CERTIFICATION OF ENROLLMENT
ENGROSSED SUBSTITUTE HOUSE BILL 1336
Chapter 294, Laws of 2021
(partial veto)
67th Legislature
2021 Regular Session
PUBLIC ENTITIES—RETAIL TELECOMMUNICATIONS SERVICES
EFFECTIVE DATE: July 25, 2021
Passed by the House April 23, 2021 CERTIFICATE
Yeas 65 Nays 32
I, Bernard Dean, Chief Clerk of the
House of Representatives of the
LAURIE JINKINS State of Washington, do hereby
Speaker of the House of certify that the attached is
Representatives ENGROSSED SUBSTITUTE HOUSE BILL
1336 as passed by the House of
Representatives and the Senate on
the dates hereon set forth.
Passed by the Senate April 11, 2021
Yeas 27 Nays 22
BERNARD DEAN
DENNY HECK Chief Clerk
President of the Senate
Approved May 13, 2021 11:33 AM with FILED
the exception of section 11, which is
vetoed. May 13, 2021
Secretary of State
JAY INSLEE State of Washington
Governor of the State of Washington
 ENGROSSED SUBSTITUTE HOUSE BILL 1336
AS AMENDED BY THE SENATE
Passed Legislature - 2021 Regular Session
State of Washington 67th Legislature 2021 Regular Session
By House Community & Economic Development (originally sponsored by
Representatives Hansen, Ybarra, Berry, Simmons, Ramel, Valdez,
Leavitt, Morgan, Ryu, Peterson, Shewmake, Davis, Ormsby, Gilday,
Stonier, Eslick, Pollet, and Harris-Talley)
READ FIRST TIME 02/08/21.
1 AN ACT Relating to creating and expanding unrestricted authority
2 for public entities to provide telecommunications services to end
3 users; amending RCW 54.16.005, 54.16.330, 54.16.425, 53.08.005,
4 53.08.370, and 43.155.070; adding a new section to chapter 54.16 RCW;
5 adding a new section to chapter 35.27 RCW; adding a new section to
6 chapter 35.23 RCW; adding a new section to chapter 36.01 RCW; adding
7 a new section to chapter 53.08 RCW; creating a new section; and
8 repealing RCW 54.16.420.
9 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:
10 Sec. 1. RCW 54.16.005 and 2000 c 81 s 2 are each amended to read
11 as follows:
12 The definitions in this section apply throughout this chapter
13 unless the context clearly requires otherwise.
14 (1) "Broadband infrastructure" means networks of deployed
15 telecommunications equipment and technologies necessary to provide
16 high-speed internet access and other advanced telecommunications
17 services.
18 (2) "Commission" means the Washington utilities and
19 transportation commission.
20 (((2))) (3) "District commission" means the governing board of a
21 public utility district.
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 1 (4) "Retail telecommunications services" means the sale, lease,
2 license, or indivisible right of use of telecommunications services
3 or telecommunications facilities directly to end users.
4 (5) "Telecommunications" has the same meaning as ((that
5 contained)) defined in RCW 80.04.010.
6 (((3))) (6) "Telecommunications facilities" means lines,
7 conduits, ducts, poles, wires, cables, crossarms, receivers,
8 transmitters, instruments, machines, appliances, instrumentalities
9 and all devices, real estate, easements, apparatus, property, and
10 routes used, operated, owned, or controlled by any entity to
11 facilitate the provision of telecommunications services.
12 (((4))) (7) "Wholesale telecommunications services" means the
13 provision of telecommunications services or telecommunications
14 facilities for resale ((by)) to an entity ((authorized to provide))
15 that provides retail telecommunications services ((to the general
16 public and internet service providers)).
17 Sec. 2. RCW 54.16.330 and 2019 c 365 s 9 are each amended to
18 read as follows:
19 (1)(((a))) A public utility district in existence on June 8,
20 2000, may construct, purchase, acquire, develop, finance, lease,
21 license, handle, provide, add to, contract for, interconnect, alter,
22 improve, repair, operate, and maintain any telecommunications
23 facilities within or without the district's limits for the following
24 purposes:
25 (((i))) (a) For the district's internal telecommunications needs;
26 (((ii) For the provision of wholesale telecommunications services
27 within the district and by contract with another public utility
28 district.
