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Session of 2026
HOUSE BILL No. 2586
By Committee on Energy, Utilities and Telecommunications
Requested by Megan Bottenberg on behalf of Cox Communications Inc.
1-28
AN ACT concerning municipalities; relating to franchises with
telecommunications service providers; requiring revenues received by
telecommunications service providers for the provision of broadband
services to be calculated when determining gross receipts; amending
K.S.A. 12-2001 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:
Section 1. K.S.A. 12-2001 is hereby amended to read as follows: 12-
2001. (a) The governing body of any city may permit any person, firm or
corporation to:
(1) Manufacture, sell and furnish artificial or natural gas light and
heat; electric light, water, power or heat; or steam heat to the inhabitants;
(2) build street railways, to be operated over and along or under the
streets and public grounds of such city;
(3) lay pipes, conduits, cables and all appliances necessary for the
construction, operation of gas and electric-light or steam-heat plants;
(4) lay pipes, conduits, cables and all appliances necessary for the
construction and operation of electric railways or bus companies;
(5) lay pipes for the operation of a water plant for the distribution or
furnishing of water over, under and along the streets and alleys of such
city; or
(6) use the streets in the carrying on of any business which that is not
prohibited by law.
(b) If the governing body of a city permits any activity specified in
subsection (a), the granting of permission to engage in the activity shall be
subject to the following:
(1) All contracts granting or giving any such original franchise, right
or privilege, or extending or renewing or amending any existing grant,
right, privilege or franchise, to engage in such an activity shall be made by
ordinance, and not otherwise.
(2) No contract, grant, right, privilege or franchise to engage in such
an activity, now existing or hereafter granted, shall be extended for any
longer period of time than 20 years from the date of such grant or
extension.
(3) No person, firm or corporation shall be granted any exclusive
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HB 2586 2
franchise, right or privilege whatever whatsoever.
(4) The governing body of any city, at all times during the existence
of any contract, grant, privilege or franchise to engage in such an activity,
shall have the right by ordinance to fix a reasonable schedule of maximum
rates to be charged such city and the inhabitants thereof for gas, light and
heat, electric light, power or heat, steam heat or water; the rates of fare on
any street railway or bus company; or the rates charged any such city, or
the inhabitants thereof, by any person, firm or corporation operating under
any other franchise under this act. The governing body at no time shall fix
a rate which that prohibits such person, firm or corporation from earning a
reasonable rate upon the fair value of the property used and useful in such
public service. In fixing and establishing such fair value, the value of such
franchise, contract and privilege given and granted by the city to such
person, firm or corporation shall not be taken into consideration in
ascertaining the reasonableness of the rates to be charged to the inhabitants
of such city.
(5) No such grant, right, privilege or franchise shall be made to any
person, firm, corporation or association unless it provides for adequate
compensation or consideration therefor to be paid to such city, and
regardless of whether or not other or additional compensation is provided
for such grantee shall pay such fixed charge as may be prescribed in the
franchise ordinance. Such fixed charge may consist of a percentage of the
gross receipts derived from the service permitted by the grant, right,
privilege or franchise from consumers or recipients of such service located
within the corporate boundaries of such city, and, in case of public utilities
or common carriers situated and operated wholly or principally within
such city, or principally operated for the benefit of such city or its people,
from consumers or recipients located in territory immediately adjoining
such city and not within the boundaries of any other incorporated city; and
in such case such city shall make and report to the governing body all such
gross receipts once each month, or at such other intervals as stipulated in
the franchise ordinance and pay into the treasury the amount due such city
at the time the report is made. The governing body shall also have access
to and the right to examine, at all reasonable times, all books, receipts,
files, records and documents of any such grantee necessary to verify the
correctness of such statement and to correct the same, if found to be
erroneous. If such statement of gross receipts is incorrect, then such
payment shall be made upon such corrected statement.
On and after the effective date of the act, any provision for
compensation or consideration, included in a franchise granted pursuant to
this section which that is established on the basis of compensation or
consideration paid by the utility under another franchise, is hereby
declared to be contrary to the public policy of this state and shall be void
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and unenforceable. Any such provision, included in a franchise granted
pursuant to this section and in force on the effective date of this act which
that requires payments to the city by a utility to increase by virtue of the
compensation or consideration required to be paid under a franchise
granted by another city to the utility's predecessor in interest, is hereby
declared to be contrary to the public policy of this state and shall be void
and unenforceable.
(6) No such right, privilege or franchise shall be effective until the
ordinance granting the same has been adopted as provided by law.
