall mean the area within the territorial boundaries of the county, or of the municipality or municipalities, which created or joined in or caused the creation or organization of a municipal authority;

(7) "Local unit" shall mean the county, or any municipality, which created or joined in or caused the creation or organization of a municipal authority;

(8) "Water system" shall mean the plants, structures and other real and personal property acquired, constructed or operated or to be acquired, constructed or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose for the purposes of the municipal authority, including reservoirs, basins, dams, canals, aqueducts, standpipes, conduits, pipelines, mains, pumping stations, water distribution systems, compensating reservoirs, waterworks or sources of water supply, wells, purification or filtration plants or other plants and works, connections, rights of flowage or division, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the accumulation, supply and redistribution of water;

(9) "Sewerage system" shall mean the plants, structures, on-site wastewater systems and other real and personal property acquired, constructed or operated or to be acquired, constructed, maintained or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose for the purposes of the municipal authority, including sewers, conduits, pipelines, mains, pumping and ventilating stations, sewage treatment or disposal systems, plants and works, connections, outfalls, compensating reservoirs, and other plants, structures, boats, conveyances, and other real and personal property, and rights therein, and appurtenances necessary or useful and convenient for the collection, treatment, purification or disposal in a sanitary manner of any sewage, liquid or solid wastes, night soil or industrial wastes;

(10) "Utility system" shall mean a water system, solid waste system, sewerage system, or a hydroelectric system or any combination of such systems, acquired, constructed or operated or to be acquired, constructed or operated by a municipal authority or by any person to whom a municipal authority has extended credit for this purpose;

(11) "Cost" shall mean, in addition to the usual connotations thereof, the cost of acquisition or construction of all or any part of a utility system and of all or any property, rights, easements, privileges, agreements and franchises deemed by the municipal authority to be necessary or useful and convenient therefor or in connection therewith and the cost of retiring the present value of the unfunded accrued liability due and owing by a municipal authority, as calculated by the system actuary for a date certain upon the request of a municipal authority, for early retirement incentive benefits granted by the municipal authority pursuant to P.L.1991, c.230 and P.L.1993, c.181, including interest or discount on bonds, cost of issuance of bonds, engineering and inspection costs and legal expenses, cost of financial, professional and other estimates and advice, organization, administrative, operating and other expenses of the municipal authority prior to and during such acquisition or construction, and all such other expenses as may be necessary or incident to the financing, acquisition, construction and completion of said utility system or part thereof and the placing of the same in operation, and also such provision or reserves for working capital, operating, maintenance or replacement expenses or for payment or security of principal of or interest on bonds during or after such acquisition or construction as the municipal authority may determine, and also reimbursements to the municipal authority or any county, municipality or other person of any moneys theretofore expended for the purposes of the municipal authority or to any county or municipality of any moneys theretofore expended for or in connection with water supply, solid waste, water distribution, sanitation or hydroelectric facilities;

(12) "Real property" shall mean lands both within or without the State, and improvements thereof or thereon, or any rights or interests therein;

(13) "Construct" and "construction" shall connote and include acts of construction, reconstruction, replacement, extension, improvement and betterment of a utility system;

(14) "Industrial wastes" shall mean liquid or other wastes resulting from any processes of industry, manufacture, trade or business or from the development of any natural resource, and shall include any chemical wastes or hazardous wastes;

(15) "Sewage" shall mean the water-carried wastes created in and carried, or to be carried, away from, or to be processed by on-site wastewater systems, residences, hotels, apartments, schools, hospitals, industrial establishments, or any other public or private building, together with such surface or ground water and industrial wastes and leacheate as may be present;

(16) "On-site wastewater system" means any of several facilities, septic tanks or other devices, used to collect, treat, reclaim, or dispose of wastewater or sewage on or adjacent to the property on which the wastewater or sewage is produced, or to convey such wastewater or sewage from said property to such facilities as the authority may establish for its disposal;

(17) "Pollution" means the condition of water resulting from the introduction therein of substances of a kind and in quantities rendering it detrimental or immediately or potentially dangerous to the public health, or unfit for public or commercial use;

(18) "Bonds" shall mean bonds or other obligations issued pursuant to this act;

(19) "Service charges" shall mean water service charges, solid waste service charges, sewer service charges, hydroelectric service charges or any combination of such charges, as said terms are defined in section 21 or 22 of this act or in section 7 of this amendatory and supplementary act;

(20) "Compensating reservoir" shall mean the structures, facilities and appurtenances for the impounding, transportation and release of water for the replenishment in periods of drought or at other necessary times of all or a part of waters in or bordering the State diverted into a utility system operated by a municipal authority;

