By: Armbrister S.B. No. 1751 A BILL TO BE ENTITLED AN ACT 1-1 relating to the adoption of a nonsubstantive revision of statutes 1-2 relating to utilities, including conforming amendments, repeals, 1-3 and penalties. 1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-5 SECTION 1. ADOPTION OF CODE. The Utilities Code is adopted 1-6 to read as follows: 1-7 UTILITIES CODE 1-8 TITLE 1. GENERAL PROVISIONS 1-9 CHAPTER 1. GENERAL PROVISIONS 1-10 (Chapters 2-10 reserved for expansion) 1-11 TITLE 2. PUBLIC UTILITY REGULATORY ACT 1-12 SUBTITLE A. PROVISIONS APPLICABLE TO ALL UTILITIES 1-13 CHAPTER 11. GENERAL PROVISIONS 1-14 CHAPTER 12. ORGANIZATION OF COMMISSION 1-15 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNCIL 1-16 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 1-17 OTHER REGULATORY AUTHORITIES 1-18 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 1-19 CHAPTER 16. COMMISSION FINANCING 1-20 (Chapters 17-30 reserved for expansion) 1-21 SUBTITLE B. ELECTRIC UTILITIES 1-22 CHAPTER 31. GENERAL PROVISIONS 2-1 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION AND 2-2 OTHER REGULATORY AUTHORITIES 2-3 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 2-4 CHAPTER 34. ELECTRICAL PLANNING 2-5 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 2-6 CHAPTER 36. RATES 2-7 CHAPTER 37. CERTIFICATES OF CONVENIENCE AND NECESSITY 2-8 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 2-9 (Chapters 39-50 reserved for expansion) 2-10 SUBTITLE C. TELECOMMUNICATIONS UTILITIES 2-11 CHAPTER 51. GENERAL PROVISIONS 2-12 CHAPTER 52. COMMISSION JURISDICTION 2-13 CHAPTER 53. RATES 2-14 CHAPTER 54. CERTIFICATES 2-15 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 2-16 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE AND UNIVERSAL 2-17 SERVICE FUND 2-18 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 2-19 CHAPTER 58. INCENTIVE REGULATION 2-20 CHAPTER 59. INFRASTRUCTURE PLAN 2-21 CHAPTER 60. COMPETITIVE SAFEGUARDS 2-22 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 2-23 CHAPTER 62. BROADCASTER SAFEGUARDS 2-24 CHAPTER 63. ELECTRONIC PUBLISHING 2-25 (Chapters 64-100 reserved for expansion) 3-1 TITLE 3. GAS REGULATION 3-2 SUBTITLE A. GAS UTILITY REGULATORY ACT 3-3 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF PUBLIC 3-4 UTILITY COUNSEL 3-5 CHAPTER 102. JURISDICTION AND POWERS OF RAILROAD COMMISSION 3-6 AND OTHER REGULATORY AUTHORITIES 3-7 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 3-8 CHAPTER 104. RATES AND SERVICES 3-9 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 3-10 (Chapters 106-120 reserved for expansion) 3-11 SUBTITLE B. REGULATION OF TRANSPORTATION AND USE 3-12 CHAPTER 121. GAS PIPELINES 3-13 CHAPTER 122. GAS UTILITY PIPELINE TAX 3-14 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 3-15 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS AND 3-16 APARTMENT HOUSES 3-17 (Chapters 125-160 reserved for expansion) 3-18 TITLE 4. DELIVERY OF UTILITY SERVICES 3-19 SUBTITLE A. UTILITY CORPORATIONS AND OTHER PROVIDERS 3-20 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 3-21 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 3-22 CHAPTER 163. JOINT POWERS AGENCIES 3-23 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES BY 3-24 PUBLIC ENTITIES 3-25 (Chapters 165-180 reserved for expansion) 4-1 SUBTITLE B. PROVISIONS REGULATING DELIVERY OF SERVICES 4-2 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 4-3 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 4-4 CHAPTER 183. UTILITY DEPOSITS 4-5 CHAPTER 184. ELECTRIC AND WATER METERING 4-6 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 4-7 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY AND INTEGRITY 4-8 OF UTILITY SERVICE 4-9 UTILITIES CODE 4-10 TITLE 1. GENERAL PROVISIONS 4-11 CHAPTER 1. GENERAL PROVISIONS 4-12 Sec. 1.001. PURPOSE OF CODE 4-13 Sec. 1.002. CONSTRUCTION OF CODE 4-14 Sec. 1.003. REFERENCE IN LAW TO STATUTE REVISED BY CODE 4-15 CHAPTER 1. GENERAL PROVISIONS 4-16 Sec. 1.001. PURPOSE OF CODE. (a) This code is enacted as a 4-17 part of the state's continuing statutory revision program, begun by 4-18 the Texas Legislative Council in 1963 as directed by the 4-19 legislature in the law codified as Section 323.007, Government 4-20 Code. The program contemplates a topic-by-topic revision of the 4-21 state's general and permanent statute law without substantive 4-22 change. 4-23 (b) Consistent with the objectives of the statutory revision 4-24 program, the purpose of this code is to make the law encompassed by 4-25 this code more accessible and understandable by: 5-1 (1) rearranging the statutes into a more logical 5-2 order; 5-3 (2) employing a format and numbering system designed 5-4 to facilitate citation of the law and to accommodate future 5-5 expansion of the law; 5-6 (3) eliminating repealed, duplicative, 5-7 unconstitutional, expired, executed, and other ineffective 5-8 provisions; and 5-9 (4) restating the law in modern American English to 5-10 the greatest extent possible. (New.) 5-11 Sec. 1.002. CONSTRUCTION OF CODE. Chapter 311, Government 5-12 Code (Code Construction Act), applies to the construction of each 5-13 provision in this code except as otherwise expressly provided by 5-14 this code. (New.) 5-15 Sec. 1.003. REFERENCE IN LAW TO STATUTE REVISED BY CODE. A 5-16 reference in a law to a statute or a part of a statute revised by 5-17 this code is considered to be a reference to the part of this code 5-18 that revises that statute or part of that statute. (New.) 5-19 (Chapters 2-10 reserved for expansion) 5-20 TITLE 2. PUBLIC UTILITY REGULATORY ACT 5-21 SUBTITLE A. PROVISIONS APPLICABLE TO ALL UTILITIES 5-22 CHAPTER 11. GENERAL PROVISIONS 5-23 Sec. 11.001. SHORT TITLE 5-24 Sec. 11.002. PURPOSE AND FINDINGS 5-25 Sec. 11.003. DEFINITIONS 6-1 Sec. 11.004. DEFINITION OF UTILITY 6-2 Sec. 11.005. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN 6-3 MANNER OTHER THAN BY SETTING OF RATES 6-4 Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE 6-5 Sec. 11.007. ADMINISTRATIVE PROCEDURE 6-6 Sec. 11.008. LIBERAL CONSTRUCTION 6-7 Sec. 11.009. CONSTRUCTION WITH FEDERAL AUTHORITY 6-8 CHAPTER 11. GENERAL PROVISIONS 6-9 Sec. 11.001. SHORT TITLE. This title may be cited as the 6-10 Public Utility Regulatory Act. (V.A.C.S. Art. 1446c-0, Sec. 6-11 1.001.) 6-12 Sec. 11.002. PURPOSE AND FINDINGS. (a) This title is 6-13 enacted to protect the public interest inherent in the rates and 6-14 services of public utilities. The purpose of this title is to 6-15 establish a comprehensive and adequate regulatory system for public 6-16 utilities to assure rates, operations, and services that are just 6-17 and reasonable to the consumers and to the utilities. 6-18 (b) Public utilities traditionally are by definition 6-19 monopolies in the areas they serve. As a result, the normal forces 6-20 of competition that regulate prices in a free enterprise society do 6-21 not operate. Public agencies regulate utility rates, operations, 6-22 and services as a substitute for competition. (V.A.C.S. 6-23 Art. 1446c-0, Sec. 1.002.) 6-24 Sec. 11.003. DEFINITIONS. In this title: 6-25 (1) "Affected person" means: 7-1 (A) a public utility affected by an action of a 7-2 regulatory authority; 7-3 (B) a person whose utility service or rates are 7-4 affected by a proceeding before a regulatory authority; or 7-5 (C) a person who: 7-6 (i) is a competitor of a public utility 7-7 with respect to a service performed by the utility; or 7-8 (ii) wants to enter into competition with 7-9 a public utility. 7-10 (2) "Affiliate" means: 7-11 (A) a person who directly or indirectly owns or 7-12 holds at least five percent of the voting securities of a public 7-13 utility; 7-14 (B) a person in a chain of successive ownership 7-15 of at least five percent of the voting securities of a public 7-16 utility; 7-17 (C) a corporation that has at least five percent 7-18 of its voting securities owned or controlled, directly or 7-19 indirectly, by a public utility; 7-20 (D) a corporation that has at least five percent 7-21 of its voting securities owned or controlled, directly or 7-22 indirectly, by: 7-23 (i) a person who directly or indirectly 7-24 owns or controls at least five percent of the voting securities of 7-25 a public utility; or 8-1 (ii) a person in a chain of successive 8-2 ownership of at least five percent of the voting securities of a 8-3 public utility; 8-4 (E) a person who is an officer or director of a 8-5 public utility or of a corporation in a chain of successive 8-6 ownership of at least five percent of the voting securities of a 8-7 public utility; or 8-8 (F) a person determined to be an affiliate under 8-9 Section 11.006. 8-10 (3) "Allocation" means the division among 8-11 municipalities or among municipalities and unincorporated areas of 8-12 the plant, revenues, expenses, taxes, and reserves of a utility 8-13 used to provide public utility service in a municipality or for a 8-14 municipality and unincorporated areas. 8-15 (4) "Commission" means the Public Utility Commission 8-16 of Texas. 8-17 (5) "Commissioner" means a member of the Public 8-18 Utility Commission of Texas. 8-19 (6) "Cooperative corporation" means: 8-20 (A) an electric cooperative corporation 8-21 organized under Chapter 161 or a predecessor statute to Chapter 161 8-22 and operating under that chapter; or 8-23 (B) a telephone cooperative corporation 8-24 organized under Chapter 162 or a predecessor statute to Chapter 162 8-25 and operating under that chapter. 9-1 (7) "Corporation" means a domestic or foreign 9-2 corporation, joint-stock company, or association, and each lessee, 9-3 assignee, trustee, receiver, or other successor in interest of the 9-4 corporation, company, or association, that has any of the powers or 9-5 privileges of a corporation not possessed by an individual or 9-6 partnership. The term does not include a municipal corporation, 9-7 except as expressly provided by this title. 9-8 (8) "Counsellor" means the public utility counsel. 9-9 (9) "Facilities" means all of the plant and equipment 9-10 of a public utility, and includes the tangible and intangible 9-11 property, without limitation, owned, operated, leased, licensed, 9-12 used, controlled, or supplied for, by, or in connection with the 9-13 business of the public utility. 9-14 (10) "Municipally owned utility" means a utility 9-15 owned, operated, and controlled by a municipality or by a nonprofit 9-16 corporation the directors of which are appointed by one or more 9-17 municipalities. 9-18 (11) "Office" means the Office of Public Utility 9-19 Counsel. 9-20 (12) "Order" means all or a part of a final 9-21 disposition by a regulatory authority in a matter other than 9-22 rulemaking, without regard to whether the disposition is 9-23 affirmative or negative or injunctive or declaratory. The term 9-24 includes: 9-25 (A) the issuance of a certificate of convenience 10-1 and necessity; and 10-2 (B) the setting of a rate. 10-3 (13) "Person" includes an individual, a partnership of 10-4 two or more persons having a joint or common interest, a mutual or 10-5 cooperative association, and a corporation. 10-6 (14) "Proceeding" means a hearing, investigation, 10-7 inquiry, or other procedure for finding facts or making a decision 10-8 under this title. The term includes a denial of relief or 10-9 dismissal of a complaint. 10-10 (15) "Rate" includes: 10-11 (A) any compensation, tariff, charge, fare, 10-12 toll, rental, or classification that is directly or indirectly 10-13 demanded, observed, charged, or collected by a public utility for a 10-14 service, product, or commodity described in the definition of 10-15 utility in Section 31.002 or 51.002; and 10-16 (B) a rule, practice, or contract affecting the 10-17 compensation, tariff, charge, fare, toll, rental, or 10-18 classification. 10-19 (16) "Ratemaking proceeding" means: 10-20 (A) a proceeding in which a rate is changed; and 10-21 (B) a proceeding initiated under Chapter 34. 10-22 (17) "Regulatory authority" means either the 10-23 commission or the governing body of a municipality, in accordance 10-24 with the context. 10-25 (18) "Service" has its broadest and most inclusive 11-1 meaning. The term includes any act performed, anything supplied, 11-2 and any facilities used or supplied by a public utility in the 11-3 performance of the utility's duties under this title to its 11-4 patrons, employees, other public utilities, and the public. The 11-5 term also includes the interchange of facilities between two or 11-6 more public utilities. The term does not include the printing, 11-7 distribution, or sale of advertising in a telephone directory. 11-8 (19) "Test year" means the most recent 12 months, 11-9 beginning on the first day of a calendar or fiscal year quarter, 11-10 for which operating data for a public utility are available. 11-11 (20) "Trade association" means a nonprofit, 11-12 cooperative, and voluntarily joined association of business or 11-13 professional persons who are employed by public utilities or 11-14 utility competitors to assist the public utility industry, a 11-15 utility competitor, or the industry's or competitor's employees in 11-16 dealing with mutual business or professional problems and in 11-17 promoting their common interest. (V.A.C.S. Art. 1446c-0, Secs. 11-18 1.003(1), (2) (part), (3), (4), (5), (6), (7), (8), (9), (10), 11-19 (11), (12), (13), (13A), (14), (15), (16), (17), (18); New.) 11-20 Sec. 11.004. DEFINITION OF UTILITY. In Subtitle A, "public 11-21 utility" or "utility" means: 11-22 (1) an electric utility, as that term is defined by 11-23 Section 31.002; or 11-24 (2) a public utility or utility, as those terms are 11-25 defined by Section 51.002. (V.A.C.S. Art. 1446c-0, Sec. 1.004.) 12-1 Sec. 11.005. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN 12-2 MANNER OTHER THAN BY SETTING OF RATES. In this title, an entity, 12-3 including a utility competitor or utility supplier, is considered 12-4 to be affected in a manner other than by the setting of rates for 12-5 that class of customer if during a relevant calendar year the 12-6 entity provides fuel, utility-related goods, utility-related 12-7 products, or utility-related services to a regulated or unregulated 12-8 provider of telecommunications or electric services or to an 12-9 affiliate in an amount equal to the greater of $10,000 or 10 12-10 percent of the person's business. (V.A.C.S. Art. 1446c-0, Sec. 12-11 1.006.) 12-12 Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE. (a) The 12-13 commission may determine that a person is an affiliate for purposes 12-14 of this title if the commission after notice and hearing finds that 12-15 the person: 12-16 (1) actually exercises substantial influence or 12-17 control over the policies and actions of a public utility; 12-18 (2) is a person over which a public utility exercises 12-19 the control described by Subdivision (1); 12-20 (3) is under common control with a public utility; or 12-21 (4) together with one or more persons with whom the 12-22 person is related by ownership or blood relationship, or by action 12-23 in concert, actually exercises substantial influence over the 12-24 policies and actions of a public utility even though neither person 12-25 may qualify as an affiliate individually. 13-1 (b) For purposes of Subsection (a)(3), "common control with 13-2 a public utility" means the direct or indirect possession of the 13-3 power to direct or cause the direction of the management and 13-4 policies of another, without regard to whether that power is 13-5 established through ownership or voting of securities or by any 13-6 other direct or indirect means. (V.A.C.S. Art. 1446c-0, Sec. 13-7 1.003(2) (part).) 13-8 Sec. 11.007. ADMINISTRATIVE PROCEDURE. (a) Chapter 2001, 13-9 Government Code, applies to a proceeding under this title except to 13-10 the extent inconsistent with this title. 13-11 (b) A communication of a member or employee of the 13-12 commission with any person, including a party or a party's 13-13 representative, is governed by Section 2001.061, Government Code. 13-14 (V.A.C.S. Art. 1446c-0, Sec. 1.005(a).) 13-15 Sec. 11.008. LIBERAL CONSTRUCTION. This title shall be 13-16 construed liberally to promote the effectiveness and efficiency of 13-17 regulation of public utilities to the extent that this construction 13-18 preserves the validity of this title and its provisions. (V.A.C.S. 13-19 Art. 1446c-0, Sec. 1.404 (part).) 13-20 Sec. 11.009. CONSTRUCTION WITH FEDERAL AUTHORITY. This 13-21 title shall be construed to apply so as not to conflict with any 13-22 authority of the United States. (V.A.C.S. Art. 1446c-0, Sec. 1.404 13-23 (part).) 14-1 CHAPTER 12. ORGANIZATION OF COMMISSION 14-2 SUBCHAPTER A. GENERAL PROVISIONS 14-3 Sec. 12.001. PUBLIC UTILITY COMMISSION OF TEXAS 14-4 Sec. 12.002. OFFICE 14-5 Sec. 12.003. SEAL 14-6 Sec. 12.004. REPRESENTATION BY THE ATTORNEY GENERAL 14-7 Sec. 12.005. APPLICATION OF SUNSET ACT 14-8 (Sections 12.006-12.050 reserved for expansion) 14-9 SUBCHAPTER B. COMMISSION APPOINTMENT AND FUNCTIONS 14-10 Sec. 12.051. APPOINTMENT; TERM 14-11 Sec. 12.052. PRESIDING OFFICER 14-12 Sec. 12.053. MEMBERSHIP QUALIFICATIONS 14-13 Sec. 12.054. REMOVAL OF COMMISSIONER 14-14 Sec. 12.055. PROHIBITION ON SEEKING ANOTHER OFFICE 14-15 Sec. 12.056. EFFECT OF VACANCY 14-16 Sec. 12.057. COMPENSATION 14-17 Sec. 12.058. MEETINGS 14-18 Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS 14-19 (Sections 12.060-12.100 reserved for expansion) 14-20 SUBCHAPTER C. COMMISSION PERSONNEL 14-21 Sec. 12.101. COMMISSION EMPLOYEES 14-22 Sec. 12.102. DUTIES OF EMPLOYEES 14-23 Sec. 12.103. DUTIES OF EXECUTIVE DIRECTOR 14-24 Sec. 12.104. DUTIES OF GENERAL COUNSEL 15-1 Sec. 12.105. CAREER LADDER PROGRAM; PERFORMANCE 15-2 EVALUATIONS; MERIT PAY 15-3 Sec. 12.106. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT 15-4 (Sections 12.107-12.150 reserved for expansion) 15-5 SUBCHAPTER D. PROHIBITED RELATIONSHIPS AND ACTIVITIES 15-6 Sec. 12.151. REGISTERED LOBBYIST 15-7 Sec. 12.152. CONFLICT OF INTEREST 15-8 Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION 15-9 Sec. 12.154. PROHIBITED ACTIVITIES 15-10 Sec. 12.155. PROHIBITION ON EMPLOYMENT OR REPRESENTATION 15-11 Sec. 12.156. QUALIFICATIONS AND STANDARDS OF 15-12 CONDUCT INFORMATION 15-13 (Sections 12.157-12.200 reserved for expansion) 15-14 SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND REPORTS 15-15 Sec. 12.201. PUBLIC INTEREST INFORMATION 15-16 Sec. 12.202. PUBLIC PARTICIPATION 15-17 Sec. 12.203. ANNUAL REPORT 15-18 (Sections 12.204-12.250 reserved for expansion) 15-19 SUBCHAPTER F. HISTORICALLY UNDERUTILIZED BUSINESSES 15-20 Sec. 12.251. DEFINITION 15-21 Sec. 12.252. COMMISSION AUTHORITY 15-22 Sec. 12.253. REPORT REQUIRED 15-23 Sec. 12.254. DISCRIMINATION PROHIBITED 15-24 Sec. 12.255. CAUSE OF ACTION NOT CREATED 16-1 CHAPTER 12. ORGANIZATION OF COMMISSION 16-2 SUBCHAPTER A. GENERAL PROVISIONS 16-3 Sec. 12.001. PUBLIC UTILITY COMMISSION OF TEXAS. The Public 16-4 Utility Commission of Texas exercises the jurisdiction and powers 16-5 conferred by this title. (V.A.C.S. Art. 1446c-0, Sec. 1.021(a) 16-6 (part).) 16-7 Sec. 12.002. OFFICE. (a) The principal office of the 16-8 commission is in Austin. 16-9 (b) The office shall be open daily during usual business 16-10 hours. The office is not required to be open on Saturday, Sunday, 16-11 or a legal holiday. (V.A.C.S. Art. 1446c-0, Sec. 1.031(a) (part).) 16-12 Sec. 12.003. SEAL. (a) The commission has a seal bearing 16-13 the inscription: "Public Utility Commission of Texas." 16-14 (b) The seal shall be affixed to each record and to an 16-15 authentication of a copy of a record. The commission may require 16-16 the seal to be affixed to other instruments. 16-17 (c) A court of this state shall take judicial notice of the 16-18 seal. (V.A.C.S. Art. 1446c-0, Sec. 1.032.) 16-19 Sec. 12.004. REPRESENTATION BY THE ATTORNEY GENERAL. The 16-20 attorney general shall represent the commission in a matter before 16-21 a state court, a court of the United States, or a federal public 16-22 utility regulatory commission. (V.A.C.S. Art. 1446c-0, Secs. 16-23 1.037, 1.301 (part).) 16-24 Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility 16-25 Commission of Texas is subject to Chapter 325, Government Code 17-1 (Texas Sunset Act). Unless continued in existence as provided by 17-2 that chapter, the commission is abolished and this title expires 17-3 September 1, 2001. (V.A.C.S. Art. 1446c-0, Sec. 1.022 (part).) 17-4 (Sections 12.006-12.050 reserved for expansion) 17-5 SUBCHAPTER B. COMMISSION APPOINTMENT AND FUNCTIONS 17-6 Sec. 12.051. APPOINTMENT; TERM. (a) The commission is 17-7 composed of three commissioners appointed by the governor with the 17-8 advice and consent of the senate. 17-9 (b) An appointment to the commission shall be made without 17-10 regard to the race, color, disability, sex, religion, age, or 17-11 national origin of the appointee. 17-12 (c) Commissioners serve staggered, six-year terms. 17-13 (V.A.C.S. Art. 1446c-0, Secs. 1.021(a) (part), (d).) 17-14 Sec. 12.052. PRESIDING OFFICER. (a) The governor shall 17-15 designate a commissioner as the presiding officer. 17-16 (b) The presiding officer serves in that capacity at the 17-17 pleasure of the governor. (V.A.C.S. Art. 1446c-0, Sec. 1.021(c).) 17-18 Sec. 12.053. MEMBERSHIP QUALIFICATIONS. (a) To be eligible 17-19 for appointment, a commissioner must be: 17-20 (1) a qualified voter; 17-21 (2) a citizen of the United States; and 17-22 (3) a representative of the general public. 17-23 (b) A person is not eligible for appointment as a 17-24 commissioner if the person: 17-25 (1) at any time during the two years preceding 18-1 appointment: 18-2 (A) personally served as an officer, director, 18-3 owner, employee, partner, or legal representative of a public 18-4 utility, affiliate, or direct competitor of a public utility; or 18-5 (B) owned or controlled, directly or indirectly, 18-6 stocks or bonds of any class with a value of $10,000 or more in a 18-7 public utility, affiliate, or direct competitor of a public 18-8 utility; or 18-9 (2) is not qualified to serve under Section 12.151, 18-10 12.152, or 12.153. (V.A.C.S. Art. 1446c-0, Secs. 1.023(a) (part), 18-11 (c).) 18-12 Sec. 12.054. REMOVAL OF COMMISSIONER. (a) It is a ground 18-13 for removal from the commission if a commissioner: 18-14 (1) does not have at the time of appointment or 18-15 maintain during service on the commission the qualifications 18-16 required by Section 12.053; 18-17 (2) violates a prohibition provided by Section 12.053 18-18 or by Subchapter D; 18-19 (3) cannot discharge the commissioner's duties for a 18-20 substantial part of the term for which the commissioner is 18-21 appointed because of illness or disability; or 18-22 (4) is absent from more than half of the regularly 18-23 scheduled commission meetings that the commissioner is eligible to 18-24 attend during a calendar year unless the absence is excused by 18-25 majority vote of the commission. 19-1 (b) The validity of an action of the commission is not 19-2 affected by the fact that the action is taken when a ground for 19-3 removal of a commissioner exists. 19-4 (c) If the executive director has knowledge that a potential 19-5 ground for removal exists, the executive director shall notify the 19-6 presiding officer of the commission of the potential ground. The 19-7 presiding officer shall then notify the governor and the attorney 19-8 general that a potential ground for removal exists. If the 19-9 potential ground for removal involves the presiding officer, the 19-10 executive director shall notify the next highest officer of the 19-11 commission, who shall notify the governor and the attorney general 19-12 that a potential ground for removal exists. (V.A.C.S. 19-13 Art. 1446c-0, Secs. 1.026(a), (b), (c).) 19-14 Sec. 12.055. PROHIBITION ON SEEKING ANOTHER OFFICE. A 19-15 person may not seek nomination or election to another civil office 19-16 of this state or of the United States while serving as a 19-17 commissioner. If a commissioner files for nomination or election 19-18 to another civil office of this state or of the United States, the 19-19 person's office as commissioner immediately becomes vacant, and the 19-20 governor shall appoint a successor. (V.A.C.S. Art. 1446c-0, Sec. 19-21 1.024(f).) 19-22 Sec. 12.056. EFFECT OF VACANCY. A vacancy or 19-23 disqualification does not prevent the remaining commissioner or 19-24 commissioners from exercising the powers of the commission. 19-25 (V.A.C.S. Art. 1446c-0, Sec. 1.033 (part).) 20-1 Sec. 12.057. COMPENSATION. The annual salary of the 20-2 commissioners is determined by the legislature. (V.A.C.S. 20-3 Art. 1446c-0, Sec. 1.030.) 20-4 Sec. 12.058. MEETINGS. The commission shall hold meetings 20-5 at its office and at other convenient places in this state as 20-6 expedient and necessary for the proper performance of the 20-7 commission's duties. (V.A.C.S. Art. 1446c-0, Sec. 1.031(a) 20-8 (part).) 20-9 Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS. 20-10 (a) Before a commissioner may assume the commissioner's duties and 20-11 before the commissioner may be confirmed by the senate, the 20-12 commissioner must complete at least one course of the training 20-13 program established under this section. 20-14 (b) A training program established under this section shall 20-15 provide information to the commissioner regarding: 20-16 (1) the enabling legislation that created the 20-17 commission and its policymaking body to which the commissioner is 20-18 appointed to serve; 20-19 (2) the programs operated by the commission; 20-20 (3) the role and functions of the commission; 20-21 (4) the rules of the commission with an emphasis on 20-22 the rules that relate to disciplinary and investigatory authority; 20-23 (5) the current budget for the commission; 20-24 (6) the results of the most recent formal audit of the 20-25 commission; 21-1 (7) the requirements of Chapters 551, 552, and 2001, 21-2 Government Code; 21-3 (8) the requirements of the conflict of interest laws 21-4 and other laws relating to public officials; and 21-5 (9) any applicable ethics policies adopted by the 21-6 commission or the Texas Ethics Commission. (V.A.C.S. Art. 1446c-0, 21-7 Secs. 1.026(d), (e).) 21-8 (Sections 12.060-12.100 reserved for expansion) 21-9 SUBCHAPTER C. COMMISSION PERSONNEL 21-10 Sec. 12.101. COMMISSION EMPLOYEES. The commission shall 21-11 employ: 21-12 (1) an executive director; 21-13 (2) a general counsel; and 21-14 (3) officers and other employees the commission 21-15 considers necessary to administer this title. (V.A.C.S. 21-16 Art. 1446c-0, Sec. 1.028(a) (part).) 21-17 Sec. 12.102. DUTIES OF EMPLOYEES. The commission shall 21-18 develop and implement policies that clearly define the respective 21-19 responsibilities of the commission and commission employees. 21-20 (V.A.C.S. Art. 1446c-0, Sec. 1.028(a) (part).) 21-21 Sec. 12.103. DUTIES OF EXECUTIVE DIRECTOR. The executive 21-22 director is responsible for the daily operations of the commission 21-23 and shall coordinate the activities of commission employees. 21-24 (V.A.C.S. Art. 1446c-0, Sec. 1.028(b).) 21-25 Sec. 12.104. DUTIES OF GENERAL COUNSEL. The duties of the 22-1 general counsel include: 22-2 (1) gathering information relating to each matter 22-3 within the authority of the commission; 22-4 (2) accumulating evidence and other information for 22-5 the purposes specified by this section from: 22-6 (A) public utilities; 22-7 (B) the accounting, technical, and other 22-8 commission staff; and 22-9 (C) other sources; 22-10 (3) preparing and presenting the evidence described by 22-11 Subdivision (2) in a proceeding before the commission or the 22-12 commission's appointed examiner; 22-13 (4) conducting an investigation of a public utility 22-14 under the jurisdiction of the commission; 22-15 (5) preparing proposed changes in the rules of the 22-16 commission; 22-17 (6) preparing recommendations that the commission 22-18 investigate a matter within its authority; 22-19 (7) preparing recommendations and a report by 22-20 commission employees for inclusion in the annual report of the 22-21 commission; 22-22 (8) protecting and representing the public interest 22-23 and, as necessary to effect the objectives and purposes stated in 22-24 this title and protect the public interest, coordinating and 22-25 directing the preparation and presentation of evidence from 23-1 commission employees in each case before the commission; and 23-2 (9) performing any other activity reasonably necessary 23-3 to the general counsel's duties. (V.A.C.S. Art. 1446c-0, Secs. 23-4 1.028(c), (d).) 23-5 Sec. 12.105. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 23-6 MERIT PAY. (a) The executive director or the executive director's 23-7 designee shall develop an intra-agency career ladder program that 23-8 addresses opportunities for mobility and advancement for commission 23-9 employees. The program shall require intra-agency posting of each 23-10 position concurrently with any public posting. 23-11 (b) The executive director or the executive director's 23-12 designee shall develop a system of annual performance evaluations 23-13 that are based on documented employee performance. Merit pay for 23-14 commission employees must be based on the system established under 23-15 this subsection. (V.A.C.S. Art. 1446c-0, Sec. 1.029(a).) 23-16 Sec. 12.106. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT. 23-17 (a) The executive director or the executive director's designee 23-18 shall prepare and maintain a written policy statement to ensure 23-19 implementation of a program of equal employment opportunity under 23-20 which all personnel transactions are made without regard to race, 23-21 color, disability, sex, religion, age, or national origin. 23-22 (b) The policy statement under Subsection (a) must include: 23-23 (1) personnel policies, including policies related to 23-24 recruitment, evaluation, selection, appointment, training, and 23-25 promotion of personnel, that are in compliance with the 24-1 requirements of Chapter 21, Labor Code; 24-2 (2) a comprehensive analysis of the commission 24-3 workforce that meets federal and state guidelines; 24-4 (3) procedures by which a determination can be made 24-5 about the extent of underuse in the commission workforce of all 24-6 persons for whom federal or state guidelines encourage a more 24-7 equitable balance; and 24-8 (4) reasonable methods to appropriately address the 24-9 underuse. 24-10 (c) A policy statement prepared under Subsection (b) must: 24-11 (1) cover an annual period; 24-12 (2) be updated at least annually; 24-13 (3) be reviewed by the Commission on Human Rights for 24-14 compliance with Subsection (b)(1); and 24-15 (4) be filed with the governor's office. 24-16 (d) The governor's office shall deliver a biennial report to 24-17 the legislature based on the information received under Subsection 24-18 (c). The report may be made separately or as a part of other 24-19 biennial reports to the legislature. (V.A.C.S. Art. 1446c-0, Secs. 24-20 1.029(b), (c), (d).) 24-21 (Sections 12.107-12.150 reserved for expansion) 24-22 SUBCHAPTER D. PROHIBITED RELATIONSHIPS AND ACTIVITIES 24-23 Sec. 12.151. REGISTERED LOBBYIST. A person required to 24-24 register as a lobbyist under Chapter 305, Government Code, because 24-25 of the person's activities for compensation on behalf of a 25-1 profession related to the operation of the commission may not serve 25-2 as a commissioner or act as general counsel to the commission. 25-3 (V.A.C.S. Art. 1446c-0, Sec. 1.023(d) (part).) 25-4 Sec. 12.152. CONFLICT OF INTEREST. (a) A person is not 25-5 eligible for appointment as a commissioner or for employment as the 25-6 general counsel or executive director of the commission if: 25-7 (1) the person serves on the board of directors of a 25-8 company that supplies fuel, utility-related services, or 25-9 utility-related products to regulated or unregulated electric or 25-10 telecommunications utilities; or 25-11 (2) the person or the person's spouse: 25-12 (A) is employed by or participates in the 25-13 management of a business entity or other organization that is 25-14 regulated by or receives funds from the commission; 25-15 (B) directly or indirectly owns or controls more 25-16 than a 10 percent interest or a pecuniary interest with a value 25-17 exceeding $10,000 in: 25-18 (i) a business entity or other 25-19 organization that is regulated by or receives funds from the 25-20 commission; or 25-21 (ii) a utility competitor, utility 25-22 supplier, or other entity affected by a commission decision in a 25-23 manner other than by the setting of rates for that class of 25-24 customer; 25-25 (C) uses or receives a substantial amount of 26-1 tangible goods, services, or funds from the commission, other than 26-2 compensation or reimbursement authorized by law for commission 26-3 membership, attendance, or expenses; or 26-4 (D) notwithstanding Paragraph (B), has an 26-5 interest in a mutual fund or retirement fund in which more than 10 26-6 percent of the fund's holdings at the time of appointment is in a 26-7 single utility, utility competitor, or utility supplier in this 26-8 state and the person does not disclose this information to the 26-9 governor, senate, commission, or other entity, as appropriate. 26-10 (b) A person otherwise ineligible because of Subsection 26-11 (a)(2)(B) may be appointed to the commission and serve as a 26-12 commissioner or may be employed as the general counsel or executive 26-13 director if the person: 26-14 (1) notifies the attorney general and commission that 26-15 the person is ineligible because of Subsection (a)(2)(B); and 26-16 (2) divests the person or the person's spouse of the 26-17 ownership or control: 26-18 (A) before beginning service or employment; or 26-19 (B) if the person is already serving or 26-20 employed, within a reasonable time. (V.A.C.S. Art. 1446c-0, Secs. 26-21 1.023(e), (f).) 26-22 Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION. A person 26-23 may not serve as a commissioner or be a commission employee who is 26-24 exempt from the state's position classification plan or is 26-25 compensated at or above the amount prescribed by the General 27-1 Appropriations Act for step 1, salary group 17, of the position 27-2 classification salary schedule if the person is: 27-3 (1) an officer, employee, or paid consultant of a 27-4 trade association; or 27-5 (2) the spouse of an officer, manager, or paid 27-6 consultant of a trade association. (V.A.C.S. Art. 1446c-0, Secs. 27-7 1.023(g), (h).) 27-8 Sec. 12.154. PROHIBITED ACTIVITIES. (a) During the period 27-9 of service with the commission, a commissioner or commission 27-10 employee may not: 27-11 (1) have a pecuniary interest, including an interest 27-12 as an officer, director, partner, owner, employee, attorney, or 27-13 consultant, in: 27-14 (A) a public utility or affiliate; or 27-15 (B) a person a significant portion of whose 27-16 business consists of furnishing goods or services to public 27-17 utilities or affiliates; 27-18 (2) directly or indirectly own or control securities 27-19 in a public utility, affiliate, or direct competitor of a public 27-20 utility; or 27-21 (3) accept a gift, gratuity, or entertainment from: 27-22 (A) a public utility, affiliate, or direct 27-23 competitor of a public utility; 27-24 (B) a person a significant portion of whose 27-25 business consists of furnishing goods or services to public 28-1 utilities, affiliates, or direct competitors of public utilities; 28-2 or 28-3 (C) an agent, representative, attorney, 28-4 employee, officer, owner, director, or partner of a person 28-5 described by Paragraph (A) or (B). 28-6 (b) A commissioner or a commission employee may not directly 28-7 or indirectly solicit, request from, or suggest or recommend to a 28-8 public utility or an agent, representative, attorney, employee, 28-9 officer, owner, director, or partner of a public utility the 28-10 appointment to a position or the employment of a person by the 28-11 public utility or affiliate. 28-12 (c) A person may not give or offer to give a gift, gratuity, 28-13 employment, or entertainment to a commissioner or commission 28-14 employee if that person is: 28-15 (1) a public utility, affiliate, or direct competitor 28-16 of a public utility; 28-17 (2) a person who furnishes goods or services to a 28-18 public utility, affiliate, or direct competitor of a public 28-19 utility; or 28-20 (3) an agent, representative, attorney, employee, 28-21 officer, owner, director, or partner of a person described by 28-22 Subdivision (1) or (2). 