All expense of publishing any ordinance adopted pursuant to this
section shall be paid by the proposed grantee.
(7) All contracts, grants, rights, privileges or franchises for the use of
the streets and alleys of such city, not herein mentioned, shall be governed
by all the provisions of this act, and all amendments, extensions or
enlargements of any contract, right, privilege or franchise previously
granted to any person, firm or corporation for the use of the streets and
alleys of such city shall be subject to all the conditions provided for in this
act for the making of original grants and franchises. The provisions of this
section shall not apply to railway companies for the purpose of reaching
and affording railway connections and switch privileges to the owners or
users of any industrial plants, or for the purpose of reaching and affording
railway connections and switch privileges to any agency or institution of
the state of Kansas.
(c) As used in this act:
(1) "Access line" shall mean means and be is limited to retail billed
and collected residential lines ;, business lines ;, ISDN lines ;, PBX trunks
and simulated exchange access lines provided by a central office based
switching arrangement where all stations served by such simulated
exchange access lines are used by a single customer of the provider of
such arrangement. "Access line " may shall not be construed to include
interoffice transport or other transmission media that do not terminate at an
end user customer's premises, or to permit duplicate or multiple
assessment of access line rates on the provision of a single service or on
the multiple communications paths derived from a billed and collected
access line. "Access line" shall does not include the following: (A)
Wireless telecommunications services,; (B) the sale or lease of unbundled
loop facilities ,; (C) special access services ,; or (D) lines providing only
data services without voice services processed by a telecommunications
local exchange service provider or private line service arrangements.
(2) "Access line count" means the number of access lines serving
consumers within the corporate boundaries of the city on the last day of
each month.
(3) "Access line fee" means a fee determined by a city, up to a
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HB 2586 4
maximum as set out in this act , and amendments thereto, to be used by a
telecommunications local exchange service provider in calculating the
amount of access line remittance.
(4) "Access line remittance" means the amount to be paid by a
telecommunications local exchange service provider to a city, the total of
which is calculated by multiplying the access line fee, as determined in the
city, by the number of access lines served by that telecommunications local
exchange service provider within that such city for each month in that
calendar quarter.
(5) "Broadband internet access services" means a mass-market retail
service by wire or radio that provides the capability to transmit data to
and receive data from all or substantially all internet endpoints, including
any capabilities that are incidental to and enable the operation of the
communications service or any service determined by the federal
communications commission that provides the functional equivalent
thereof or is used to evade the protections established pursuant to 47
C.F .R. § 8.1. "Broadband internet access services" does not include dial-
up internet access services.
(6) "Commission" means the state corporation commission.
(6)(7) "Gross receipts" means only those receipts collected from
within the corporate boundaries of the city enacting the franchise and
which that are derived from the following: (A) Recurring local exchange
service for business and residence which that includes basic exchange
service, touch tone, optional calling features and measured local calls; (B)
recurring local exchange access line services for pay phone lines provided
by a telecommunications local exchange service provider to all pay phone
service providers; (C) local directory assistance revenue; (D) line status
verification/busy interrupt revenue; (E) local operator assistance revenue;
and (F) nonrecurring local exchange service revenue which shall include
that includes customer service for installation of lines, reconnection of
service and charge for duplicate bills ; and (G) broadband internet access
services that are offered by an entity other than a holder, or affiliate of a
holder, of a state-issued video service authorization pursuant to K.S.A. 12-
2023, and amendments thereto. All other revenues, including, but not
limited to, revenues from extended area service, the sale or lease of
unbundled network elements, nonregulated services, carrier and end user
access, long distance, wireless telecommunications services, lines
providing only data service without voice services processed by a
telecommunications local exchange service provider, private line service
arrangements, internet, broadband internet access services of a holder, or
affiliate of a holder, of a state-issued video service authorization pursuant
to K.S.A. 12-2023, and amendments thereto, and all other services not
wholly local in nature are excluded from gross receipts. Gross receipts
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HB 2586 5
shall be reduced by bad debt expenses. Uncollectible and late charges shall
not be included within gross receipts. If a telecommunications local
exchange service provider offers additional services of a wholly local
nature which that if in existence on or before July 1, 2002, would have
been included with the definition of gross receipts, such services shall be
included from the date of the offering of such services in the city.
(7)(8) "Local exchange service" means local switched
telecommunications service within any local exchange service area
approved by the state corporation commission, regardless of the medium
by which the local telecommunications service is provided. The term
"Local exchange service " shall does not include wireless communication
services.