(21) "Sewage or water reclamation authority" shall mean a public body created pursuant to the "sewerage authorities law," P.L.1946, c.138 (C.40:14A-1 et seq.) or the acts amendatory thereof or supplemental thereto;

(22) "County sewer authority" shall mean a sanitary sewer district authority created pursuant to the act entitled "An act relating to the establishment of sewerage districts in first- and second-class counties, the creation of Sanitary Sewer District Authorities by the establishing of such districts, prescribing the powers and duties of any such authority and of other public bodies in connection with the construction of sewers and sewage disposal facilities in any such district, and providing the ways and means for paying the costs of construction and operation thereof," approved April 23, 1946 (P.L.1946, c.123), or the acts amendatory thereof or supplemental thereto;

(23) "Chemical waste" shall mean a material normally generated by or used in chemical, petrochemical, plastic, pharmaceutical, biochemical or microbiological manufacturing processes or petroleum refining processes, which has been selected for waste disposal and which is known to hydrolize, ionize or decompose, which is soluble, burns or oxidizes, or which may react with any of the waste materials which are introduced into the landfill, or which is buoyant on water, or which has a viscosity less than that of water or which produces a foul odor. Chemical waste may be either hazardous or nonhazardous;

(24) "Effluent" shall mean liquids which are treated in and discharged by sewage treatment plants;

(25) "Hazardous wastes" shall mean any waste or combination of waste which poses a present or potential threat to human health, living organisms or the environment. "Hazardous waste" shall include, but not be limited to, waste material that is toxic, corrosive, irritating, sensitizing, radioactive, biologically infectious, explosive or flammable;

(26) "Leachate" shall mean a liquid that has been in contact with solid waste and contains dissolved or suspended materials from that solid waste;

(27) "Recycling" shall mean the separation, collection, processing or recovery of metals, glass, paper, solid waste and other materials for reuse or for energy production and shall include resource recovery;

(28) "Sludge" shall mean any solid, semisolid, or liquid waste generated from a municipal, industrial or other sewage treatment plant, water supply treatment plant, or air pollution control facility, or any other such waste having similar characteristics and effects; "sludge" shall not include effluent;

(29) "Solid waste" shall mean garbage, refuse, and other discarded materials resulting from industrial, commercial and agricultural operations, and from domestic and community activities, and shall include all other waste materials including sludge, chemical waste, hazardous wastes and liquids, except for liquids which are treated in public sewage treatment plants and except for solid animal and vegetable wastes collected by swine producers licensed by the State Department of Agriculture to collect, prepare and feed such wastes to swine on their own farms;

(30) "Solid waste system" shall mean and include the plants, structures and other real and personal property acquired, constructed or operated or to be acquired, constructed or operated by an authority or by any person to whom a municipal authority has extended credit for this purpose pursuant to the provisions of this act, including transfer stations, incinerators, recycling facilities, including facilities for the generation, transmission and distribution of energy derived from the processing of solid waste, sanitary landfill facilities or other property or plants for the collection, recycling or disposal of solid waste and all vehicles, equipment and other real and personal property and rights thereon and appurtenances necessary or useful and convenient for the collection, recycling, or disposal of solid waste in a sanitary manner;

(31) "Hydroelectric system" shall mean the plants, structures and other real and personal property acquired, constructed or operated or to be acquired, constructed or operated by an authority pursuant to the provisions of this act, including all that which is necessary or useful and convenient for the generation, transmission and sale of hydroelectric power at wholesale;

(32) "Hydroelectric power" shall mean the production of electric current by the energy of moving water;

(33) "Sale of hydroelectric power at wholesale" shall mean any sale of hydroelectric power to any person for purposes of resale of such power;

(34) “Broadband telecommunications infrastructure” means any equipment used for the purpose of providing broadband telecommunications service, including, but not limited to, fiber optic, digital subscriber lines, digital wireline or wireless cable transmission, broadband wireless, and broadband satellite mediums;

(35) “Broadband telecommunications service” means any telecommunications service that uses broadband telecommunications infrastructure for the purpose of offering high speed, switched, broadband, wireline or wireless telecommunications capability that enables users to originate and receive high-quality voice, data, graphics or video telecommunications through the Internet and using any technology;

(36) "Local Finance Board" means the Local Finance Board, in the Division of Local Government Services, in the Department of Community Affairs, as constituted pursuant to section 1 of P.L.1974, c.35 (C.52:27D-18.1);

(37) "Related competitive business segment" means a structurally separate business unit established by a municipal authority that offers to install, construct, maintain, repair, renew, relocate, or remove broadband telecommunications infrastructure, or offers to provide or provides broadband telecommunications service.