28-23 (d) A public utility, affiliate, or direct competitor of a 28-24 public utility or a person furnishing goods or services to a public 28-25 utility, affiliate, or direct competitor of a public utility may 29-1 not aid, abet, or participate with a commissioner, commission 29-2 employee, or former commission employee in conduct that violates 29-3 Subsection (a)(3) or (c). 29-4 (e) Subsection (a)(1) does not apply to an interest in a 29-5 nonprofit group or association, other than a trade association, 29-6 that is solely supported by gratuitous contributions of money, 29-7 property, or services. 29-8 (f) It is not a violation of this section if a commissioner 29-9 or commission employee, on becoming the owner of stocks, bonds, or 29-10 another pecuniary interest in a public utility, affiliate, or 29-11 direct competitor of a public utility otherwise than voluntarily, 29-12 informs the commission and the attorney general of the ownership 29-13 and divests the ownership or interest within a reasonable time. 29-14 (g) It is not a violation of this section if a pecuniary 29-15 interest is held indirectly by ownership of an interest in a 29-16 retirement system, institution, or fund that in the normal course 29-17 of business invests in diverse securities independently of the 29-18 control of the commissioner or commission employee. 29-19 (h) This section does not apply to a contract for a public 29-20 utility product or service or equipment for use of a public utility 29-21 product when a commissioner or commission employee is acting as a 29-22 consumer. 29-23 (i) In this section, a "pecuniary interest" includes income, 29-24 compensation, and payment of any kind, in addition to an ownership 29-25 interest. (V.A.C.S. Art. 1446c-0, Secs. 1.024(a) (part), (b), (c), 30-1 (d), (e).) 30-2 Sec. 12.155. PROHIBITION ON EMPLOYMENT OR REPRESENTATION. 30-3 (a) A commissioner, a commission employee, or an employee of the 30-4 State Office of Administrative Hearings involved in hearing utility 30-5 cases may not: 30-6 (1) be employed by a public utility that was in the 30-7 scope of the commissioner's or employee's official responsibility 30-8 while the commissioner or employee was associated with the 30-9 commission or the State Office of Administrative Hearings; or 30-10 (2) represent a person before the commission or State 30-11 Office of Administrative Hearings or a court in a matter: 30-12 (A) in which the commissioner or employee was 30-13 personally involved while associated with the commission or State 30-14 Office of Administrative Hearings; or 30-15 (B) that was within the commissioner's or 30-16 employee's official responsibility while the commissioner or 30-17 employee was associated with the commission or State Office of 30-18 Administrative Hearings. 30-19 (b) The prohibition of Subsection (a)(1) applies until the: 30-20 (1) second anniversary of the date the commissioner 30-21 ceases to serve as a commissioner; and 30-22 (2) first anniversary of the date the employee's 30-23 employment with the commission or State Office of Administrative 30-24 Hearings ceases. 30-25 (c) The prohibition of Subsection (a)(2) applies while a 31-1 commissioner, commission employee, or employee of the State Office 31-2 of Administrative Hearings involved in hearing utility cases is 31-3 associated with the commission or State Office of Administrative 31-4 Hearings and at any time after. (V.A.C.S. Art. 1446c-0, Secs. 31-5 1.025(a), (b).) 31-6 Sec. 12.156. QUALIFICATIONS AND STANDARDS OF CONDUCT 31-7 INFORMATION. The executive director or the executive director's 31-8 designee shall provide to commissioners and commission employees as 31-9 often as necessary information regarding their: 31-10 (1) qualifications for office or employment under this 31-11 title; and 31-12 (2) responsibilities under applicable laws relating to 31-13 standards of conduct for state officers and employees. (V.A.C.S. 31-14 Art. 1446c-0, Sec. 1.025(c).) 31-15 (Sections 12.157-12.200 reserved for expansion) 31-16 SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND REPORTS 31-17 Sec. 12.201. PUBLIC INTEREST INFORMATION. (a) The 31-18 commission shall prepare information of public interest describing 31-19 the functions of the commission and the commission's procedures by 31-20 which a complaint is filed with and resolved by the commission. 31-21 The commission shall make the information available to the public 31-22 and appropriate state agencies. 31-23 (b) The commission by rule shall establish methods by which 31-24 consumers and service recipients are notified of the name, mailing 31-25 address, and telephone number of the commission for the purpose of 32-1 directing complaints to the commission. (V.A.C.S. Art. 1446c-0, 32-2 Secs. 1.036(a), (b).) 32-3 Sec. 12.202. PUBLIC PARTICIPATION. (a) The commission 32-4 shall develop and implement policies that provide the public with a 32-5 reasonable opportunity to appear before the commission and to speak 32-6 on any issue under the jurisdiction of the commission. 32-7 (b) The commission shall comply with federal and state laws 32-8 related to program and facility accessibility. 32-9 (c) The commission shall prepare and maintain a written plan 32-10 that describes how a person who does not speak English may be 32-11 provided reasonable access to the commission's programs and 32-12 services. (V.A.C.S. Art. 1446c-0, Secs. 1.031(b), 1.036(c).) 32-13 Sec. 12.203. ANNUAL REPORT. (a) The commission shall 32-14 prepare annually a complete and detailed written report accounting 32-15 for all funds received and disbursed by the commission during the 32-16 preceding fiscal year. The annual report must meet the reporting 32-17 requirements applicable to financial reporting in the General 32-18 Appropriations Act. 32-19 (b) In the annual report issued in the year preceding the 32-20 convening of each regular session of the legislature, the 32-21 commission shall make suggestions regarding modification and 32-22 improvement of the commission's statutory authority and for the 32-23 improvement of utility regulation in general that the commission 32-24 considers appropriate for protecting and furthering the interest of 32-25 the public. (V.A.C.S. Art. 1446c-0, Sec. 1.035.) 33-1 (Sections 12.204-12.250 reserved for expansion) 33-2 SUBCHAPTER F. HISTORICALLY UNDERUTILIZED BUSINESSES 33-3 Sec. 12.251. DEFINITION. In this subchapter, "historically 33-4 underutilized business" has the meaning assigned by Section 33-5 481.101, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.407(c).) 33-6 Sec. 12.252. COMMISSION AUTHORITY. The commission, after 33-7 notice and hearing, may require each utility subject to regulation 33-8 under this title to make an effort to overcome the underuse of 33-9 historically underutilized businesses. (V.A.C.S. Art. 1446c-0, 33-10 Sec. 1.407(a).) 33-11 Sec. 12.253. REPORT REQUIRED. The commission shall require 33-12 each utility subject to regulation under this title to prepare and 33-13 submit to the commission a comprehensive annual report detailing 33-14 its use of historically underutilized businesses. (V.A.C.S. 33-15 Art. 1446c-0, Sec. 1.407(b).) 33-16 Sec. 12.254. DISCRIMINATION PROHIBITED. The rules adopted 33-17 under this subchapter may not be used to discriminate against a 33-18 citizen on the basis of sex, race, color, creed, or national 33-19 origin. (V.A.C.S. Art. 1446c-0, Sec. 1.407(d).) 33-20 Sec. 12.255. CAUSE OF ACTION NOT CREATED. This subchapter 33-21 does not create a public or private cause of action. (V.A.C.S. 33-22 Art. 1446c-0, Sec. 1.407(e).) 33-23 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNSEL 33-24 SUBCHAPTER A. GENERAL PROVISIONS; POWERS AND DUTIES 33-25 Sec. 13.001. OFFICE OF PUBLIC UTILITY COUNSEL 34-1 Sec. 13.002. APPLICATION OF SUNSET ACT 34-2 Sec. 13.003. OFFICE POWERS AND DUTIES 34-3 (Sections 13.004-13.020 reserved for expansion) 34-4 SUBCHAPTER B. PUBLIC UTILITY COUNSEL 34-5 Sec. 13.021. APPOINTMENT; TERM 34-6 Sec. 13.022. QUALIFICATIONS 34-7 Sec. 13.023. GROUNDS FOR REMOVAL 34-8 Sec. 13.024. PROHIBITED ACTS 34-9 (Sections 13.025-13.040 reserved for expansion) 34-10 SUBCHAPTER C. OFFICE PERSONNEL 34-11 Sec. 13.041. PERSONNEL 34-12 Sec. 13.042. RELATIONSHIP WITH TRADE ASSOCIATION 34-13 Sec. 13.043. PROHIBITION ON EMPLOYMENT OR REPRESENTATION 34-14 Sec. 13.044. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 34-15 MERIT PAY 34-16 Sec. 13.045. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT 34-17 Sec. 13.046. QUALIFICATIONS AND STANDARDS OF CONDUCT 34-18 INFORMATION 34-19 (Sections 13.047-13.060 reserved for expansion) 34-20 SUBCHAPTER D. PUBLIC INTEREST INFORMATION AND REPORTS 34-21 Sec. 13.061. PUBLIC INTEREST INFORMATION 34-22 Sec. 13.062. PUBLIC PARTICIPATION 34-23 Sec. 13.063. ANNUAL REPORT 35-1 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNSEL 35-2 SUBCHAPTER A. GENERAL PROVISIONS; POWERS AND DUTIES 35-3 Sec. 13.001. OFFICE OF PUBLIC UTILITY COUNSEL. The 35-4 independent office of public utility counsel represents the 35-5 interests of residential and small commercial consumers. (V.A.C.S. 35-6 Art. 1446c-0, Sec. 1.051(a).) 35-7 Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of 35-8 Public Utility Counsel is subject to Chapter 325, Government Code 35-9 (Texas Sunset Act). Unless continued in existence as provided by 35-10 that chapter, the office is abolished and this chapter expires 35-11 September 1, 2001. (V.A.C.S. Art. 1446c-0, Sec. 1.022 (part).) 35-12 Sec. 13.003. OFFICE POWERS AND DUTIES. (a) The office: 35-13 (1) shall assess the effect of utility rate changes 35-14 and other regulatory actions on residential consumers in this 35-15 state; 35-16 (2) shall advocate in the office's own name a position 35-17 determined by the counsellor to be most advantageous to a 35-18 substantial number of residential consumers; 35-19 (3) may appear or intervene, as a party or otherwise, 35-20 as a matter of right on behalf of: 35-21 (A) residential consumers, as a class, in any 35-22 proceeding before the commission; and 35-23 (B) small commercial consumers, as a class, in 35-24 any proceeding in which the counsellor determines that small 35-25 commercial consumers are in need of representation; 36-1 (4) may initiate or intervene as a matter of right or 36-2 otherwise appear in a judicial proceeding that involves an action 36-3 taken by an administrative agency in a proceeding in which the 36-4 counsellor is authorized to appear; 36-5 (5) is entitled to the same access as a party, other 36-6 than commission staff, to records gathered by the commission under 36-7 Section 14.204; 36-8 (6) is entitled to discovery of any nonprivileged 36-9 matter that is relevant to the subject matter of a proceeding or 36-10 petition before the commission; 36-11 (7) may represent an individual residential or small 36-12 commercial consumer with respect to the consumer's disputed 36-13 complaint concerning utility services that is unresolved before the 36-14 commission; and 36-15 (8) may recommend legislation to the legislature that 36-16 the office determines would positively affect the interests of 36-17 residential and small commercial consumers. 36-18 (b) This section does not limit the authority of the 36-19 commission to represent residential or small commercial consumers. 36-20 (c) The appearance of the counsellor in a proceeding does 36-21 not preclude the appearance of other parties on behalf of 36-22 residential or small commercial consumers. The counsellor may not 36-23 be grouped with any other party. (V.A.C.S. Art. 1446c-0, Sec. 36-24 1.054.) 36-25 (Sections 13.004-13.020 reserved for expansion) 37-1 SUBCHAPTER B. PUBLIC UTILITY COUNSEL 37-2 Sec. 13.021. APPOINTMENT; TERM. (a) The chief executive of 37-3 the office is the counsellor. 37-4 (b) The counsellor is appointed by the governor with the 37-5 advice and consent of the senate. 37-6 (c) The appointment of the counsellor shall be made without 37-7 regard to the race, color, disability, sex, religion, age, or 37-8 national origin of the appointee. 37-9 (d) The counsellor serves a two-year term that expires on 37-10 February 1 of the final year of the term. (V.A.C.S. Art. 1446c-0, 37-11 Sec. 1.051(b).) 37-12 Sec. 13.022. QUALIFICATIONS. (a) The counsellor must: 37-13 (1) be licensed to practice law in this state; 37-14 (2) have demonstrated a strong commitment to and 37-15 involvement in efforts to safeguard the rights of the public; and 37-16 (3) possess the knowledge and experience necessary to 37-17 practice effectively in utility proceedings. 37-18 (b) A person is not eligible for appointment as counsellor 37-19 if: 37-20 (1) the person or the person's spouse: 37-21 (A) is employed by or participates in the 37-22 management of a business entity or other organization that is 37-23 regulated by or receives funds from the commission; 37-24 (B) directly or indirectly owns or controls more 37-25 than a 10 percent interest or a pecuniary interest with a value 38-1 exceeding $10,000 in: 38-2 (i) a business entity or other 38-3 organization that is regulated by or receives funds from the 38-4 commission or the office; or 38-5 (ii) a utility competitor, utility 38-6 supplier, or other entity affected by a commission decision in a 38-7 manner other than by the setting of rates for that class of 38-8 customer; 38-9 (C) uses or receives a substantial amount of 38-10 tangible goods, services, or funds from the commission or the 38-11 office, other than compensation or reimbursement authorized by law 38-12 for service as counsellor or for commission membership, attendance, 38-13 or expenses; or 38-14 (D) notwithstanding Paragraph (B), has an 38-15 interest in a mutual fund or retirement fund in which more than 10 38-16 percent of the fund's holdings is in a single utility, utility 38-17 competitor, or utility supplier in this state and the person does 38-18 not disclose this information to the governor, senate, or other 38-19 entity, as appropriate; or 38-20 (2) the person is not qualified to serve under Section 38-21 13.042. 38-22 (c) A person required to register as a lobbyist under 38-23 Chapter 305, Government Code, because of the person's activities 38-24 for compensation on behalf of a profession related to the operation 38-25 of the commission or the office may not serve as counsellor. 39-1 (d) A person otherwise ineligible because of Subsection 39-2 (b)(1)(B) may be appointed and serve as counsellor if the person: 39-3 (1) notifies the attorney general and commission that 39-4 the person is ineligible because of Subsection (b)(1)(B); and 39-5 (2) divests the person or the person's spouse of the 39-6 ownership or control: 39-7 (A) before beginning service; or 39-8 (B) if the person is already serving, within a 39-9 reasonable time. (V.A.C.S. Art. 1446c-0, Secs. 1.023(d) (part), 39-10 1.051(c), (d), (e), (g).) 39-11 Sec. 13.023. GROUNDS FOR REMOVAL. (a) It is a ground for 39-12 removal from office if the counsellor: 39-13 (1) does not have at the time of appointment or 39-14 maintain during service as counsellor the qualifications required 39-15 by Section 13.022; 39-16 (2) violates a prohibition provided by Section 13.022, 39-17 13.042, or 13.043; or 39-18 (3) cannot discharge the counsellor's duties for a 39-19 substantial part of the term for which the counsellor is appointed 39-20 because of illness or disability. 39-21 (b) The validity of an action of the office is not affected 39-22 by the fact that the action is taken when a ground for removal of 39-23 the counsellor exists. (V.A.C.S. Art. 1446c-0, Sec. 1.0511.) 39-24 Sec. 13.024. PROHIBITED ACTS. (a) The counsellor may not: 39-25 (1) have a direct or indirect interest in a utility 40-1 company regulated under this title; or 40-2 (2) provide legal services directly or indirectly to 40-3 or be employed in any capacity by a utility company regulated under 40-4 this title, its parent, or its subsidiary companies, corporations, 40-5 or cooperatives or a utility competitor, utility supplier, or other 40-6 entity affected in a manner other than by the setting of rates for 40-7 that class of customer. 40-8 (b) The prohibition under Subsection (a) applies during the 40-9 period of the counsellor's service and until the second anniversary 40-10 of the date the counsellor ceases to serve as counsellor. 40-11 (c) This section does not prohibit a person from otherwise 40-12 engaging in the private practice of law after the person ceases to 40-13 serve as counsellor. (V.A.C.S. Art. 1446c-0, Sec. 1.052.) 40-14 (Sections 13.025-13.040 reserved for expansion) 40-15 SUBCHAPTER C. OFFICE PERSONNEL 40-16 Sec. 13.041. PERSONNEL. (a) The counsellor may employ 40-17 lawyers, economists, engineers, consultants, statisticians, 40-18 accountants, clerical staff, and other employees as the counsellor 40-19 considers necessary to carry out this chapter. 40-20 (b) An employee receives compensation as prescribed by the 40-21 legislature from the assessment imposed by Subchapter A, Chapter 40-22 16. (V.A.C.S. Art. 1446c-0, Sec. 1.053(a).) 40-23 Sec. 13.042. RELATIONSHIP WITH TRADE ASSOCIATION. A person 40-24 may not serve as counsellor or be an employee of the office who is 40-25 exempt from the state's position classification plan or is 41-1 compensated at or above the amount prescribed by the General 41-2 Appropriations Act for step 1, salary group 17, of the position 41-3 classification salary schedule if the person is: 41-4 (1) an officer, employee, or paid consultant of a 41-5 trade association; or 41-6 (2) the spouse of an officer, manager, or paid 41-7 consultant of a trade association. (V.A.C.S. Art. 1446c-0, Sec. 41-8 1.051(f).) 41-9 Sec. 13.043. PROHIBITION ON EMPLOYMENT OR REPRESENTATION. 41-10 (a) The counsellor or an employee of the office may not: 41-11 (1) be employed by a public utility that was in the 41-12 scope of the counsellor's or employee's official responsibility 41-13 while the counsellor or employee was associated with the office; or 41-14 (2) represent a person before the commission or a 41-15 court in a matter: 41-16 (A) in which the counsellor or employee was 41-17 personally involved while associated with the office; or 41-18 (B) that was within the counsellor's or 41-19 employee's official responsibility while the counsellor or employee 41-20 was associated with the office. 41-21 (b) The prohibition of Subsection (a)(1) applies until the: 41-22 (1) second anniversary of the date the counsellor 41-23 ceases to serve as a counsellor; and 41-24 (2) first anniversary of the date the employee's 41-25 employment with the office ceases. 42-1 (c) The prohibition of Subsection (a)(2) applies while a 42-2 counsellor or employee of the office is associated with the office 42-3 and at any time after. (V.A.C.S. Art. 1446c-0, Sec. 1.0512.) 42-4 Sec. 13.044. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 42-5 MERIT PAY. (a) The counsellor or the counsellor's designee shall 42-6 develop an intra-agency career ladder program that addresses 42-7 opportunities for mobility and advancement for office employees. 42-8 The program shall require intra-agency postings of each position 42-9 concurrently with any public posting. 42-10 (b) The counsellor or the counsellor's designee shall 42-11 develop a system of annual performance evaluations that are based 42-12 on documented employee performance. Merit pay for office employees 42-13 must be based on the system established under this subsection. 42-14 (V.A.C.S. Art. 1446c-0, Sec. 1.053(b).) 42-15 Sec. 13.045. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT. 42-16 (a) The counsellor or the counsellor's designee shall prepare and 42-17 maintain a written policy statement to ensure implementation of a 42-18 program of equal employment opportunity under which all personnel 42-19 transactions are made without regard to race, color, disability, 42-20 sex, religion, age, or national origin. 42-21 (b) The policy statement under Subsection (a) must include: 42-22 (1) personnel policies, including policies related to 42-23 recruitment, evaluation, selection, appointment, training, and 42-24 promotion of personnel, that are in compliance with the 42-25 requirements of Chapter 21, Labor Code; 43-1 (2) a comprehensive analysis of the office workforce 43-2 that meets federal and state guidelines; 43-3 (3) procedures by which a determination can be made 43-4 about the extent of underuse in the office workforce of all persons 43-5 for whom federal or state guidelines encourage a more equitable 43-6 balance; and 43-7 (4) reasonable methods to appropriately address the 43-8 underuse. 43-9 (c) A policy statement prepared under Subsection (b) must: 43-10 (1) cover an annual period; 43-11 (2) be updated at least annually; 43-12 (3) be reviewed by the Commission on Human Rights for 43-13 compliance with Subsection (b)(1); and 43-14 (4) be filed with the governor's office. 43-15 (d) The governor's office shall deliver a biennial report to 43-16 the legislature based on the information received under Subsection 43-17 (c). The report may be made separately or as a part of other 43-18 biennial reports to the legislature. (V.A.C.S. Art. 1446c-0, Secs. 43-19 1.053(c), (d).) 43-20 Sec. 13.046. QUALIFICATIONS AND STANDARDS OF CONDUCT 43-21 INFORMATION. The office shall provide to office employees as often 43-22 as necessary information regarding their: 43-23 (1) qualifications for employment under this title; 43-24 and 43-25 (2) responsibilities under applicable laws relating to 44-1 standards of conduct for employees. (V.A.C.S. Art. 1446c-0, Sec. 44-2 1.053(e).) 44-3 (Sections 13.047-13.060 reserved for expansion) 44-4 SUBCHAPTER D. PUBLIC INTEREST INFORMATION AND REPORTS 44-5 Sec. 13.061. PUBLIC INTEREST INFORMATION. The office shall 44-6 prepare information of public interest describing the functions of 44-7 the office. The office shall make the information available to the 44-8 public and appropriate state agencies. (V.A.C.S. Art. 1446c-0, 44-9 Sec. 1.0513(b).) 44-10 Sec. 13.062. PUBLIC PARTICIPATION. (a) The office shall 44-11 comply with federal and state laws related to program and facility 44-12 accessibility. 44-13 (b) The office shall prepare and maintain a written plan 44-14 that describes how a person who does not speak English may be 44-15 provided reasonable access to the office's programs and services. 44-16 (V.A.C.S. Art. 1446c-0, Sec. 1.0513(c).) 44-17 Sec. 13.063. ANNUAL REPORT. The office shall prepare 44-18 annually a complete and detailed written report accounting for all 44-19 funds received and disbursed by the office during the preceding 44-20 fiscal year. The annual report must meet the reporting 44-21 requirements applicable to financial reporting in the General 44-22 Appropriations Act. (V.A.C.S. Art. 1446c-0, Sec. 1.0513(a).) 45-1 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 45-2 OTHER REGULATORY AUTHORITIES 45-3 SUBCHAPTER A. GENERAL POWERS OF COMMISSION 45-4 Sec. 14.001. POWER TO REGULATE AND SUPERVISE 45-5 Sec. 14.002. RULES 45-6 Sec. 14.003. COMMISSION POWERS RELATING TO REPORTS 45-7 Sec. 14.004. REPORT OF SUBSTANTIAL INTEREST 45-8 Sec. 14.005. CRITERIA AND GUIDELINES GOVERNING TERMINATION 45-9 OF SERVICES TO ELDERLY AND DISABLED 45-10 Sec. 14.006. INTERFERENCE WITH TERMS OR CONDITIONS OF 45-11 EMPLOYMENT; PRESUMPTION OF REASONABLENESS 45-12 Sec. 14.007. ASSISTANCE TO MUNICIPALITY 45-13 Sec. 14.008. MUNICIPAL FRANCHISES 45-14 (Sections 14.009-14.050 reserved for expansion) 45-15 SUBCHAPTER B. PRACTICE AND PROCEDURE 45-16 Sec. 14.051. PROCEDURAL POWERS 45-17 Sec. 14.052. RULES 45-18 Sec. 14.053. POWERS AND DUTIES OF STATE OFFICE OF 45-19 ADMINISTRATIVE HEARINGS 45-20 Sec. 14.054. SETTLEMENTS 45-21 Sec. 14.055. RECORD OF PROCEEDINGS 45-22 Sec. 14.056. RIGHT TO BE HEARD 45-23 Sec. 14.057. ORDERS OF COMMISSION; TRANSCRIPTS AND EXHIBITS; 45-24 PUBLIC RECORDS 45-25 (Sections 14.058-14.100 reserved for expansion) 46-1 SUBCHAPTER C. RESTRICTIONS ON CERTAIN TRANSACTIONS 46-2 Sec. 14.101. REPORT OF CERTAIN TRANSACTIONS; COMMISSION 46-3 CONSIDERATION 46-4 Sec. 14.102. REPORT OF PURCHASE OF VOTING STOCK IN PUBLIC 46-5 UTILITY 46-6 Sec. 14.103. REPORT OF LOAN TO STOCKHOLDERS 46-7 (Sections 14.104-14.150 reserved for expansion) 46-8 SUBCHAPTER D. RECORDS 46-9 Sec. 14.151. RECORDS OF PUBLIC UTILITY 46-10 Sec. 14.152. MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE 46-11 Sec. 14.153. COMMUNICATIONS WITH REGULATORY AUTHORITY 46-12 Sec. 14.154. JURISDICTION OVER AFFILIATE 46-13 (Sections 14.155-14.200 reserved for expansion) 46-14 SUBCHAPTER E. AUDITS AND INSPECTIONS 46-15 Sec. 14.201. INQUIRY INTO MANAGEMENT AND AFFAIRS 46-16 Sec. 14.202. MANAGEMENT AUDITS BY COMMISSION 46-17 Sec. 14.203. AUDIT OF ACCOUNTS 46-18 Sec. 14.204. INSPECTION 46-19 Sec. 14.205. EXAMINATIONS UNDER OATH 46-20 Sec. 14.206. ENTERING PREMISES OF PUBLIC UTILITY 46-21 Sec. 14.207. PRODUCTION OF OUT-OF-STATE RECORDS 46-22 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 46-23 OTHER REGULATORY AUTHORITIES 46-24 SUBCHAPTER A. GENERAL POWERS OF COMMISSION 46-25 Sec. 14.001. POWER TO REGULATE AND SUPERVISE. The 47-1 commission has the general power to regulate and supervise the 47-2 business of each public utility within its jurisdiction and to do 47-3 anything specifically designated or implied by this title that is 47-4 necessary and convenient to the exercise of that power and 47-5 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 1.101(a).) 47-6 Sec. 14.002. RULES. The commission shall adopt and enforce 47-7 rules reasonably required in the exercise of its powers and 47-8 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 1.101(b) (part).) 47-9 Sec. 14.003. COMMISSION POWERS RELATING TO REPORTS. The 47-10 commission may: 47-11 (1) require a public utility to report to the 47-12 commission information relating to: 47-13 (A) the utility; and 47-14 (B) a transaction between the utility and an 47-15 affiliate inside or outside this state, to the extent that the 47-16 transaction is subject to the commission's jurisdiction; 47-17 (2) establish the form for a report; 47-18 (3) determine the time for a report and the frequency 47-19 with which the report is to be made; 47-20 (4) require that a report be made under oath; 47-21 (5) require the filing with the commission of a copy 47-22 of: 47-23 (A) a contract or arrangement between a public 47-24 utility and an affiliate; 47-25 (B) a report filed with a federal agency or a 48-1 governmental agency or body of another state; and 48-2 (C) an annual report that shows each payment of 48-3 compensation, other than salary or wages subject to federal income 48-4 tax withholding: 48-5 (i) to residents of this state; 48-6 (ii) with respect to legal, 48-7 administrative, or legislative matters in this state; or 48-8 (iii) for representation before the 48-9 legislature of this state or any governmental agency or body; and 48-10 (6) require that a contract or arrangement described 48-11 by Subdivision (5)(A) that is not in writing be reduced to writing 48-12 and filed with the commission. (V.A.C.S. Art. 1446c-0, Sec. 48-13 1.202(a).) 48-14 Sec. 14.004. REPORT OF SUBSTANTIAL INTEREST. The commission 48-15 may require disclosure of the identity and respective interests of 48-16 each owner of at least one percent of the voting securities of a 48-17 public utility or its affiliate. (V.A.C.S. Art. 1446c-0, Sec. 48-18 1.272.) 48-19 Sec. 14.005. CRITERIA AND GUIDELINES GOVERNING TERMINATION 48-20 OF SERVICES TO ELDERLY AND DISABLED. The commission may establish 48-21 criteria and guidelines with the utility industry relating to 48-22 industry procedures used in terminating services to the elderly and 48-23 disabled. (V.A.C.S. Art. 1446c-0, Sec. 1.405.) 48-24 Sec. 14.006. INTERFERENCE WITH TERMS OR CONDITIONS OF 48-25 EMPLOYMENT; PRESUMPTION OF REASONABLENESS. The commission may not 49-1 interfere with employee wages and benefits, working conditions, or 49-2 other terms or conditions of employment that are the product of a 49-3 collective bargaining agreement recognized under federal law. An 49-4 employee wage rate or benefit that is the product of the collective 49-5 bargaining is presumed to be reasonable. (V.A.C.S. Art. 1446c-0, 49-6 Sec. 1.206.) 49-7 Sec. 14.007. ASSISTANCE TO MUNICIPALITY. On request by the 49-8 governing body of a municipality, the commission may provide 49-9 commission employees as necessary to advise and consult with the 49-10 municipality on a pending matter. (V.A.C.S. Art. 1446c-0, Sec. 49-11 1.202(b).) 49-12 Sec. 14.008. MUNICIPAL FRANCHISES. (a) This title does not 49-13 restrict the rights and powers of a municipality to grant or refuse 49-14 a franchise to use the streets and alleys in the municipality or to 49-15 make a statutory charge for that use. 49-16 (b) A franchise agreement may not limit or interfere with a 49-17 power conferred on the commission by this title. (V.A.C.S. 49-18 Art. 1446c-0, Sec. 1.103.) 49-19 (Sections 14.009-14.050 reserved for expansion) 49-20 SUBCHAPTER B. PRACTICE AND PROCEDURE 49-21 Sec. 14.051. PROCEDURAL POWERS. The commission may: 49-22 (1) call and hold a hearing; 49-23 (2) administer an oath; 49-24 (3) receive evidence at a hearing; 49-25 (4) issue a subpoena to compel the attendance of a 50-1 witness or the production of a document; and 50-2 (5) make findings of fact and decisions to administer 50-3 this title or a rule, order, or other action of the commission. 50-4 (V.A.C.S. Art. 1446c-0, Sec. 1.101(d).) 50-5 Sec. 14.052. RULES. (a) The commission shall adopt and 50-6 enforce rules governing practice and procedure before the 50-7 commission and, as applicable, practice and procedure before the 50-8 utility division of the State Office of Administrative Hearings. 50-9 (b) The commission shall adopt rules that authorize an 50-10 administrative law judge to: 50-11 (1) limit the amount of time that a party may have to 50-12 present its case; 50-13 (2) limit the number of requests for information that 50-14 a party may make in a contested case; 50-15 (3) require a party to a contested case to identify 50-16 contested issues and facts before the hearing begins; 50-17 (4) limit cross-examination to only those issues and 50-18 facts identified before the hearing and to any new issues that may 50-19 arise as a result of the discovery process; and 50-20 (5) group parties, other than the office, that have 50-21 the same position on an issue to facilitate cross-examination on 50-22 that issue. 50-23 (c) A rule adopted under Subsection (b)(5) must permit each 50-24 party in a group to present that party's witnesses for 50-25 cross-examination during the hearing. 51-1 (d) A rule adopted under this section must ensure that each 51-2 party receives due process. (V.A.C.S. Art. 1446c-0, Secs. 1.101(b) 51-3 (part), (c).) 51-4 Sec. 14.053. POWERS AND DUTIES OF STATE OFFICE OF 51-5 ADMINISTRATIVE HEARINGS. (a) The utility division of the State 51-6 Office of Administrative Hearings shall conduct each hearing in a 51-7 contested case that is not conducted by one or more commissioners. 51-8 (b) The commission may delegate to the utility division of 51-9 the State Office of Administrative Hearings the authority to make a 51-10 final decision and to issue findings of fact, conclusions of law, 51-11 and other necessary orders in a proceeding in which there is not a 51-12 contested issue of fact or law. 51-13 (c) The commission by rule shall define the procedures by 51-14 which it delegates final decision-making authority under Subsection 51-15 (b). 51-16 (d) For review purposes an administrative law judge's final 51-17 decision under Subsection (b) has the same effect as a final 51-18 decision of the commission unless a commissioner requests formal 51-19 review of the decision. (V.A.C.S. Art. 1446c-0, Sec. 1.101(e).) 51-20 Sec. 14.054. SETTLEMENTS. (a) The commission by rule shall 51-21 adopt procedures governing the use of settlements to resolve 51-22 contested cases. 51-23 (b) Rules adopted under this section must ensure that: 51-24 (1) each party retains the right to: 51-25 (A) a full hearing before the commission on 52-1 issues that remain in dispute; and 52-2 (B) judicial review of issues that remain in 52-3 dispute; 52-4 (2) an issue of fact raised by a nonsettling party may 52-5 not be waived by a settlement or stipulation of the other parties; 52-6 and 52-7 (3) a nonsettling party may use an issue of fact 52-8 raised by that party as the basis for judicial review. (V.A.C.S. 52-9 Art. 1446c-0, Sec. 1.104.) 52-10 Sec. 14.055. RECORD OF PROCEEDINGS. The regulatory 52-11 authority shall keep a record of each proceeding before the 52-12 authority. (V.A.C.S. Art. 1446c-0, Sec. 1.402 (part).) 52-13 Sec. 14.056. RIGHT TO BE HEARD. Each party to a proceeding 52-14 before a regulatory authority is entitled to be heard by attorney 52-15 or in person. (V.A.C.S. Art. 1446c-0, Sec. 1.402 (part).) 52-16 Sec. 14.057. ORDERS OF COMMISSION; TRANSCRIPTS AND EXHIBITS; 52-17 PUBLIC RECORDS. (a) A commission order must be in writing and 52-18 contain detailed findings of the facts on which it is passed. 52-19 (b) The commission shall retain a copy of the transcript and 52-20 the exhibits in any matter in which the commission issues an order. 52-21 (c) Subject to Chapter 552, Government Code, each file 52-22 pertaining to a matter that was at any time pending before the 52-23 commission or to a record, report, or inspection required by 52-24 Section 14.003, 14.151, 14.152, 14.153, 14.201, or 14.203-14.207 or 52-25 by Subtitle B or C is public information. (V.A.C.S. Art. 1446c-0, 53-1 Sec. 1.034.) 53-2 (Sections 14.058-14.100 reserved for expansion) 53-3 SUBCHAPTER C. RESTRICTIONS ON CERTAIN TRANSACTIONS 53-4 Sec. 14.101. REPORT OF CERTAIN TRANSACTIONS; COMMISSION 53-5 CONSIDERATION. (a) Unless a public utility reports the 53-6 transaction to the commission within a reasonable time, the public 53-7 utility may not: 53-8 (1) sell, acquire, or lease a plant as an operating 53-9 unit or system in this state for a total consideration of more than 53-10 $100,000; or 53-11 (2) merge or consolidate with another public utility 53-12 operating in this state. 53-13 (b) A public utility shall report to the commission within a 53-14 reasonable time each transaction that involves the sale of at least 53-15 50 percent of the stock of the utility. On the filing of a report 53-16 with the commission, the commission shall investigate the 53-17 transaction, with or without a public hearing, to determine whether 53-18 the action is consistent with the public interest. In reaching its 53-19 determination, the commission shall consider: 53-20 (1) the reasonable value of the property, facilities, 53-21 or securities to be acquired, disposed of, merged, transferred, or 53-22 consolidated; 53-23 (2) whether the transaction will: 53-24 (A) adversely affect the health or safety of 53-25 customers or employees; 54-1 (B) result in the transfer of jobs of citizens 54-2 of this state to workers domiciled outside this state; or 54-3 (C) result in the decline of service; 54-4 (3) whether the public utility will receive 54-5 consideration equal to the reasonable value of the assets when it 54-6 sells, leases, or transfers assets; and 54-7 (4) whether the transaction is consistent with the 54-8 public interest. 54-9 (c) If the commission finds that a transaction is not in the 54-10 public interest, the commission shall take the effect of the 54-11 transaction into consideration in ratemaking proceedings and 54-12 disallow the effect of the transaction if the transaction will 54-13 unreasonably affect rates or service. 54-14 (d) This section does not apply to: 54-15 (1) the purchase of a unit of property for 54-16 replacement; or 54-17 (2) an addition to the facilities of a public utility 54-18 by construction. (V.A.C.S. Art. 1446c-0, Sec. 1.251.) 54-19 Sec. 14.102. REPORT OF PURCHASE OF VOTING STOCK IN PUBLIC 54-20 UTILITY. A public utility may not purchase voting stock in another 54-21 public utility doing business in this state unless the utility 54-22 reports the purchase to the commission. (V.A.C.S. Art. 1446c-0, 54-23 Sec. 1.252.) 54-24 Sec. 14.103. REPORT OF LOAN TO STOCKHOLDERS. A public 54-25 utility may not loan money, stocks, bonds, notes, or other evidence 55-1 of indebtedness to a person who directly or indirectly owns or 55-2 holds any stock of the public utility unless the public utility 55-3 reports the transaction to the commission within a reasonable time. 55-4 (V.A.C.S. Art. 1446c-0, Sec. 1.253.) 55-5 (Sections 14.104-14.150 reserved for expansion) 55-6 SUBCHAPTER D. RECORDS 55-7 Sec. 14.151. RECORDS OF PUBLIC UTILITY. (a) Each public 55-8 utility shall keep and provide to the regulatory authority, in the 55-9 manner and form prescribed by the commission, uniform accounts of 55-10 all business transacted by the utility. 