BILL ANALYSIS

Senate Research Center	C.S.S.B. 1425
88R22007 DIO-D	By: Perry
	Business & Commerce
	4/4/2023
	Committee Report (Substituted)

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

The purpose of the Texas Universal Service Fund (USF) is to implement a competitively neutral mechanism to enable all residents of the state to obtain the basic telecommunications services needed to communicate with other residents, businesses, and governmental entities.

The current support that the small companies receive is set to sunset on September 1, 2023.

If this support is lost, the development and maintenance of basic telecommunications infrastructure across rural Texas will be negatively impacted. Additionally, the small companies will have to file traditional regulatory "rate cases" with the Public Utility Commission (PUC) if the USF support is reduced. These rate cases are expected to average $500,000 per company and take up to a year or more to complete. These cases will burden the resources of the small companies and the PUC.

S.B. 1425 will extend the small company USF sunset date to September 1, 2033. S.B. 1425 proposes a long-term, regulatory-efficient, and "needs-based" support program. As public utilities, the small companies will remain subject, at all times, to the full rate and revenue jurisdiction of the PUC.

Additionally, S.B. 1425 will make some data that the small companies submit to the PUC in their annual reports publicly available. This additional requirement will create greater transparency regarding the support small companies receive.

C.S.S.B. 1425 amends current law relating to disbursements from the universal service fund for certain small and rural companies.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 56.032, Utilities Code, by adding Subsections (d-1) and (d-2) and amending Subsection (n), as follows:

(d-1) Requires a small provider that submits a request under Subsection (c) (relating to requiring the Public Utility Commission of Texas (PUC) to provide support upon request from a small provider), in addition to the report required by Subsection (d) (relating to requiring the PUC to initiate rulemaking to determine the annualized support amount to be dispersed under Subsection (c)), to file with the PUC annually a report that includes the following information regarding the provider's operations that are regulated by the PUC:

(1) total operating revenues;

(2) total operating expenses;

(3) total operating tax expense;

(4) rate of return;

(5) total invested capital; and

(6) network access revenue.

(d-2) Requires a small provider to file the report required by Subsection (d-1) using the PUC's public filing system. Provides that Subsection (k) (relating to providing that the information submitted by a small provider to the PUC is confidential) does not apply to information in a report filed under Subsection (d-1).

(n)  Provides that Subsections (a) (relating to the definition of "rate of return" and "small provider"), (c), (d), (e) (relating to authorizing the PUC to consider data provided by the provider to the PUC to determine support levels), (f) (relating to the definition of "reasonable return"), (g) (relating to prohibiting the PUC to adjust support by the PUC under certain circumstances), (h) (relating to authorizing a small provider to file for administrative review certain circumstances), (i) (relating to authorizing the PUC to review a small provider's support level and regulated revenues), (j) (relating to requiring a small provider to receive the same level of support until certain dates), (k), (l) (relating to providing that the authority of the PUC is not affected or limited by certain factors), and (m) (relating to authorizing the PUC to recalculate the annualized support amount� by the PUC for certain small providers) and any monthly amounts approved under those subsections expire September 1, 2033, rather than September 1, 2023.

SECTION 2. Effective date: upon passage or September 1, 2023.