1-1     By:  Shapiro                                          S.B. No. 1665

 1-2           (In the Senate - Filed March 14, 1997; March 24, 1997, read

 1-3     first time and referred to Committee on Economic Development;

 1-4     April 22, 1997, reported favorably, as amended, by the following

 1-5     vote:  Yeas 8, Nays 0; April 22, 1997, sent to printer.)

 1-6     COMMITTEE AMENDMENT NO. 1                              By:  Shapiro

 1-7     Amend S.B. No. 1665 in SECTION 1, Section 3.304(a)(4)(C)(iii),

 1-8     Public Regulatory Act of 1995 (page 2, line 54, by striking

 1-9     "(a)(2)(C)(i) or (a)(2)(C)(ii)" and substituting "(a)(4)(C)(i) or

1-10     (a)(4)(C)(ii)".

1-11     COMMITTEE AMENDMENT NO. 2                              By:  Shapiro

1-12     Amend S.B. 1665 in SECTION 1, Section 3.304(c), Public Utility

1-13     Regulatory Act of 1995, by striking Subsection (c) (page 3, lines

1-14     26-29), and substituting the following:

1-15           (c)  In [The commission may, in] order to promote the wide

1-16     dispersion of pay telephones, [either exempt] such telephones shall

1-17     be exempt from the provisions of this section [or change the rates

1-18     to be charged from such telephones in an amount sufficient to

1-19     promote this goal].

1-20                            A BILL TO BE ENTITLED

1-21                                   AN ACT

1-22     relating to the expansion of toll-free calling areas.

1-23           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

1-24           SECTION 1.  Section 3.304, Public Utility Regulatory Act of

1-25     1995 (Article 1446c-0, Vernon's Texas Civil Statutes), is amended

1-26     to read as follows:

1-27           Sec. 3.304.  Expansion of Toll-Free Calling Areas; Criteria.

1-28     (a)  To address telephone calling needs between nearby telephone

1-29     exchanges, the commission shall initiate a rulemaking proceeding to

1-30     approve rules to provide for an expedited hearing to allow the

1-31     expanding of toll-free calling areas according to the following

1-32     criteria:

1-33                 (1)  Toll-free calling boundaries may only be expanded

1-34     under this section after the filing of a petition signed by the

1-35     lesser of five percent of the subscribers or 100 subscribers within

1-36     an exchange.  If such a petition is filed with the commission, the

1-37     commission shall order the incumbent local exchange company to

1-38     provide for the balloting of its subscribers within the petitioning

1-39     exchange and, if there is an affirmative vote of at least 70

1-40     percent of those responding, the commission shall consider the

1-41     request.

1-42                 (2)  The commission shall provide for the expansion of

1-43     toll-free calling areas for each incumbent local exchange customer

1-44     in the petitioning exchange if the petitioning exchange serves not

1-45     more than 10,000 lines and if:

1-46                       (A)  the central switching office of the

1-47     petitioning exchange is located within 22 miles utilizing vertical

1-48     and horizontal geographic coordinates of the central switching

1-49     office of the exchange requested for toll-free calling service; or

1-50                       (B)  the petitioning exchange shall demonstrate

1-51     in its petition that it shares a community of interest with the

1-52     exchange requested for toll-free calling service.  For purposes of

1-53     this paragraph, "community of interest" includes areas that have a

1-54     relationship because of schools, hospitals, local governments,

1-55     business centers, and other relationships the unavailability of

1-56     which would cause a hardship to the residents of the area but shall

1-57     not include an area where the affected central offices are more

1-58     than 50 miles apart.

1-59                 (3)  The commission shall permit only one-way toll-free

1-60     calling areas under this section for petitions filed on or after

1-61     April 15, 1997.

1-62                 (4)(A)  The incumbent local exchange company shall

1-63     recover all of its costs incurred and all loss of revenue from any

1-64     expansion of toll-free calling areas under this section through a

 2-1     request other than a revenue requirement showing by:

 2-2                             (i)  a monthly fee for toll-free calling

 2-3     service of not more than $3.50 per line for residential customers

 2-4     nor more than $7 per line for business customers for up to five

 2-5     exchanges, together with an additional monthly fee of $1.50 per

 2-6     line for each exchange in excess of five, whether obtained in one

 2-7     or more petitions, to be collected from all such residential or

 2-8     business customers in the petitioning exchange and only until the

 2-9     incumbent local exchange company's next general rate case;

2-10                             (ii)  a monthly surcharge [fee] for

2-11     toll-free calling service for all of the incumbent local exchange

2-12     company's local exchange service customers in the state in addition

2-13     to the company's current local exchange rates; or

2-14                             (iii)  both (i) and (ii).