55-11 (b) The commission may prescribe the form of books, 55-12 accounts, records, and memoranda to be kept by a public utility, 55-13 including: 55-14 (1) the books, accounts, records, and memoranda of: 55-15 (A) the provision of and capacity for service; 55-16 and 55-17 (B) the receipt and expenditure of money; and 55-18 (2) any other form, record, and memorandum that the 55-19 commission considers necessary to carry out this title. 55-20 (c) For a public utility subject to regulation by a federal 55-21 regulatory agency, compliance with the system of accounts 55-22 prescribed for the particular class of utilities by the federal 55-23 agency may be considered sufficient compliance with the system 55-24 prescribed by the commission. The commission may prescribe the 55-25 form of books, accounts, records, and memoranda covering 56-1 information in addition to that required by the federal agency. 56-2 The system of accounts and the form of books, accounts, records, 56-3 and memoranda prescribed by the commission for a public utility or 56-4 class of utilities may not be inconsistent with the systems and 56-5 forms established by a federal agency for that public utility or 56-6 class of utilities. 56-7 (d) Each public utility shall: 56-8 (1) keep and provide its books, accounts, records, and 56-9 memoranda accurately in the manner and form prescribed by the 56-10 commission; and 56-11 (2) comply with the directions of the regulatory 56-12 authority relating to the books, accounts, records, and memoranda. 56-13 (e) In this section, "public utility" includes a municipally 56-14 owned utility. (V.A.C.S. Art. 1446c-0, Secs. 1.201(a), (b), (c), 56-15 (d) (part), (e).) 56-16 Sec. 14.152. MAINTENANCE OF OFFICE AND RECORDS IN THIS 56-17 STATE. (a) Each public utility shall maintain an office in this 56-18 state in a county in which some part of the utility's property is 56-19 located. The utility shall keep in this office all books, 56-20 accounts, records, and memoranda required by the commission to be 56-21 kept in this state. 56-22 (b) A book, account, record, or memorandum required by the 56-23 regulatory authority to be kept in this state may not be removed 56-24 from this state, except as: 56-25 (1) provided by Section 52.255; and 57-1 (2) prescribed by the commission. (V.A.C.S. 57-2 Art. 1446c-0, Sec. 1.204.) 57-3 Sec. 14.153. COMMUNICATIONS WITH REGULATORY AUTHORITY. 57-4 (a) The regulatory authority shall adopt rules governing 57-5 communications with the regulatory authority or a member or 57-6 employee of the regulatory authority by: 57-7 (1) a public utility; 57-8 (2) an affiliate; or 57-9 (3) a representative of a public utility or affiliate. 57-10 (b) A record of a communication must contain: 57-11 (1) the name of the person contacting the regulatory 57-12 authority or member or employee of the regulatory authority; 57-13 (2) the name of the business entity represented; 57-14 (3) a brief description of the subject matter of the 57-15 communication; and 57-16 (4) the action, if any, requested by the public 57-17 utility, affiliate, or representative. 57-18 (c) Records compiled under Subsection (b) shall be available 57-19 to the public monthly. (V.A.C.S. Art. 1446c-0, Sec. 1.205.) 57-20 Sec. 14.154. JURISDICTION OVER AFFILIATE. (a) The 57-21 commission has jurisdiction over an affiliate that has a 57-22 transaction with a public utility under the commission's 57-23 jurisdiction to the extent of access to a record of the affiliate 57-24 relating to the transaction, including a record of joint or general 57-25 expenses, any portion of which may be applicable to the 58-1 transaction. 58-2 (b) A record obtained by the commission relating to sale of 58-3 electrical energy at wholesale by an affiliate to the public 58-4 utility is confidential and is not subject to disclosure under 58-5 Chapter 552, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.271.) 58-6 (Sections 14.155-14.200 reserved for expansion) 58-7 SUBCHAPTER E. AUDITS AND INSPECTIONS 58-8 Sec. 14.201. INQUIRY INTO MANAGEMENT AND AFFAIRS. A 58-9 regulatory authority may inquire into the management and affairs of 58-10 each public utility and shall keep itself informed as to the manner 58-11 and method in which each public utility is managed and its affairs 58-12 are conducted. (V.A.C.S. Art. 1446c-0, Sec. 1.203(c).) 58-13 Sec. 14.202. MANAGEMENT AUDITS BY COMMISSION. (a) The 58-14 commission shall: 58-15 (1) inquire into the management of the business of 58-16 each public utility under its jurisdiction; 58-17 (2) keep itself informed as to the manner and method 58-18 in which the utility's business is managed; and 58-19 (3) obtain from the public utility any information 58-20 necessary to enable the commission to perform a management audit. 58-21 (b) The commission may audit a utility under its 58-22 jurisdiction as frequently as needed. Six months after an audit, 58-23 the utility shall report to the commission on the status of the 58-24 implementation of the recommendations of the audit and shall file 58-25 subsequent reports at times the commission considers appropriate. 59-1 (V.A.C.S. Art. 1446c-0, Sec. 1.102.) 59-2 Sec. 14.203. AUDIT OF ACCOUNTS. A regulatory authority may 59-3 require the examination and audit of the accounts of a public or 59-4 municipally owned utility. (V.A.C.S. Art. 1446c-0, Secs. 1.201(d) 59-5 (part), (e).) 59-6 Sec. 14.204. INSPECTION. (a) A regulatory authority and, 59-7 to the extent authorized by the regulatory authority, its counsel, 59-8 agent, or employee, may: 59-9 (1) inspect and obtain copies of the papers, books, 59-10 accounts, documents, and other business records of a public utility 59-11 within its jurisdiction; and 59-12 (2) inspect the plant, equipment, and other property 59-13 of a public utility within its jurisdiction. 59-14 (b) An action under this section must be conducted at a 59-15 reasonable time for a reasonable purpose. (V.A.C.S. Art. 1446c-0, 59-16 Sec. 1.203(a) (part).) 59-17 Sec. 14.205. EXAMINATIONS UNDER OATH. In connection with an 59-18 action taken under Section 14.204, the regulatory authority may: 59-19 (1) examine under oath an officer, agent, or employee 59-20 of a public utility; or 59-21 (2) authorize the person conducting the action to make 59-22 the examination under oath. (V.A.C.S. Art. 1446c-0, Sec. 1.203(a) 59-23 (part).) 59-24 Sec. 14.206. ENTERING PREMISES OF PUBLIC UTILITY. (a) A 59-25 member, agent, or employee of a regulatory authority may enter the 60-1 premises occupied by a public utility to conduct an inspection, 60-2 examination, or test or to exercise any other authority provided by 60-3 this title. 60-4 (b) A member, agent, or employee of the regulatory authority 60-5 may act under this section only during reasonable hours and after 60-6 reasonable notice to the public utility. 60-7 (c) A public utility is entitled to be represented when an 60-8 inspection, examination, or test is conducted on its premises. The 60-9 utility is entitled to a reasonable time to secure a representative 60-10 before the inspection, examination, or test begins. (V.A.C.S. 60-11 Art. 1446c-0, Secs. 1.203(b), 2.156(a) (part).) 60-12 Sec. 14.207. PRODUCTION OF OUT-OF-STATE RECORDS. (a) A 60-13 regulatory authority may require, by order or subpoena served on a 60-14 public utility, the production, at the time and place in this state 60-15 that the regulatory authority designates, of any books, accounts, 60-16 papers, or records kept by that public utility outside this state 60-17 or, if ordered by the commission, verified copies of the books, 60-18 accounts, papers, or records. 60-19 (b) A public utility that fails or refuses to comply with an 60-20 order or subpoena under this section violates this title. 60-21 (V.A.C.S. Art. 1446c-0, Sec. 1.203(a) (part).) 60-22 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 60-23 SUBCHAPTER A. JUDICIAL REVIEW 60-24 Sec. 15.001. RIGHT TO JUDICIAL REVIEW 60-25 Sec. 15.002. COMMISSION AS DEFENDANT 61-1 Sec. 15.003. COSTS AND ATTORNEY'S FEES 61-2 Sec. 15.004. JUDICIAL STAY OR SUSPENSION 61-3 (Sections 15.005-15.020 reserved for expansion) 61-4 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 61-5 Sec. 15.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE 61-6 Sec. 15.022. CONTEMPT 61-7 Sec. 15.023. ADMINISTRATIVE PENALTY 61-8 Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE 61-9 Sec. 15.025. PAYMENT OF ADMINISTRATIVE PENALTY 61-10 Sec. 15.026. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY 61-11 Sec. 15.027. ADMINISTRATIVE PENALTY COLLECTION; GENERAL 61-12 PROVISIONS 61-13 Sec. 15.028. CIVIL PENALTY AGAINST PUBLIC UTILITY, PAY 61-14 TELEPHONE SERVICE PROVIDER, OR AFFILIATE 61-15 Sec. 15.029. CIVIL PENALTY FOR VIOLATING SECTION 12.055 61-16 OR 12.154 61-17 Sec. 15.030. OFFENSE 61-18 Sec. 15.031. PLACE FOR SUIT 61-19 Sec. 15.032. PENALTIES CUMULATIVE 61-20 Sec. 15.033. DISPOSITION OF FINES AND PENALTIES 61-21 (Sections 15.034-15.050 reserved for expansion) 61-22 SUBCHAPTER C. COMPLAINTS 61-23 Sec. 15.051. COMPLAINT BY AFFECTED PERSON 61-24 Sec. 15.052. COMPLAINT REGARDING RECREATIONAL VEHICLE 61-25 PARK OWNER 62-1 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 62-2 SUBCHAPTER A. JUDICIAL REVIEW 62-3 Sec. 15.001. RIGHT TO JUDICIAL REVIEW. Any party to a 62-4 proceeding before the commission is entitled to judicial review 62-5 under the substantial evidence rule. (V.A.C.S. Art. 1446c-0, Sec. 62-6 1.301 (part).) 62-7 Sec. 15.002. COMMISSION AS DEFENDANT. The commission must 62-8 be a defendant in a proceeding for judicial review. (V.A.C.S. 62-9 Art. 1446c-0, Sec. 1.301 (part).) 62-10 Sec. 15.003. COSTS AND ATTORNEY'S FEES. (a) A party 62-11 represented by counsel who alleges that existing rates are 62-12 excessive or that rates prescribed by the commission are excessive 62-13 and who prevails in a proceeding for review of a commission order 62-14 or decision is entitled in the same action to recover against the 62-15 regulation fund reasonable fees for attorneys and expert witnesses 62-16 and other costs for the party's efforts before the commission and 62-17 the court. 62-18 (b) The court shall set the amount of attorney's fees 62-19 awarded under Subsection (a). 62-20 (c) If a court finds that an action under Section 15.001 or 62-21 this section was groundless and brought in bad faith and for the 62-22 purpose of harassment, the court may award reasonable attorney's 62-23 fees to the defendant public utility. (V.A.C.S. Art. 1446c-0, Sec. 62-24 1.302.) 62-25 Sec. 15.004. JUDICIAL STAY OR SUSPENSION. While an appeal 63-1 of an order, ruling, or decision of a regulatory authority is 63-2 pending, the district court, court of appeals, or supreme court, as 63-3 appropriate, may stay or suspend all or part of the operation of 63-4 the order, ruling, or decision. In granting or refusing a stay or 63-5 suspension, the court shall act in accordance with the practice of 63-6 a court exercising equity jurisdiction. (V.A.C.S. Art. 1446c-0, 63-7 Sec. 1.403.) 63-8 (Sections 15.005-15.020 reserved for expansion) 63-9 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 63-10 Sec. 15.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. 63-11 (a) The attorney general, on the request of the commission, shall 63-12 apply in the name of the commission for a court order under 63-13 Subsection (b) if the commission determines that a public utility 63-14 or other person is: 63-15 (1) engaging in or about to engage in an act that 63-16 violates this title or an order or rule of the commission entered 63-17 or adopted under this title; or 63-18 (2) failing to comply with the requirements of this 63-19 title or a rule or order of the commission. 63-20 (b) A court, in an action under this section, may: 63-21 (1) prohibit the commencement or continuation of an 63-22 act that violates this title or an order or rule of the commission 63-23 entered or adopted under this title; or 63-24 (2) require compliance with a provision of this title 63-25 or an order or rule of the commission. 64-1 (c) The remedy under this section is in addition to any 64-2 other remedy provided under this title. (V.A.C.S. Art. 1446c-0, 64-3 Sec. 1.321.) 64-4 Sec. 15.022. CONTEMPT. The commission may file a court 64-5 action for contempt against a person who: 64-6 (1) fails to comply with a lawful order of the 64-7 commission; 64-8 (2) fails to comply with a subpoena or subpoena duces 64-9 tecum; or 64-10 (3) refuses to testify about a matter on which the 64-11 person may be lawfully interrogated. (V.A.C.S. Art. 1446c-0, Sec. 64-12 1.326.) 64-13 Sec. 15.023. ADMINISTRATIVE PENALTY. (a) The commission 64-14 may impose an administrative penalty against a person regulated 64-15 under this title who violates this title or a rule or order adopted 64-16 under this title. 64-17 (b) The penalty for a violation may be in an amount not to 64-18 exceed $5,000. Each day a violation continues or occurs is a 64-19 separate violation for purposes of imposing a penalty. 64-20 (c) The amount of an administrative penalty shall be based 64-21 on: 64-22 (1) the seriousness of the violation, including: 64-23 (A) the nature, circumstances, extent, and 64-24 gravity of a prohibited act; and 64-25 (B) the hazard or potential hazard created to 65-1 the health, safety, or economic welfare of the public; 65-2 (2) the economic harm to property or the environment 65-3 caused by the violation; 65-4 (3) the history of previous violations; 65-5 (4) the amount necessary to deter future violations; 65-6 (5) efforts to correct the violation; and 65-7 (6) any other matter that justice may require. 65-8 (V.A.C.S. Art. 1446c-0, Secs. 1.3215(a), (b), (c).) 65-9 Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE. 65-10 (a) If the executive director determines that a violation has 65-11 occurred, the executive director may issue to the commission a 65-12 report that states the facts on which the determination is based 65-13 and the executive director's recommendation on the imposition of an 65-14 administrative penalty, including a recommendation on the amount of 65-15 the penalty. 65-16 (b) Not later than the 14th day after the date the report is 65-17 issued, the executive director shall give written notice of the 65-18 report to the person against whom the penalty may be assessed. The 65-19 notice may be given by certified mail. The notice must: 65-20 (1) include a brief summary of the alleged violation; 65-21 (2) state the amount of the recommended penalty; and 65-22 (3) inform the person that the person has a right to a 65-23 hearing on the occurrence of the violation, the amount of the 65-24 penalty, or both the occurrence of the violation and the amount of 65-25 the penalty. 66-1 (c) A penalty may not be assessed under this section if the 66-2 person against whom the penalty may be assessed remedies the 66-3 violation before the 31st day after the date the person receives 66-4 the notice under Subsection (b). A person who claims to have 66-5 remedied an alleged violation has the burden of proving to the 66-6 commission that the alleged violation was remedied and was 66-7 accidental or inadvertent. 66-8 (d) Not later than the 20th day after the date the person 66-9 receives the notice, the person may accept the determination and 66-10 recommended penalty of the executive director in writing or may 66-11 make a written request for a hearing on the occurrence of the 66-12 violation, the amount of the penalty, or both the occurrence of the 66-13 violation and the amount of the penalty. 66-14 (e) If the person accepts the executive director's 66-15 determination and recommended penalty, the commission by order 66-16 shall approve the determination and impose the recommended penalty. 66-17 (f) If the person requests a hearing or fails to timely 66-18 respond to the notice, the executive director shall set a hearing 66-19 and give notice of the hearing to the person. The hearing shall be 66-20 held by an administrative law judge of the State Office of 66-21 Administrative Hearings. The administrative law judge shall make 66-22 findings of fact and conclusions of law and promptly issue to the 66-23 commission a proposal for a decision about the occurrence of the 66-24 violation and the amount of a proposed penalty. Based on the 66-25 findings of fact, conclusions of law, and proposal for a decision, 67-1 the commission by order may find that a violation has occurred and 67-2 impose a penalty or may find that no violation occurred. 67-3 (g) The notice of the commission's order shall be given to 67-4 the person as provided by Chapter 2001, Government Code, and must 67-5 include a statement of the right of the person to judicial review 67-6 of the order. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(d), (e), (f), 67-7 (g), (h), (i).) 67-8 Sec. 15.025. PAYMENT OF ADMINISTRATIVE PENALTY. (a) Not 67-9 later than the 30th day after the date the commission's order 67-10 imposing an administrative penalty is final as provided by Section 67-11 2001.144, Government Code, the person shall: 67-12 (1) pay the amount of the penalty; 67-13 (2) pay the amount of the penalty and file a petition 67-14 for judicial review contesting: 67-15 (A) the occurrence of the violation; 67-16 (B) the amount of the penalty; or 67-17 (C) both the occurrence of the violation and the 67-18 amount of the penalty; or 67-19 (3) without paying the amount of the penalty, file a 67-20 petition for judicial review contesting: 67-21 (A) the occurrence of the violation; 67-22 (B) the amount of the penalty; or 67-23 (C) both the occurrence of the violation and the 67-24 amount of the penalty. 67-25 (b) Not later than the 30th day after the date the 68-1 commission's order is final as provided by Section 2001.144, 68-2 Government Code, a person who acts under Subsection (a)(3) may: 68-3 (1) stay enforcement of the penalty by: 68-4 (A) paying the amount of the penalty to the 68-5 court for placement in an escrow account; or 68-6 (B) giving to the court a supersedeas bond that 68-7 is approved by the court for the amount of the penalty and that is 68-8 effective until all judicial review of the commission's order is 68-9 final; or 68-10 (2) request the court to stay enforcement of the 68-11 penalty by: 68-12 (A) filing with the court a sworn affidavit of 68-13 the person stating that the person is financially unable to pay the 68-14 amount of the penalty and is financially unable to give the 68-15 supersedeas bond; and 68-16 (B) giving a copy of the affidavit to the 68-17 executive director by certified mail. 68-18 (c) The executive director, on receipt of a copy of an 68-19 affidavit under Subsection (b)(2), may file with the court, not 68-20 later than the fifth day after the date the copy is received, a 68-21 contest to the affidavit. The court shall hold a hearing on the 68-22 facts alleged in the affidavit as soon as practicable and shall 68-23 stay the enforcement of the penalty on finding that the alleged 68-24 facts are true. The person who files an affidavit has the burden 68-25 of proving that the person is financially unable to pay the amount 69-1 of the penalty and to give a supersedeas bond. 69-2 (d) If the person does not pay the amount of the penalty and 69-3 the enforcement of the penalty is not stayed, the executive 69-4 director may refer the matter to the attorney general for 69-5 collection of the amount of the penalty. (V.A.C.S. Art. 1446c-0, 69-6 Secs. 1.3215(j), (k), (l), (m).) 69-7 Sec. 15.026. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY. 69-8 (a) Judicial review of a commission order imposing an 69-9 administrative penalty is: 69-10 (1) instituted by filing a petition as provided by 69-11 Subchapter G, Chapter 2001, Government Code; and 69-12 (2) under the substantial evidence rule. 69-13 (b) If the court sustains the occurrence of the violation, 69-14 the court may uphold or reduce the amount of the penalty and order 69-15 the person to pay the full or reduced amount of the penalty. If 69-16 the court does not sustain the occurrence of the violation, the 69-17 court shall order that no penalty is owed. 69-18 (c) When the judgment of the court becomes final, the court 69-19 shall proceed under this subsection. If the person paid the amount 69-20 of the penalty and that amount is reduced or is not upheld by the 69-21 court, the court shall order that the appropriate amount plus 69-22 accrued interest be remitted to the person. The rate of the 69-23 interest is the rate charged on loans to depository institutions by 69-24 the New York Federal Reserve Bank, and the interest shall be paid 69-25 for the period beginning on the date the penalty was paid and 70-1 ending on the date the penalty is remitted. If the person gave a 70-2 supersedeas bond and the amount of the penalty is not upheld by the 70-3 court, the court shall order the release of the bond. If the 70-4 person gave a supersedeas bond and the amount of the penalty is 70-5 reduced, the court shall order the release of the bond after the 70-6 person pays the amount. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(n), 70-7 (o), (p).) 70-8 Sec. 15.027. ADMINISTRATIVE PENALTY COLLECTION; GENERAL 70-9 PROVISIONS. (a) An administrative penalty collected under this 70-10 subchapter shall be sent to the comptroller. 70-11 (b) A proceeding relating to an administrative penalty under 70-12 this subchapter is subject to Chapter 2001, Government Code. 70-13 (c) The executive director may delegate any power or duty 70-14 relating to an administrative penalty given the executive director 70-15 by this subchapter to a person designated by the executive 70-16 director. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(q), (r), (s).) 70-17 Sec. 15.028. CIVIL PENALTY AGAINST PUBLIC UTILITY, PAY 70-18 TELEPHONE SERVICE PROVIDER, OR AFFILIATE. (a) A public utility, 70-19 customer-owned pay telephone service provider under Section 55.178, 70-20 or affiliate is subject to a civil penalty if the utility, 70-21 provider, or affiliate knowingly violates this title, fails to 70-22 perform a duty imposed on it, or fails or refuses to obey an order, 70-23 rule, direction, or requirement of the commission or a decree or 70-24 judgment of a court. 70-25 (b) A civil penalty under this section shall be in an amount 71-1 of not less than $1,000 and not more than $5,000 for each 71-2 violation. 71-3 (c) A public utility or affiliate commits a separate 71-4 violation each day it continues to violate Subsection (a). 71-5 (d) The attorney general shall file in the name of the 71-6 commission a suit on the attorney general's own initiative or at 71-7 the request of the commission to recover the civil penalty under 71-8 this section. (V.A.C.S. Art. 1446c-0, Sec. 1.322.) 71-9 Sec. 15.029. CIVIL PENALTY FOR VIOLATING SECTION 12.055 OR 71-10 12.154. (a) A member of the commission or an officer or director 71-11 of a public utility or affiliate who knowingly violates Section 71-12 12.055 or 12.154 is subject to a civil penalty of $1,000 for each 71-13 violation. 71-14 (b) A person other than a person subject to Subsection (a) 71-15 who knowingly violates Section 12.154 is subject to a civil penalty 71-16 of $500 for each violation. 71-17 (c) A member, officer, or employee of the commission who in 71-18 any action is found by a preponderance of the evidence to have 71-19 violated a provision of Section 12.055 or 12.154 shall be removed 71-20 from the person's office or employment. 71-21 (d) A civil penalty under this section is recoverable in a 71-22 suit filed in the name of the commission by the attorney general on 71-23 the attorney general's own initiative or at the request of the 71-24 commission. (V.A.C.S. Art. 1446c-0, Sec. 1.323.) 71-25 Sec. 15.030. OFFENSE. (a) A person commits an offense if 72-1 the person wilfully and knowingly violates this title. 72-2 (b) This section does not apply to an offense described by 72-3 Section 55.138. 72-4 (c) An offense under this section is a felony of the third 72-5 degree. (V.A.C.S. Art. 1446c-0, Sec. 1.325(a).) 72-6 Sec. 15.031. PLACE FOR SUIT. A suit for an injunction or a 72-7 penalty under this title may be brought in: 72-8 (1) Travis County; 72-9 (2) a county in which the violation is alleged to have 72-10 occurred; or 72-11 (3) a county in which a defendant resides. (V.A.C.S. 72-12 Art. 1446c-0, Sec. 1.328.) 72-13 Sec. 15.032. PENALTIES CUMULATIVE. (a) A penalty that 72-14 accrues under this title is cumulative of any other penalty. 72-15 (b) A suit for the recovery of a penalty does not bar or 72-16 affect the recovery of any other penalty or bar a criminal 72-17 prosecution against any person. (V.A.C.S. Art. 1446c-0, Sec. 72-18 1.325(b).) 72-19 Sec. 15.033. DISPOSITION OF FINES AND PENALTIES. A fine or 72-20 penalty collected under this title, other than a fine or penalty 72-21 collected in a criminal proceeding or a penalty collected under 72-22 Section 15.027(a), shall be paid to the commission. (V.A.C.S. 72-23 Art. 1446c-0, Sec. 1.327.) 72-24 (Sections 15.034-15.050 reserved for expansion) 73-1 SUBCHAPTER C. COMPLAINTS 73-2 Sec. 15.051. COMPLAINT BY AFFECTED PERSON. (a) An affected 73-3 person may complain to the regulatory authority in writing setting 73-4 forth an act or omission by a public utility in violation or 73-5 claimed violation of a law that the regulatory authority has 73-6 jurisdiction to administer or of an order, ordinance, or rule of 73-7 the regulatory authority. 73-8 (b) The commission shall keep for a reasonable period 73-9 information about each complaint filed with the commission. The 73-10 information shall include: 73-11 (1) the date the complaint is received; 73-12 (2) the name of the complainant; 73-13 (3) the subject matter of the complaint; 73-14 (4) a record of each person contacted in relation to 73-15 the complaint; 73-16 (5) a summary of the results of the review or 73-17 investigation of the complaint; and 73-18 (6) if the commission took no action on the complaint, 73-19 an explanation of the reason the complaint was closed without 73-20 action. 73-21 (c) The commission shall keep a file about each written 73-22 complaint filed with the commission that the commission has 73-23 authority to resolve. The commission shall provide to the person 73-24 filing the complaint and to each person or entity complained about 73-25 information concerning the commission's policies and procedures on 74-1 complaint investigation and resolution. The commission, at least 74-2 quarterly and until final disposition of the complaint, shall 74-3 notify the person filing the complaint and each person or entity 74-4 complained about of the status of the complaint unless the notice 74-5 would jeopardize an undercover investigation. (V.A.C.S. 74-6 Art. 1446c-0, Secs. 1.401(a), (b).) 74-7 Sec. 15.052. COMPLAINT REGARDING RECREATIONAL VEHICLE PARK 74-8 OWNER. (a) An affected person may complain to the regulatory 74-9 authority in writing setting forth an act or omission by a 74-10 recreational vehicle park owner who provides metered electric 74-11 service under Subchapter C, Chapter 184, in violation or claimed 74-12 violation of a law that the regulatory authority has jurisdiction 74-13 to administer or of an order, ordinance, or rule of the regulatory 74-14 authority. 74-15 (b) The commission shall keep for a reasonable period an 74-16 information file about each complaint filed with the commission 74-17 relating to a recreational vehicle park owner. 74-18 (c) The commission, at least quarterly and until final 74-19 disposition of the written complaint, shall notify the parties to 74-20 the complaint of the status of the complaint unless the notice 74-21 would jeopardize an undercover investigation. (V.A.C.S. 74-22 Art. 1446c-0, Sec. 1.401(c).) 74-23 CHAPTER 16. COMMISSION FINANCING 74-24 SUBCHAPTER A. ASSESSMENT ON PUBLIC UTILITIES 74-25 Sec. 16.001. ASSESSMENT ON PUBLIC UTILITIES 75-1 Sec. 16.002. PAYMENT DATES 75-2 Sec. 16.003. LATE PAYMENT PENALTY 75-3 Sec. 16.0031. CERTAIN PAYMENTS BASED ON ESTIMATED GROSS 75-4 RECEIPTS 75-5 Sec. 16.004. COLLECTION BY COMPTROLLER 75-6 (Sections 16.005-16.020 reserved for expansion) 75-7 SUBCHAPTER B. GRANTS AND OTHER FINANCIAL ASSISTANCE 75-8 Sec. 16.021. GRANTS OF FEDERAL FUNDS 75-9 (Sections 16.022-16.040 reserved for expansion) 75-10 SUBCHAPTER C. MONEY DISPOSITION, ACCOUNTING, AND BUDGET 75-11 Sec. 16.041. APPLICATION OF STATE FUNDS REFORM ACT 75-12 Sec. 16.042. ACCOUNTING RECORDS 75-13 Sec. 16.043. AUDIT 75-14 Sec. 16.044. APPROVAL OF BUDGET 75-15 CHAPTER 16. COMMISSION FINANCING 75-16 SUBCHAPTER A. ASSESSMENT ON PUBLIC UTILITIES 75-17 Sec. 16.001. ASSESSMENT ON PUBLIC UTILITIES. (a) To defray 75-18 the expenses incurred in the administration of this title, an 75-19 assessment is imposed on each public utility within the 75-20 jurisdiction of the commission that serves the ultimate consumer, 75-21 including each interexchange telecommunications carrier. 75-22 (b) An assessment under this section is equal to one-sixth 75-23 of one percent of the public utility's gross receipts from rates 75-24 charged to the ultimate consumer in this state. 75-25 (c) An interexchange telecommunications carrier that does 76-1 not provide local exchange telephone service may collect the fee 76-2 imposed under this section as an additional item separately stated 76-3 on the customer bill as "utility gross receipts assessment." 76-4 (V.A.C.S. Art. 1446c-0, Secs. 1.351(a), (c).) 76-5 Sec. 16.002. PAYMENT DATES. (a) The assessment is due 76-6 August 15. 76-7 (b) A public utility may instead make quarterly payments due 76-8 August 15, November 15, February 15, and May 15. (V.A.C.S. 76-9 Art. 1446c-0, Sec. 1.352(a).) 76-10 Sec. 16.003. LATE PAYMENT PENALTY. (a) An additional fee 76-11 equal to 10 percent of the amount due shall be assessed for any 76-12 late payment of an assessment required under this subchapter. 76-13 (b) An assessment delinquent for more than 30 days accrues 76-14 interest at an annual rate of 12 percent on the amount of the 76-15 assessment and penalty due. (V.A.C.S. Art. 1446c-0, Sec. 76-16 1.352(b).) 76-17 Sec. 16.0031. CERTAIN PAYMENTS BASED ON ESTIMATED GROSS 76-18 RECEIPTS. (a) Notwithstanding Section 16.002, the assessments are 76-19 due as provided by this section and are computed on a public 76-20 utility's estimate of its gross receipts. 76-21 (b) For the assessment otherwise due August 15, 1995, 50 76-22 percent of the assessment shall be paid by August 15, 1994, and 50 76-23 percent shall be paid by February 15, 1995. 76-24 (c) For the assessment otherwise due August 15, 1996, 50 76-25 percent of the assessment shall be paid by August 15, 1995, and 50 77-1 percent shall be paid by February 15, 1996. 77-2 (d) For the assessment otherwise due August 15, 1997, 50 77-3 percent of the assessment shall be paid by August 15, 1996, and 50 77-4 percent shall be paid by February 15, 1997. 77-5 (e) For the assessment otherwise due August 15, 1998, 50 77-6 percent of the assessment shall be paid by August 15, 1997, and 50 77-7 percent shall be paid by August 15, 1998. 77-8 (f) An amount that is underpaid for an assessment due August 77-9 15, 1995, August 15, 1996, or August 15, 1997, shall be paid by 77-10 those respective dates. An assessment amount that is overpaid 77-11 shall be credited against a subsequent assessment. 77-12 (g) This section expires September 1, 1998. (V.A.C.S. 77-13 Art. 1446c-0, Sec. 1.353.) 77-14 Sec. 16.004. COLLECTION BY COMPTROLLER. The comptroller 77-15 shall collect the assessment and any penalty or interest due under 77-16 this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 1.354(a).) 77-17 (Sections 16.005-16.020 reserved for expansion) 77-18 SUBCHAPTER B. GRANTS AND OTHER FINANCIAL ASSISTANCE 77-19 Sec. 16.021. GRANTS OF FEDERAL FUNDS. (a) The commission 77-20 may apply to an appropriate agency or officer of the United States 77-21 to receive and spend federal funds available by grant or other 77-22 similar form of financial assistance. 77-23 (b) This section does not impair the ability of the 77-24 commission to contract with or receive assistance from a state, 77-25 local, or other authorized source of funds. (V.A.C.S. 78-1 Art. 1446c-0, Sec. 1.355(a).) 78-2 (Sections 16.022-16.040 reserved for expansion) 78-3 SUBCHAPTER C. MONEY DISPOSITION, ACCOUNTING, AND BUDGET 78-4 Sec. 16.041. APPLICATION OF STATE FUNDS REFORM ACT. Money 78-5 paid to the commission or to the office under this title is subject 78-6 to Subchapter F, Chapter 404, Government Code. (V.A.C.S. 78-7 Art. 1446c-0, Sec. 1.354(b).) 78-8 Sec. 16.042. ACCOUNTING RECORDS. The commission shall keep 78-9 the accounting records required by the comptroller. (V.A.C.S. 78-10 Art. 1446c-0, Sec. 1.356 (part).) 78-11 Sec. 16.043. AUDIT. The financial transactions of the 78-12 commission are subject to audit by the state auditor under Chapter 78-13 321, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.356 (part).) 78-14 Sec. 16.044. APPROVAL OF BUDGET. The commission budget is 78-15 subject to legislative approval as part of the General 78-16 Appropriations Act. (V.A.C.S. Art. 1446c-0, Sec. 1.357.) 78-17 (Chapters 17-30 reserved for expansion) 78-18 SUBTITLE B. ELECTRIC UTILITIES 78-19 CHAPTER 31. GENERAL PROVISIONS 78-20 Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF 78-21 SUBTITLE 78-22 Sec. 31.002. DEFINITIONS 78-23 Sec. 31.003. REPORT ON SCOPE OF COMPETITION 78-24 Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES 79-1 SUBTITLE B. ELECTRIC UTILITIES 79-2 CHAPTER 31. GENERAL PROVISIONS 79-3 Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE. 79-4 (a) This subtitle is enacted to protect the public interest 79-5 inherent in the rates and services of electric utilities. The 79-6 purpose of this subtitle is to establish a comprehensive and 79-7 adequate regulatory system for electric utilities to assure rates, 79-8 operations, and services that are just and reasonable to the 79-9 consumers and to the electric utilities. 79-10 (b) Electric utilities are by definition monopolies in many 79-11 of the services provided and areas they serve. As a result, the 79-12 normal forces of competition that regulate prices in a free 79-13 enterprise society do not always operate. Public agencies regulate 79-14 electric utility rates, operations, and services, except as 79-15 otherwise provided by this subtitle. 79-16 (c) The wholesale electric industry, through federal 79-17 legislative, judicial, and administrative actions, is becoming a 79-18 more competitive industry that does not lend itself to traditional 79-19 electric utility regulatory rules, policies, and principles. As a 79-20 result, the public interest requires that rules, policies, and 79-21 principles be formulated and applied to protect the public interest 79-22 in a more competitive marketplace. The development of a 79-23 competitive wholesale electric market that allows for increased 79-24 participation by electric utilities and certain nonutilities is in 79-25 the public interest. (V.A.C.S. Art. 1446c-0, Sec. 2.001(a).) 80-1 Sec. 31.002. DEFINITIONS. In this subtitle: 80-2 (1) "Electric utility" means a person or river 80-3 authority that owns or operates for compensation in this state 80-4 equipment or facilities to produce, generate, transmit, distribute, 80-5 sell, or furnish electricity in this state. The term includes a 80-6 lessee, trustee, or receiver of an electric utility and a 80-7 recreational vehicle park owner who does not comply with Subchapter 80-8 C, Chapter 184, with regard to the metered sale of electricity at 80-9 the recreational vehicle park. The term does not include: 80-10 (A) a municipal corporation; 80-11 (B) a qualifying facility; 80-12 (C) an exempt wholesale generator; 80-13 (D) a power marketer; 80-14 (E) a corporation described by Section 32.053 to 80-15 the extent the corporation sells electricity exclusively at 80-16 wholesale and not to the ultimate consumer; or 80-17 (F) a person not otherwise an electric utility 80-18 who: 80-19 (i) furnishes an electric service or 80-20 commodity only to itself, its employees, or its tenants as an 80-21 incident of employment or tenancy, if that service or commodity is 80-22 not resold to or used by others; 80-23 (ii) owns or operates in this state 80-24 equipment or facilities to produce, generate, transmit, distribute, 80-25 sell, or furnish electric energy to an electric utility, if the 81-1 equipment or facilities are used primarily to produce and generate 81-2 electric energy for consumption by that person; or 81-3 (iii) owns or operates in this state a 81-4 recreational vehicle park that provides metered electric service in 81-5 accordance with Subchapter C, Chapter 184. 