29 (b) Except as provided in subsection (8) of this section, nothing
30 in this section shall be construed to authorize public utility
31 districts to provide telecommunications services to end users)) (b)
32 For the provision of wholesale telecommunications services as
33 follows:
34 (i) Within the district and by contract with another public
35 utility district;
36 (ii) Within an area in an adjoining county that is already
37 provided electrical services by the district; or
38 (iii) Within an adjoining county that does not have a public
39 utility district providing electrical or telecommunications services
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 1 headquartered within the county's boundaries, but only if the
2 district providing telecommunications services is not authorized to
3 provide electrical services; or
4 (c) For the provision of retail telecommunications services as
5 authorized in this section.
6 (2) A public utility district providing wholesale or retail
7 telecommunications services shall ensure that rates, terms, and
8 conditions for such services are not unduly or unreasonably
9 discriminatory or preferential. Rates, terms, and conditions are
10 discriminatory or preferential when a public utility district
11 offering rates, terms, and conditions to an entity for wholesale or
12 retail telecommunications services does not offer substantially
13 similar rates, terms, and conditions to all other entities seeking
14 substantially similar services.
15 (3) A public utility district providing wholesale or retail
16 telecommunications services shall not be required to, but may,
17 establish a separate utility system or function for such purpose. In
18 either case, a public utility district providing wholesale or retail
19 telecommunications services shall separately account for any revenues
20 and expenditures for those services according to standards
21 established by the state auditor pursuant to its authority in chapter
22 43.09 RCW and consistent with the provisions of this title. Any
23 revenues received from the provision of wholesale or retail
24 telecommunications services must be dedicated to costs incurred to
25 build and maintain any telecommunications facilities constructed,
26 installed, or acquired to provide such services, including payments
27 on debt issued to finance such services, until such time as any bonds
28 or other financing instruments executed after June 8, 2000, and used
29 to finance such telecommunications facilities are discharged or
30 retired.
31 (4) When a public utility district provides wholesale or retail
32 telecommunications services, all telecommunications services rendered
33 to the district for the district's internal telecommunications needs
34 shall be allocated or charged at its true and full value. A public
35 utility district may not charge its nontelecommunications operations
36 rates that are preferential or discriminatory compared to those it
37 charges entities purchasing wholesale or retail telecommunications
38 services.
39 (5) If a person or entity receiving retail telecommunications
40 services from a public utility district under this section has a
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 1 complaint regarding the reasonableness of the rates, terms,
2 conditions, or services provided, the person or entity may file a
3 complaint with the district commission.
4 (6) A public utility district shall not exercise powers of
5 eminent domain to acquire telecommunications facilities or
6 contractual rights held by any other person or entity to
7 telecommunications facilities.
8 (7) Except as otherwise specifically provided, a public utility
9 district may exercise any of the powers granted to it under this
10 title and other applicable laws in carrying out the powers authorized
11 under this section. Nothing in chapter 81, Laws of 2000 limits any
12 existing authority of a public utility district under this title.
13 (((8)(a) If an internet service provider operating on
14 telecommunications facilities of a public utility district that
15 provides wholesale telecommunications services but does not provide
16 retail telecommunications services, ceases to provide access to the
17 internet to its end-use customers, and no other retail service
18 providers are willing to provide service, the public utility district
19 may provide retail telecommunications services to the end-use
20 customers of the defunct internet service provider in order for end-
21 use customers to maintain access to the internet until a replacement
22 internet service provider is, or providers are, in operation.
23 (b) Within thirty days of an internet service provider ceasing to
24 provide access to the internet, the public utility district must
25 initiate a process to find a replacement internet service provider or
26 providers to resume providing access to the internet using
27 telecommunications facilities of a public utility district.
28 (c) For a maximum period of five months, following initiation of
29 the process begun in (b) of this section, or, if earlier than five
30 months, until a replacement internet service provider is, or
31 providers are, in operation, the district commission may establish a
32 rate for providing access to the internet and charge customers to
33 cover expenses necessary to provide access to the internet.
34 (9) The tax treatment of the retail telecommunications services
35 provided by a public utility district to the end-use customers during
36 the period specified in subsection (8) of this section must be the
37 same as if those retail telecommunications services were provided by
38 the defunct internet service provider.))
39 (8) A public utility district may provide retail
40 telecommunications services or telecommunications facilities within
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1 the district's limits or without the district's limits by contract
2 with another public utility district, any political subdivision of
3 the state authorized to provide retail telecommunications services in
4 the state, or with any federally recognized tribe located in the
5 state of Washington.