2-15                       The monthly fees allowed by Subparagraph (i) of

2-16     this paragraph shall be a charge to customers, including customers

2-17     of petitioning exchanges, in addition to the customer surcharge

2-18     allowed by Subparagraph (ii) of this paragraph or Paragraph (C) of

2-19     this subdivision.  The surcharge to each customer permitted under

2-20     either Subparagraph (ii) of this paragraph or Paragraph (C) of this

2-21     subdivision is not limited or reduced by any monthly fee assessed

2-22     the customer under Subparagraph (i) of this paragraph.

2-23                       (B)  For petitions filed after April 15, 1997,

2-24     the petitioned and petitioning incumbent local exchange companies

2-25     shall recover all costs incurred and all loss of revenue from the

2-26     granting of a petition for toll-free calling areas through a

2-27     monthly fee assessed to residential and business local exchange

2-28     customers in the petitioning exchange.  Such fee shall not be

2-29     limited to $3.50 per line for residential customers or $7 per line

2-30     for business customers.

2-31                       (C)  For surcharges allowed by Paragraph (A)(ii)

2-32     of this subdivision relating to petitions filed prior to April 15,

2-33     1997:

2-34                             (i)  the surcharge rate shall be

2-35     recalculated and will be administratively approved to allow the

2-36     company's previously approved total expanded local calling service

2-37     surcharge amount to be collected from only the company's customers

2-38     in the expanded local calling service petitioning and petitioned

2-39     exchanges;

2-40                             (ii)  for those companies having fewer than

2-41     one million access lines, the surcharge rate, at the company's

2-42     initiative, shall be recalculated and will be administratively

2-43     approved to allow the approved total expanded local calling service

2-44     surcharge amount to be collected either from only the company's

2-45     customers in the expanded local calling service petitioning and

2-46     petitioned exchanges or from all of the company's local exchange

2-47     service customers, at its option.

2-48                       Any surcharge amount relating to petitions filed

2-49     prior to April 15, 1997, which surcharge has not been approved by

2-50     the commission as of April 15, 1997, shall be calculated consistent

2-51     with the provisions of subsections (a)(2)(C)(i) or (a)(2)(C)(ii).

2-52                       (D)  If two years after the imposition of a fee

2-53     or surcharge allowed by Paragraphs (A) - (C) of this subdivision a

2-54     local exchange company has not had a general rate case, the company

2-55     may include all of the fees and surcharges allowed by Paragraphs

2-56     (A) - (C) of this subdivision in the company's regular charge for

2-57     local exchange service in the exchanges to which the monthly fee or

2-58     surcharge applies and changes to the company's tariffs shall be

2-59     approved on a revenue-neutral basis by the commission on

2-60     application by a company under this subsection.

2-61                       (E) [(B)]  An incumbent local exchange company

2-62     may not recover regulatory case expenses under this section by

2-63     surcharging petitioning exchange subscribers.

2-64                       (F)  A proceeding under this section is not a

2-65     ratemaking proceeding before the commission or in a court.

2-66           (b)(1)  The commission and an incumbent local exchange

2-67     company are not required to comply with this section with regard to

2-68     a petitioning exchange or petitioned exchange if:

2-69                       (A)  the commission determines that there has

 3-1     been a good and sufficient showing of a geographic or technological

 3-2     infeasibility to serve the area;

 3-3                       (B)  the incumbent local exchange company has

 3-4     less than 10,000 lines;

 3-5                       (C)  the petitioning or petitioned exchange is

 3-6     served by a cooperative;

 3-7                       (D)  extended area service or extended

 3-8     metropolitan service is currently available between the petitioning

 3-9     and petitioned exchanges; or

3-10                       (E)  the petitioning or petitioned exchange is a

3-11     metropolitan exchange.

3-12                 (2)  The commission may expand the toll-free calling

3-13     area into an exchange not within a metropolitan exchange but within

3-14     the local calling area contiguous to a metropolitan exchange that

3-15     the commission determines to have a community of interest

3-16     relationship with the petitioning exchange.  For the purposes of

3-17     this section, metropolitan exchange, local calling area of a

3-18     metropolitan exchange, and exchange have the meanings and

3-19     boundaries as defined and approved by the commission on September

3-20     1, 1993.  However, under no circumstances shall a petitioning or

3-21     petitioned exchange be split in the provision of a toll-free

3-22     calling area.

3-23           (c)  The commission may, in order to promote the wide

3-24     dispersion of pay telephones, either exempt such telephones from

3-25     the provisions of this section or change the rates to be charged

3-26     from such telephones in an amount sufficient to promote this goal.

3-27           SECTION 2.  This Act takes effect September 1, 1997.

3-28           SECTION 3.  The importance of this legislation and the

3-29     crowded condition of the calendars in both houses create an

3-30     emergency and an imperative public necessity that the

3-31     constitutional rule requiring bills to be read on three several

3-32     days in each house be suspended, and this rule is hereby suspended.

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