(8)(9) "Telecommunications local exchange service provider" means
a local exchange carrier and a telecommunications carrier as those such
terms are defined in K.S.A. 66-1,187, and amendments thereto, which that
does, or in good faith intends to, provide local exchange service. The term
"Telecommunications local exchange service provider" does not include an
interexchange carrier that does not provide local exchange service,
competitive access provider that does not provide local exchange service
or any wireless telecommunications local exchange service provider.
(9)(10) "Telecommunications services" means providing the means of
transmission, between or among points specified by the user, of
information of the user's choosing, without change in the form or content
of the information as sent and received.
(d) A city may require a telecommunications local exchange service
provider that intends to provide local exchange service in that city, to enter
into a valid contract franchise ordinance enacted pursuant to this act.
Compensation for the contract franchise ordinance shall be established
pursuant to subsection (j). A contract franchise complying with the
provisions of this act shall be deemed reasonable and shall be adopted by
the governing body of a city absent a compelling public interest
necessitated by public health, safety and welfare. A contract franchise must
shall be competitively neutral and may not be unreasonable or
discriminatory. No telecommunications contract franchise ordinance shall
be denied or revoked without reasonable notice and an opportunity for a
public hearing before the city governing body. A city governing body's
denial or revocation of a contract franchise ordinance may be appealed to a
district court.
(e) If the governing body of a city requires a contract franchise as
specified in subsection (d), the contract franchise shall be subject to the
following:
(1) All contracts granting or giving any such original contract
franchise, right or privilege or extending, renewing or amending any
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HB 2586 6
existing grant, right, privilege or franchise, to engage in such an activity
shall be made by ordinance and not otherwise;
(2) no contract, grant, right, privilege or contract franchise to engage
in such an activity, now existing or hereafter granted, shall be extended for
any longer period of time than 20 years from the date of such grant or
extension;
(3) no telecommunications local exchange service provider shall be
granted any exclusive contract franchise, right or privilege whatever
whatsoever;
(4) no such right, privilege or contract franchise shall be effective
until the ordinance granting the same has been adopted as provided by law.
All expense of publishing any ordinance adopted pursuant to this section
shall be paid by the proposed grantee; and
(5) no city shall have the authority or jurisdiction to regulate
telecommunications local exchange service providers based upon the
content, nature or type of telecommunications service or signal to be
provided or the quality of service provided to customers.
(f) A franchisee shall make and report to the governing body once
each quarter, or at such other intervals as stipulated in the contract
franchise ordinance, the compensation collected and pay into the treasury
the amount due such city at the time the report is made.
(g) A city may assess a one-time application fee to recover its costs
associated with the review and approval of a contract franchise provided
that such application fee reimburses the city for its reasonable, actual and
verifiable costs of reviewing and approving the contract franchise. An
application fee must shall be competitively neutral and may not be
unreasonable or discriminatory.
(h) Within 90 days of the receipt of a completed application for a
telecommunications contract franchise, a city shall process and submit the
application and contract franchise to the city's governing body, and the
governing body shall take a final vote concerning such contract franchise
unless the telecommunications local exchange service provider and city
agree otherwise.
(i) In considering the adoption and passage of a telecommunications
contract franchise ordinance, no city shall have the authority or jurisdiction
to regulate telecommunications local exchange service providers based
upon the content, nature or type of telecommunications service or signal to
be provided, or the quality of service provided to customers.
(j) The governing body of a city may require telecommunications
local exchange service providers to collect and remit to each such city an
access line fee of up to a maximum of $2.00 $2.75 per month per access
line or a fee on gross receipts as described in subsection (j)(2). The access
line fee shall be a maximum of $2.25 per month per access line in 2006; a
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HB 2586 7
maximum of $2.50 in 2009; a maximum of $2.75 in 2012 and thereafter.
(1) To determine an access line remittance fee, the
telecommunications local exchange service provider shall calculate and
remit an amount equal to the access line fee established by a city
multiplied by the access line count. Such amount shall be due not later
than 45 days after the end of the remittal period. The city shall have the
right to examine, upon written notice to the telecommunications local
exchange service provider, no more than once per calendar year, those
access line count records necessary to verify the correctness of the access
line count. If the access line count is determined to be erroneous, then the
telecommunications local exchange service provider shall revise the access
line fees accordingly and payment shall be made upon such corrected
access line count. If the city and the telecommunications local exchange
service provider cannot agree on the access line count, or are in dispute
concerning the amounts due under this section for the payment of access
line fees, either party may seek appropriate relief in a court of competent
jurisdiction, and that court may impose all appropriate remedies, including
monetary and injunctive relief and reasonable costs and attorney fees. All
claims authorized in this section must shall be brought within three years
of the date on which the disputed payment was due. The access line fee
imposed under this section must shall be assessed in a competitively
neutral manner, may not unduly impair competition, must be
nondiscriminatory and must comply with state and federal law.