81-6 (2) "Exempt wholesale generator" means a person who is 81-7 engaged directly or indirectly through one or more affiliates 81-8 exclusively in the business of owning or operating all or part of a 81-9 facility for generating electric energy and selling electric energy 81-10 at wholesale and who: 81-11 (A) does not own a facility for the transmission 81-12 of electricity, other than an essential interconnecting 81-13 transmission facility necessary to effect a sale of electric energy 81-14 at wholesale; and 81-15 (B) has: 81-16 (i) applied to the Federal Energy 81-17 Regulatory Commission for a determination under 15 U.S.C. Section 81-18 79z-5a; or 81-19 (ii) registered as an exempt wholesale 81-20 generator as required by Section 35.032. 81-21 (3) "Power marketer" means a person who: 81-22 (A) becomes an owner of electric energy in this 81-23 state for the purpose of selling the electric energy at wholesale; 81-24 (B) does not own generation, transmission, or 81-25 distribution facilities in this state; 82-1 (C) does not have a certificated service area; 82-2 and 82-3 (D) has: 82-4 (i) been granted authority by the Federal 82-5 Energy Regulatory Commission to sell electric energy at 82-6 market-based rates; or 82-7 (ii) registered as a power marketer under 82-8 Section 35.032. 82-9 (4) "Qualifying cogenerator" and "qualifying small 82-10 power producer" have the meanings assigned those terms by 16 U.S.C. 82-11 Sections 796(18)(C) and 796(17)(D). 82-12 (5) "Qualifying facility" means a qualifying 82-13 cogenerator or qualifying small power producer. 82-14 (6) "Rate" includes a compensation, tariff, charge, 82-15 fare, toll, rental, or classification that is directly or 82-16 indirectly demanded, observed, charged, or collected by an electric 82-17 utility for a service, product, or commodity described in the 82-18 definition of electric utility in this section and a rule, 82-19 practice, or contract affecting the compensation, tariff, charge, 82-20 fare, toll, rental, or classification that must be approved by a 82-21 regulatory authority. 82-22 (7) "Transmission service" includes construction or 82-23 enlargement of facilities, transmission over distribution 82-24 facilities, control area services, scheduling resources, regulation 82-25 services, reactive power support, voltage control, provision of 83-1 operating reserves, and any other associated electrical service the 83-2 commission determines appropriate. (V.A.C.S. Art. 1446c-0, Secs. 83-3 2.0011, 2.0012(a) (part).) 83-4 Sec. 31.003. REPORT ON SCOPE OF COMPETITION. (a) Before 83-5 January 15 of each odd-numbered year, the commission shall report 83-6 to the legislature on the scope of competition in electric markets 83-7 and the effect of competition and industry restructuring on 83-8 customers in both competitive and noncompetitive markets. 83-9 (b) The report under this section must include: 83-10 (1) an assessment of the effect of competition on the 83-11 rates and availability of electric services for residential and 83-12 small commercial customers; 83-13 (2) a summary of commission action over the preceding 83-14 two years that reflects changes in the scope of competition in 83-15 regulated electric markets; and 83-16 (3) recommendations to the legislature for legislation 83-17 that the commission finds appropriate to promote the public 83-18 interest in the context of a partially competitive electric market. 83-19 (V.A.C.S. Art. 1446c-0, Sec. 2.003.) 83-20 Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES. (a) The 83-21 commission may serve as a resource center to assist school 83-22 districts in developing energy-efficient facilities. 83-23 (b) As a resource center under this section, the commission 83-24 may: 83-25 (1) present programs to school districts relating to 84-1 managing energy, training school-plant operators, and designing 84-2 energy-efficient buildings; 84-3 (2) provide school districts with technical assistance 84-4 in managing energy; 84-5 (3) collect and distribute information relating to 84-6 energy management in school facilities; and 84-7 (4) offer energy resource workshops to educators and 84-8 make available to educators a film library on energy-related 84-9 matters and energy education lesson packages. (V.A.C.S. 84-10 Art. 1446c-0, Sec. 2.002.) 84-11 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION 84-12 AND OTHER REGULATORY AUTHORITIES 84-13 SUBCHAPTER A. COMMISSION JURISDICTION 84-14 Sec. 32.001. COMMISSION JURISDICTION 84-15 Sec. 32.002. LIMITATION ON COMMISSION JURISDICTION 84-16 Sec. 32.003. EXEMPT AREA JURISDICTION 84-17 Sec. 32.004. ASSISTANCE TO MUNICIPALITY 84-18 (Sections 32.005-32.050 reserved for expansion) 84-19 SUBCHAPTER B. EXEMPTIONS FROM COMMISSION JURISDICTION 84-20 Sec. 32.051. EXEMPTION OF RIVER AUTHORITY FROM WHOLESALE 84-21 RATE REGULATION 84-22 Sec. 32.052. ABILITY OF CERTAIN RIVER AUTHORITIES TO 84-23 CONSTRUCT IMPROVEMENTS 84-24 Sec. 32.053. ABILITY OF CERTAIN RIVER AUTHORITY 84-25 AFFILIATES TO CONSTRUCT IMPROVEMENTS 85-1 Sec. 32.054. RESTRICTIONS ON AUTHORITY OF CORPORATIONS 85-2 OR RIVER AUTHORITY 85-3 (Sections 32.055-32.100 reserved for expansion) 85-4 SUBCHAPTER C. REQUIRED REPORTS AND FILINGS 85-5 Sec. 32.101. TARIFF FILINGS 85-6 Sec. 32.102. DEPRECIATION ACCOUNT 85-7 Sec. 32.103. ACCOUNTS OF PROFITS AND LOSSES 85-8 Sec. 32.104. REPORT OF CERTAIN EXPENSES 85-9 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION 85-10 AND OTHER REGULATORY AUTHORITIES 85-11 SUBCHAPTER A. COMMISSION JURISDICTION 85-12 Sec. 32.001. COMMISSION JURISDICTION. (a) Except as 85-13 provided by Section 32.002, the commission has exclusive original 85-14 jurisdiction over the rates, operations, and services of an 85-15 electric utility in: 85-16 (1) areas outside a municipality; and 85-17 (2) areas inside a municipality that surrenders its 85-18 jurisdiction to the commission under Section 33.002. 85-19 (b) The commission has exclusive appellate jurisdiction to 85-20 review an order or ordinance of a municipality exercising exclusive 85-21 original jurisdiction under this subtitle. (V.A.C.S. Art. 1446c-0, 85-22 Secs. 2.101(d), (e).) 85-23 Sec. 32.002. LIMITATION ON COMMISSION JURISDICTION. Except 85-24 as otherwise provided by this title, this subtitle does not 85-25 authorize the commission to: 86-1 (1) regulate or supervise a rate or service of a 86-2 municipally owned utility; or 86-3 (2) affect the jurisdiction, power, or duty of a 86-4 municipality exercising exclusive original jurisdiction in that 86-5 municipality's regulation and supervision of an electric utility in 86-6 the municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.102.) 86-7 Sec. 32.003. EXEMPT AREA JURISDICTION. Notwithstanding an 86-8 election under Subchapter A, Chapter 33, by a municipality on the 86-9 issue of surrendering its jurisdiction, the commission may: 86-10 (1) consider an electric utility's revenues and return 86-11 on investment in an area exempt from commission regulation in 86-12 establishing rates and charges in an area that is not exempt from 86-13 commission regulation; and 86-14 (2) exercise necessary powers to give effect to an 86-15 order under this title for the benefit of an area that is not 86-16 exempt from commission regulation. (V.A.C.S. Art. 1446c-0, Sec. 86-17 2.104(c) (part).) 86-18 Sec. 32.004. ASSISTANCE TO MUNICIPALITY. On request of a 86-19 municipality, the commission may advise and assist the municipality 86-20 with respect to a question or proceeding arising under this title. 86-21 Assistance provided by the commission may include aid to a 86-22 municipality on a matter pending before the commission, a court, or 86-23 the municipality's governing body, such as making a staff member 86-24 available as a witness or otherwise providing evidence to the 86-25 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.107.) 87-1 (Sections 32.005-32.050 reserved for expansion) 87-2 SUBCHAPTER B. EXEMPTIONS FROM COMMISSION JURISDICTION 87-3 Sec. 32.051. EXEMPTION OF RIVER AUTHORITY FROM WHOLESALE 87-4 RATE REGULATION. Notwithstanding any other provision of this 87-5 title, the commission may not directly or indirectly regulate 87-6 revenue requirements, rates, fuel costs, fuel charges, or fuel 87-7 acquisitions that are related to the generation and sale of 87-8 electricity at wholesale, and not to ultimate consumers, by a river 87-9 authority operating a steam generating plant. (V.A.C.S. 87-10 Art. 1446c-0, Sec. 2.0012(a) (part).) 87-11 Sec. 32.052. ABILITY OF CERTAIN RIVER AUTHORITIES TO 87-12 CONSTRUCT IMPROVEMENTS. A river authority operating a steam 87-13 generating plant may acquire, finance, construct, rebuild, repower, 87-14 and use new or existing power plants, equipment, transmission 87-15 lines, or other assets to sell electricity exclusively at wholesale 87-16 to: 87-17 (1) a purchaser in San Saba, Llano, Burnet, Travis, 87-18 Bastrop, Blanco, Colorado, or Fayette County; or 87-19 (2) a purchaser in an area served by the river 87-20 authority on January 1, 1975. (V.A.C.S. Art. 1446c-0, Sec. 87-21 2.0012(b).) 87-22 Sec. 32.053. ABILITY OF CERTAIN RIVER AUTHORITY AFFILIATES 87-23 TO CONSTRUCT IMPROVEMENTS. (a) This section applies only to a 87-24 corporation that: 87-25 (1) sells electricity exclusively at wholesale, and 88-1 not to ultimate consumers; 88-2 (2) is authorized by Chapter 245, Acts of the 67th 88-3 Legislature, Regular Session, 1981 (Article 717p, Vernon's Texas 88-4 Civil Statutes); and 88-5 (3) acts on behalf of a river authority. 88-6 (b) Notwithstanding a river authority's enabling legislation 88-7 or Chapter 245, Acts of the 67th Legislature, Regular Session, 1981 88-8 (Article 717p, Vernon's Texas Civil Statutes), a corporation may: 88-9 (1) acquire, finance, construct, rebuild, repower, 88-10 operate, or sell a facility directly related to the generation of 88-11 electricity; and 88-12 (2) sell, at wholesale only, the output of the 88-13 facility to a purchaser, other than an ultimate consumer, at any 88-14 location in this state. 88-15 (c) This subchapter does not prevent a corporation from 88-16 purchasing transmission and related services from a river 88-17 authority. 88-18 (d) Except as provided by this section, the development, 88-19 financing, ownership, and operation of a facility by a corporation 88-20 is subject to all other applicable laws. 88-21 (e) The property, gross receipts, and income of a 88-22 corporation acting on behalf of a river authority under this 88-23 section are subject to, and the corporation shall pay, taxes and 88-24 assessments of the federal government, this state, a political 88-25 subdivision of this state, or a taxing district of this state on 89-1 the same basis as an exempt wholesale generator. 89-2 (f) The proceeds from the sale of bonds or other obligations 89-3 the interest on which is exempt from taxation and that are issued 89-4 by a corporation or river authority subject to this section, other 89-5 than a bond or obligation available to an investor-owned utility or 89-6 exempt wholesale generator, may not be used, and may not have been 89-7 used, to finance the construction or acquisition of or the 89-8 rebuilding or repowering of a facility for the generation of 89-9 electricity by the corporation. (V.A.C.S. Art. 1446c-0, Secs. 89-10 2.0012(a) (part), (c).) 89-11 Sec. 32.054. RESTRICTIONS ON AUTHORITY OF CORPORATIONS OR 89-12 RIVER AUTHORITY. (a) This subchapter does not authorize a river 89-13 authority to acquire, install, construct, make additions to, or 89-14 operate steam generating plants having an aggregate capacity 89-15 greater than 5,000 megawatts to serve a purchaser in the area 89-16 served by the river authority on January 1, 1975. 89-17 (b) A river authority or a corporation acting on behalf of a 89-18 river authority under this subchapter may provide retail service 89-19 only to a retail customer served by the river authority or 89-20 corporation on September 1, 1995. 89-21 (c) Except as provided by this subchapter, this subchapter 89-22 does not limit a power granted a river authority in its enabling 89-23 legislation or other applicable law. (V.A.C.S. Art. 1446c-0, Secs. 89-24 2.0012(d), (e).) 89-25 (Sections 32.055-32.100 reserved for expansion) 90-1 SUBCHAPTER C. REQUIRED REPORTS AND FILINGS 90-2 Sec. 32.101. TARIFF FILINGS. (a) An electric utility shall 90-3 file with each regulatory authority a tariff showing each rate that 90-4 is: 90-5 (1) subject to the regulatory authority's original or 90-6 appellate jurisdiction; and 90-7 (2) in effect for a utility service, product, or 90-8 commodity offered by the utility. 90-9 (b) The electric utility shall file as a part of the tariff 90-10 required under Subsection (a) each rule that relates to or affects: 90-11 (1) a rate of the utility; or 90-12 (2) a utility service, product, or commodity furnished 90-13 by the electric utility. 90-14 (c) The commission shall consider customer names and 90-15 addresses, prices, individual customer contracts, and expected load 90-16 and usage data as highly sensitive trade secrets. That information 90-17 is not subject to disclosure under Chapter 552, Government Code. 90-18 (V.A.C.S. Art. 1446c-0, Sec. 2.154.) 90-19 Sec. 32.102. DEPRECIATION ACCOUNT. The commission shall 90-20 require each electric or municipally owned utility to carry a 90-21 proper and adequate depreciation account in accordance with: 90-22 (1) the rates and methods prescribed by the commission 90-23 under Section 36.056; and 90-24 (2) any other rule the commission adopts. (V.A.C.S. 90-25 Art. 1446c-0, Secs. 2.151(a) (part), (d).) 91-1 Sec. 32.103. ACCOUNTS OF PROFITS AND LOSSES. An electric or 91-2 municipally owned utility shall keep separate accounts showing 91-3 profits or losses from the sale or lease of merchandise, including 91-4 an appliance, a fixture, or equipment. (V.A.C.S. Art. 1446c-0, 91-5 Secs. 2.151(b) (part), (d).) 91-6 Sec. 32.104. REPORT OF CERTAIN EXPENSES. A regulatory 91-7 authority may require an electric utility to annually report the 91-8 utility's expenditures for: 91-9 (1) business gifts and entertainment; and 91-10 (2) advertising or public relations, including 91-11 expenditures for institutional and consumption-inducing purposes. 91-12 (V.A.C.S. Art. 1446c-0, Sec. 2.152(a).) 91-13 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 91-14 SUBCHAPTER A. GENERAL PROVISIONS 91-15 Sec. 33.001. MUNICIPAL JURISDICTION 91-16 Sec. 33.002. SURRENDER OF MUNICIPAL JURISDICTION TO 91-17 COMMISSION 91-18 Sec. 33.003. REINSTATEMENT OF MUNICIPAL JURISDICTION 91-19 Sec. 33.004. AREA EXEMPT FROM COMMISSION REGULATION 91-20 Sec. 33.005. EXEMPT AREA REPORTING 91-21 Sec. 33.006. COMMISSION POWERS IN NONEXEMPT AREAS 91-22 Sec. 33.007. ALLOWABLE CHARGES 91-23 (Sections 33.008-33.020 reserved for expansion) 91-24 SUBCHAPTER B. RATE DETERMINATION 91-25 Sec. 33.021. RATE DETERMINATION 92-1 Sec. 33.022. CONSIDERATION OF REVENUES AND RETURN 92-2 FROM NONEXEMPT AREA 92-3 Sec. 33.023. RATEMAKING PROCEEDINGS 92-4 Sec. 33.024. STATEMENT OF INTENT 92-5 Sec. 33.025. MUNICIPAL STANDING 92-6 Sec. 33.026. JUDICIAL REVIEW 92-7 (Sections 33.027-33.050 reserved for expansion) 92-8 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 92-9 Sec. 33.051. APPEAL BY PARTY 92-10 Sec. 33.052. APPEAL BY RESIDENTS 92-11 Sec. 33.053. FILING OF APPEAL 92-12 Sec. 33.054. HEARING AND ORDER 92-13 Sec. 33.055. APPLICABILITY OF RATES 92-14 (Sections 33.056-33.100 reserved for expansion) 92-15 SUBCHAPTER D. PROVISIONS APPLICABLE TO APPEAL 92-16 BY RATEPAYERS OUTSIDE MUNICIPALITY 92-17 Sec. 33.101. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY 92-18 Sec. 33.102. IDENTIFICATION OF RATEPAYERS OUTSIDE 92-19 MUNICIPALITY 92-20 Sec. 33.103. FILING OF APPEAL 92-21 Sec. 33.104. RATE APPLICATION 92-22 (Sections 33.105-33.120 reserved for expansion) 92-23 SUBCHAPTER E. RATE DETERMINATION AND APPEAL OF ORDERS 92-24 OF CERTAIN MUNICIPAL UTILITIES 92-25 Sec. 33.121. APPLICATION OF COMMISSION REVIEW 93-1 Sec. 33.122. REVIEW OF CERTAIN RATE DECISIONS 93-2 Sec. 33.123. REVIEW OF CERTAIN DECISIONS FOR RATES 93-3 CHARGED OUTSIDE MUNICIPALITY 93-4 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 93-5 SUBCHAPTER A. GENERAL PROVISIONS 93-6 Sec. 33.001. MUNICIPAL JURISDICTION. To provide fair, just, 93-7 and reasonable rates and adequate and efficient services, the 93-8 governing body of a municipality has exclusive original 93-9 jurisdiction over the rates, operations, and services of an 93-10 electric utility in areas in the municipality, subject to the 93-11 limitations imposed by this title. (V.A.C.S. Art. 1446c-0, Sec. 93-12 2.101(a).) 93-13 Sec. 33.002. SURRENDER OF MUNICIPAL JURISDICTION TO 93-14 COMMISSION. (a) A municipality shall regulate all local utility 93-15 service in the municipality until the commission assumes 93-16 jurisdiction over a local utility under this subtitle. 93-17 (b) A municipality may elect to have the commission exercise 93-18 exclusive original jurisdiction over electric utility rates, 93-19 operations, and services in the municipality by ordinance or by 93-20 submitting the question of the surrender of its jurisdiction to the 93-21 voters at a municipal election. 93-22 (c) The governing body of a municipality shall submit at a 93-23 municipal election the question of surrendering its jurisdiction to 93-24 the commission if the governing body receives a petition signed by 93-25 a number of qualified voters of the municipality equal to at least 94-1 the lesser of 20,000 or 10 percent of the number of voters voting 94-2 in the last preceding general election in the municipality. 94-3 (V.A.C.S. Art. 1446c-0, Secs. 2.101(b), 2.104(a).) 94-4 Sec. 33.003. REINSTATEMENT OF MUNICIPAL JURISDICTION. 94-5 (a) A municipality that surrenders its jurisdiction to the 94-6 commission may at any time reinstate its jurisdiction by a vote of 94-7 the electorate. 94-8 (b) A municipality that reinstates its jurisdiction under 94-9 Subsection (a) may not surrender that jurisdiction before the fifth 94-10 anniversary of the date of the election in which the municipality 94-11 elected to reinstate its jurisdiction. 94-12 (c) A municipality may not, by a vote of the electorate, 94-13 reinstate the jurisdiction of the governing body during the time a 94-14 case involving the municipality is pending before the commission. 94-15 (V.A.C.S. Art. 1446c-0, Sec. 2.101(c).) 94-16 Sec. 33.004. AREA EXEMPT FROM COMMISSION REGULATION. 94-17 (a) If a municipality does not surrender its jurisdiction, local 94-18 utility service in the municipality is exempt from regulation by 94-19 the commission under this subtitle to the extent that this subtitle 94-20 applies to local service. 94-21 (b) The municipality may exercise in the exempt area the 94-22 same regulatory powers under the same standards and rules as the 94-23 commission or under other consistent standards and rules. 94-24 (V.A.C.S. Art. 1446c-0, Sec. 2.104(b).) 94-25 Sec. 33.005. EXEMPT AREA REPORTING. (a) An electric 95-1 utility serving an area exempt from commission regulation is 95-2 subject to the reporting requirements of this title. 95-3 (b) A report must be filed with: 95-4 (1) the governing body of the municipality; and 95-5 (2) the commission. (V.A.C.S. Art. 1446c-0, Sec. 95-6 2.104(d).) 95-7 Sec. 33.006. COMMISSION POWERS IN NONEXEMPT AREAS. This 95-8 subchapter does not limit the duty and power of the commission to 95-9 regulate the service and rates of a municipally regulated electric 95-10 utility for service provided to another area in this state. 95-11 (V.A.C.S. Art. 1446c-0, Sec. 2.104(e).) 95-12 Sec. 33.007. ALLOWABLE CHARGES. A municipality that 95-13 performs a regulatory function under this title may make each 95-14 charge that is authorized by: 95-15 (1) this title; or 95-16 (2) the applicable franchise agreement. (V.A.C.S. 95-17 Art. 1446c-0, Sec. 2.103.) 95-18 (Sections 33.008-33.020 reserved for expansion) 95-19 SUBCHAPTER B. RATE DETERMINATION 95-20 Sec. 33.021. RATE DETERMINATION. (a) A municipality 95-21 regulating an electric utility under this subtitle shall require 95-22 the utility to submit information as necessary to make a reasonable 95-23 determination of rate base, expenses, investment, and rate of 95-24 return in the municipality. 95-25 (b) A municipality shall make a determination under 96-1 Subsection (a) using the procedures and requirements prescribed by 96-2 this title. 96-3 (c) A municipality shall retain personnel necessary to make 96-4 the determination of reasonable rates. (V.A.C.S. Art. 1446c-0, 96-5 Secs. 2.105(a), (b).) 96-6 Sec. 33.022. CONSIDERATION OF REVENUES AND RETURN FROM 96-7 NONEXEMPT AREA. In establishing rates and charges in an area 96-8 exempt from commission regulation, the governing body may consider 96-9 an electric utility's revenues and return on investment in an area 96-10 that is not exempt from commission regulation. (V.A.C.S. 96-11 Art. 1446c-0, Sec. 2.104(c) (part).) 96-12 Sec. 33.023. RATEMAKING PROCEEDINGS. (a) The governing 96-13 body of a municipality participating in or conducting a ratemaking 96-14 proceeding may engage rate consultants, accountants, auditors, 96-15 attorneys, and engineers to: 96-16 (1) conduct investigations, present evidence, and 96-17 advise and represent the governing body; and 96-18 (2) assist the governing body with litigation in an 96-19 electric utility ratemaking proceeding before the governing body, a 96-20 regulatory authority, or a court. 96-21 (b) The electric utility in the ratemaking proceeding shall 96-22 reimburse the governing body of the municipality for the reasonable 96-23 cost of the services of a person engaged under Subsection (a) to 96-24 the extent the applicable regulatory authority determines is 96-25 reasonable. (V.A.C.S. Art. 1446c-0, Sec. 2.106(a).) 97-1 Sec. 33.024. STATEMENT OF INTENT. (a) Not later than the 97-2 31st day before the date an electric utility files a statement of 97-3 intent under Section 36.102, the electric utility shall provide 97-4 notice of intent to file the statement to each municipality having 97-5 original jurisdiction. 97-6 (b) Not later than the 30th day after the date a 97-7 municipality receives notice under Subsection (a), the municipality 97-8 may request that the electric utility file with the municipality a 97-9 statement of intent in accordance with Section 36.102. 97-10 (c) If requested by a municipality under Subsection (b), the 97-11 electric utility shall file the statement of intent with the 97-12 municipality at the same time the statement is filed with the 97-13 commission. (V.A.C.S. Art. 1446c-0, Sec. 2.105(c).) 97-14 Sec. 33.025. MUNICIPAL STANDING. (a) A municipality has 97-15 standing in each case before the commission that relates to an 97-16 electric utility providing service in the municipality. 97-17 (b) A municipality's standing is subject to the right of the 97-18 commission to: 97-19 (1) determine standing in a case involving a retail 97-20 service area dispute that involves two or more electric utilities; 97-21 and 97-22 (2) consolidate municipalities on an issue of common 97-23 interest. (V.A.C.S. Art. 1446c-0, Sec. 2.106(b) (part).) 97-24 Sec. 33.026. JUDICIAL REVIEW. A municipality is entitled to 97-25 judicial review of a commission order relating to an electric 98-1 utility providing services in the municipality as provided by 98-2 Section 15.001. (V.A.C.S. Art. 1446c-0, Sec. 2.106(b) (part).) 98-3 (Sections 33.027-33.050 reserved for expansion) 98-4 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 98-5 Sec. 33.051. APPEAL BY PARTY. A party to a rate proceeding 98-6 before a municipality's governing body may appeal the governing 98-7 body's decision to the commission. (V.A.C.S. Art. 1446c-0, Sec. 98-8 2.108(a).) 98-9 Sec. 33.052. APPEAL BY RESIDENTS. The residents of a 98-10 municipality may appeal to the commission the decision of the 98-11 municipality's governing body in a rate proceeding by filing with 98-12 the commission a petition for review signed by a number of 98-13 qualified voters of the municipality equal to at least the lesser 98-14 of 20,000 or 10 percent of the qualified voters of the 98-15 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.108(b).) 98-16 Sec. 33.053. FILING OF APPEAL. (a) An appeal under this 98-17 subchapter is initiated by filing a petition for review with the 98-18 commission and serving a copy of the petition on each party to the 98-19 original rate proceeding. 98-20 (b) The appeal must be initiated not later than the 30th day 98-21 after the date of the final decision by the governing body of the 98-22 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.108(f).) 98-23 Sec. 33.054. HEARING AND ORDER. (a) An appeal under this 98-24 subchapter, Subchapter D, or Subchapter E is de novo and based on 98-25 the test year presented to the municipality. 99-1 (b) The commission shall enter a final order establishing 99-2 the rates the commission determines the municipality should have 99-3 set in the ordinance to which the appeal applies. 99-4 (c) In a proceeding involving the rates of a municipally 99-5 owned utility, the commission must enter a final order on or before 99-6 the 185th day after the date the appeal is perfected or the utility 99-7 files a rate application as prescribed by Section 33.104. 99-8 (d) In a proceeding in which a rate change is concurrently 99-9 sought from the commission under the commission's original 99-10 jurisdiction, the commission must enter a final order on or before 99-11 the later of the 120th day after the date the appeal is perfected 99-12 or the date final action must be taken in the proceeding filed with 99-13 the commission. 99-14 (e) In a proceeding not governed by Subsection (c) or (d), 99-15 the commission must enter a final order on or before the 185th day 99-16 after the date the appeal is perfected. 99-17 (f) If the commission fails to enter a final order before 99-18 the expiration of the applicable period prescribed by Subsections 99-19 (c)-(e), the rates proposed by the utility are considered to be 99-20 approved by the commission and take effect on the expiration of 99-21 that period. (V.A.C.S. Art. 1446c-0, Sec. 2.108(g) (part).) 99-22 Sec. 33.055. APPLICABILITY OF RATES. (a) Temporary or 99-23 permanent rates set by the commission are prospective and observed 99-24 from the date of the applicable commission order, except an interim 99-25 rate order necessary to effect uniform system-wide rates or to 100-1 provide an electric utility the opportunity to avoid confiscation 100-2 during the period beginning on the date a petition for review is 100-3 filed with the commission and ending on the date of a final order 100-4 establishing rates. 100-5 (b) The commission shall order interim rates on a prima 100-6 facie showing by the electric utility that it has experienced 100-7 confiscation during that period. The electric utility shall refund 100-8 or credit against future bills: 100-9 (1) money collected under the interim rates in excess 100-10 of the rate finally ordered; and 100-11 (2) interest on that money, at the current rate as 100-12 determined by the commission. 100-13 (c) In this section, "confiscation" includes negative cash 100-14 flow experienced by an electric utility at any time a rate case 100-15 proceeding is pending. (V.A.C.S. Art. 1446c-0, Sec. 2.108(g) 100-16 (part).) 100-17 (Sections 33.056-33.100 reserved for expansion) 100-18 SUBCHAPTER D. PROVISIONS APPLICABLE TO APPEAL 100-19 BY RATEPAYERS OUTSIDE MUNICIPALITY 100-20 Sec. 33.101. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY. 100-21 (a) The ratepayers of a municipally owned utility who are outside 100-22 the municipality may appeal to the commission an action of the 100-23 governing body of the municipality affecting the municipally owned 100-24 utility's rates by filing with the commission a petition for review 100-25 signed by a number of ratepayers served by the utility outside the 101-1 municipality equal to at least the lesser of 10,000 or five percent 101-2 of those ratepayers. 101-3 (b) A petition for review is properly signed if signed by a 101-4 person or the spouse of a person in whose name residential utility 101-5 service is carried. 101-6 (c) For purposes of this section, each person who receives a 101-7 separate bill is a ratepayer. A person who receives more than one 101-8 bill may not be counted as more than one ratepayer. (V.A.C.S. 101-9 Art. 1446c-0, Sec. 2.108(c)(1).) 101-10 Sec. 33.102. IDENTIFICATION OF RATEPAYERS OUTSIDE 101-11 MUNICIPALITY. (a) A municipality that owns a utility shall: 101-12 (1) disclose to any person, on request, the number of 101-13 ratepayers who reside outside the municipality; and 101-14 (2) provide to any person, on request, a list of the 101-15 names and addresses of the ratepayers who reside outside the 101-16 municipality. 101-17 (b) The municipality may not charge a fee for disclosing the 101-18 information under Subsection (a)(1). The municipality may charge a 101-19 reasonable fee for providing information under Subsection (a)(2). 101-20 (c) The municipality shall provide information requested 101-21 under Subsection (a)(1) by telephone or in writing, as preferred by 101-22 the person making the request. (V.A.C.S. Art. 1446c-0, Sec. 101-23 2.108(c)(2).) 101-24 Sec. 33.103. FILING OF APPEAL. (a) Not later than the 14th 101-25 day after the date a governing body of a municipality makes a final 102-1 decision, the municipality shall issue a written report stating the 102-2 effect of the decision on each class of ratepayer. 102-3 (b) An appeal under this subchapter is initiated by filing a 102-4 petition for review with the commission and serving a copy of the 102-5 petition on each party to the original rate proceeding. 102-6 (c) The appeal must be initiated not later than the 45th day 102-7 after the date the municipality issues the written report required 102-8 by Subsection (a). (V.A.C.S. Art. 1446c-0, Sec. 2.108(c)(3).) 102-9 Sec. 33.104. RATE APPLICATION. Not later than the 90th day 102-10 after the date a petition for review is filed that complies with 102-11 Section 33.103, the municipality shall file with the commission a 102-12 rate application that complies in all material respects with the 102-13 rules and forms prescribed by the commission. The commission may, 102-14 for good cause shown, extend the period for filing a rate 102-15 application. (V.A.C.S. Art. 1446c-0, Sec. 2.108(c)(4).) 102-16 (Sections 33.105-33.120 reserved for expansion) 102-17 SUBCHAPTER E. RATE DETERMINATION AND APPEAL OF ORDERS 102-18 OF CERTAIN MUNICIPAL UTILITIES 102-19 Sec. 33.121. APPLICATION OF COMMISSION REVIEW. A 102-20 municipally owned utility is subject to this subchapter if the 102-21 utility is a utility: 102-22 (1) whose rates are appealed under Subchapter D; 102-23 (2) for which the commission orders a decrease in 102-24 annual nonfuel base revenues that exceeds the greater of 102-25 $25,000,000 or 10 percent of the utility's nonfuel base revenues, 103-1 as computed on a total system basis without regard to the utility's 103-2 municipal boundaries and established in the appealed rate 103-3 ordinance; and 103-4 (3) for which the commission finds that the rates paid 103-5 by the combined residential or other major customer class, other 103-6 than a class in which the municipality is the customer of the 103-7 municipally owned utility, are removed from cost-of-service levels 103-8 to the extent that, under the nonfuel base revenue requirement 103-9 adopted by the commission as computed on a total system basis 103-10 without regard to the municipality's boundaries, a change in 103-11 nonfuel base rate revenues in excess of 50 percent from adjusted 103-12 test year levels would be required to move that class to a relative 103-13 rate of return of unity (1.00 or 100 percent) under the 103-14 cost-of-service methodology adopted by the commission in an appeal 103-15 under Subchapter D. (V.A.C.S. Art. 1446c-0, Secs. 2.108(d) (part), 103-16 (e) (part).) 103-17 Sec. 33.122. REVIEW OF CERTAIN RATE DECISIONS. (a) Except 103-18 as provided by Subsections (b)-(f), for a period of 10 years 103-19 beginning on the later of August 28, 1989, or the effective date of 103-20 the rate ordinance that is the subject of the commission's final 103-21 order invoking the application of this section, the commission has 103-22 appellate jurisdiction over the rates charged by the municipally 103-23 owned utility, both inside and outside the municipality, in the 103-24 same manner and subject to the same commission powers and authority 103-25 provided by this subtitle for an electric utility. 104-1 (b) The commission has jurisdiction to review the cost 104-2 allocation and rate design methodologies adopted by the governing 104-3 body of a municipally owned utility subject to this section. If 104-4 the commission finds that the cost-of-service methodologies result 104-5 in rates that are unjust, unreasonable, or unreasonably 104-6 discriminatory, or unduly preferential to a customer class, the 104-7 commission may order the implementation of ratesetting 104-8 methodologies the commission finds reasonable. 104-9 (c) The commission shall ensure that a customer class, other 104-10 than a class in which the municipality is the customer of the 104-11 municipally owned utility, does not pay rates that result in a 104-12 relative rate of return of more than 115 percent under the 104-13 cost-of-service methodology found reasonable by the commission. A 104-14 customer class may not experience a percentage base rate increase 104-15 that is greater than 1-1/2 times the system average base increase. 104-16 In moving an above-cost class toward cost-of-service levels, each 104-17 class farthest above cost shall be moved sequentially toward cost 104-18 so that no above-cost class moves toward cost until no other class 104-19 is further removed from cost. 104-20 (d) A municipality subject to this section may design 104-21 residential rates, as a matter of intra-class rate design, to 104-22 accomplish reasonable energy conservation goals, notwithstanding 104-23 any other provision of this title. 104-24 (e) The commission's jurisdiction under this section may be 104-25 invoked by any party to a local rate proceeding required by this 105-1 section in the same manner as an appeal of the rates of an electric 105-2 utility under Section 33.051. 105-3 (f) The commission's jurisdiction under this section does 105-4 not extend to a municipally owned utility's: 105-5 (1) revenue requirements, whether base rate or fuel 105-6 revenues; 105-7 (2) invested capital; 105-8 (3) return on invested capital; 105-9 (4) debt service coverage ratio; or 105-10 (5) level of transfer of revenues from the utility to 105-11 the municipality's general fund. 105-12 (g) The governing body of a municipally owned utility 105-13 subject to this section shall establish procedures similar to the 105-14 procedures of a municipality that retains original jurisdiction 105-15 under Section 33.001 to regulate an electric utility operating in 105-16 the municipality. The procedures must include a public hearing 105-17 process in which an affected ratepayer is granted party status on 105-18 request and is grouped for purposes of participation in accordance 105-19 with common or divergent interests, including the particular 105-20 interests of all-electric residential ratepayers and residential 105-21 ratepayers outside the municipality. 105-22 (h) This section does not require the governing body of a 105-23 municipality or the governing board of a municipally owned utility 105-24 subject to this section to adopt procedures that require the use of 105-25 the Texas Rules of Evidence, the Texas Rules of Civil Procedure, or 106-1 the presentation of sworn testimony or any other form of sworn 106-2 evidence. 106-3 (i) The governing body of a municipally owned utility 106-4 subject to this section shall appoint a consumer advocate to 106-5 represent the interests of residential and small commercial 106-6 ratepayers in the municipality's local rate proceedings. The 106-7 consumer advocate's reasonable costs of participating in a 106-8 proceeding, including the reasonable costs of ratemaking 106-9 consultants and expert witnesses, shall be funded by and recovered 106-10 from residential and small commercial ratepayers. 106-11 (j) The commission shall adopt rules applicable to a party 106-12 to an appeal under Subchapter D that provide for the public 106-13 disclosure of financial and in-kind contributions and expenditures 106-14 related to preparing and filing an appeal petition and preparing 106-15 expert testimony or legal representation for an appeal. A party or 106-16 customer who is a member of a party who makes a financial 106-17 contribution or in-kind contribution to assist in an appeal by 106-18 another party or customer class under Subchapter D shall be 106-19 required, on a finding of the commission to that effect, to pay the 106-20 municipally owned utility a penalty equivalent in amount to two 106-21 times the amount of the contribution. 