IMF S.B. 249 75(R)BILL ANALYSIS STATE AFFAIRS S.B. 249 By: Sibley (Turner, Sylvester) 3-12-97 Committee Report (Substituted) BACKGROUND Currently, Article 1446c-0, V.T.C.S., Public Utility Regulatory act of 1995, sets forth the guidelines for the collection and disbursement of the Telecommunications Infrastructure Fund (TIF). TIF is based on an annual assessment imposed on telecommunications utilities and commercial mobile service providers doing business in the state. TIF is structured to collect $150 million a year for a total of $1.5 billion over 10 years. The assessments are based on the percentage of gross telecommunications receipts necessary to collect $75 million in each of two separate accounts, one from telecommunications utilities and the other account from commercial mobile service providers. A Travis County District Court held that the rate on commercial mobile service providers must be equal to the rate of assessment on telecommunications utilities, and ordered the comptroller to lower the rate. The lower assessment rate is providing less revenue to TIF. Thus, TIF was unable to collect a total of $150 million during the first year. C.S.S.B. 249 would change the annual assessment to 1.25 percent of taxable telecommunications receipts on each telecommunication utility and on each commercial mobile service provider, with the total amount collected for TIF not to exceed $1.5 billion. PURPOSE As proposed, C.S.S.B. 249 sets forth the guidelines for the collection of the Telecommunications Infrastructure Fund based on an annual 1.25 percent assessment of taxable telecommunications receipts on each telecommunication utility and each commercial mobile service provider doing business in the State of Texas. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is expressly granted to the Telecommunication Infrastructure Fund Board in SECTION 2 (Sec. 3.606 (t), Article 1446c-0, V.T.C.S.) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Section 3.606(a), Article 1446c-0, V.T.C.S. (Public Utility Regulatory Act of 1995), by amending Subdivision (5) and by adding Subdivision (10) and (11), to redefine "school district", "public school", and "taxable telecommunications receipts. SECTION 2. Amends Sections 3.606(j)-(u) and adds 3.606 (w)-(x), Article 1446c-0, V.T.C.S., to set forth the guidelines for the collection of an annual 1.25 percent assessment of taxable telecommunications receipts imposed on each telecommunications utility and each commercial mobile service provider doing business in the state, for the Telecommunications Infrastructure Fund (TIF). Prohibits the total amount collected for TIF from exceeding $1.5 billion. Requires the comptroller to deposit 50 percent of the above amount collected to the credit of the public schools account in TIF, and the remainder to the credit of the qualifying entities account in TIF. Provides that interest earned on money in each account be deposited to the credit of that account. Deletes text providing that the assessments collected each year equal $75 million for each group, the telecommunication utilities and the commercial mobile service providers, and that the assessments be collected for a period of 10 years. Calls for the board to adopt a five-year master plan for infrastructure development. Disallows a board member who is also an employee of an entity that applies for a grant or loan from TIF from voting on or participating in the awarding of the grant or loan. Allows the board to adopt rules as necessary to administer the provisions of the bill. SECTION 3. Defines "telecommunications utility account" and "commercial mobile services account." Provides that on the effective date of this Act, money in the telecommunications account is transferred to the public schools account; and money in the commercial mobile service providers account is transferred to the qualifying entities account. Provides that the validity of an act done, an obligation incurred, or a right accrued before th transfer of money is not affected by the transfer. SECTION 4. Effective date: the first day of the first calender quarter beginning on or after 90 days after adjournment. Makes application of this Act prospective. SECTION 5. Emergency clause. COMPARISON OF ORIGINAL TO SUBSTITUTE The following is a list of changes included in C.S.S.B. 249, not present in S.B. 249: 1) In SECTION 1 of the bill, Sec. 3.606 (a), Article 1446c-0, V.T.C.S. (Public Utility Regulatory Act of 1995), subdivision (5): Amends definition of "public school" to include public elementary or secondary school, including an open-enrollment charter school, a home-rule school district school and a school with a campus or campus program charter. 2) In SECTION 2 of the bill, Sec. 3.606 (t), Article 1446c-0, V.T.C.S. (Public Utility Regulatory Act of 1995): Amends to include a provision that the Telecommunications Infrastructure Board adopt a five-year master plan for infrastructure development describing the projects, time lines, and resource allocation targets for each year included in the plan. 3) In SECTION 2 of the bill, Sec. 3.606 (w), Article 1446c-0, V.T.C.S. (Public Utility Regulatory Act of 1995): Adds provision clarifying the TIF board's rulemaking authority. 4) In SECTION 2 of the bill, Sec. 3.606 (x), Article 1446c-0, V.T.C.S. (Public Utility Regulatory Act of 1995): Adds conflict of interest provision requiring board members that are employed by entities applying for grants or loans from TIF, to recuse themselves from voting on the awarding of grants or loans from the entities with which they are employed. (For example: TIF board member Hal Guthrie, as Superintendent. of Spring ISD would not be able to vote on any awarding of grants or loans submitted by Spring ISD.)