(2) As an alternative to the access line fee specified in subsection (j)
(1), the governing body of a city may require telecommunications local
exchange service providers to collect and remit to each such city a fee of
up to a maximum of 5% of gross receipts as defined in this act. The
telecommunications local exchange service provider shall calculate the
gross receipts and multiply such receipts by the fee, up to a maximum of
5%, established by the city. The telecommunications local exchange
service provider shall remit such fee to the city no more frequently than
each quarter unless the telecommunications local exchange service
provider agrees otherwise, and not later than 45 days after the end of the
remittal period. The city shall have the right to examine, upon written
notice to the telecommunications local exchange service provider, no more
than once per calendar year, those records necessary to verify the
correctness of the gross receipts fee. If the gross receipts fee is determined
to be erroneous, then the telecommunications local exchange service
provider shall revise the gross receipts fee accordingly and payment shall
be made upon such corrected gross receipts fee. If the city and the
telecommunications local exchange service provider cannot agree on the
gross receipts fee, or are in dispute concerning the amounts due under this
section for the payment of gross receipts fees, either party may seek
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HB 2586 8
appropriate relief in a court of competent jurisdiction, and that court may
impose all appropriate remedies, including monetary and injunctive relief,
reasonable costs and attorney fees. All claims authorized in this section
must shall be brought within three years of the date on which the disputed
payment was due. The gross receipts fee imposed under this section must
shall be assessed in a competitively neutral manner, may not unduly
impair competition, must be nondiscriminatory and must comply with
state and federal law.
(k) Notwithstanding any other provision of this act, payment by a
telecommunications local exchange service provider that complies with
the terms of an unexpired franchise ordinance that applies to the provider
satisfies the payment attributable to the provider required by this act.
(l) Beginning on January 1, 2004, and every 36 months thereafter, a
city, subject to the public notification procedures set forth in subsection
(m), may elect to adopt an increased access line fee or gross receipts fee
subject to the provisions and maximum fee limitations contained in this act
or may choose to decline all or any portion of any increase in the access
line fee.
(m) Adoption of an increased access line fee or gross receipts fee by a
city shall not become effective until the following public notification
procedures occur: (1) Notice of the new fee has been provided at a regular
meeting of the governing body; (2) immediately thereafter, notification of
the new fee shall be published in the official city paper once a week for
two consecutive weeks; and (3) sixty 60 days have passed from the date of
the regular meeting of the governing body at which the new fee was
proposed. If, during the period of public notification of the new fee or
prior to the expiration of 60 days from the date of the regular meeting of
the governing body at which the new fee was proposed, 20% of the
qualified voters of such city voting for mayor, or in case no mayor is
elected then the commissioner or council member receiving the highest
number of votes at the last preceding city election, present a petition to the
governing body asking that the new fee be submitted to popular vote, the
mayor of the city shall issue a proclamation calling for an election for that
purpose. Such election shall be held in conjunction with the next available
general election. The proclamation calling such election shall specifically
state that such election is called for the adoption of the new fee, and the
new fee shall be set out in full in the proclamation. The proclamation shall
be published once each week for two consecutive weeks in the official city
newspaper, and the last publication shall not be less than 30 days before
the day upon which the election is held. If, at the election the majority of
votes cast shall be for the new fee, the new fee shall thereupon become
effective. If a majority of the votes cast at the election are against the new
fee, the new fee shall not become effective and shall be void.
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HB 2586 9
(n) A city may require a telecommunications local exchange service
provider to collect or remit an access line fee or a gross receipts fee to such
city on those access lines that have been resold to another
telecommunications local exchange service provider, but in such case the
city shall not collect an access line fee or gross receipts fee from the
reseller telecommunications local exchange service provider and shall not
require the reseller to enter into a contract franchise ordinance pursuant to
subsection (d).
(o) A city may shall not impose any of the following regulations on
telecommunications local exchange service providers:
(1) Requirement that particular business offices or other
telecommunications facilities be located in the city;
(2) requirement for filing reports and documents that are not
reasonably related to the collection of compensation pursuant to this act;
(3) requirement for inspection of the business records of a
telecommunications local exchange service provider except to the extent
necessary to conduct the review of the records related to the access line
count or gross receipts fee as provided for in this act;
(4) requirement for city approval of transfers of ownership or control
of the business or assets of a telecommunications local exchange service
provider except that a city may require that such provider maintain current
point of contact information and provide notice of a transfer within a
reasonable time; and
(5) requirement concerning the provisioning or quality of services,
facilities, equipment or goods in-kind in kind for use by the city, political
subdivision or any other telecommunications local exchange service
provider or public utility.