106-22 (k) This section does not limit the right of a party or 106-23 customer to spend money to represent its own interests following 106-24 the filing of a petition with the commission under Subchapter D. 106-25 (V.A.C.S. Art. 1446c-0, Sec. 2.108(d) (part).) 107-1 Sec. 33.123. REVIEW OF CERTAIN DECISIONS FOR RATES CHARGED 107-2 OUTSIDE MUNICIPALITY. (a) For a period of 10 years beginning on 107-3 the later of August 28, 1989, or the effective date of the rate 107-4 ordinance that is the subject of the commission's final order 107-5 invoking the application of this section, the commission has 107-6 appellate jurisdiction over the rates charged by the municipally 107-7 owned utility, outside the municipality, as provided by this 107-8 section. 107-9 (b) Except as otherwise provided by this section, a 107-10 ratepayer of a municipally owned utility subject to this section 107-11 who resides outside the municipality may appeal any action of the 107-12 governing body of a municipality affecting the rates charged by the 107-13 municipally owned utility outside the municipality by filing a 107-14 petition for review with the commission in the manner provided for 107-15 an appeal under Subchapter D. The petition must plainly disclose 107-16 that the cost of the appeal will be funded by a surcharge on the 107-17 monthly electric bills of ratepayers outside the municipality as 107-18 prescribed by the commission. 107-19 (c) After the commission approves the sufficiency of a 107-20 petition, the appellants shall submit to the office for approval a 107-21 budget itemizing the scope and expected cost of consultant services 107-22 to be purchased by the appellants in the appeal. 107-23 (d) Not later than the 120th day after the date the 107-24 commission enters its final order, the municipality shall assess a 107-25 onetime surcharge on a per capita basis among residential 108-1 ratepayers who reside outside the municipality to pay the 108-2 reasonable consultant and legal costs approved by the counsellor. 108-3 The municipality shall reimburse the appellants for incurred costs 108-4 not later than the 90th day after the date the commission enters 108-5 its final order. 108-6 (e) A municipality may not: 108-7 (1) include the costs associated with its defense of 108-8 an appeal under this section in the rates charged a ratepayer 108-9 outside the municipality; or 108-10 (2) if the municipality appeals an order entered by 108-11 the commission under this section, include the costs associated 108-12 with its appeal in the rates charged a ratepayer outside the 108-13 municipality. 108-14 (f) A ratepayer who brings an appeal under this section may 108-15 not receive funding for rate case expenses except from a 108-16 residential ratepayer who resides outside the municipality or from 108-17 another municipality inside whose boundaries the municipally owned 108-18 utility provides service. The commission shall adopt rules for 108-19 reporting financial and in-kind contributions in support of an 108-20 appeal under this section. If the commission finds that an 108-21 appellant has received contributions from a source other than from 108-22 a ratepayer who resides outside the municipality or from another 108-23 municipality, the appeal and each commission order entered in the 108-24 appeal are void. 108-25 (g) The commission has jurisdiction in an appeal under this 109-1 section to review and ensure that the revenue requirements of a 109-2 municipally owned utility subject to this section are reasonable. 109-3 The jurisdiction under this subsection does not extend to 109-4 regulating the use and level of a transfer of the utility's 109-5 revenues to the municipality's general fund. 109-6 (h) The commission has jurisdiction to review the cost 109-7 allocation and rate design methodologies adopted by the governing 109-8 body of a municipally owned utility subject to this section. If 109-9 the commission finds that the cost-of-service methodologies result 109-10 in rates that are unjust, unreasonable, or unreasonably 109-11 discriminatory or unduly preferential to a customer class, the 109-12 commission may order the implementation of ratesetting 109-13 methodologies the commission finds reasonable. The commission's 109-14 jurisdiction under this subsection does not include intra-class 109-15 residential rate design. 109-16 (i) An intervenor in an appeal under this section is limited 109-17 to presenting evidence on cost allocation and rate design 109-18 methodologies, except that an intervenor may present evidence in 109-19 support of the municipality on an issue related to utility 109-20 revenues. 109-21 (j) A ratepayer of a municipally owned utility subject to 109-22 this section who resides outside the municipality may elect to 109-23 petition for review under either this section or Subchapter D when 109-24 appealing a rate ordinance or other ratesetting action of the 109-25 governing body of a municipality. (V.A.C.S. Art. 1446c-0, Sec. 110-1 2.108(e) (part).) 110-2 CHAPTER 34. ELECTRICAL PLANNING 110-3 SUBCHAPTER A. GENERAL PROVISIONS 110-4 Sec. 34.001. DEFINITION 110-5 Sec. 34.002. APPLICABILITY TO MUNICIPALLY OWNED UTILITY 110-6 Sec. 34.003. ADOPTION OF INTEGRATED RESOURCE PLANNING 110-7 PROCESS 110-8 Sec. 34.004. STATEWIDE INTEGRATED RESOURCE PLAN 110-9 Sec. 34.005. PROMOTION OF RENEWABLE ENERGY TECHNOLOGIES 110-10 Sec. 34.006. REVIEW OF STATE TRANSMISSION SYSTEM 110-11 (Sections 34.007-34.020 reserved for expansion) 110-12 SUBCHAPTER B. PRELIMINARY INTEGRATED RESOURCE PLAN 110-13 Sec. 34.021. PRELIMINARY INTEGRATED RESOURCE PLAN REQUIRED 110-14 Sec. 34.022. CONTENTS OF PRELIMINARY INTEGRATED RESOURCE 110-15 PLAN 110-16 Sec. 34.023. PUBLIC HEARING ON PRELIMINARY INTEGRATED 110-17 RESOURCE PLAN 110-18 Sec. 34.024. INTERIM ORDER ON PRELIMINARY INTEGRATED 110-19 RESOURCE PLAN; DEADLINE 110-20 (Sections 34.025-34.050 reserved for expansion) 110-21 SUBCHAPTER C. RESOURCE SOLICITATION 110-22 Sec. 34.051. COMMENCEMENT OF SOLICITATION 110-23 Sec. 34.052. SUBMISSION OF BIDS; CONFIDENTIALITY 110-24 Sec. 34.053. ELECTRIC UTILITY DEMAND-SIDE MANAGEMENT 110-25 PROGRAMS 111-1 Sec. 34.054. QUALIFYING FACILITY BIDS; AVOIDED COSTS 111-2 Sec. 34.055. EVALUATION OF BIDS; NEGOTIATION OF CONTRACTS 111-3 Sec. 34.056. APPLICATION FOR CERTIFICATE OF CONVENIENCE 111-4 AND NECESSITY FOR RESOURCE NOT INCLUDED IN 111-5 PRELIMINARY PLAN 111-6 (Sections 34.057-34.100 reserved for expansion) 111-7 SUBCHAPTER D. FINAL INTEGRATED RESOURCE PLAN 111-8 Sec. 34.101. SUBMISSION OF FINAL INTEGRATED RESOURCE PLAN 111-9 Sec. 34.102. PUBLIC HEARING ON FINAL INTEGRATED RESOURCE 111-10 PLAN 111-11 Sec. 34.103. RULING ON FINAL INTEGRATED RESOURCE PLAN; 111-12 DEADLINE 111-13 Sec. 34.104. CERTIFICATION OF CONTRACTS 111-14 Sec. 34.105. CERTIFICATE OF CONVENIENCE AND NECESSITY 111-15 (Sections 34.106-34.150 reserved for expansion) 111-16 SUBCHAPTER E. ACQUISITION OF RESOURCES OUTSIDE THE 111-17 INTEGRATED RESOURCE PLANNING PROCESS 111-18 Sec. 34.151. EXEMPTIONS FROM SOLICITATION PROCESS 111-19 Sec. 34.152. NONGENERATING ELECTRIC UTILITY SOLICITATIONS 111-20 Sec. 34.153. EXEMPTION FOR CERTAIN FACILITIES 111-21 (Sections 34.154-34.170 reserved for expansion) 111-22 SUBCHAPTER F. MISCELLANEOUS PROVISIONS 111-23 Sec. 34.171. COST RECOVERY AND INCENTIVES 111-24 Sec. 34.172. RECONCILIATION OF RECOVERED COSTS 111-25 Sec. 34.173. RESOURCE PLANNING EXPENSES 112-1 CHAPTER 34. ELECTRICAL PLANNING 112-2 SUBCHAPTER A. GENERAL PROVISIONS 112-3 Sec. 34.001. DEFINITION. In this chapter, "electric 112-4 utility" includes a river authority subject to Subchapter B, 112-5 Chapter 32, with respect to the area served by the river authority 112-6 on January 1, 1975. (V.A.C.S. Art. 1446c-0, Sec. 2.051(aa).) 112-7 Sec. 34.002. APPLICABILITY TO MUNICIPALLY OWNED UTILITY. A 112-8 municipally owned utility is not subject to the requirements of 112-9 this chapter, except that every three years each municipally owned 112-10 utility shall submit to the commission a report containing the 112-11 information prescribed by Section 34.022. (V.A.C.S. Art. 1446c-0, 112-12 Sec. 2.051(g).) 112-13 Sec. 34.003. ADOPTION OF INTEGRATED RESOURCE PLANNING 112-14 PROCESS. (a) The commission by rule shall develop an integrated 112-15 resource planning process to provide reliable energy service at the 112-16 lowest reasonable system cost. 112-17 (b) In determining the lowest reasonable system cost of an 112-18 electric utility's integrated resource plan, the commission shall 112-19 consider: 112-20 (1) direct costs; 112-21 (2) the effect on the rates and bills of various types 112-22 of customers; 112-23 (3) minimization of the risks of future fuel costs and 112-24 regulations; 112-25 (4) the appropriateness and reliability of the mix of 113-1 resources; and 113-2 (5) the cost of compliance with environmental 113-3 protection requirements of all applicable state and federal laws, 113-4 rules, and orders. 113-5 (c) An appropriate and reliable mix under Subsection (b)(4) 113-6 may include a portfolio of cost-effective sources of power, 113-7 including fueled and nonfueled resources, such as renewable 113-8 resources and conservation measures, and a mixture of long-term and 113-9 short-term contracts. 113-10 (d) In establishing a requirement under this chapter, 113-11 including a reporting requirement, the commission shall consider 113-12 and recognize the different capabilities of small and large 113-13 electric utilities. (V.A.C.S. Art. 1446c-0, Secs. 2.051(a), (d).) 113-14 Sec. 34.004. STATEWIDE INTEGRATED RESOURCE PLAN. (a) The 113-15 commission by rule shall adopt and periodically update a statewide 113-16 integrated resource plan that includes the commission's long-term 113-17 resource planning goals. The commission shall notify each electric 113-18 utility of the approval of the plan. 113-19 (b) The commission shall send a report on the statewide 113-20 integrated resource plan to the governor when it adopts or revises 113-21 the plan and make the report available to the public. 113-22 (c) The report on the statewide integrated resource plan 113-23 must include: 113-24 (1) historical data for electric consumption statewide 113-25 and by each electric utility; 114-1 (2) historical data for electric generation by each 114-2 electric utility and by type of capacity, including alternative 114-3 energy sources; 114-4 (3) an inventory of generation capacity statewide and 114-5 by each electric utility; 114-6 (4) quantitative data on demand-side management 114-7 programs to the extent the commission determines necessary; 114-8 (5) each generating electric utility's forecast 114-9 without adjustment; 114-10 (6) the commission's long-term resource planning goals 114-11 included in the plan; 114-12 (7) a projection of the need for electric services; 114-13 (8) a description of the approved individual 114-14 integrated resource plan of each electric utility; and 114-15 (9) an assessment of transmission planning being 114-16 conducted by electric utilities in this state. (V.A.C.S. 114-17 Art. 1446c-0, Secs. 2.051(b), (c).) 114-18 Sec. 34.005. PROMOTION OF RENEWABLE ENERGY TECHNOLOGIES. 114-19 The commission shall adopt rules consistent with the integrated 114-20 resource planning process to promote the development of renewable 114-21 energy technologies. (V.A.C.S. Art. 1446c-0, Sec. 2.051(v).) 114-22 Sec. 34.006. REVIEW OF STATE TRANSMISSION SYSTEM. In 114-23 carrying out its duties related to the integrated resource planning 114-24 process, the commission may review this state's transmission system 114-25 and make recommendations to electric utilities on the need to build 115-1 new power lines, upgrade power lines, and make other necessary 115-2 improvements and additions. (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) 115-3 (part).) 115-4 (Sections 34.007-34.020 reserved for expansion) 115-5 SUBCHAPTER B. PRELIMINARY INTEGRATED RESOURCE PLAN 115-6 Sec. 34.021. PRELIMINARY INTEGRATED RESOURCE PLAN REQUIRED. 115-7 (a) Every three years each nongenerating electric utility planning 115-8 to construct generating resources and each generating electric 115-9 utility shall submit to the commission a preliminary integrated 115-10 resource plan covering a 10-year period. 115-11 (b) The commission by rule shall: 115-12 (1) establish a staggered schedule for the submission 115-13 of integrated resource plans by electric utilities; 115-14 (2) prescribe the form and manner in which a plan must 115-15 be submitted; 115-16 (3) adopt filing requirements and schedules; and 115-17 (4) prescribe the methods by which an electric utility 115-18 may recover supply-side and demand-side costs. 115-19 (c) The commission by rule may: 115-20 (1) define the scope and nature of public 115-21 participation in the development of the integrated resource plan; 115-22 and 115-23 (2) establish the general guidelines an electric 115-24 utility shall use to evaluate and to select or reject a resource, 115-25 including procedures governing the solicitation process. (V.A.C.S. 116-1 Art. 1446c-0, Sec. 2.051(e).) 116-2 Sec. 34.022. CONTENTS OF PRELIMINARY INTEGRATED RESOURCE 116-3 PLAN. (a) A preliminary integrated resource plan must include: 116-4 (1) the electric utility's forecast of future demands; 116-5 (2) an estimate of the energy savings and demand 116-6 reduction the electric utility can achieve during the time covered 116-7 by the plan by use of demand-side management resources and the 116-8 range of possible costs for those resources; 116-9 (3) if additional supply-side resources are needed to 116-10 meet future demand, an estimate of: 116-11 (A) the amount and operational characteristics 116-12 of the additional capacity needed; 116-13 (B) the types of viable supply-side resources 116-14 for meeting that need; and 116-15 (C) the range of probable costs of those 116-16 resources; 116-17 (4) if necessary, proposed requests for proposals to 116-18 be used in a solicitation of demand-side or supply-side resources, 116-19 or both; 116-20 (5) the specific criteria the electric utility will 116-21 use to evaluate and to select or reject demand-side or supply-side 116-22 resources; 116-23 (6) the methods by which the electric utility intends 116-24 to monitor demand-side or supply-side resources, or both as 116-25 appropriate, after selection; 117-1 (7) the method by which the electric utility intends 117-2 to allocate costs; 117-3 (8) a description of how the electric utility will 117-4 achieve equity among customer classes and provide demand-side 117-5 programs to each customer class, including tenants and low-income 117-6 ratepayers; 117-7 (9) any proposed incentive factors; and 117-8 (10) any other information the commission requires. 117-9 (b) If the commission adopts under Section 34.021(c) the 117-10 general guidelines an electric utility shall use to evaluate and to 117-11 select or reject a resource, the specific criteria proposed by the 117-12 electric utility under Subsection (a)(5) may deviate from those 117-13 guidelines only on a showing of good cause. (V.A.C.S. 117-14 Art. 1446c-0, Sec. 2.051(f).) 117-15 Sec. 34.023. PUBLIC HEARING ON PRELIMINARY INTEGRATED 117-16 RESOURCE PLAN. (a) If a preliminary integrated resource plan 117-17 includes a proposed solicitation of demand-side or supply-side 117-18 resources, the commission, on its own motion or on the motion of 117-19 the electric utility or an affected person, may convene a public 117-20 hearing on the adequacy and merits of the plan. 117-21 (b) Any interested person may intervene in the hearing and, 117-22 at the hearing, may present evidence and cross-examine witnesses 117-23 regarding the contents and adequacy of the preliminary integrated 117-24 resource plan. 117-25 (c) Discovery by a participant in the hearing is limited to: 118-1 (1) an issue relating to the development of the 118-2 preliminary integrated resource plan; 118-3 (2) a fact issue included in the plan; and 118-4 (3) other issues the commission is required to decide 118-5 relating to the plan. 118-6 (d) A hearing before the commission is not required for a 118-7 preliminary integrated resource plan filed by a river authority or 118-8 generating electric cooperative that does not intend to build a new 118-9 generating plant. (V.A.C.S. Art. 1446c-0, Sec. 2.051(h) (part).) 118-10 Sec. 34.024. INTERIM ORDER ON PRELIMINARY INTEGRATED 118-11 RESOURCE PLAN; DEADLINE. (a) After conducting a hearing on a 118-12 preliminary integrated resource plan under Section 34.023, the 118-13 commission shall determine: 118-14 (1) whether the plan is based on substantially 118-15 accurate data and an adequate method of forecasting; 118-16 (2) whether the plan identifies and takes into account 118-17 any present and projected reduction in the demand for energy that 118-18 may result from cost-effective measures to improve conservation and 118-19 energy efficiency in various customer classes of the area being 118-20 served; 118-21 (3) if additional supply-side resources are needed to 118-22 meet future demand, whether the plan adequately demonstrates: 118-23 (A) the amount and operational characteristics 118-24 of the additional capacity needed; 118-25 (B) the types of viable supply-side resources 119-1 for meeting that need; and 119-2 (C) the range of probable costs of those 119-3 resources; 119-4 (4) whether the plan describes opportunities for 119-5 appropriate persons to participate in developing the plan; 119-6 (5) whether the specific criteria the electric utility 119-7 will use to evaluate and to select or reject resources are 119-8 reasonable and consistent with the guidelines of the integrated 119-9 resource planning process; 119-10 (6) whether the cost allocation method proposed by the 119-11 electric utility is reasonable; 119-12 (7) how the electric utility will achieve equity among 119-13 customer classes and provide demand-side programs to each customer 119-14 class, including tenants and low-income ratepayers; and 119-15 (8) whether any incentive factors are appropriate and, 119-16 if so, the levels of the factors. 119-17 (b) Not later than the 180th day after the date an electric 119-18 utility submits a preliminary integrated resource plan, the 119-19 commission shall issue an interim order approving the plan, 119-20 approving the plan as modified by the commission, or remanding the 119-21 plan for additional proceedings. The commission may extend the 119-22 deadline for not more than 30 days for extenuating circumstances 119-23 encountered in the development and processing of the plan if the 119-24 circumstances are fully explained and agreed on by the 119-25 commissioners. (V.A.C.S. Art. 1446c-0, Secs. 2.051(i), (j).) 120-1 (Sections 34.025-34.050 reserved for expansion) 120-2 SUBCHAPTER C. RESOURCE SOLICITATION 120-3 Sec. 34.051. COMMENCEMENT OF SOLICITATION. (a) After the 120-4 commission approves an electric utility's preliminary integrated 120-5 resource plan, the utility shall conduct solicitations of 120-6 demand-side and supply-side resources as prescribed by the plan. 120-7 (b) In addition to soliciting resources from a nonaffiliated 120-8 third party, an electric utility may: 120-9 (1) prepare and submit a bid of a new utility 120-10 demand-side management program as prescribed by Section 34.053; 120-11 (2) receive bids from one or more affiliates; and 120-12 (3) request a certificate of convenience and necessity 120-13 for a new rate-based generating plant. (V.A.C.S. Art. 1446c-0, 120-14 Sec. 2.051(k).) 120-15 Sec. 34.052. SUBMISSION OF BIDS; CONFIDENTIALITY. (a) Each 120-16 bidder under Section 34.051, including the electric utility 120-17 conducting the solicitation and each bidding affiliate, shall 120-18 submit two copies of its bid to the commission. The commission 120-19 shall ensure that the electric utility has access to all bids at 120-20 the same time. 120-21 (b) The commission shall keep a copy of each bid submitted 120-22 by the electric utility conducting the solicitation or a bidding 120-23 affiliate to determine whether the utility complied with the 120-24 criteria established for conducting the solicitation. 120-25 (c) A bid submitted or retained under this section is 121-1 confidential and is not subject to disclosure under Chapter 552, 121-2 Government Code. (V.A.C.S. Art. 1446c-0, Sec. 2.051(l).) 121-3 Sec. 34.053. ELECTRIC UTILITY DEMAND-SIDE MANAGEMENT 121-4 PROGRAMS. (a) An electric utility that intends to use a proposed 121-5 demand-side management program to meet a need identified by the 121-6 utility's preliminary integrated resource plan must prepare a bid 121-7 reflecting that resource. 121-8 (b) A bid prepared by an electric utility under this section 121-9 must comply with the solicitation, evaluation, selection, and 121-10 rejection criteria specified by the utility's preliminary 121-11 integrated resource plan. The electric utility may not give 121-12 preferential treatment or consideration to the bid. (V.A.C.S. 121-13 Art. 1446c-0, Sec. 2.051(m).) 121-14 Sec. 34.054. QUALIFYING FACILITY BIDS; AVOIDED COSTS. 121-15 (a) The submission of a bid under this chapter by a qualifying 121-16 facility, regardless of whether the bid is accepted or rejected, 121-17 with respect to the capacity need for which the bid is submitted: 121-18 (1) is a waiver by the qualifying facility of any 121-19 right it may otherwise have under law to sell capacity to the 121-20 electric utility; 121-21 (2) represents the qualifying facility's agreement to 121-22 negotiate a rate for the purchase of capacity and terms relating to 121-23 the purchase that differ from the rate or terms that would 121-24 otherwise be required by 18 CFR Chapter I, Subchapter K, Part 292, 121-25 Subpart C; and 122-1 (3) is a waiver by the qualifying facility of its 122-2 right to the rate or terms for a purchase of capacity by the 122-3 electric utility that might otherwise be required by 18 CFR Chapter 122-4 I, Subchapter K, Part 292, Subpart C. 122-5 (b) The avoided capacity costs under 18 CFR Chapter I, 122-6 Subchapter K, Part 292, Subpart C, of an electric utility that has 122-7 submitted a preliminary integrated resource plan to the commission 122-8 under this chapter is $0 and remains $0, with respect to any 122-9 capacity needs shown in the preliminary plan or final plan that are 122-10 to be satisfied by resources approved in the utility's final plan. 122-11 (c) This section does not affect the validity of a contract 122-12 entered into between an electric utility and a qualifying facility 122-13 for any purchase. (V.A.C.S. Art. 1446c-0, Sec. 2.051(z).) 122-14 Sec. 34.055. EVALUATION OF BIDS; NEGOTIATION OF CONTRACTS. 122-15 (a) An electric utility shall evaluate each bid submitted, 122-16 including an affiliate bid, in accordance with the criteria 122-17 specified by the utility's preliminary integrated resource plan and 122-18 shall negotiate each necessary contract. 122-19 (b) An electric utility is not required to accept a bid and 122-20 may reject any or all bids in accordance with the selection and 122-21 rejection criteria specified by the utility's preliminary 122-22 integrated resource plan. (V.A.C.S. Art. 1446c-0, Sec. 2.051(n) 122-23 (part).) 122-24 Sec. 34.056. APPLICATION FOR CERTIFICATE OF CONVENIENCE AND 122-25 NECESSITY FOR RESOURCE NOT INCLUDED IN PRELIMINARY PLAN. If the 123-1 results of the solicitation and contract negotiations do not meet 123-2 the supply-side needs identified by the electric utility's 123-3 preliminary integrated resource plan, the utility may apply for a 123-4 certificate of convenience and necessity for a utility-owned 123-5 resource addition, notwithstanding that a solicitation was 123-6 conducted and the resource addition was not included in the 123-7 approved plan. (V.A.C.S. Art. 1446c-0, Sec. 2.051(n) (part).) 123-8 (Sections 34.057-34.100 reserved for expansion) 123-9 SUBCHAPTER D. FINAL INTEGRATED RESOURCE PLAN 123-10 Sec. 34.101. SUBMISSION OF FINAL INTEGRATED RESOURCE PLAN. 123-11 After conducting each solicitation and negotiating each contract, 123-12 an electric utility shall submit a proposed final integrated 123-13 resource plan to the commission. The proposed plan must include: 123-14 (1) the results of each solicitation; 123-15 (2) any contracts for resources; 123-16 (3) the terms under which the electric utility will 123-17 provide resources to meet a need identified by the preliminary 123-18 integrated resource plan, if the electric utility accepts a bid 123-19 submitted under Section 34.053; and 123-20 (4) an application for a certificate of convenience 123-21 and necessity, if necessary. (V.A.C.S. Art. 1446c-0, Sec. 123-22 2.051(o).) 123-23 Sec. 34.102. PUBLIC HEARING ON FINAL INTEGRATED RESOURCE 123-24 PLAN. (a) The commission, on request by an affected person, shall 123-25 convene a public hearing on the reasonableness and 124-1 cost-effectiveness of a proposed final integrated resource plan. 124-2 The commission shall convene the hearing, if requested, not later 124-3 than the 90th day after the date the electric utility files its 124-4 proposed plan. 124-5 (b) Any interested person may intervene in the hearing and, 124-6 at the hearing, may present evidence and cross-examine witnesses 124-7 regarding the reasonableness and cost-effectiveness of the proposed 124-8 final integrated resource plan. 124-9 (c) A party to the hearing may not litigate or conduct 124-10 discovery on an issue that was or could have been litigated in 124-11 connection with the filing of the electric utility's preliminary 124-12 integrated resource plan. 124-13 (d) To the extent permitted by federal law, the commission 124-14 may issue a written order for access to the books, accounts, 124-15 memoranda, contracts, or other records of an exempt wholesale 124-16 generator or power marketer selling energy at wholesale to an 124-17 electric utility, if access is required for the effective discharge 124-18 of the commission's regulatory responsibilities under this 124-19 subtitle. The materials obtained by the commission under this 124-20 subsection are confidential and are not subject to disclosure under 124-21 Chapter 552, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 124-22 2.051(p).) 124-23 Sec. 34.103. RULING ON FINAL INTEGRATED RESOURCE PLAN; 124-24 DEADLINE. (a) After conducting a hearing on a proposed final 124-25 integrated resource plan under Section 34.102, the commission shall 125-1 determine whether: 125-2 (1) the final plan was developed in accordance with 125-3 the electric utility's preliminary integrated resource plan and 125-4 commission rules; 125-5 (2) the resource solicitations, evaluations, 125-6 selections, and rejections were conducted in accordance with the 125-7 criteria included in the utility's preliminary plan; 125-8 (3) the final plan is cost-effective; 125-9 (4) the final plan is equitable among customer classes 125-10 and provides demand-side programs to each customer class, including 125-11 tenants and low-income ratepayers; 125-12 (5) the commission should certify each contract and 125-13 electric utility bid submitted under Section 34.053 that resulted 125-14 from the solicitations; and 125-15 (6) the commission should grant a requested 125-16 certificate of convenience and necessity for an electric 125-17 utility-owned resource addition. 125-18 (b) Not later than the 180th day after the date an electric 125-19 utility submits a proposed final integrated resource plan, the 125-20 commission shall issue a final order approving the plan, approving 125-21 the plan as modified by the commission, or remanding the plan for 125-22 additional proceedings. (V.A.C.S. Art. 1446c-0, Secs. 2.051(q), 125-23 (t).) 125-24 Sec. 34.104. CERTIFICATION OF CONTRACTS. (a) In 125-25 determining whether to certify a supply-side or demand-side 126-1 contract that results from a solicitation, the commission shall 126-2 consider: 126-3 (1) the reliability, financial condition, and safety 126-4 of the resource contract; and 126-5 (2) whether the solicitation, evaluation, and 126-6 selection of the resource contract was conducted in accordance with 126-7 the criteria included in the electric utility's preliminary 126-8 integrated resource plan. 126-9 (b) In addition to the considerations in Subsection (a), if 126-10 a contract proposed for certification is between an electric 126-11 utility and its affiliate, the commission shall determine whether: 126-12 (1) the utility treated and considered the affiliate's 126-13 bid in the same manner it treated and considered each other bid 126-14 intended to meet the same resource needs; 126-15 (2) the transaction will benefit consumers; 126-16 (3) the transaction violates any state law, including 126-17 least-cost planning; 126-18 (4) the transaction provides the affiliate with an 126-19 unfair competitive advantage by virtue of its affiliation or 126-20 association with the utility; 126-21 (5) the transaction is in the public interest; and 126-22 (6) the commission has sufficient regulatory 126-23 authority, resources, and access to the books and records of the 126-24 utility and its affiliate to make the determination required by 126-25 this subsection. 127-1 (c) The commission may not certify a contract for a new 127-2 purchase of power by an electric utility unless the utility has 127-3 determined, after giving consideration to consistently applied 127-4 regional or national reliability standards, guidelines, or 127-5 criteria, that: 127-6 (1) the contract would not unreasonably impair the 127-7 continued reliability of electric systems affected by the purchase; 127-8 and 127-9 (2) the purchase can reasonably be expected to produce 127-10 benefits to customers of the purchasing utility. 127-11 (d) Commission certification of a resource contract under 127-12 this section does not negate the necessity of the resource to 127-13 comply with all applicable environmental and siting regulations. 127-14 (e) In establishing an electric utility's rates, a 127-15 regulatory authority shall consider a payment made under a 127-16 certified contract to be a reasonable and necessary operating 127-17 expense of the utility during the period for which the certified 127-18 contract is effective. A regulatory authority may provide for 127-19 monthly recovery of approved costs of the contract as those costs 127-20 are incurred, including any markup allowed by the commission. 127-21 (V.A.C.S. Art. 1446c-0, Sec. 2.051(r).) 127-22 Sec. 34.105. CERTIFICATE OF CONVENIENCE AND NECESSITY. 127-23 (a) In determining whether to grant a certificate of convenience 127-24 and necessity requested by an electric utility in the utility's 127-25 proposed final integrated resource plan, the commission shall 128-1 consider: 128-2 (1) the effect of granting the certificate on the 128-3 recipient of the certificate and on any electric utility serving 128-4 the proximate area; and 128-5 (2) other factors, such as: 128-6 (A) community values; 128-7 (B) recreational and park areas; 128-8 (C) historical and aesthetic values; 128-9 (D) environmental integrity; and 128-10 (E) the probable improvement of service or 128-11 lowering of cost to consumers in the area if the certificate is 128-12 granted. 128-13 (b) The commission shall grant a requested certificate of 128-14 convenience and necessity as part of the commission's approval of a 128-15 final integrated resource plan if the commission finds that: 128-16 (1) the proposed resource addition is necessary under 128-17 the plan; 128-18 (2) the proposed resource addition is the best and 128-19 most economical choice of technology for the service area; and 128-20 (3) cost-effective conservation and other 128-21 cost-effective alternative energy sources cannot reasonably meet 128-22 the need. (V.A.C.S. Art. 1446c-0, Sec. 2.051(s).) 128-23 (Sections 34.106-34.150 reserved for expansion) 129-1 SUBCHAPTER E. ACQUISITION OF RESOURCES OUTSIDE THE 129-2 INTEGRATED RESOURCE PLANNING PROCESS 129-3 Sec. 34.151. EXEMPTIONS FROM SOLICITATION PROCESS. (a) The 129-4 commission shall adopt rules allowing an electric utility to add 129-5 new or incremental resources outside the solicitation process, 129-6 consistent with the utility's last approved integrated resource 129-7 planning goals, including resources listed in Subsection (b). 129-8 (b) Consistent with an electric utility's last approved 129-9 integrated resource planning goals, if any, an electric utility, 129-10 including a nongenerating electric utility, may add new or 129-11 incremental resources outside the solicitation process, including: 129-12 (1) contract renegotiation for existing capacity from 129-13 an electric cooperative or nonaffiliated power generating facility; 129-14 (2) electric cooperative or nonaffiliated demand-side 129-15 management programs or renewable resources; 129-16 (3) capacity purchases with two-year or shorter terms 129-17 from an electric cooperative or nonaffiliated power supplier; 129-18 (4) capacity purchases necessary to satisfy 129-19 unanticipated emergency conditions; 129-20 (5) the exercise of an option in a purchased power 129-21 contract with an electric cooperative or nonaffiliated supplier; 129-22 and 129-23 (6) renewable distributed resources, located at or 129-24 near the point of consumption, if the resources are less costly 129-25 than transmission extensions or upgrades. 130-1 (c) The addition of new or incremental resources by an 130-2 electric utility under Subsection (b) does not require an amendment 130-3 to the utility's integrated resource plan. (V.A.C.S. Art. 1446c-0, 130-4 Secs. 2.051(u), (x), (y).) 130-5 Sec. 34.152. NONGENERATING ELECTRIC UTILITY SOLICITATIONS. 130-6 (a) A nongenerating electric utility not planning to construct 130-7 generating facilities shall conduct a solicitation of resources if 130-8 the utility seeks to purchase from a wholesale power supplier other 130-9 than the utility's existing power supplier more than 25 percent of 130-10 the utility's peak demand or more than 70 megawatts. A 130-11 nongenerating electric utility is not required to conduct a 130-12 solicitation for a purchase from an existing power supplier and the 130-13 utility may add new or incremental resources outside the 130-14 solicitation process as provided by Section 34.151. 130-15 (b) The commission, on request by the nongenerating electric 130-16 utility, may review a proposed contract for resources resulting 130-17 from a solicitation to determine the contract's reasonableness. 130-18 The commission shall certify the proposed contract if the 130-19 commission finds that the contract is reasonable. The commission 130-20 shall make its determination not later than the 90th day after the 130-21 date the proposed contract is submitted. 130-22 (c) This section does not alter or amend a wholesale power 130-23 supply contract executed before September 1, 1995. (V.A.C.S. 130-24 Art. 1446c-0, Sec. 2.051(bb) (part).) 130-25 Sec. 34.153. EXEMPTION FOR CERTAIN FACILITIES. (a) To 131-1 provide for the orderly transition to an integrated resource 131-2 planning process and to avoid delays in the construction of 131-3 resources necessary to provide electric service, an integrated 131-4 resource plan is not required for issuance of a certificate of 131-5 convenience and necessity for the construction of a generating 131-6 facility if: 131-7 (1) the commission approved the electric utility's 131-8 notice of intent relating to the facility before September 1, 1995; 131-9 (2) the electric utility has conducted a solicitation 131-10 for resources to meet the need identified by the utility's notice 131-11 of intent in accordance with commission rules in effect at the time 131-12 of the solicitation; and 131-13 (3) the electric utility has submitted to the 131-14 commission the results of the solicitation and an application for 131-15 certification of the facility to meet the need identified by the 131-16 utility's notice of intent. 131-17 (b) The commission shall grant a certificate of convenience 131-18 and necessity for a generating facility to which this section 131-19 applies if: 131-20 (1) the facility is needed to meet future demand; 131-21 (2) the facility is the best and most economical 131-22 choice of technology for the service area; and 131-23 (3) cost-effective conservation and cost-effective 131-24 alternative energy sources cannot reasonably meet the need. 131-25 (V.A.C.S. Art. 1446c-0, Sec. 2.051(dd).) 132-1 (Sections 34.154-34.170 reserved for expansion) 132-2 SUBCHAPTER F. MISCELLANEOUS PROVISIONS 132-3 Sec. 34.171. COST RECOVERY AND INCENTIVES. In carrying out 132-4 its duties related to the integrated resource planning process, the 132-5 commission may: 132-6 (1) allow timely recovery of the reasonable costs of 132-7 conservation, load management, and purchased power, notwithstanding 132-8 Section 36.201; and 132-9 (2) authorize additional incentives for conservation, 132-10 load management, purchased power, and renewable resources. 