(cf: P.L.2002, c.42, s.5)

5. (New section) Every authority operating under the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.), is hereby authorized to provide the local units and their inhabitants within the district with broadband telecommunications service by:

b. establishing a related competitive business segment.

6. (New section) If an authority operating under the "municipal and county utilities authorities law," P.L.1957, c.183 (C.40:14B-1 et seq.), offers broadband telecommunications service, whether by contracting with a private entity or by establishing a related competitive business segment, then:

a. the costs of providing broadband telecommunications service shall not adversely impact the ability of the authority to offer the services of the utility system, to customers in a safe, adequate and proper manner;

b. in all instances in which resources are jointly deployed by the authority to provide broadband telecommunications service and the services of the utility system and resource constraints arise, the provision of the services of the utility system shall receive a higher priority;

c. the price which the authority charges for broadband telecommunications service shall not be less than the fully allocated cost of providing broadband telecommunications service, as subject to review and approval of the local finance board, which cost shall include an allocation of the cost of all equipment, vehicles, labor, related fringe benefits and overheads, and administration utilized, and all other assets utilized and costs incurred, directly or indirectly, in providing broadband telecommunications service;

d. the provision of broadband telecommunications service by the authority shall be subject to the provisions of the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.) and the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.);

e. the authority shall not use the rates of the services of the utility system, or any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue, to subsidize broadband telecommunications service offered by the authority, and expenses incurred in conjunction with broadband telecommunications service shall not be borne by customers of the services of the utility system;

f. the rates of the services of the utility system shall be subject to the review and approval of the local finance board to determine that there is no subsidization of broadband telecommunications service by the rates of the services of the utility system, or by any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue;

g. each such authority shall maintain books and records, and provide accounting entries of its services of the utility system to such local unit as may be required by the local finance board, to show that there is strict separation and allocation of the authority's revenues, costs, assets, risks and functions, between the services of the utility system and broadband telecommunications service.

7. This act shall take effect immediately.

STATEMENT

This bill permits a county or municipal sewerage authority and a county or municipal utilities authority (“authority”) to provide broadband telecommunications (“broadband”) service within the authority’s district by: (1) contracting with a private entity to install, construct, maintain, repair, renew, relocate, or remove broadband infrastructure and to provide broadband service; or (2) establishing a related competitive business segment of the authority to install, construct, maintain, repair, renew, relocate, or remove broadband infrastructure and to provide broadband service, provided that the related competitive business segment is structurally separated from the authority.

The bill requires that if an authority offers broadband service, whether by contracting with a private entity or by establishing a related competitive business segment: (1) the costs of providing broadband service is not to adversely impact the ability of the authority to offer the services of the utility system (i.e., water, solid waste, sewer, or hydroelectric, or any combination thereof, as applicable), to customers in a safe, adequate and proper manner; (2) in all instances in which resources are jointly deployed by the authority to provide broadband service and the services of the utility system and resource constraints arise, the provision of the services of the utility system are to receive a higher priority; (3) the price which an authority charges for broadband service is not to be less than the fully allocated cost of providing broadband service, as subject to review and approval of the Local Finance Board, in the Division of Local Government Services, in the Department of Community Affairs, which cost is to include an allocation of the cost of all equipment, vehicles, labor, related fringe benefits and overheads, and administration utilized, and all other assets utilized and costs incurred, directly or indirectly, in providing broadband telecommunications service; (4) the provision of broadband service is to be subject to the provisions of the "Local Authorities Fiscal Control Law," P.L.1983, c.313 (C.40A:5A-1 et seq.) and the "Local Public Contracts Law," P.L.1971, c.198 (C.40A:11-1 et seq.); (5) the authority is not to use the rates of the services of the utility system, or any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue, to subsidize broadband service offered by the authority, and expenses incurred in conjunction with broadband service is not to be borne by customers of the services of the utility system; (6) the rates of the services of the utility system are to be subject to the review and approval of the Local Finance Board to determine that there is no subsidization of broadband service by the rates of the services of the utility system, or by any revenue received in payment for those services or any interest or other earnings realized from the deposit or investment of such revenue; and (7) each such authority is to maintain books and records, and provide accounting entries of its services of the utility system to such local unit as may be required by the Local Finance Board, to show that there is strict separation and allocation of the authority's revenues, costs, assets, risks and functions, between the services of the utility system and broadband service.