LEGISLATIVE BUDGET BOARD
                          Austin, Texas

                           FISCAL NOTE
                       74th Regular Session

                           May 6, 1995



 TO:     Honorable Curtis Seidlits, Chair       IN RE: Committee Substitute
         Committee on State Affairs                           forHouse Bill
         House of Representatives               No. 1777
         Austin, Texas                                  By: Black









FROM: John Keel, Director

In response to your request for a Fiscal Note on House Bill No.
1777 (Relating to the regulation of small telecommunications
utilities and telephone cooperative corporations.) this office
has determined the following:

The bill would make no appropriation but could provide the legal
basis for an appropriation of funds to implement the provisions
of the bill.

The bill would allow local exchange companies that are
cooperatives to offer extended local services or new services on
an optional basis or make minor changes to rates, subject to
certain notice conditions and revenue limitations.  The bill
would also require the Public Utility Commission to review its
rules, policies and reporting requirements as they relate to
small local exchange companies and cooperatives to eliminate or
revise those placing unnecessary burden or expense on such
companies.  In addition, the bill would allow telephone
cooperatives to vote to partially deregulate.  Partially
deregulated cooperatives could offer extended local calling
services or new services on an optional basis or make rate
changes, subject to certain notice provisions.

Implementation of the bill's provisions would result in
additional complex rule adoption proceedings by the Public
Utility Commission, review and revision of rules and reporting
requirements, and an increase in tariff filings.    




The probable fiscal implication of implementing the provisions of 
the bill during each of the first  five years following passage
is estimated as follows:
     



            Fiscal  Probable Cost Out      Change in   
             Year      of  General      Number of State
                     Revenue Fund 001   Employees from 
                                            FY 1995    
                                                       
          1996                 $77,651              1.4
          1997                  16,016               .3
                                                       
          1998                  16,016               .3
                                                       
          1999                  16,016               .3
          2000                  16,016               .3
                                                       
                                                       
                                                       




Similar annual fiscal implications would continue as long as the
provisions of the bill are in effect.

No fiscal implication to units of local government is
anticipated.


Source:   Public Utility Commission, Office of the Public Utility
Counsel
          LBB Staff: JK, RM, DF