132-11 (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) (part).) 132-12 Sec. 34.172. RECONCILIATION OF RECOVERED COSTS. (a) To the 132-13 extent that the commission authorizes an electric utility to 132-14 recover the costs of demand-side management programs, conservation, 132-15 load management, or purchased power through cost recovery factors, 132-16 the commission shall make a final reconciliation of the costs 132-17 recovered through the cost recovery factors. 132-18 (b) The commission shall adopt rules regarding: 132-19 (1) the timing of reconciliations for each cost 132-20 recovery factor; 132-21 (2) the information an electric utility must file in 132-22 support of each reconciliation; and 132-23 (3) other matters necessary to accomplish the 132-24 reconciliation. 132-25 (c) Each reconciliation must: 133-1 (1) review the reasonableness of the electric 133-2 utility's administration of the contracts and programs the costs of 133-3 which are being reconciled; and 133-4 (2) reconcile the revenue collected under each cost 133-5 recovery factor and the costs that the utility incurred on 133-6 purchased power, demand-side management, conservation, or load 133-7 management, as applicable, during the reconciliation period. 133-8 (V.A.C.S. Art. 1446c-0, Sec. 2.051(cc).) 133-9 Sec. 34.173. RESOURCE PLANNING EXPENSES. (a) To the extent 133-10 that an electric utility is required by the commission to reimburse 133-11 a municipality for expenses incurred while participating in a 133-12 proceeding under this chapter, the commission shall, as part of the 133-13 commission's approval of the utility's integrated resource plan, 133-14 authorize a surcharge to be included in the utility's rates to 133-15 allow the utility to recover the amount paid to the municipality 133-16 before the utility's next preliminary integrated resource plan is 133-17 filed. 133-18 (b) An electric utility may recover its reasonable expenses 133-19 arising from planning, preparing, and participating in a proceeding 133-20 under this chapter only after commission review is conducted in 133-21 accordance with Subchapter C or D, Chapter 36. (V.A.C.S. 133-22 Art. 1446c-0, Sec. 2.051(ee).) 134-1 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 134-2 SUBCHAPTER A. COMPETITION AND TRANSMISSION ACCESS 134-3 IN THE WHOLESALE MARKET 134-4 Sec. 35.001. DEFINITION 134-5 Sec. 35.002. RIGHT TO COMPETE AT WHOLESALE 134-6 Sec. 35.003. PURCHASE FROM AFFILIATE; UNDUE PREFERENCE 134-7 PROHIBITED 134-8 Sec. 35.004. PROVISION OF TRANSMISSION SERVICE 134-9 Sec. 35.005. AUTHORITY TO ORDER TRANSMISSION SERVICE 134-10 Sec. 35.006. RULES RELATED TO WHOLESALE TRANSMISSION SERVICE, 134-11 RATES, AND ACCESS 134-12 Sec. 35.007. TARIFFS REQUIRED 134-13 Sec. 35.008. ALTERNATIVE DISPUTE RESOLUTION 134-14 Sec. 35.0081. REPORT TO LEGISLATURE CONCERNING STRANDED 134-15 COST 134-16 (Sections 35.009-35.030 reserved for expansion) 134-17 SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS 134-18 Sec. 35.031. AUTHORITY TO OPERATE 134-19 Sec. 35.032. COMMISSION REGISTRATION AND REQUIRED REPORTS 134-20 Sec. 35.033. AFFILIATE WHOLESALE PROVIDER 134-21 Sec. 35.034. TRANSFER OF ASSETS 134-22 Sec. 35.035. VALUATION AND ACCOUNTING OF TRANSFERRED ASSETS 134-23 (Sections 35.036-35.060 reserved for expansion) 134-24 SUBCHAPTER C. QUALIFYING FACILITIES 134-25 Sec. 35.061. ENCOURAGEMENT OF ECONOMICAL PRODUCTION 135-1 Sec. 35.062. APPLICATION FOR CERTIFICATION 135-2 Sec. 35.063. HEARING 135-3 Sec. 35.064. CERTIFICATION STANDARDS 135-4 Sec. 35.065. DEADLINES FOR COMMISSION ACTION 135-5 Sec. 35.066. TERM OF CERTIFICATION 135-6 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 135-7 SUBCHAPTER A. COMPETITION AND TRANSMISSION ACCESS 135-8 IN THE WHOLESALE MARKET 135-9 Sec. 35.001. DEFINITION. In this subchapter, "electric 135-10 utility" includes a municipally owned utility. (V.A.C.S. 135-11 Art. 1446c-0, Sec. 2.057(g).) 135-12 Sec. 35.002. RIGHT TO COMPETE AT WHOLESALE. A provider of 135-13 generation, including an electric utility affiliate, exempt 135-14 wholesale generator, and qualifying facility, may compete for the 135-15 business of selling power. (V.A.C.S. Art. 1446c-0, Sec. 2.057(f) 135-16 (part).) 135-17 Sec. 35.003. PURCHASE FROM AFFILIATE; UNDUE PREFERENCE 135-18 PROHIBITED. (a) An electric utility may purchase power from an 135-19 affiliate in accordance with this title. 135-20 (b) An electric utility may not grant an undue preference to 135-21 a person in connection with the utility's purchase or sale of 135-22 electric energy at wholesale or other utility service. (V.A.C.S. 135-23 Art. 1446c-0, Sec. 2.057(f) (part).) 135-24 Sec. 35.004. PROVISION OF TRANSMISSION SERVICE. (a) An 135-25 electric utility that owns or operates transmission facilities 136-1 shall provide wholesale transmission service at rates and terms, 136-2 including terms of access, that are comparable to the rates and 136-3 terms of the utility's use of its system. 136-4 (b) The commission shall ensure that an electric utility 136-5 provides nondiscriminatory access to transmission service for 136-6 qualifying facilities, exempt wholesale generators, power 136-7 marketers, and other electric utilities. 136-8 (c) When an electric utility provides transmission service 136-9 at the request of a third party, the commission shall ensure that 136-10 the utility recovers the utility's reasonable costs in providing 136-11 transmission services necessary for the transaction from the entity 136-12 for which the transmission is provided so that the utility's other 136-13 customers do not bear the costs of the service. (V.A.C.S. 136-14 Art. 1446c-0, Secs. 2.057(a) (part), (c).) 136-15 Sec. 35.005. AUTHORITY TO ORDER TRANSMISSION SERVICE. 136-16 (a) The commission may require an electric utility to provide 136-17 transmission service at wholesale to another electric utility, a 136-18 qualifying facility, an exempt wholesale generator, or a power 136-19 marketer and may determine whether terms for the transmission 136-20 service are reasonable. 136-21 (b) The commission may require transmission service at 136-22 wholesale, including the construction or enlargement of a facility, 136-23 in a proceeding not related to approval of an integrated resource 136-24 plan. 136-25 (c) The commission may not issue a decision or rule relating 137-1 to transmission service that is contrary to an applicable decision, 137-2 rule, or policy statement of a federal regulatory agency having 137-3 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 2.056(a).) 137-4 Sec. 35.006. RULES RELATED TO WHOLESALE TRANSMISSION 137-5 SERVICE, RATES, AND ACCESS. (a) The commission shall adopt rules 137-6 relating to wholesale transmission service, rates, and access. The 137-7 rules: 137-8 (1) must be consistent with the standards in this 137-9 subchapter; 137-10 (2) may not be contrary to federal law, including any 137-11 applicable decision, rule, or policy statement of a federal 137-12 regulatory agency having jurisdiction; 137-13 (3) must require transmission services that are not 137-14 less than the transmission services the Federal Energy Regulatory 137-15 Commission may require in similar circumstances; 137-16 (4) must require that an electric utility provide all 137-17 ancillary services associated with the utility's discounted 137-18 wholesale sales at the same prices and under the same terms as the 137-19 services are provided to a third person; and 137-20 (5) must require that an electric utility provide all 137-21 ancillary services associated with the utility's discounted 137-22 wholesale sales to a third person on request. 137-23 (b) The commission shall adopt rules relating to the 137-24 registration and reporting requirements of a qualifying facility, 137-25 exempt wholesale generator, and power marketer. (V.A.C.S. 138-1 Art. 1446c-0, Secs. 2.057(a) (part), (b).) 138-2 Sec. 35.007. TARIFFS REQUIRED. (a) Except as provided by 138-3 Subsection (b), an electric utility that owns or operates a 138-4 transmission facility shall file a tariff in compliance with 138-5 commission rules adopted under Section 35.006. 138-6 (b) An electric utility is not required to file a tariff 138-7 under this section if the utility's terms for access and pricing 138-8 for wholesale transmission service are included in another electric 138-9 utility's tariff. 138-10 (c) An electric utility shall file a tariff required by this 138-11 section with the appropriate state or federal regulatory agency 138-12 having jurisdiction over the utility's transmission service. 138-13 (V.A.C.S. Art. 1446c-0, Sec. 2.057(a) (part).) 138-14 Sec. 35.008. ALTERNATIVE DISPUTE RESOLUTION. The commission 138-15 may require that each party to a dispute concerning prices or terms 138-16 of wholesale transmission service engage in a nonbinding 138-17 alternative dispute resolution process before seeking resolution of 138-18 the dispute by the commission. (V.A.C.S. Art. 1446c-0, Sec. 138-19 2.057(d).) 138-20 Sec. 35.0081. REPORT TO LEGISLATURE CONCERNING STRANDED 138-21 COST. (a) The commission shall report to the 75th Legislature on 138-22 methods or procedures to quantify the magnitude of stranded 138-23 investment, procedures for allocating costs, and acceptable methods 138-24 of recovering stranded costs. 138-25 (b) This section expires January 12, 1999. (V.A.C.S. 139-1 Art. 1446c-0, Sec. 2.057(e).) 139-2 (Sections 35.009-35.030 reserved for expansion) 139-3 SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS 139-4 Sec. 35.031. AUTHORITY TO OPERATE. An exempt wholesale 139-5 generator or power marketer may sell electric energy only at 139-6 wholesale. (V.A.C.S. Art. 1446c-0, Sec. 2.053(a).) 139-7 Sec. 35.032. COMMISSION REGISTRATION AND REQUIRED REPORTS. 139-8 (a) An exempt wholesale generator or power marketer that sells 139-9 electric energy in this state shall, not later than the 30th day 139-10 after the date it becomes subject to this section: 139-11 (1) register with the commission; or 139-12 (2) provide to the commission proof that it has 139-13 registered with the Federal Energy Regulatory Commission or has 139-14 been authorized by the Federal Energy Regulatory Commission to sell 139-15 electric energy at market-based rates. 139-16 (b) The exempt wholesale generator or power marketer may 139-17 register by filing with the commission: 139-18 (1) a description of the location of any facility used 139-19 to provide service; 139-20 (2) a description of the type of service provided; 139-21 (3) a copy of any information filed with the Federal 139-22 Energy Regulatory Commission in connection with registration with 139-23 that commission; and 139-24 (4) other information required by commission rule. 139-25 (c) An exempt wholesale generator or power marketer required 140-1 to register under Subsection (a) shall file any report required by 140-2 commission rule. (V.A.C.S. Art. 1446c-0, Secs. 2.053(b), (c).) 140-3 Sec. 35.033. AFFILIATE WHOLESALE PROVIDER. An affiliate of 140-4 an electric utility may be an exempt wholesale generator or power 140-5 marketer and may sell electric energy to its affiliated electric 140-6 utility in accordance with Chapter 34 and other laws governing 140-7 wholesale sales of electric energy. (V.A.C.S. Art. 1446c-0, Sec. 140-8 2.054(a).) 140-9 Sec. 35.034. TRANSFER OF ASSETS. (a) Unless an electric 140-10 utility receives commission approval under Subsection (b), the 140-11 utility may not sell or transfer a facility to an affiliate or 140-12 otherwise consider the facility to be an eligible facility as 140-13 defined by federal law if on May 27, 1995, the utility had a rate 140-14 or charge in effect: 140-15 (1) for or in connection with the construction of the 140-16 facility; 140-17 (2) for electric energy produced by the construction 140-18 of the facility; or 140-19 (3) for electric energy produced by the facility other 140-20 than a portion of a rate or charge that represents recovery of the 140-21 cost of a wholesale rate or charge. 140-22 (b) The commission, after notice and hearing, may allow an 140-23 electric utility to sell or transfer a facility governed by 140-24 Subsection (a) to an affiliate or otherwise allow the facility to 140-25 become an eligible facility only if the transaction: 141-1 (1) will benefit ratepayers of the utility making the 141-2 sale or transfer; 141-3 (2) is in the public interest; and 141-4 (3) otherwise complies with state law. (V.A.C.S. 141-5 Art. 1446c-0, Sec. 2.054(b).) 141-6 Sec. 35.035. VALUATION AND ACCOUNTING OF TRANSFERRED ASSETS. 141-7 (a) A transfer of assets from an electric utility to an affiliated 141-8 exempt wholesale generator or power marketer shall be valued at the 141-9 greater of net book cost or fair market value. 141-10 (b) A transfer of assets from an exempt wholesale generator 141-11 or power marketer to an affiliated electric utility shall be valued 141-12 at the lesser of net book cost or fair market value. 141-13 (c) At the time that a transfer of assets between an 141-14 electric utility and an affiliated exempt wholesale generator or 141-15 power marketer is approved, the commission shall order the utility 141-16 to adjust its rates so that the utility's tariffs reflect benefits 141-17 from the proceeds of the sale and exclude any costs associated with 141-18 the transferred facility. (V.A.C.S. Art. 1446c-0, Sec. 2.054(c).) 141-19 (Sections 35.036-35.060 reserved for expansion) 141-20 SUBCHAPTER C. QUALIFYING FACILITIES 141-21 Sec. 35.061. ENCOURAGEMENT OF ECONOMICAL PRODUCTION. The 141-22 commission shall adopt and enforce rules to encourage the 141-23 economical production of electric energy by qualifying facilities. 141-24 (V.A.C.S. Art. 1446c-0, Sec. 2.052(a).) 141-25 Sec. 35.062. APPLICATION FOR CERTIFICATION. (a) An 142-1 electric utility or a qualifying facility may submit to the 142-2 commission for certification a copy of an agreement between the 142-3 utility and facility for the purchase of capacity. 142-4 (b) An agreement submitted for certification under this 142-5 section may provide that the agreement is contingent on 142-6 certification by the commission. (V.A.C.S. Art. 1446c-0, Sec. 142-7 2.209(b) (part).) 142-8 Sec. 35.063. HEARING. (a) The commission, on its own 142-9 motion or on the request of a party to the agreement or another 142-10 affected person, may conduct a hearing on an agreement for which 142-11 certification is sought under Section 35.062. 142-12 (b) A request for a hearing or a commission decision to hold 142-13 a hearing must be made not later than the 90th day after the date 142-14 the agreement is submitted to the commission. (V.A.C.S. 142-15 Art. 1446c-0, Sec. 2.209(d) (part).) 142-16 Sec. 35.064. CERTIFICATION STANDARDS. The commission shall 142-17 certify an agreement submitted under Section 35.062 if the 142-18 agreement: 142-19 (1) provides for payments over the contract term that 142-20 are equal to or less than the electric utility's avoided costs, as 142-21 established by the commission and in effect at the time the 142-22 agreement was signed; and 142-23 (2) provides the electric utility the opportunity to 142-24 acquire the cogeneration or small-power production installation 142-25 before the installation is offered to another purchaser or provides 143-1 other sufficient assurance that the electric utility will be 143-2 provided with a comparable supply of electricity, if the qualifying 143-3 facility ceases to operate the installation. (V.A.C.S. 143-4 Art. 1446c-0, Secs. 2.209(b) (part), (c) (part).) 143-5 Sec. 35.065. DEADLINES FOR COMMISSION ACTION. (a) Except 143-6 as provided by Subsection (b), the commission shall make its 143-7 determination regarding whether a certification should be granted 143-8 under Section 35.064 not later than the 90th day after the date the 143-9 agreement is submitted. 143-10 (b) If a hearing is held under Section 35.063, the 143-11 commission shall make its determination regarding whether a 143-12 certification should be granted not later than the 120th day after 143-13 the date the agreement is submitted, except that this deadline is 143-14 extended by two days for each day in excess of five days on which 143-15 the commission conducts a hearing on the merits of the 143-16 certification. 143-17 (c) If the commission does not make a determination by the 143-18 date provided by Subsection (a) or (b), as applicable, the 143-19 agreement is considered to meet the requirements of Section 35.064 143-20 and the certification is considered granted. (V.A.C.S. 143-21 Art. 1446c-0, Secs. 2.209(c) (part), (d) (part).) 143-22 Sec. 35.066. TERM OF CERTIFICATION. A certification of an 143-23 agreement granted under this subchapter is effective until the 143-24 earlier of: 143-25 (1) the expiration date of the agreement; or 144-1 (2) the 15th anniversary of the date of the 144-2 certification. (V.A.C.S. Art. 1446c-0, Sec. 2.209(c) (part).) 144-3 CHAPTER 36. RATES 144-4 SUBCHAPTER A. GENERAL PROVISIONS 144-5 Sec. 36.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES 144-6 Sec. 36.002. COMPLIANCE WITH TITLE 144-7 Sec. 36.003. JUST AND REASONABLE RATES 144-8 Sec. 36.004. EQUALITY OF RATES AND SERVICES 144-9 Sec. 36.005. RATES FOR AREA NOT IN MUNICIPALITY 144-10 Sec. 36.006. BURDEN OF PROOF 144-11 Sec. 36.007. DISCOUNTED WHOLESALE OR RETAIL RATES 144-12 Sec. 36.008. STATE TRANSMISSION SYSTEM 144-13 (Sections 36.009-36.050 reserved for expansion) 144-14 SUBCHAPTER B. COMPUTATION OF RATES 144-15 Sec. 36.051. ESTABLISHING OVERALL REVENUES 144-16 Sec. 36.052. ESTABLISHING REASONABLE RETURN 144-17 Sec. 36.053. COMPONENTS OF INVESTED CAPITAL 144-18 Sec. 36.054. CONSTRUCTION WORK IN PROGRESS 144-19 Sec. 36.055. SEPARATIONS AND ALLOCATIONS 144-20 Sec. 36.056. DEPRECIATION, AMORTIZATION, AND DEPLETION 144-21 Sec. 36.057. NET INCOME; DETERMINATION OF REVENUES 144-22 AND EXPENSES 144-23 Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE 144-24 Sec. 36.059. TREATMENT OF CERTAIN TAX BENEFITS 144-25 Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS 145-1 Sec. 36.061. ALLOWANCE OF CERTAIN EXPENSES 145-2 Sec. 36.062. CONSIDERATION OF CERTAIN EXPENSES 145-3 Sec. 36.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 145-4 LEASE OF MERCHANDISE 145-5 Sec. 36.064. SELF-INSURANCE 145-6 (Sections 36.065-36.100 reserved for expansion) 145-7 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGES 145-8 PROPOSED BY UTILITY 145-9 Sec. 36.101. DEFINITION 145-10 Sec. 36.102. STATEMENT OF INTENT TO CHANGE RATES 145-11 Sec. 36.103. NOTICE OF INTENT TO CHANGE RATES 145-12 Sec. 36.104. EARLY EFFECTIVE DATE OF RATE CHANGE 145-13 Sec. 36.105. DETERMINATION OF PROPRIETY OF RATE 145-14 CHANGE; HEARING 145-15 Sec. 36.106. REGIONAL HEARING 145-16 Sec. 36.107. PREFERENCE TO HEARING 145-17 Sec. 36.108. RATE SUSPENSION; DEADLINE 145-18 Sec. 36.109. TEMPORARY RATES 145-19 Sec. 36.110. BONDED RATES 145-20 Sec. 36.111. ESTABLISHMENT OF FINAL RATES 145-21 (Sections 36.112-36.150 reserved for expansion) 145-22 SUBCHAPTER D. RATE CHANGES PROPOSED BY REGULATORY AUTHORITY 145-23 Sec. 36.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 145-24 Sec. 36.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 145-25 ANOTHER SOURCE 146-1 Sec. 36.153. RATE-FILING PACKAGE 146-2 Sec. 36.154. DEADLINE 146-3 Sec. 36.155. INTERIM ORDER ESTABLISHING TEMPORARY RATES 146-4 Sec. 36.156. AUTOMATIC TEMPORARY RATES 146-5 (Sections 36.157-36.200 reserved for expansion) 146-6 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENT 146-7 Sec. 36.201. AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS 146-8 Sec. 36.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY 146-9 Sec. 36.203. FUEL COST RECOVERY; ADJUSTMENT OF FUEL 146-10 FACTOR 146-11 Sec. 36.204. COST RECOVERY AND INCENTIVES 146-12 Sec. 36.205. PURCHASED POWER COST RECOVERY 146-13 Sec. 36.206. MARK-UPS 146-14 Sec. 36.207. USE OF MARK-UPS 146-15 Sec. 36.208. PAYMENT TO QUALIFYING FACILITY 146-16 (Sections 36.209-36.250 reserved for expansion) 146-17 SUBCHAPTER F. PARTIAL RATE DEREGULATION AVAILABLE 146-18 TO CERTAIN COOPERATIVES 146-19 Sec. 36.251. ELECTRIC COOPERATIVE EXEMPTION 146-20 Sec. 36.252. ELECTION ON EXEMPTION 146-21 Sec. 36.253. EFFECT OF ELECTION 146-22 Sec. 36.254. APPLICATION OF OTHER PROVISIONS 146-23 Sec. 36.255. SUBSEQUENT ELECTION; REVOCATION 146-24 (Sections 36.256-36.300 reserved for expansion) 147-1 SUBCHAPTER G. RATE CHANGES BY CERTAIN 147-2 ELECTRIC COOPERATIVES 147-3 Sec. 36.301. APPLICATION OF SUBCHAPTER 147-4 Sec. 36.302. METHODS OF CHANGING RATES 147-5 Sec. 36.303. CONTENTS OF NOTICE 147-6 Sec. 36.304. ACCESS TO WRITTEN OPPOSITION 147-7 Sec. 36.305. TARIFFS; EFFECTIVE DATE OF RATE CHANGES 147-8 Sec. 36.306. DISCOUNTED RATES 147-9 Sec. 36.307. COMMISSION REVIEW 147-10 Sec. 36.308. REVIEW REQUESTED BY COOPERATIVE MEMBER OR 147-11 COMMISSION 147-12 Sec. 36.309. REVIEW REQUESTED BY AFFECTED ELECTRIC UTILITY 147-13 (Sections 36.310-36.350 reserved for expansion) 147-14 SUBCHAPTER H. RATES FOR GOVERNMENTAL ENTITIES 147-15 Sec. 36.351. DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF 147-16 HIGHER EDUCATION 147-17 Sec. 36.352. SPECIAL RATE CLASS 147-18 Sec. 36.353. PAYMENT IN LIEU OF TAX 147-19 CHAPTER 36. RATES 147-20 SUBCHAPTER A. GENERAL PROVISIONS 147-21 Sec. 36.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 147-22 (a) The regulatory authority may establish and regulate rates of 147-23 an electric utility and may adopt rules for determining: 147-24 (1) the classification of customers and services; and 147-25 (2) the applicability of rates. 148-1 (b) A rule or order of the regulatory authority may not 148-2 conflict with a ruling of a federal regulatory body. (V.A.C.S. 148-3 Art. 1446c-0, Sec. 2.201.) 148-4 Sec. 36.002. COMPLIANCE WITH TITLE. An electric utility may 148-5 not charge or receive a rate for utility service except as provided 148-6 by this title. (V.A.C.S. Art. 1446c-0, Sec. 2.153 (part).) 148-7 Sec. 36.003. JUST AND REASONABLE RATES. (a) The regulatory 148-8 authority shall ensure that each rate an electric utility or two or 148-9 more electric utilities jointly make, demand, or receive is just 148-10 and reasonable. 148-11 (b) A rate may not be unreasonably preferential, 148-12 prejudicial, or discriminatory but must be sufficient, equitable, 148-13 and consistent in application to each class of consumer. 148-14 (c) An electric utility may not: 148-15 (1) grant an unreasonable preference or advantage 148-16 concerning rates to a person in a classification; 148-17 (2) subject a person in a classification to an 148-18 unreasonable prejudice or disadvantage concerning rates; or 148-19 (3) establish or maintain an unreasonable difference 148-20 concerning rates between localities or between classes of service. 148-21 (d) In establishing an electric utility's rates, the 148-22 commission may treat as a single class two or more municipalities 148-23 that an electric utility serves if the commission considers that 148-24 treatment to be appropriate. 148-25 (e) A charge to an individual customer for retail or 149-1 wholesale electric service that is less than the rate approved by 149-2 the regulatory authority does not constitute an impermissible 149-3 difference, preference, or advantage. (V.A.C.S. Art. 1446c-0, 149-4 Secs. 2.202, 2.214 (part).) 149-5 Sec. 36.004. EQUALITY OF RATES AND SERVICES. (a) An 149-6 electric utility may not directly or indirectly charge, demand, or 149-7 receive from a person a greater or lesser compensation for a 149-8 service provided or to be provided by the utility than the 149-9 compensation prescribed by the applicable tariff filed under 149-10 Section 32.101. 149-11 (b) A person may not knowingly receive or accept a service 149-12 from an electric utility for a compensation greater or less than 149-13 the compensation prescribed by the tariff. 149-14 (c) Notwithstanding Subsections (a) and (b), an electric 149-15 utility may charge an individual customer for wholesale or retail 149-16 electric service in accordance with Section 36.007. 149-17 (d) This title does not prevent a cooperative corporation 149-18 from returning to its members net earnings resulting from its 149-19 operations in proportion to the members' purchases from or through 149-20 the corporation. (V.A.C.S. Art. 1446c-0, Secs. 2.215(a), (b).) 149-21 Sec. 36.005. RATES FOR AREA NOT IN MUNICIPALITY. Without 149-22 the approval of the commission, an electric utility's rates for an 149-23 area not in a municipality may not exceed 115 percent of the 149-24 average of all rates for similar services for all municipalities 149-25 served by the same utility in the same county as that area. 150-1 (V.A.C.S. Art. 1446c-0, Sec. 2.213.) 150-2 Sec. 36.006. BURDEN OF PROOF. In a proceeding involving a 150-3 proposed rate change, the electric utility has the burden of 150-4 proving that: 150-5 (1) the rate change is just and reasonable, if the 150-6 utility proposes the change; or 150-7 (2) an existing rate is just and reasonable, if the 150-8 proposal is to reduce the rate. (V.A.C.S. Art. 1446c-0, Sec. 150-9 2.204.) 150-10 Sec. 36.007. DISCOUNTED WHOLESALE OR RETAIL RATES. (a) On 150-11 application by an electric utility, a regulatory authority may 150-12 approve wholesale or retail tariffs or contracts containing charges 150-13 that are less than rates approved by the regulatory authority but 150-14 not less than the utility's marginal cost. The charges must be in 150-15 accordance with the principles of this title and may not be 150-16 unreasonably preferential, prejudicial, discriminatory, predatory, 150-17 or anticompetitive. 150-18 (b) The method for computing the marginal cost of the 150-19 electric utility consists of energy and capacity components. The 150-20 energy component includes variable operation and maintenance 150-21 expense and marginal fuel or the energy component of purchased 150-22 power. The capacity component is based on the annual economic 150-23 value of deferring, accelerating, or avoiding the next increment of 150-24 needed capacity, without regard to whether the capacity is 150-25 purchased or built. 151-1 (c) The commission shall ensure that the method for 151-2 determining marginal cost is consistently applied among utilities 151-3 but may recognize the individual load and resource requirements of 151-4 the electric utility. 151-5 (d) Notwithstanding any other provision of this title, the 151-6 commission shall ensure that the electric utility's allocable costs 151-7 of serving customers paying discounted rates under this section are 151-8 not borne by the utility's other customers. (V.A.C.S. 151-9 Art. 1446c-0, Secs. 2.001(b), (c), (d) (part), 2.052(b), (c).) 151-10 Sec. 36.008. STATE TRANSMISSION SYSTEM. In establishing 151-11 rates for an electric utility not required to file an integrated 151-12 resource plan, the commission may review the state's transmission 151-13 system and make recommendations to the utility on the need to build 151-14 new power lines, upgrade power lines, and make other necessary 151-15 improvements and additions. (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) 151-16 (part).) 151-17 (Sections 36.009-36.050 reserved for expansion) 151-18 SUBCHAPTER B. COMPUTATION OF RATES 151-19 Sec. 36.051. ESTABLISHING OVERALL REVENUES. In establishing 151-20 an electric utility's rates, the regulatory authority shall 151-21 establish the utility's overall revenues at an amount that will 151-22 permit the utility a reasonable opportunity to earn a reasonable 151-23 return on the utility's invested capital used and useful in 151-24 providing service to the public in excess of the utility's 151-25 reasonable and necessary operating expenses. (V.A.C.S. 152-1 Art. 1446c-0, Sec. 2.203(a).) 152-2 Sec. 36.052. ESTABLISHING REASONABLE RETURN. In 152-3 establishing a reasonable return on invested capital, the 152-4 regulatory authority shall consider applicable factors, including: 152-5 (1) the efforts of the electric utility to comply with 152-6 its most recently approved integrated resource plan; 152-7 (2) the efforts and achievements of the utility in 152-8 conserving resources; 152-9 (3) the quality of the utility's services; 152-10 (4) the efficiency of the utility's operations; and 152-11 (5) the quality of the utility's management. 152-12 (V.A.C.S. Art. 1446c-0, Sec. 2.203(b).) 152-13 Sec. 36.053. COMPONENTS OF INVESTED CAPITAL. (a) Electric 152-14 utility rates shall be based on the original cost, less 152-15 depreciation, of property used by and useful to the utility in 152-16 providing service. 152-17 (b) The original cost of property shall be determined at the 152-18 time the property is dedicated to public use, whether by the 152-19 utility that is the present owner or by a predecessor. 152-20 (c) In this section, the term "original cost" means the 152-21 actual money cost or the actual money value of consideration paid 152-22 other than money. (V.A.C.S. Art. 1446c-0, Secs. 2.206(a) (part), 152-23 (c).) 152-24 Sec. 36.054. CONSTRUCTION WORK IN PROGRESS. 152-25 (a) Construction work in progress, at cost as recorded on the 153-1 electric utility's books, may be included in the utility's rate 153-2 base. The inclusion of construction work in progress is an 153-3 exceptional form of rate relief that the regulatory authority may 153-4 grant only if the utility demonstrates that inclusion is necessary 153-5 to the utility's financial integrity. 153-6 (b) Construction work in progress may not be included in the 153-7 rate base for a major project under construction to the extent that 153-8 the project has been inefficiently or imprudently planned or 153-9 managed. (V.A.C.S. Art. 1446c-0, Secs. 2.206(a) (part), (b).) 153-10 Sec. 36.055. SEPARATIONS AND ALLOCATIONS. Costs of 153-11 facilities, revenues, expenses, taxes, and reserves shall be 153-12 separated or allocated as prescribed by the regulatory authority. 153-13 (V.A.C.S. Art. 1446c-0, Sec. 2.207.) 153-14 Sec. 36.056. DEPRECIATION, AMORTIZATION, AND DEPLETION. 153-15 (a) The commission shall establish proper and adequate rates and 153-16 methods of depreciation, amortization, or depletion for each class 153-17 of property of an electric or municipally owned utility. 153-18 (b) The rates and methods established under this section and 153-19 the depreciation account required by Section 32.102 shall be used 153-20 uniformly and consistently throughout rate-setting and appeal 153-21 proceedings. (V.A.C.S. Art. 1446c-0, Secs. 2.151(a) (part), (d).) 153-22 Sec. 36.057. NET INCOME; DETERMINATION OF REVENUES AND 153-23 EXPENSES. (a) An electric utility's net income is the total 153-24 revenues of the utility less all reasonable and necessary expenses 153-25 as determined by the regulatory authority. 154-1 (b) The regulatory authority shall determine revenues and 154-2 expenses in a manner consistent with this subchapter. 154-3 (c) The regulatory authority may adopt reasonable rules with 154-4 respect to whether an expense is allowed for ratemaking purposes. 154-5 (V.A.C.S. Art. 1446c-0, Secs. 2.208(a), (e).) 154-6 Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE. 154-7 (a) Except as provided by Subsection (b), the regulatory authority 154-8 may not allow as capital cost or as expense a payment to an 154-9 affiliate for: 154-10 (1) the cost of a service, property, right, or other 154-11 item; or 154-12 (2) interest expense. 154-13 (b) The regulatory authority may allow a payment described 154-14 by Subsection (a) only to the extent that the regulatory authority 154-15 finds the payment is reasonable and necessary for each item or 154-16 class of items as determined by the commission. 154-17 (c) A finding under Subsection (b) must include: 154-18 (1) a specific finding of the reasonableness and 154-19 necessity of each item or class of items allowed; and 154-20 (2) a finding that the price to the electric utility 154-21 is not higher than the prices charged by the supplying affiliate to 154-22 its other affiliates or divisions or to a nonaffiliated person for 154-23 the same item or class of items. 154-24 (d) In making a finding regarding an affiliate transaction, 154-25 including an affiliate transaction subject to Chapter 34, the 155-1 regulatory authority shall: 155-2 (1) determine the extent to which the conditions and 155-3 circumstances of that transaction are reasonably comparable 155-4 relative to quantity, terms, date of contract, and place of 155-5 delivery; and 155-6 (2) allow for appropriate differences based on that 155-7 determination. 155-8 (e) This section does not require a finding to be made 155-9 before payments made by an electric utility to an affiliate are 155-10 included in the utility's charges to consumers if there is a 155-11 mechanism for making the charges subject to refund pending the 155-12 making of the finding. (V.A.C.S. Art. 1446c-0, Sec. 2.208(b).) 155-13 Sec. 36.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 155-14 determining the allocation of tax savings derived from liberalized 155-15 depreciation and amortization, the investment tax credit, and the 155-16 application of similar methods, the regulatory authority shall: 155-17 (1) balance equitably the interests of present and 155-18 future customers; and 155-19 (2) apportion accordingly the benefits between 155-20 consumers and the electric or municipally owned utility. 155-21 (b) If an electric utility or a municipally owned utility 155-22 retains a portion of the investment tax credit, that portion shall 155-23 be deducted from the original cost of the facilities or other 155-24 addition to the rate base to which the credit applied to the extent 155-25 allowed by the Internal Revenue Code. (V.A.C.S. Art. 1446c-0, 156-1 Secs. 2.151(c), (d).) 156-2 Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS. (a) Unless 156-3 it is shown to the satisfaction of the regulatory authority that it 156-4 was reasonable to choose not to consolidate returns, an electric 156-5 utility's income taxes shall be computed as though a consolidated 156-6 return had been filed and the utility had realized its fair share 156-7 of the savings resulting from that return, if: 156-8 (1) the utility is a member of an affiliated group 156-9 eligible to file a consolidated income tax return; and 156-10 (2) it is advantageous to the utility to do so. 156-11 (b) The amount of income tax that a consolidated group of 156-12 which an electric utility is a member saves, because the 156-13 consolidated return eliminates the intercompany profit on purchases 156-14 by the utility from an affiliate, shall be applied to reduce the 156-15 cost of the property or service purchased from the affiliate. 156-16 (c) The investment tax credit allowed against federal income 156-17 taxes, to the extent retained by the electric utility, shall be 156-18 applied as a reduction in the rate-based contribution of the assets 156-19 to which the credit applies, to the extent and at the rate allowed 156-20 by the Internal Revenue Code. (V.A.C.S. Art. 1446c-0, Sec. 156-21 2.208(c).) 156-22 Sec. 36.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The 156-23 regulatory authority may not allow as a cost or expense for 156-24 ratemaking purposes: 156-25 (1) an expenditure for legislative advocacy; or 157-1 (2) an expenditure described by Section 32.104 that 157-2 the regulatory authority determines to be not in the public 157-3 interest. 157-4 (b) The regulatory authority may allow as a cost or expense: 157-5 (1) reasonable charitable or civic contributions not 157-6 to exceed the amount approved by the regulatory authority; and 157-7 (2) reasonable costs of participating in a proceeding 157-8 under this title not to exceed the amount approved by the 157-9 regulatory authority. (V.A.C.S. Art. 1446c-0, Secs. 2.152(b), (c), 157-10 (d), (e).) 157-11 Sec. 36.062. CONSIDERATION OF CERTAIN EXPENSES. The 157-12 regulatory authority may not consider for ratemaking purposes: 157-13 (1) an expenditure for legislative advocacy, made 157-14 directly or indirectly, including legislative advocacy expenses 157-15 included in trade association dues; 157-16 (2) a payment made to cover costs of an accident, 157-17 equipment failure, or negligence at a utility facility owned by a 157-18 person or governmental entity not selling power in this state, 157-19 other than a payment made under an insurance or risk-sharing 157-20 arrangement executed before the date of loss; 157-21 (3) an expenditure for costs of processing a refund or 157-22 credit under Section 36.110; or 157-23 (4) any other expenditure, including an executive 157-24 salary, advertising expense, legal expense, or civil penalty or 157-25 fine, the regulatory authority finds to be unreasonable, 158-1 unnecessary, or not in the public interest. (V.A.C.S. 158-2 Art. 1446c-0, Sec. 2.208(d).) 