6 NEW SECTION. Sec. 3. A new section is added to chapter 54.16
7 RCW to read as follows:
8 (1) Before providing retail telecommunications services, a public
9 utility district must report to its governing body and to the state
10 broadband office the following about the area to be served by the
11 public utility district:
12 (a) An assessment of the current availability of broadband
13 infrastructure and its adequacy to provide high-speed internet access
14 and other advanced telecommunications services to end users;
15 (b) The location of where retail telecommunications services will
16 be provided;
17 (c) Evidence relating to the unserved nature of the community in
18 which retail telecommunications services will be provided;
19 (d) Expected costs of providing retail telecommunications
20 services to customers to be served by the public utility district;
21 (e) Evidence that proposed telecommunications infrastructure will
22 be capable of scaling to greater download and upload speeds to meet
23 state broadband goals under RCW 43.330.536;
24 (f) Sources of funding for the project that will supplement any
25 grant or loan awards; and
26 (g) A strategic plan to maintain long-term operation of the
27 infrastructure, and the expected installation charges and monthly
28 costs for end users.
29 (2) The state broadband office must post a review of the proposed
30 project on their website.
31 (3) For the purposes of this section, "unserved" means an area of
32 Washington in which households and businesses lack access to
33 broadband service at a minimum 100 megabits per second download speed
34 and at a minimum 20 megabits per second upload speed.
35 Sec. 4. RCW 54.16.425 and 2018 c 186 s 3 are each amended to
36 read as follows:
37 (1) Property owned by a public utility district that is exempt
38 from property tax under RCW 84.36.010 is subject to an annual payment
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 1 in lieu of property taxes if the property consists of a broadband
2 ((network)) infrastructure used in providing retail ((internet
3 service)) telecommunications services.
4 (2)(a) The amount of the payment must be determined jointly and
5 in good faith negotiation between the public utility district that
6 owns the property and the county or counties in which the property is
7 located.
8 (b) The amount agreed upon may not exceed the property tax amount
9 that would be owed on the property comprising the broadband
10 ((network)) infrastructure used in providing retail ((internet
11 service)) telecommunications services as calculated by the department
12 of revenue. The public utility district must provide information
13 necessary for the department of revenue to make the required
14 valuation under this subsection. The department of revenue must
15 provide the amount of property tax that would be owed on the property
16 to the county or counties in which the broadband ((network))
17 infrastructure is located on an annual basis.
18 (c) If the public utility district and a county cannot agree on
19 the amount of the payment in lieu of taxes, either party may invoke
20 binding arbitration by providing written notice to the other party.
21 In the event that the amount of payment in lieu of taxes is submitted
22 to binding arbitration, the arbitrators must consider the government
23 services available to the public utility district's broadband
24 ((network)) infrastructure used in providing retail ((internet
25 service)) telecommunications services. The public utility district
26 and county must each select one arbitrator, the two of whom must pick
27 a third arbitrator. Costs of the arbitration, including compensation
28 for the arbitrators' services, must be borne equally by the parties
29 participating in the arbitration.
30 (3) By April 30th of each year, a public utility district must
31 remit the annual payment to the county treasurer of each county in
32 which the public utility district's broadband ((network))
33 infrastructure used in providing retail ((internet service))
34 telecommunications services is located in a form and manner required
35 by the county treasurer.
36 (4) The county must distribute the amounts received under this
37 section to all property taxing districts, including the state, in
38 appropriate tax code areas in the same proportion as it would
39 distribute property taxes from taxable property.
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1 (5) By December 1, 2019, and annually thereafter, the department
2 of revenue must submit a report to the appropriate legislative
3 committees detailing the amount of payments made under this section
4 and the amount of property tax that would be owed on the property
5 comprising the broadband ((network)) infrastructure used in providing
6 retail ((internet service)) telecommunications services.
7 (((6) The definitions in RCW 54.16.420 apply to this section.))
8 NEW SECTION. Sec. 5. A new section is added to chapter 35.27
9 RCW to read as follows:
10 (1) A town may construct, purchase, acquire, develop, finance,
11 lease, license, provide, contract for, interconnect, alter, improve,
12 repair, operate, and maintain telecommunications services or
13 telecommunications facilities for the purpose of furnishing the town
14 and its inhabitants with telecommunications services. The town has
15 full authority to regulate and control the use, distribution, and
16 price of the services.
17 (2)(a) Before providing telecommunications services pursuant to
18 subsection (1) of this section, a town must examine and report to its
19 governing body and to the state broadband office the following about
20 the area to be served by the town:
21 (i) An assessment of the current availability of broadband
22 infrastructure and its adequacy to provide high-speed internet access
23 and other advanced telecommunications services to end users;
24 (ii) The location of where retail telecommu