(p) Information provided to municipalities and political subdivisions
under this act shall be governed by confidentiality procedures in
compliance with K.S.A. 45-215 and 66-1220a et seq., and amendments
thereto.
(q) Except as otherwise provided, this act does not affect the validity
of a franchise agreement or contract ordinance with a telecommunications
local exchange service provider so long as if the franchise agreement or
contract ordinance does not include a linear foot charge and/or or a
minimum fee, was enacted prior to the effective date of this act , and was
agreed to by the telecommunications local exchange service provider.
Under such circumstances, a city may continue to enforce a previously
enacted franchise agreement or contract ordinance and to collect franchise
fees and other charges under that franchise agreement or contract
ordinance until the date on which the agreement or ordinance expires by
its own terms or is terminated in accordance with the terms of this act.
Notwithstanding any other provision hereof, where if such a franchise
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HB 2586 10
agreement or contract ordinance exists between a city and a
telecommunications local exchange service provider prior to the effective
date of this act, during the term of such existing franchise agreement or
contract ordinance , the city must shall offer to new applicants franchise
agreements or contract franchises whose terms and conditions are as a
whole competitively neutral and nondiscriminatory , as compared to such
existing agreement.
(r) Without prejudice to a telecommunications local exchange service
provider's other rights and authorities, a telecommunications local
exchange service provider which that is assessed, collects and remits an
application fee, access line fee or gross receipts fee assessed by a city shall
add to its end-user customer's bill, statement or invoice a surcharge equal
to the pro rata share of any such fees.
(s) Subsections (c) through (r) apply only to telecommunications
local exchange service providers that are subject to a local
telecommunications franchise. Nothing in this section shall be construed
to empower a city to require a holder, or affiliate of a holder, of a state-
issued video service authorization pursuant to K.S.A. 12-2023, and
amendments thereto, to enter into or be subject to any franchise, franchise
agreement, franchise ordinance, contract franchise or contract franchise
ordinance pursuant to the provisions of this section.
(t) (1) Except as further provided in paragraph (2), a city:
(A) Shall not require a wireless services provider or a wireless
infrastructure provider to enter into a franchise, franchise agreement,
franchise ordinance, contract franchise or contract franchise ordinance for
the provision of wireless services;
(B) may govern the use of the public right-of-way by a wireless
services provider or a wireless infrastructure provider by requiring a small
cell facility deployment agreement or a master license agreement, through
permitting requirements or municipal ordinances or codes, or any
combination thereof, in a manner consistent with federal and state law; and
(C) may assess a wireless services provider or a wireless
infrastructure provider a fixed right-of-way access fee for each small cell
facility that the provider deploys that requires use of the city's public right-
of-way, but such fee shall not be based on such provider's gross receipts
derived from services provided within the city's corporate limits.
(2) The provisions of paragraph (1) shall only apply to a wireless
infrastructure provider to the extent of such provider's operations and
services as a provider for the deployment of small cell facilities in the
city's public right-of-way that are used for the provision of wireless
services. Nothing in this subsection shall be construed to apply to such
provider's other operations and services as a utility or otherwise or have
any effect on any franchise that is related to such other operations and
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HB 2586 11
services.
(3) Nothing in this subsection shall be construed as prohibiting a city
from requiring a telecommunications local exchange service provider to
enter into a valid contract franchise ordinance pursuant to this section.
(4) For the purposes ofAs used in this subsection:
(A) The terms "Authority," "public right-of-way," "small cell
facility," "utility pole," "wireless infrastructure provider," "wireless
services" and "wireless services provider" shall have mean the same
meaning as provided defined in K.S.A. 66-2019, and amendments thereto;
and
(B) "small cell facility deployment agreement" means an agreement
between a wireless services provider or wireless infrastructure provider
and an authority for the deployment of small cell facilities on or adjacent
to existing, modified, replacement or new utility poles within the public
right-of-way pursuant to K.S.A. 66-2019, and amendments thereto, and
federal law. A "small cell facility deployment agreement" is not a
franchise, franchise agreement, franchise ordinance, contract franchise or
contract franchise ordinance.
Sec. 2. K.S.A. 12-2001 is hereby repealed.
Sec. 3. This act shall take effect and be in force from and after its
publication in the statute book.
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