158-3 Sec. 36.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 158-4 LEASE OF MERCHANDISE. In establishing an electric or municipally 158-5 owned utility's rates, the regulatory authority may not consider 158-6 any profit or loss that results from the sale or lease of 158-7 merchandise, including appliances, fixtures, or equipment, to the 158-8 extent that merchandise is not integral to providing utility 158-9 service. (V.A.C.S. Art. 1446c-0, Secs. 2.151(b) (part), (d).) 158-10 Sec. 36.064. SELF-INSURANCE. (a) An electric utility may 158-11 self-insure all or part of the utility's potential liability or 158-12 catastrophic property loss, including windstorm, fire, and 158-13 explosion losses, that could not have been reasonably anticipated 158-14 and included under operating and maintenance expenses. 158-15 (b) The commission shall approve a self-insurance plan under 158-16 this section if the commission finds that: 158-17 (1) the coverage is in the public interest; 158-18 (2) the plan, considering all costs, is a lower cost 158-19 alternative to purchasing commercial insurance; and 158-20 (3) ratepayers will receive the benefits of the 158-21 savings. 158-22 (c) In computing an electric utility's reasonable and 158-23 necessary expenses under this subchapter, the regulatory authority, 158-24 to the extent the regulatory authority finds is in the public 158-25 interest, shall allow as a necessary expense the money credited to 159-1 a reserve account for self-insurance. The regulatory authority 159-2 shall determine reasonableness under this subsection: 159-3 (1) from information provided at the time the 159-4 self-insurance plan and reserve account are established; and 159-5 (2) on the filing of a rate case by an electric 159-6 utility that has a reserve account. 159-7 (d) After a reserve account for self-insurance is 159-8 established, the regulatory authority shall: 159-9 (1) determine whether the reserve account has a 159-10 surplus or shortage under Subsection (e); and 159-11 (2) subtract any surplus from or add any shortage to 159-12 the utility's rate base. 159-13 (e) A surplus in the reserve account exists if the charges 159-14 against the account are less than the money credited to the 159-15 account. A shortage in the reserve account exists if the charges 159-16 against the account are greater than the money credited to the 159-17 account. 159-18 (f) The allowance for self-insurance under this title for 159-19 ratemaking purposes is not applicable to nuclear plant investment. 159-20 (g) The commission shall adopt rules governing 159-21 self-insurance under this section. (V.A.C.S. Art. 1446c-0, Sec. 159-22 2.210.) 159-23 (Sections 36.065-36.100 reserved for expansion) 160-1 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGES 160-2 PROPOSED BY UTILITY 160-3 Sec. 36.101. DEFINITION. In this subchapter, "major change" 160-4 means an increase in rates that would increase the aggregate 160-5 revenues of the applicant more than the greater of $100,000 or 160-6 2-1/2 percent. The term does not include an increase in rates that 160-7 the regulatory authority allows to go into effect or the electric 160-8 utility makes under an order of the regulatory authority after 160-9 hearings held with public notice. (V.A.C.S. Art. 1446c-0, Sec. 160-10 2.212(b) (part).) 160-11 Sec. 36.102. STATEMENT OF INTENT TO CHANGE RATES. 160-12 (a) Except as provided by Section 33.024, an electric utility may 160-13 not change its rates unless the utility files a statement of its 160-14 intent with the regulatory authority that has original jurisdiction 160-15 over those rates at least 35 days before the effective date of the 160-16 proposed change. 160-17 (b) The electric utility shall also mail or deliver a copy 160-18 of the statement of intent to the appropriate officer of each 160-19 affected municipality. 160-20 (c) The statement of intent must include: 160-21 (1) proposed revisions of tariffs; and 160-22 (2) a detailed statement of: 160-23 (A) each proposed change; 160-24 (B) the effect the proposed change is expected 160-25 to have on the revenues of the utility; 161-1 (C) each class and number of utility consumers 161-2 affected; and 161-3 (D) any other information required by the 161-4 regulatory authority's rules. (V.A.C.S. Art. 1446c-0, Sec. 161-5 2.212(a) (part).) 161-6 Sec. 36.103. NOTICE OF INTENT TO CHANGE RATES. (a) The 161-7 electric utility shall: 161-8 (1) publish, in conspicuous form and place, notice to 161-9 the public of the proposed change once each week for four 161-10 successive weeks before the effective date of the proposed change 161-11 in a newspaper having general circulation in each county containing 161-12 territory affected by the proposed change; and 161-13 (2) mail notice of the proposed change to any other 161-14 affected person as required by the regulatory authority's rules. 161-15 (b) The regulatory authority may waive the publication of 161-16 notice requirement prescribed by Subsection (a) in a proceeding 161-17 that involves only a rate reduction for each affected ratepayer. 161-18 The applicant shall give notice of the proposed rate change by mail 161-19 to each affected utility customer. 161-20 (c) The regulatory authority by rule shall define other 161-21 proceedings for which the publication of notice requirement 161-22 prescribed by Subsection (a) may be waived on a showing of good 161-23 cause. A waiver may not be granted in a proceeding involving a 161-24 rate increase to any class or category of ratepayer. (V.A.C.S. 161-25 Art. 1446c-0, Sec. 2.212(a) (part).) 162-1 Sec. 36.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For 162-2 good cause shown, the regulatory authority may allow a rate change, 162-3 other than a major change, to take effect: 162-4 (1) before the end of the 35-day period prescribed by 162-5 Section 36.102; and 162-6 (2) under conditions the regulatory authority 162-7 prescribes, subject to suspension as provided by this subchapter. 162-8 (b) The electric utility shall immediately revise its 162-9 tariffs to include the change. (V.A.C.S. Art. 1446c-0, Sec. 162-10 2.212(b) (part).) 162-11 Sec. 36.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 162-12 HEARING. (a) If a tariff changing rates is filed with a 162-13 regulatory authority, the regulatory authority shall, on complaint 162-14 by an affected person, or may, on its own motion, not later than 162-15 the 30th day after the effective date of the change, enter on a 162-16 hearing to determine the propriety of the change. 162-17 (b) The regulatory authority shall hold a hearing in every 162-18 case in which the change constitutes a major change. The 162-19 regulatory authority may, however, use an informal proceeding if 162-20 the regulatory authority does not receive a complaint before the 162-21 46th day after the date notice of the change is filed. 162-22 (c) The regulatory authority shall give reasonable notice of 162-23 the hearing, including notice to the governing body of each 162-24 affected municipality and county. The electric utility is not 162-25 required to provide a formal answer or file any other formal 163-1 pleading in response to the notice, and the absence of an answer 163-2 does not affect an order for a hearing. (V.A.C.S. Art. 1446c-0, 163-3 Sec. 2.212(c) (part).) 163-4 Sec. 36.106. REGIONAL HEARING. The commission shall hold a 163-5 regional hearing at an appropriate location in a case in which the 163-6 commission determines it is in the public interest to hear 163-7 testimony at a regional hearing for inclusion in the record. 163-8 (V.A.C.S. Art. 1446c-0, Sec. 2.212(c) (part).) 163-9 Sec. 36.107. PREFERENCE TO HEARING. The regulatory 163-10 authority shall: 163-11 (1) give preference to a hearing under this subchapter 163-12 and to deciding questions arising under this subchapter and 163-13 Subchapter E over any other question pending before it; and 163-14 (2) decide the questions as quickly as possible. 163-15 (V.A.C.S. Art. 1446c-0, Sec. 2.212(d) (part).) 163-16 Sec. 36.108. RATE SUSPENSION; DEADLINE. (a) Pending the 163-17 hearing and a decision: 163-18 (1) the local regulatory authority, after delivering 163-19 to the electric utility a written statement of the regulatory 163-20 authority's reasons, may suspend the rate change for not longer 163-21 than 90 days after the date the rate change would otherwise be 163-22 effective; and 163-23 (2) the commission may suspend the rate change for not 163-24 longer than 150 days after the date the rate change would otherwise 163-25 be effective. 164-1 (b) The 150-day period prescribed by Subsection (a)(2) shall 164-2 be extended two days for each day the actual hearing on the merits 164-3 of the case exceeds 15 days. 164-4 (c) If the regulatory authority does not make a final 164-5 determination concerning a rate change before expiration of the 164-6 applicable suspension period, the regulatory authority is 164-7 considered to have approved the change. This approval is subject 164-8 to the authority of the regulatory authority thereafter to continue 164-9 a hearing in progress. (V.A.C.S. Art. 1446c-0, Sec. 2.212(d) 164-10 (part).) 164-11 Sec. 36.109. TEMPORARY RATES. (a) The regulatory authority 164-12 may establish temporary rates to be in effect during the applicable 164-13 suspension period under Section 36.108. 164-14 (b) If the regulatory authority does not establish temporary 164-15 rates, the rates in effect when the suspended tariff was filed 164-16 continue in effect during the suspension period. (V.A.C.S. 164-17 Art. 1446c-0, Sec. 2.212(d) (part).) 164-18 Sec. 36.110. BONDED RATES. (a) An electric utility may put 164-19 a changed rate into effect throughout the area in which the utility 164-20 sought to change its rates, including an area over which the 164-21 commission is exercising appellate or original jurisdiction, by 164-22 filing a bond with the commission if: 164-23 (1) the 150-day suspension period has been extended 164-24 under Section 36.108(b); and 164-25 (2) the commission fails to make a final determination 165-1 before the 151st day after the date the rate change would otherwise 165-2 be effective. 165-3 (b) The bonded rate may not exceed the proposed rate. 165-4 (c) The bond must be: 165-5 (1) payable to the commission in an amount, in a form, 165-6 and with a surety approved by the commission; and 165-7 (2) conditioned on refund. 165-8 (d) The electric utility shall refund or credit against 165-9 future bills: 165-10 (1) money collected under the bonded rates in excess 165-11 of the rate finally ordered; and 165-12 (2) interest on that money, at the current interest 165-13 rate as determined by the commission. (V.A.C.S. Art. 1446c-0, Sec. 165-14 2.212(e).) 165-15 Sec. 36.111. ESTABLISHMENT OF FINAL RATES. (a) If, after 165-16 hearing, the regulatory authority finds the rates are unreasonable 165-17 or in violation of law, the regulatory authority shall: 165-18 (1) enter an order establishing the rates the electric 165-19 utility shall charge or apply for the service in question; and 165-20 (2) serve a copy of the order on the electric utility. 165-21 (b) The rates established in the order shall be observed 165-22 thereafter until changed as provided by this title. (V.A.C.S. 165-23 Art. 1446c-0, Sec. 2.212(f).) 165-24 (Sections 36.112-36.150 reserved for expansion) 166-1 SUBCHAPTER D. RATE CHANGES PROPOSED BY REGULATORY AUTHORITY 166-2 Sec. 36.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. 166-3 (a) If the regulatory authority, on its own motion or on complaint 166-4 by an affected person, after reasonable notice and hearing, finds 166-5 that the existing rates of an electric utility for a service are 166-6 unreasonable or in violation of law, the regulatory authority 166-7 shall: 166-8 (1) enter an order establishing the just and 166-9 reasonable rates to be observed thereafter, including maximum or 166-10 minimum rates; and 166-11 (2) serve a copy of the order on the electric utility. 166-12 (b) The rates established under Subsection (a) constitute 166-13 the legal rates of the electric utility until changed as provided 166-14 by this title. (V.A.C.S. Art. 1446c-0, Sec. 2.211(a).) 166-15 Sec. 36.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 166-16 ANOTHER SOURCE. If an electric utility does not produce or 166-17 generate the service that it distributes, transmits, or furnishes 166-18 to the public for compensation but obtains the service from another 166-19 source, the regulatory authority may investigate the cost of that 166-20 production or generation in an investigation of the reasonableness 166-21 of the electric utility's rates. (V.A.C.S. Art. 1446c-0, Sec. 166-22 2.211(b).) 166-23 Sec. 36.153. RATE-FILING PACKAGE. (a) An electric utility 166-24 shall file a rate-filing package with the regulatory authority not 166-25 later than the 120th day after the date the authority notifies the 167-1 utility that the authority will proceed with an inquiry under 167-2 Section 36.151. 167-3 (b) The regulatory authority may grant an extension of the 167-4 120-day period prescribed by Subsection (a) or waive the 167-5 rate-filing package requirement on agreement of the parties. 167-6 (V.A.C.S. Art. 1446c-0, Sec. 2.211(c) (part).) 167-7 Sec. 36.154. DEADLINE. (a) The regulatory authority shall 167-8 make a final determination not later than the 185th day after the 167-9 date the electric utility files the rate-filing package required by 167-10 Section 36.153. 167-11 (b) The deadline prescribed by Subsection (a) is extended 167-12 two days for each day the actual hearing on the merits of the case 167-13 exceeds 15 days. (V.A.C.S. Art. 1446c-0, Sec. 2.211(c) (part).) 167-14 Sec. 36.155. INTERIM ORDER ESTABLISHING TEMPORARY RATES. 167-15 (a) At any time after an initial complaint is filed under Section 167-16 36.151, the regulatory authority may issue an interim order 167-17 establishing temporary rates for the electric utility to be in 167-18 effect until a final determination is made. 167-19 (b) On issuance of a final order, the regulatory authority: 167-20 (1) may require the electric utility to refund to 167-21 customers or to credit against future bills: 167-22 (A) money collected under the temporary rates in 167-23 excess of the rate finally ordered; and 167-24 (B) interest on that money, at the current 167-25 interest rate as determined by the commission; or 168-1 (2) shall authorize the electric utility to surcharge 168-2 bills to recover: 168-3 (A) the amount by which the money collected 168-4 under the temporary rates is less than the money that would have 168-5 been collected under the rate finally ordered; and 168-6 (B) interest on that amount, at the current 168-7 interest rate as determined by the commission. (V.A.C.S. 168-8 Art. 1446c-0, Sec. 2.211(d).) 168-9 Sec. 36.156. AUTOMATIC TEMPORARY RATES. (a) The rates 168-10 charged by the electric utility on the 185th day after the date the 168-11 utility files the rate-filing package required by Section 36.153 168-12 automatically become temporary rates if: 168-13 (1) the 185-day period has been extended under Section 168-14 36.154(b); and 168-15 (2) the regulatory authority has not issued a final 168-16 order or established temporary rates for the electric utility on or 168-17 before the 185th day. 168-18 (b) On issuance of a final order, the regulatory authority: 168-19 (1) shall require the electric utility to refund to 168-20 customers or to credit against future bills: 168-21 (A) money collected under the temporary rates in 168-22 excess of the rate finally ordered; and 168-23 (B) interest on that money, at the current 168-24 interest rate as determined by the commission; or 168-25 (2) shall authorize the electric utility to surcharge 169-1 bills to recover: 169-2 (A) the amount by which the money collected 169-3 under the temporary rates is less than the money that would have 169-4 been collected under the rate finally ordered; and 169-5 (B) interest on that amount, at the current 169-6 interest rate as determined by the commission. (V.A.C.S. 169-7 Art. 1446c-0, Sec. 2.211(e).) 169-8 (Sections 36.157-36.200 reserved for expansion) 169-9 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENT 169-10 Sec. 36.201. AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS. 169-11 Except as permitted by Chapter 34 or Section 36.204, the commission 169-12 may not establish a rate or tariff that authorizes an electric 169-13 utility to automatically adjust and pass through to the utility's 169-14 customers a change in the utility's fuel or other costs. (V.A.C.S. 169-15 Art. 1446c-0, Sec. 2.212(g)(1).) 169-16 Sec. 36.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY. 169-17 (a) The commission, on its own motion or on the petition of an 169-18 electric utility, shall provide for the adjustment of the utility's 169-19 billing to reflect an increase or decrease in the utility's tax 169-20 liability to this state if the increase or decrease: 169-21 (1) results from Chapter 5, Acts of the 72nd 169-22 Legislature, 1st Called Session, 1991; and 169-23 (2) is attributable to an activity subject to the 169-24 commission's jurisdiction. 169-25 (b) The commission shall apportion pro rata to each type and 170-1 class of service provided by the utility any billing adjustment 170-2 under this section. The adjustment: 170-3 (1) shall be made effective at the same time as the 170-4 increase or decrease of tax liability described by Subsection 170-5 (a)(1) or as soon after that increase or decrease as is reasonably 170-6 practical; and 170-7 (2) remains effective only until the commission alters 170-8 the adjustment as provided by this section or enters an order for 170-9 the utility under Subchapter C or D. 170-10 (c) Each year after an original adjustment, the commission 170-11 shall: 170-12 (1) review the utility's increase or decrease of tax 170-13 liability described by Subsection (a)(1); and 170-14 (2) alter the adjustment as necessary to reflect the 170-15 increase or decrease. 170-16 (d) A proceeding under this section is not a rate case under 170-17 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.212(h).) 170-18 Sec. 36.203. FUEL COST RECOVERY; ADJUSTMENT OF FUEL FACTOR. 170-19 (a) Section 36.201 does not prohibit the commission from reviewing 170-20 and providing for adjustments of a utility's fuel factor. 170-21 (b) The commission by rule shall implement procedures that 170-22 provide for the timely adjustment of a utility's fuel factor, with 170-23 or without a hearing. The procedures must require that: 170-24 (1) the findings required by Section 36.058 regarding 170-25 fuel transactions with affiliated interests are made in a fuel 171-1 reconciliation proceeding or in a rate case filed under Subchapter 171-2 C or D; and 171-3 (2) an affected party receive notice and have the 171-4 opportunity to request a hearing before the commission. 171-5 (c) The commission may adjust a utility's fuel factor 171-6 without a hearing if the commission determines that a hearing is 171-7 not necessary. If the commission holds a hearing, the commission 171-8 may consider at the hearing any evidence that is appropriate and in 171-9 the public interest. 171-10 (d) The commission shall render a timely decision approving, 171-11 disapproving, or modifying the adjustment to the utility's fuel 171-12 factor. 171-13 (e) The commission by rule shall provide for the 171-14 reconciliation of a utility's fuel costs on a timely basis. 171-15 (f) A proceeding under this section is not a rate case under 171-16 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.212(g)(2).) 171-17 Sec. 36.204. COST RECOVERY AND INCENTIVES. In establishing 171-18 rates for an electric utility not required to file an integrated 171-19 resource plan, the commission may: 171-20 (1) allow timely recovery of the reasonable costs of 171-21 conservation, load management, and purchased power, notwithstanding 171-22 Section 36.201; and 171-23 (2) authorize additional incentives for conservation, 171-24 load management, purchased power, and renewable resources. 171-25 (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) (part).) 172-1 Sec. 36.205. PURCHASED POWER COST RECOVERY. (a) This 172-2 section applies only to an increase or decrease in the cost of 172-3 purchased electricity that has been: 172-4 (1) accepted by a federal regulatory authority; or 172-5 (2) approved after a hearing by the commission. 172-6 (b) The commission may use any appropriate method to provide 172-7 for the adjustment of the cost of purchased electricity on terms 172-8 determined by the commission. 172-9 (c) Purchased electricity costs may be recovered: 172-10 (1) concurrently with the effective date of the 172-11 changed costs to the purchasing electric utility; or 172-12 (2) as soon after the effective date as reasonably 172-13 practical. 172-14 (d) The commission may provide a mechanism to allow an 172-15 electric utility that has a noncontiguous geographical service area 172-16 and that purchases power for resale for that noncontiguous service 172-17 area from electric utilities that are not members of the Electric 172-18 Reliability Council of Texas to recover purchased power costs for 172-19 the area in a manner that reflects the purchased power cost for 172-20 that specific geographical noncontiguous area. The commission may 172-21 not require an electric cooperative corporation to use the 172-22 mechanism provided under this section unless the electric 172-23 cooperative corporation requests its use. (V.A.C.S. Art. 1446c-0, 172-24 Sec. 2.212(g)(3).) 172-25 Sec. 36.206. MARK-UPS. (a) A cost recovery factor 173-1 established for the recovery of purchased power costs may include: 173-2 (1) the cost the electric utility incurs in purchasing 173-3 capacity and energy; 173-4 (2) a mark-up added to the cost or another mechanism 173-5 the commission determines will reasonably compensate the utility 173-6 for any financial risk associated with purchased power obligations; 173-7 and 173-8 (3) the value added by the utility in making the 173-9 purchased power available to customers. 173-10 (b) The mark-ups and cost recovery factors, if allowed, may 173-11 be those necessary to encourage the electric utility to include 173-12 economical purchased power as part of the utility's energy and 173-13 capacity resource supply plan. (V.A.C.S. Art. 1446c-0, Sec. 173-14 2.1511.) 173-15 Sec. 36.207. USE OF MARK-UPS. Any mark-ups approved under 173-16 Chapter 34 or Section 36.206 are an exceptional form of rate relief 173-17 that the electric utility may recover from ratepayers only on a 173-18 finding by the commission that the relief is necessary to maintain 173-19 the utility's financial integrity. (V.A.C.S. Art. 1446c-0, Sec. 173-20 2.001(d) (part).) 173-21 Sec. 36.208. PAYMENT TO QUALIFYING FACILITY. In 173-22 establishing an electric utility's rates, the regulatory authority 173-23 shall: 173-24 (1) consider a payment made to a qualifying facility 173-25 under an agreement certified under Subchapter C, Chapter 35, to be 174-1 a reasonable and necessary operating expense of the electric 174-2 utility during the period for which the certification is effective; 174-3 and 174-4 (2) allow full, concurrent, and monthly recovery of 174-5 the amount of the payment. (V.A.C.S. Art. 1446c-0, Sec. 2.209(e).) 174-6 (Sections 36.209-36.250 reserved for expansion) 174-7 SUBCHAPTER F. PARTIAL RATE DEREGULATION AVAILABLE 174-8 TO CERTAIN COOPERATIVES 174-9 Sec. 36.251. ELECTRIC COOPERATIVE EXEMPTION. An electric 174-10 cooperative corporation providing retail electric utility service 174-11 at distribution voltage is exempt from rate regulation if: 174-12 (1) a majority of the members voting in an election on 174-13 the deregulation of the electric cooperative approve the exemption; 174-14 and 174-15 (2) the electric cooperative sends notice of the 174-16 action to each applicable regulatory authority. (V.A.C.S. 174-17 Art. 1446c-0, Sec. 2.2011(a) (part).) 174-18 Sec. 36.252. ELECTION ON EXEMPTION. (a) An electric 174-19 cooperative holding an election under Section 36.251 shall mail a 174-20 ballot to each electric cooperative member. The cooperative may 174-21 include the ballot in a monthly billing. 174-22 (b) The ballot shall be printed to permit voting for or 174-23 against rate deregulation of the electric cooperative. 174-24 (c) If the proposition is approved, the electric cooperative 174-25 shall send the ballots to the commission not later than the 10th 175-1 day after the date the electric cooperative counts the ballots. 175-2 (d) The commission shall administratively certify whether 175-3 the electric cooperative is deregulated for ratemaking purposes 175-4 based on the ballots received under Subsection (c). (V.A.C.S. 175-5 Art. 1446c-0, Sec. 2.2011(a) (part).) 175-6 Sec. 36.253. EFFECT OF ELECTION. (a) Except as provided by 175-7 Section 36.307, a regulatory authority may not establish or 175-8 regulate an electric cooperative's rates if the cooperative elects 175-9 under Section 36.252 to be exempt from rate regulation. 175-10 (b) Notwithstanding Section 33.001, the commission has 175-11 exclusive original jurisdiction in the electric cooperative's 175-12 service area in a proceeding initiated under Section 36.307. 175-13 (V.A.C.S. Art. 1446c-0, Sec. 2.2011(b).) 175-14 Sec. 36.254. APPLICATION OF OTHER PROVISIONS. (a) This 175-15 subchapter does not affect the application of a provision of this 175-16 title not directly related to: 175-17 (1) rates; or 175-18 (2) the authority of the commission to require an 175-19 electric cooperative to file a report required under this title or 175-20 under the commission's rules. 175-21 (b) A service fee or a service rule set by an electric 175-22 cooperative under this subchapter must comply with commission rules 175-23 that apply to all electric utilities. 175-24 (c) The commission may determine if an electric cooperative 175-25 has unlawfully charged or received a rate for electric utility 176-1 service. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(n).) 176-2 Sec. 36.255. SUBSEQUENT ELECTION; REVOCATION. (a) An 176-3 electric cooperative may not hold an election on the issue of its 176-4 exemption from rate regulation before the first anniversary of the 176-5 most recent election on the issue. 176-6 (b) Except as provided by Subsection (a), the members of an 176-7 electric cooperative may, by a majority vote of the members voting, 176-8 at any time: 176-9 (1) revoke the electric cooperative's election to be 176-10 exempt from rate regulation; or 176-11 (2) elect to be exempt from rate regulation. 176-12 (V.A.C.S. Art. 1446c-0, Secs. 2.2011(a) (part), (m).) 176-13 (Sections 36.256-36.300 reserved for expansion) 176-14 SUBCHAPTER G. RATE CHANGES BY CERTAIN 176-15 ELECTRIC COOPERATIVES 176-16 Sec. 36.301. APPLICATION OF SUBCHAPTER. This subchapter 176-17 applies to an electric cooperative that has elected to be exempt 176-18 from rate regulation under Subchapter F. (V.A.C.S. Art. 1446c-0, 176-19 Secs. 2.2011(a) (part), (p) (part).) 176-20 Sec. 36.302. METHODS OF CHANGING RATES. (a) An electric 176-21 cooperative may change its rates by: 176-22 (1) adopting a resolution approving the proposed 176-23 change; 176-24 (2) mailing notice of the proposed change to: 176-25 (A) the commission; 177-1 (B) each affected municipality and customer; and 177-2 (C) each electric utility providing retail 177-3 service in the electric cooperative's service area or in an 177-4 adjoining service area; and 177-5 (3) making available for review by any person at each 177-6 of the electric cooperative's business offices, a cost-of-service 177-7 study that: 177-8 (A) was prepared not earlier than the fifth 177-9 anniversary before the date the electric cooperative adopts rates 177-10 under this subchapter; and 177-11 (B) is certified by a professional engineer or 177-12 certified public accountant. 177-13 (b) The electric cooperative may satisfy the customer 177-14 notification requirement by including the notice in a monthly 177-15 billing. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(c).) 177-16 Sec. 36.303. CONTENTS OF NOTICE. (a) The notice required 177-17 by Section 36.302 must include: 177-18 (1) information concerning the increase or decrease in 177-19 total operating revenues over actual test year revenues or over 177-20 test year revenues adjusted to annualize the recovery of changes in 177-21 the cost of purchased electricity, stated as a dollar amount and as 177-22 a percentage; 177-23 (2) information concerning the classes of utility 177-24 customers affected; 177-25 (3) information concerning the creation and 178-1 application of any new rate classes; 178-2 (4) information concerning the increase or decrease 178-3 for each class stated as a percentage of actual test year revenues 178-4 for the class or of test year revenues for the class adjusted to 178-5 annualize the recovery of changes in the cost of purchased 178-6 electricity; 178-7 (5) a statement that the commission may review the 178-8 rate change if the commission receives, not later than the 60th day 178-9 after the date the notice is received, a petition that complies 178-10 with Section 36.307; 178-11 (6) the address and telephone number of the 178-12 commission; 178-13 (7) a statement that a customer opposed to the rate 178-14 change should notify the electric cooperative in writing of the 178-15 person's opposition and provide a return address; and 178-16 (8) a statement that a member may review a copy of any 178-17 written opposition the electric cooperative receives. 178-18 (b) The electric cooperative may not be required to provide 178-19 additional information in the notice. (V.A.C.S. Art. 1446c-0, Sec. 178-20 2.2011(d).) 178-21 Sec. 36.304. ACCESS TO WRITTEN OPPOSITION. An electric 178-22 cooperative shall make available for review by a member of the 178-23 cooperative at each of the electric cooperative's business offices 178-24 a copy of written opposition to a rate change received by the 178-25 cooperative. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(e).) 179-1 Sec. 36.305. TARIFFS; EFFECTIVE DATE OF RATE CHANGES. 179-2 (a) An electric cooperative shall file tariffs with the 179-3 commission. 179-4 (b) If the electric cooperative complies with Section 179-5 36.302, the commission shall approve the tariffs not later than the 179-6 10th day after the 60-day period prescribed by Section 36.307(a) 179-7 unless a review is required under that section. 179-8 (c) If the tariffs are approved or if a review is not 179-9 required and the commission fails to act on or before the deadline 179-10 prescribed by Subsection (b), the change in rates is effective on: 179-11 (1) the 70th day after the date the electric 179-12 cooperative first complies with each requirement prescribed by 179-13 Section 36.302; or 179-14 (2) a later date determined by the electric 179-15 cooperative. 179-16 (d) Except as provided by Section 36.307, the rates of the 179-17 electric cooperative are not subject to review. (V.A.C.S. 179-18 Art. 1446c-0, Sec. 2.2011(f).) 179-19 Sec. 36.306. DISCOUNTED RATES. (a) An electric cooperative 179-20 may, by resolution, adopt retail tariffs or contracts containing 179-21 charges that are less than the average embedded cost retail rates 179-22 but that are not less than the electric cooperative's marginal 179-23 cost. 179-24 (b) The standards described in Section 36.007 apply to the 179-25 review of rates adopted under Subsection (a). In a review of the 180-1 rates, the electric cooperative's marginal cost shall be the lowest 180-2 marginal cost of any of the cooperative's wholesale power 180-3 suppliers. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(p) (part).) 180-4 Sec. 36.307. COMMISSION REVIEW. (a) The commission shall 180-5 review a change in rates under this subchapter if, not later than 180-6 the 60th day after the date the electric cooperative first complies 180-7 with each requirement prescribed by Section 36.302, the commission 180-8 receives a petition requesting review signed by: 180-9 (1) at least 10 percent of the members of the electric 180-10 cooperative; 180-11 (2) members of the electric cooperative who purchased 180-12 more than 50 percent of the electric cooperative's annual energy 180-13 sales to a customer class in the test year, if the petition 180-14 contains a certification of the purchases; or 180-15 (3) an executive officer of an affected electric 180-16 utility, if the petition describes each particular class for which 180-17 a review is requested. 180-18 (b) A person who files a petition under Subsection (a) shall 180-19 notify the electric cooperative in writing of the action. 180-20 (c) The commission, on its own motion, may review the rates 180-21 of an electric cooperative if the commission finds that there is 180-22 good cause to believe that the electric cooperative is earning more 180-23 than a reasonable return on overall system revenues or on revenue 180-24 from a rate class. 180-25 (d) A single customer may seek a review of the rates of an 181-1 electric cooperative under Subchapter D if, in any period of 12 181-2 consecutive months during the 36 months preceding the date the 181-3 customer initiates a proceeding under Subchapter D, the customer: 181-4 (1) consumes more than 250,000,000 kwh; and 181-5 (2) purchases from the cooperative electric energy 181-6 equal to more than: 181-7 (A) 10 percent of the total energy sales of the 181-8 electric cooperative; or 181-9 (B) 7-1/2 percent of the total revenues of the 181-10 electric cooperative. 181-11 (e) A right conferred by Subsection (d) is in addition to 181-12 the rights of a customer under Subsection (a). (V.A.C.S. 181-13 Art. 1446c-0, Secs. 2.2011(g), (h), (i), (o), as added Acts 74th 181-14 Leg., R.S., Chs. 765 and 1013.) 181-15 Sec. 36.308. REVIEW REQUESTED BY COOPERATIVE MEMBER OR 181-16 COMMISSION. (a) The commission shall conduct a review under 181-17 Section 36.307(a)(1) or (2) or Section 36.307(c) in accordance with 181-18 Subchapter C and other applicable rate-setting principles of this 181-19 title, except that: 181-20 (1) the period for review does not begin until the 181-21 electric cooperative files the rate-filing package as required by 181-22 commission rules; 181-23 (2) a proposed change may not be suspended during the 181-24 pendency of the review; and 181-25 (3) the electric cooperative shall observe the rates 182-1 established by the commission until the rates are changed as 182-2 provided by this subchapter or another section of this title. 182-3 (b) Notwithstanding Subsection (a)(2), if ordered by the 182-4 commission, the electric cooperative shall refund or credit against 182-5 future bills money collected in excess of the rate finally 182-6 established by the commission. (V.A.C.S. Art. 1446c-0, Sec. 182-7 2.2011(j).) 182-8 Sec. 36.309. REVIEW REQUESTED BY AFFECTED ELECTRIC UTILITY. 182-9 (a) In a review conducted under Section 36.307(a)(3), an electric 182-10 cooperative shall file with the commission a copy of the 182-11 cost-of-service study required under Section 36.302 not later than 182-12 the 10th day after the date the electric cooperative receives 182-13 notice from an affected electric utility that a petition has been 182-14 filed. 182-15 (b) The commission shall determine for each class for which 182-16 review has been requested: 182-17 (1) the annual cost of providing service to the class, 182-18 as stated in the electric cooperative's cost-of-service study; and 182-19 (2) the revenues for the class that would be produced 182-20 by multiplying the rate established by the electric cooperative by 182-21 the annual billing units for the class, as stated in the 182-22 cost-of-service study. 182-23 (c) If the electric cooperative proposes a rate class solely 182-24 for a new customer, the electric cooperative shall: 182-25 (1) estimate the reasonable annual cost of providing 183-1 service to the class; and 183-2 (2) base class revenues on a reasonable estimate of 183-3 billing units. 183-4 (d) The rate for a class for which a review is requested 183-5 under Section 36.307(a)(3) is suspended during the pendency of the 183-6 review. 183-7 (e) The commission shall dismiss a petition for review and 183-8 approve the rates if the revenues for the class are not less than 183-9 the cost of providing service to the class. 183-10 (f) The commission shall disapprove a rate under review if 183-11 the revenues for the class are less than the cost of providing 183-12 service to the class. This action does not affect reconsideration 183-13 of the rate as a part of any subsequent ratemaking proceeding. 183-14 (g) A rate adopted by an electric cooperative is approved 183-15 and may be placed into effect if the commission fails to make its 183-16 final determination administratively not later than the 45th day 183-17 after the date the electric cooperative files its cost-of-service 183-18 study. (V.A.C.S. Art. 1446c-0, Secs. 2.2011(k), (l).) 183-19 (Sections 36.310-36.350 reserved for expansion) 183-20 SUBCHAPTER H. RATES FOR GOVERNMENTAL ENTITIES 183-21 Sec. 36.351. DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF 183-22 HIGHER EDUCATION. (a) Notwithstanding any other provision of this 183-23 title, each electric utility and municipally owned utility shall 183-24 discount charges for electric service provided to a facility of a 183-25 four-year state university, upper-level institution, Texas State 184-1 Technical College, or college. 184-2 (b) The discount is a 20-percent reduction of the utility's 184-3 base rates that would otherwise be paid under the applicable 184-4 tariffed rate. 184-5 (c) An electric or municipally owned utility is exempt from 184-6 this section if the 20-percent discount results in a reduction 184-7 equal to more than one percent of the utility's total annual 184-8 revenues. 184-9 (d) A municipally owned utility is exempt from this section 184-10 if the municipally owned utility, on September 1, 1995, discounted 184-11 base commercial rates for electric service provided to all 184-12 four-year state universities or colleges in its service area by 20 184-13 percent or more. 184-14 (e) This section does not apply to a rate charged to an 184-15 institution of higher education by a municipally owned utility that 184-16 provides a discounted rate to the state for electric services below 184-17 rates in effect on January 1, 1995, if the discounted rate provides 184-18 a greater financial discount to the state than is provided to the 184-19 institution of higher education through the discount provided by 184-20 this section. 184-21 (f) An investor-owned electric utility may not recover from 184-22 residential customers or any other customer class the assigned and 184-23 allocated costs of serving a state university or college that 184-24 receives a discount under this section. 184-25 (g) Each electric utility shall file tariffs with the 185-1 commission reflecting the discount required under this section. 185-2 The initial tariff filing is not a rate change for purposes of 185-3 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.2141.) 185-4 Sec. 36.352. SPECIAL RATE CLASS. Notwithstanding any other 185-5 provision of this title, if the commission, on or before September 185-6 1, 1995, approved the establishment of a separate rate class for 185-7 electric service for a university and grouped public schools in a 185-8 separate rate class, the commission shall include community 185-9 colleges in the rate class with public school customers. (V.A.C.S. 185-10 Art. 1446c-0, Sec. 2.215(c).) 185-11 Sec. 36.353. PAYMENT IN LIEU OF TAX. (a) A payment made in 185-12 lieu of a tax by a municipally owned utility to the municipality by 185-13 which the utility is owned may not be considered an expense of 185-14 operation in establishing the utility's rate for providing utility 185-15 service to a school district or hospital district. 185-16 (b) A rate a municipally owned utility receives from a 185-17 school district or hospital district may not be used to make or to 185-18 cover the cost of making payments in lieu of taxes to the 185-19 municipality that owns the utility. (V.A.C.S. Art. 1446c-0, Sec. 185-20 2.217.) 185-21 CHAPTER 37. CERTIFICATES OF CONVENIENCE 185-22 AND NECESSITY 185-23 SUBCHAPTER A. DEFINITIONS 185-24 Sec. 37.001. DEFINITIONS 185-25 (Sections 37.002-37.050 reserved for expansion) 186-1 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 186-2 Sec. 37.051. CERTIFICATE REQUIRED 186-3 Sec. 37.052. EXCEPTIONS TO CERTIFICATE REQUIREMENT 186-4 FOR SERVICE EXTENSION 186-5 Sec. 37.053. APPLICATION FOR CERTIFICATE 186-6 Sec. 37.054. NOTICE AND HEARING ON APPLICATION 186-7 Sec. 37.055. REQUEST FOR PRELIMINARY ORDER 186-8 Sec. 37.056. GRANT OR DENIAL OF CERTIFICATE 186-9 Sec. 37.057. DEADLINE FOR APPLICATION FOR NEW TRANSMISSION 186-10 FACILITY 186-11 Sec. 37.058. CERTIFICATE FOR ELECTRIC GENERATING PLANT 186-12 Sec. 37.059. REVOCATION OR AMENDMENT OF CERTIFICATE 186-13 (Sections 37.060-37.100 reserved for expansion) 186-14 SUBCHAPTER C. MUNICIPALITIES 186-15 Sec. 37.101. SERVICE IN ANNEXED OR INCORPORATED AREA 186-16 Sec. 37.102. GRANT OF CERTIFICATE FOR CERTAIN 186-17 MUNICIPALITIES 186-18 (Sections 37.103-37.150 reserved for expansion) 186-19 SUBCHAPTER D. REGULATION OF SERVICES, AREAS, AND FACILITIES 186-20 Sec. 37.151. PROVISION OF SERVICE 186-21 Sec. 37.152. GROUNDS FOR REDUCTION OF SERVICE 186-22 Sec. 37.153. REQUIRED REFUSAL OF SERVICE 186-23 Sec. 37.154. TRANSFER OF CERTIFICATE 186-24 Sec. 37.155. APPLICATION OF CONTRACTS 186-25 Sec. 37.156. INTERFERENCE WITH ANOTHER UTILITY 187-1 Sec. 37.157. MAPS 187-2 CHAPTER 37. CERTIFICATES OF CONVENIENCE 187-3 AND NECESSITY 187-4 SUBCHAPTER A. DEFINITIONS 187-5 Sec. 37.001. DEFINITIONS. In this chapter: 187-6 (1) "Certificate" means a certificate of convenience 187-7 and necessity. 187-8 (2) "Retail electric utility" means a person, 187-9 political subdivision, or agency that operates, maintains, or 187-10 controls in this state a facility to provide retail electric 187-11 utility service. The term does not include a corporation described 187-12 by Section 32.053 to the extent that the corporation sells 187-13 electricity exclusively at wholesale and not to the ultimate 187-14 consumer. A qualifying cogenerator that sells electric energy at 187-15 retail to the sole purchaser of the cogenerator's thermal output 187-16 under Sections 35.061 and 36.007 is not for that reason considered 187-17 to be a retail electric utility. (V.A.C.S. Art. 1446c-0, Secs. 187-18 2.0012(a) (part), 2.251; New.) 187-19 (Sections 37.002-37.050 reserved for expansion) 187-20 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 187-21 Sec. 37.051. CERTIFICATE REQUIRED. (a) An electric utility 187-22 may not directly or indirectly provide service to the public under 187-23 a franchise or permit unless the utility first obtains from the 187-24 commission a certificate that states that the public convenience 187-25 and necessity requires or will require the installation, operation, 188-1 or extension of the service. 188-2 (b) Except as otherwise provided by this chapter, a retail 188-3 electric utility may not furnish or make available retail electric 188-4 utility service to an area in which retail electric utility service 188-5 is being lawfully furnished by another retail electric utility 188-6 unless the utility first obtains a certificate that includes the 188-7 area in which the consuming facility is located. (V.A.C.S. 188-8 Art. 1446c-0, Sec. 2.252.) 188-9 Sec. 37.052. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 188-10 SERVICE EXTENSION. (a) An electric utility is not required to 188-11 obtain a certificate for an: 188-12 (1) extension into territory that is: 188-13 (A) contiguous to the territory the electric 188-14 utility serves; 188-15 (B) not receiving similar service from another 188-16 electric utility; and 188-17 (C) not in another electric utility's 188-18 certificated area; 188-19 (2) extension in or to territory the utility serves or 188-20 is authorized to serve under a certificate; or 188-21 (3) operation, extension, or service in progress on 188-22 September 1, 1975. 188-23 (b) An extension allowed under Subsection (a) is limited to 188-24 a device used: 188-25 (1) to interconnect existing facilities; or 189-1 (2) solely to transmit electric utility services from 189-2 an existing facility to a customer of retail electric utility 189-3 service. (V.A.C.S. Art. 1446c-0, Sec. 2.253.) 189-4 Sec. 37.053. APPLICATION FOR CERTIFICATE. (a) An electric 189-5 utility that wants to obtain or amend a certificate must submit an 189-6 application to the commission. 189-7 (b) The applicant shall file with the commission evidence 189-8 the commission requires to show the applicant has received the 189-9 consent, franchise, or permit required by the proper municipal or 189-10 other public authority. (V.A.C.S. Art. 1446c-0, Secs. 2.254(a), 189-11 (c).) 189-12 Sec. 37.054. NOTICE AND HEARING ON APPLICATION. (a) When 189-13 an application for a certificate is filed, the commission shall: 189-14 (1) give notice of the application to interested 189-15 parties; and 189-16 (2) if requested: 189-17 (A) set a time and place for a hearing; and 189-18 (B) give notice of the hearing. 189-19 (b) A person interested in the application may intervene at 189-20 the hearing. (V.A.C.S. Art. 1446c-0, Sec. 2.255(a).) 189-21 Sec. 37.055. REQUEST FOR PRELIMINARY ORDER. (a) An 189-22 electric utility that wants to exercise a right or privilege under 189-23 a franchise or permit that the utility anticipates obtaining but 189-24 has not been granted may apply to the commission for a preliminary 189-25 order under this section. 190-1 (b) The commission may issue a preliminary order declaring 190-2 that the commission, on application and under commission rules, 190-3 will grant the requested certificate on terms the commission 190-4 designates, after the electric utility obtains the franchise or 190-5 permit. 190-6 (c) The commission shall grant the certificate on 190-7 presentation of evidence satisfactory to the commission that the 190-8 electric utility has obtained the franchise or permit. (V.A.C.S. 190-9 Art. 1446c-0, Sec. 2.258.) 190-10 Sec. 37.056. GRANT OR DENIAL OF CERTIFICATE. (a) The 190-11 commission may approve an application and grant a certificate only 190-12 if the commission finds that the certificate is necessary for the 190-13 service, accommodation, convenience, or safety of the public. 190-14 (b) The commission may: 190-15 (1) grant the certificate as requested; 190-16 (2) grant the certificate for the construction of a 190-17 portion of the requested system, facility, or extension or the 190-18 partial exercise of the requested right or privilege; or 190-19 (3) refuse to grant the certificate. 190-20 (c) The commission shall grant each certificate on a 190-21 nondiscriminatory basis after considering: 190-22 (1) the adequacy of existing service; 190-23 (2) the need for additional service; 190-24 (3) the effect of granting the certificate on the 190-25 recipient of the certificate and any electric utility serving the 191-1 proximate area; and 191-2 (4) other factors, such as: 191-3 (A) community values; 191-4 (B) recreational and park areas; 191-5 (C) historical and aesthetic values; 191-6 (D) environmental integrity; and 191-7 (E) the probable improvement of service or 191-8 lowering of cost to consumers in the area if the certificate is 191-9 granted. (V.A.C.S. Art. 1446c-0, Secs. 2.255(b), (c).) 191-10 Sec. 37.057. DEADLINE FOR APPLICATION FOR NEW TRANSMISSION 191-11 FACILITY. The commission must approve or deny an application for a 191-12 certificate for a new transmission facility not later than the 191-13 first anniversary of the date the application is filed. If the 191-14 commission does not approve or deny the application on or before 191-15 that date, a party may seek a writ of mandamus in a district court 191-16 of Travis County to compel the commission to decide on the 191-17 application. (V.A.C.S. Art. 1446c-0, Sec. 2.255(e).) 191-18 Sec. 37.058. CERTIFICATE FOR ELECTRIC GENERATING PLANT. 191-19 (a) Sections 37.054, 37.056, and 37.057 do not apply to a 191-20 certificate for an electric generating plant that is requested 191-21 under Chapter 34. 191-22 (b) The commission may grant a certificate for an electric 191-23 generating plant only in accordance with Chapter 34. (V.A.C.S. 191-24 Art. 1446c-0, Sec. 2.255(d).) 191-25 Sec. 37.059. REVOCATION OR AMENDMENT OF CERTIFICATE. 192-1 (a) The commission may revoke or amend a certificate after notice 192-2 and hearing if the commission finds that the certificate holder has 192-3 never provided or is no longer providing service in all or any part 192-4 of the certificated area. 192-5 (b) The commission may require one or more electric 192-6 utilities to provide service in an area affected by the revocation 192-7 or amendment of a certificate. (V.A.C.S. Art. 1446c-0, Sec. 192-8 2.264.) 192-9 (Sections 37.060-37.100 reserved for expansion) 192-10 SUBCHAPTER C. MUNICIPALITIES 192-11 Sec. 37.101. SERVICE IN ANNEXED OR INCORPORATED AREA. 192-12 (a) If an area is or will be included within a municipality as the 192-13 result of annexation, incorporation, or another reason, each 192-14 electric utility that holds or is entitled to hold a certificate 192-15 under this title to provide service or operate a facility in the 192-16 area before the inclusion has the right to continue to provide the 192-17 service or operate the facility and extend service within the 192-18 utility's certificated area in the annexed or incorporated area 192-19 under the rights granted by the certificate and this title. 192-20 (b) Notwithstanding any other law, an electric utility has 192-21 the right to: 192-22 (1) continue and extend service within the utility's 192-23 certificated area; and 192-24 (2) use roads, streets, highways, alleys, and public 192-25 property to furnish retail electric utility service. 193-1 (c) The governing body of a municipality may require an 193-2 electric utility to relocate the utility's facility at the 193-3 utility's expense to permit the widening or straightening of a 193-4 street by: 193-5 (1) giving the electric utility 30 days' notice; and 193-6 (2) specifying the new location for the facility along 193-7 the right-of-way of the street. 193-8 (d) This section does not: 193-9 (1) limit the power of a city, town, or village to 193-10 incorporate or of a municipality to extend its boundaries by 193-11 annexation; or 193-12 (2) prohibit a municipality from levying a tax or 193-13 other special charge for the use of the streets as authorized by 193-14 Section 182.025, Tax Code. (V.A.C.S. Art. 1446c-0, Secs. 2.256(a), 193-15 (b), (c).) 193-16 Sec. 37.102. GRANT OF CERTIFICATE FOR CERTAIN 193-17 MUNICIPALITIES. (a) If a municipal corporation offers retail 193-18 electric utility service in a municipality having a population of 193-19 more than 135,000 that is located in a county having a population 193-20 of more than 1,500,000, the commission shall singly certificate 193-21 areas in the municipality's boundaries in which more than one 193-22 electric utility provides electric utility service. 193-23 (b) In singly certificating an area under Subsection (a), 193-24 the commission shall preserve the right of an electric utility to 193-25 serve the customers the electric utility was serving on June 17, 194-1 1983. This subsection does not apply to a customer at least 194-2 partially served by a nominal 69,000 volts system who gave notice 194-3 of termination to the utility servicing that customer before June 194-4 17, 1983. (V.A.C.S. Art. 1446c-0, Sec. 2.256(d).) 194-5 (Sections 37.103-37.150 reserved for expansion) 194-6 SUBCHAPTER D. REGULATION OF SERVICES, AREAS, AND FACILITIES 194-7 Sec. 37.151. PROVISION OF SERVICE. Except as provided by 194-8 this section, Section 37.152, and Section 37.153, a certificate 194-9 holder shall: 194-10 (1) serve every consumer in the utility's certificated 194-11 area; and 194-12 (2) provide continuous and adequate service in that 194-13 area. (V.A.C.S. Art. 1446c-0, Sec. 2.259(a).) 194-14 Sec. 37.152. GROUNDS FOR REDUCTION OF SERVICE. (a) Unless 194-15 the commission issues a certificate that the present and future 194-16 convenience and necessity will not be adversely affected, a 194-17 certificate holder may not discontinue, reduce, or impair service 194-18 to any part of the holder's certificated service area except for: 194-19 (1) nonpayment of charges; 194-20 (2) nonuse; or 194-21 (3) another similar reason that occurs in the usual 194-22 course of business. 194-23 (b) A discontinuance, reduction, or impairment of service 194-24 must be in compliance with and subject to any condition or 194-25 restriction the commission prescribes. (V.A.C.S. Art. 1446c-0, 195-1 Secs. 2.259(b), (c).) 195-2 Sec. 37.153. REQUIRED REFUSAL OF SERVICE. A certificate 195-3 holder shall refuse to serve a customer in the holder's 195-4 certificated area if the holder is prohibited from providing the 195-5 service under Section 212.012 or 232.029, Local Government Code. 195-6 (V.A.C.S. Art. 1446c-0, Sec. 2.260.) 195-7 Sec. 37.154. TRANSFER OF CERTIFICATE. (a) An electric 195-8 utility may sell, assign, or lease a certificate or a right 195-9 obtained under a certificate if the commission determines that the 195-10 purchaser, assignee, or lessee can provide adequate service. 195-11 (b) A sale, assignment, or lease of a certificate or a right 195-12 is subject to conditions the commission prescribes. (V.A.C.S. 195-13 Art. 1446c-0, Sec. 2.261.) 195-14 Sec. 37.155. APPLICATION OF CONTRACTS. A contract approved 195-15 by the commission between retail electric utilities that designates 195-16 areas and customers to be served by the utilities: 195-17 (1) is valid and enforceable; and 195-18 (2) shall be incorporated into the appropriate areas 195-19 of certification. (V.A.C.S. Art. 1446c-0, Sec. 2.257.) 195-20 Sec. 37.156. INTERFERENCE WITH ANOTHER UTILITY. If an 195-21 electric utility constructing or extending the utility's lines, 195-22 plant, or system interferes or attempts to interfere with the 195-23 operation of a line, plant, or system of another utility, the 195-24 commission by order may: 195-25 (1) prohibit the construction or extension; or 196-1 (2) prescribe terms for locating the affected lines, 196-2 plants, or systems. (V.A.C.S. Art. 1446c-0, Sec. 2.262.) 196-3 Sec. 37.157. MAPS. An electric utility shall file with the 196-4 commission one or more maps that show each utility facility and 196-5 that separately illustrate each utility facility for the 196-6 generation, transmission, or distribution of the utility's services 196-7 on a date the commission orders. (V.A.C.S. Art. 1446c-0, Sec. 196-8 2.254(b).) 196-9 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 196-10 SUBCHAPTER A. STANDARDS 196-11 Sec. 38.001. GENERAL STANDARD 196-12 Sec. 38.002. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 196-13 STANDARDS 196-14 Sec. 38.003. RULE OR STANDARD 196-15 Sec. 38.004. MINIMUM CLEARANCE STANDARD 196-16 (Sections 38.005-38.020 reserved for expansion) 196-17 SUBCHAPTER B. PROHIBITIONS ON 196-18 PREFERENCES AND DISCRIMINATION 196-19 Sec. 38.021. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 196-20 SERVICE PROHIBITED 196-21 Sec. 38.022. DISCRIMINATION AND RESTRICTION ON COMPETITION 196-22 (Sections 38.023-38.050 reserved for expansion) 196-23 SUBCHAPTER C. EXAMINATIONS, TESTS, AND INSPECTIONS 196-24 Sec. 38.051. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; 196-25 INSPECTION 197-1 Sec. 38.052. INSPECTION FOR CONSUMER 197-2 (Sections 38.053-38.070 reserved for expansion) 197-3 SUBCHAPTER D. IMPROVEMENTS IN SERVICE 197-4 Sec. 38.071. IMPROVEMENTS IN SERVICE; INTERCONNECTING SERVICE 197-5 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 197-6 SUBCHAPTER A. STANDARDS 197-7 Sec. 38.001. GENERAL STANDARD. An electric utility shall 197-8 furnish service, instrumentalities, and facilities that are safe, 197-9 adequate, efficient, and reasonable. (V.A.C.S. Art. 1446c-0, Sec. 197-10 2.155(a).) 197-11 Sec. 38.002. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 197-12 STANDARDS. A regulatory authority, on its own motion or on 197-13 complaint and after reasonable notice and hearing, may: 197-14 (1) adopt just and reasonable standards, 197-15 classifications, rules, or practices an electric utility must 197-16 follow in furnishing a service; 197-17 (2) adopt adequate and reasonable standards for 197-18 measuring a condition, including quantity, quality, pressure, and 197-19 initial voltage, relating to the furnishing of a service; 197-20 (3) adopt reasonable rules for examining, testing, and 197-21 measuring a service; and 197-22 (4) adopt or approve reasonable rules, specifications, 197-23 and standards to ensure the accuracy of equipment, including meters 197-24 and instruments, used to measure a service. (V.A.C.S. 197-25 Art. 1446c-0, Sec. 2.155(b).) 198-1 Sec. 38.003. RULE OR STANDARD. (a) An electric utility may 198-2 not impose a rule except as provided by this title. 198-3 (b) An electric utility may file with the regulatory 198-4 authority a standard, classification, rule, or practice the utility 198-5 follows. 198-6 (c) The standard, classification, rule, or practice 198-7 continues in force until: 198-8 (1) amended by the utility; or 198-9 (2) changed by the regulatory authority as provided by 198-10 this title. (V.A.C.S. Art. 1446c-0, Secs. 2.153 (part), 2.155(c).) 198-11 Sec. 38.004. MINIMUM CLEARANCE STANDARD. Notwithstanding 198-12 any other law, a transmission or distribution line owned by an 198-13 electric utility must be constructed, operated, and maintained, as 198-14 to clearances, in the manner described by the National Electrical 198-15 Safety Code Standard ANSI (c)(2), as adopted by the American 198-16 National Safety Institute and in effect at the time of 198-17 construction. (V.A.C.S. Art. 1446c-0, Sec. 2.155(d).) 198-18 (Sections 38.005-38.020 reserved for expansion) 198-19 SUBCHAPTER B. PROHIBITIONS ON 198-20 PREFERENCES AND DISCRIMINATION 198-21 Sec. 38.021. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 198-22 SERVICE PROHIBITED. In providing a service to persons in a 198-23 classification, an electric utility may not: 198-24 (1) grant an unreasonable preference or advantage to a 198-25 person in the classification; or 199-1 (2) subject a person in the classification to an 199-2 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 199-3 Sec. 2.214 (part).) 199-4 Sec. 38.022. DISCRIMINATION AND RESTRICTION ON COMPETITION. 199-5 An electric utility may not: 199-6 (1) discriminate against a person who sells or leases 199-7 equipment or performs services in competition with the electric 199-8 utility; or 199-9 (2) engage in a practice that tends to restrict or 199-10 impair that competition. (V.A.C.S. Art. 1446c-0, Sec. 2.216.) 199-11 (Sections 38.023-38.050 reserved for expansion) 199-12 SUBCHAPTER C. EXAMINATIONS, TESTS, AND INSPECTIONS 199-13 Sec. 38.051. EXAMINATION AND TEST OF INSTRUMENT OR 199-14 EQUIPMENT; INSPECTION. (a) A regulatory authority may: 199-15 (1) examine and test equipment, including meters and 199-16 instruments, used to measure service of an electric utility; and 199-17 (2) set up and use on the premises occupied by an 199-18 electric utility an apparatus or appliance necessary for the 199-19 examination or test. 199-20 (b) The electric utility is entitled to be represented at an 199-21 examination, test, or inspection made under this section. 199-22 (c) The electric utility and its officers and employees 199-23 shall facilitate the examination, test, or inspection by giving 199-24 reasonable aid to the regulatory authority and to any person 199-25 designated by the regulatory authority for the performance of those 200-1 duties. (V.A.C.S. Art. 1446c-0, Sec. 2.156(a) (part).) 200-2 Sec. 38.052. INSPECTION FOR CONSUMER. (a) A consumer may 200-3 have a meter or other measuring device tested by an electric 200-4 utility: 200-5 (1) once without charge, after a reasonable period of 200-6 presumed accuracy the regulatory authority establishes by rule; and 200-7 (2) at a shorter interval on payment of a reasonable 200-8 fee established by the regulatory authority. 200-9 (b) The regulatory authority shall establish reasonable fees 200-10 to be paid for other examining or testing of a measuring device on 200-11 the request of a consumer. 200-12 (c) If the consumer requests the test under Subsection 200-13 (a)(2) and the measuring device is found unreasonably defective or 200-14 incorrect to the substantial disadvantage of the consumer, the fee 200-15 the consumer paid at the time of the request shall be refunded. 200-16 (V.A.C.S. Art. 1446c-0, Sec. 2.156(b).) 200-17 (Sections 38.053-38.070 reserved for expansion) 200-18 SUBCHAPTER D. IMPROVEMENTS IN SERVICE 200-19 Sec. 38.071. IMPROVEMENTS IN SERVICE; INTERCONNECTING 200-20 SERVICE. The commission, after notice and hearing, may: 200-21 (1) order an electric utility to provide specified 200-22 improvements in its service in a specified area if: 200-23 (A) service in the area is inadequate or 200-24 substantially inferior to service in a comparable area; and 200-25 (B) requiring the company to provide the 201-1 improved service is reasonable; or 201-2 (2) order two or more electric utilities to establish 201-3 specified facilities for interconnecting service. (V.A.C.S. 201-4 Art. 1446c-0, Sec. 2.263.) 201-5 (Chapters 39-50 reserved for expansion) 201-6 SUBTITLE C. TELECOMMUNICATIONS UTILITIES 201-7 CHAPTER 51. GENERAL PROVISIONS 201-8 Sec. 51.001. POLICY 201-9 Sec. 51.002. DEFINITIONS 201-10 Sec. 51.003. APPLICABILITY 201-11 Sec. 51.004. PRICING FLEXIBILITY 201-12 Sec. 51.005. ASSISTANCE TO MUNICIPALITY 201-13 Sec. 51.006. MUNICIPAL PARTICIPATION IN RATEMAKING 201-14 PROCEEDINGS 201-15 Sec. 51.007. MUNICIPAL STANDING IN CERTAIN CASES 201-16 Sec. 51.008. JUDICIAL REVIEW 201-17 Sec. 51.009. MUNICIPAL FEES 201-18 Sec. 51.010. COMMISSION INVESTIGATION OF SALE, MERGER, OR 201-19 CERTAIN OTHER ACTIONS 201-20 CHAPTER 51. GENERAL PROVISIONS 201-21 Sec. 51.001. POLICY. (a) Significant changes have occurred 201-22 in telecommunications since the law from which this title is 201-23 derived was originally adopted. To encourage and accelerate the 201-24 development of a competitive and advanced telecommunications 201-25 environment and infrastructure, new rules, policies, and principles 202-1 must be formulated and applied to protect the public interest. 202-2 (b) It is the policy of this state to: 202-3 (1) promote diversity of telecommunications providers 202-4 and interconnectivity; 202-5 (2) encourage a fully competitive telecommunications 202-6 marketplace; and 202-7 (3) maintain a wide availability of high quality, 202-8 interoperable, standards-based telecommunications services at 202-9 affordable rates. 202-10 (c) The policy goals described by Subsection (b) are best 202-11 achieved by legislation that modernizes telecommunications 202-12 regulation by: 202-13 (1) guaranteeing the affordability of basic telephone 202-14 service in a competitively neutral manner; and 202-15 (2) fostering free market competition in the 202-16 telecommunications industry. 202-17 (d) The technological advancements, advanced 202-18 telecommunications infrastructure, and increased customer choices 202-19 for telecommunications services generated by a truly competitive 202-20 market play a critical role in Texas' economic future by raising 202-21 living standards for Texans through: 202-22 (1) enhanced economic development; and 202-23 (2) improved delivery of education, health, and other 202-24 public and private services. 202-25 (e) The strength of competitive forces varies widely between 203-1 markets, products, and services. It is the policy of this state to 203-2 require the commission to take action necessary to enhance 203-3 competition by adjusting regulation to match the degree of 203-4 competition in the marketplace to: 203-5 (1) reduce the cost and burden of regulation; and 203-6 (2) protect markets that are not competitive. 203-7 (f) It is the policy of this state to ensure that high 203-8 quality telecommunications services are available, accessible, and 203-9 usable by an individual with a disability, unless making the 203-10 services available, accessible, or usable would: 203-11 (1) result in an undue burden, including unreasonable 203-12 cost or technical infeasibility; or 203-13 (2) have an adverse competitive effect. (V.A.C.S. 203-14 Art. 1446c-0, Sec. 3.001.) 203-15 Sec. 51.002. DEFINITIONS. In this subtitle: 203-16 (1) "Basic local telecommunications service" means: 203-17 (A) flat rate residential and business local 203-18 exchange telephone service, including primary directory listings; 203-19 (B) tone dialing service; 203-20 (C) access to operator services; 203-21 (D) access to directory assistance services; 203-22 (E) access to 911 service provided by a local 203-23 authority or dual party relay service; 203-24 (F) the ability to report service problems seven 203-25 days a week; 204-1 (G) lifeline and tel-assistance services; and 204-2 (H) any other service the commission determines 204-3 after a hearing is a basic local telecommunications service. 204-4 (2) "Dominant carrier" means a provider of a 204-5 communication service provided wholly or partly over a telephone 204-6 system who the commission determines has sufficient market power in 204-7 a telecommunications market to control prices for that service in 204-8 that market in a manner adverse to the public interest. The term 204-9 includes a provider who provided local exchange telephone service 204-10 within a certificated exchange area on September 1, 1995, as to 204-11 that service and as to any other service for which a competitive 204-12 alternative is not available in a particular geographic market. In 204-13 addition, with respect to: 204-14 (A) intraLATA long distance message 204-15 telecommunications service originated by dialing the access code 204-16 "1-plus," the term includes a provider of local exchange telephone 204-17 service in a certificated exchange area for whom the use of that 204-18 access code for the origination of "1-plus" intraLATA calls in the 204-19 exchange area is exclusive; and 204-20 (B) interexchange services, the term does not 204-21 include an interexchange carrier that is not a certificated local 204-22 exchange company. 204-23 (3) "Incumbent local exchange company" means a local 204-24 exchange company that has a certificate of convenience and 204-25 necessity on September 1, 1995. 205-1 (4) "Local exchange company" means a 205-2 telecommunications utility that has a certificate of convenience 205-3 and necessity or a certificate of operating authority to provide in 205-4 this state: 205-5 (A) local exchange telephone service; 205-6 (B) basic local telecommunications service; or 205-7 (C) switched access service. 205-8 (5) "Local exchange telephone service" means 205-9 telecommunications service provided within an exchange to establish 205-10 connections between customer premises within the exchange, 205-11 including connections between a customer premises and a long 205-12 distance provider serving the exchange. The term includes tone 205-13 dialing service, service connection charges, and directory 205-14 assistance services offered in connection with basic local 205-15 telecommunications service and interconnection with other service 205-16 providers. The term does not include the following services, 205-17 whether offered on an intraexchange or interexchange basis: 205-18 (A) central office based PBX-type services for 205-19 systems of 75 stations or more; 205-20 (B) billing and collection services; 205-21 (C) high-speed private line services of 1.544 205-22 megabits or greater; 205-23 (D) customized services; 205-24 (E) private line or virtual private line 205-25 services; 206-1 (F) resold or shared local exchange telephone 206-2 services if permitted by tariff; 206-3 (G) dark fiber services; 206-4 (H) non-voice data transmission service offered 206-5 as a separate service and not as a component of basic local 206-6 telecommunications service; 206-7 (I) dedicated or virtually dedicated access 206-8 services; or 206-9 (J) any other service the commission determines 206-10 is not a "local exchange telephone service." 206-11 (6) "Long run incremental cost" has the meaning 206-12 assigned by 16 T.A.C. Section 23.91. 206-13 (7) "Pricing flexibility" includes: 206-14 (A) customer specific contracts; 206-15 (B) packaging of services; 206-16 (C) volume, term, and discount pricing; 206-17 (D) zone density pricing; and 206-18 (E) other promotional pricing. 206-19 (8) "Public utility" or "utility" means a person or 206-20 river authority that owns or operates for compensation in this 206-21 state equipment or facilities to convey, transmit, or receive 206-22 communications over a telephone system as a dominant carrier. The 206-23 term includes a lessee, trustee, or receiver of any of those 206-24 entities, or a combination of those entities. The term does not 206-25 include a municipal corporation. A person is not a public utility 207-1 solely because the person: 207-2 (A) furnishes or furnishes and maintains a 207-3 private system; 207-4 (B) manufactures, distributes, installs, or 207-5 maintains customer premise communications equipment and 207-6 accessories; or 207-7 (C) furnishes a telecommunications service or 207-8 commodity only to itself, its employees, or its tenants as an 207-9 incident of employment or tenancy, if that service or commodity is 207-10 not resold to or used by others. 207-11 (9) "Separation" means the division of plant, 207-12 revenues, expenses, taxes, and reserves applicable to exchange or 207-13 local service if these items are used in common to provide public 207-14 utility service to both local exchange telephone service and other 207-15 service, such as interstate or intrastate toll service. 207-16 (10) "Telecommunications provider": 207-17 (A) means: 207-18 (i) a certificated telecommunications 207-19 utility; 207-20 (ii) a shared tenant service provider; 207-21 (iii) a nondominant carrier of 207-22 telecommunications services; 207-23 (iv) a provider of commercial mobile 207-24 service as defined by Section 332(d), Communications Act of 1934 207-25 (47 U.S.C. Section 151 et seq.), Federal Communications Commission 208-1 rules, and the Omnibus Budget Reconciliation Act of 1993 (Public 208-2 Law 103-66); 208-3 (v) a telecommunications entity that 208-4 provides central office based PBX-type sharing or resale 208-5 arrangements; 208-6 (vi) an interexchange telecommunications 208-7 carrier; 208-8 (vii) a specialized common carrier; 208-9 (viii) a reseller of communications; 208-10 (ix) a provider of operator services; 208-11 (x) a provider of customer-owned pay 208-12 telephone service; or 208-13 (xi) another person or entity determined 208-14 by the commission to provide telecommunications services to 208-15 customers in this state; and 208-16 (B) does not mean: 208-17 (i) a provider of enhanced or information 208-18 services, or another user of telecommunications services, who does 208-19 not also provide telecommunications services; or 208-20 (ii) a state agency or state institution 208-21 of higher education, or a service provided by a state agency or 208-22 state institution of higher education. 208-23 (11) "Telecommunications utility" means: 208-24 (A) a public utility; 208-25 (B) an interexchange telecommunications carrier, 209-1 including a reseller of interexchange telecommunications services; 209-2 (C) a specialized communications common carrier; 209-3 (D) a reseller of communications; 209-4 (E) a communications carrier who conveys, 209-5 transmits, or receives communications wholly or partly over a 209-6 telephone system; 209-7 (F) a provider of operator services as defined 209-8 by Section 55.081, unless the provider is a subscriber to 209-9 customer-owned pay telephone service; and 209-10 (G) a separated affiliate or an electronic 209-11 publishing joint venture as defined in Chapter 63. 209-12 (12) "Tier 1 local exchange company" has the meaning 209-13 assigned by the Federal Communications Commission. (V.A.C.S. 209-14 Art. 1446c-0, Secs. 3.002(1), (2) (part), (3), (5), (6), (7), (8) 209-15 (part), (9) (part), (10), (11), (12); New.) 209-16 Sec. 51.003. APPLICABILITY. Except as otherwise expressly 209-17 provided by this title, this title does not apply to: 209-18 (1) a company that as its only form of business: 209-19 (A) is a telecommunications manager; or 209-20 (B) administers central office based or customer 209-21 based PBX-type sharing/resale arrangements; 209-22 (2) telegraph services; 209-23 (3) television or radio stations; 209-24 (4) community antenna television services; or 209-25 (5) a provider of commercial mobile service as defined 210-1 by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 210-2 151 et seq.), Federal Communications Commission rules, and the 210-3 Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), 210-4 other than conventional rural radio-telephone services provided by 210-5 a wire-line telephone company under the Public Mobile Service rules 210-6 of the Federal Communications Commission (47 C.F.R. Part 22). 210-7 (V.A.C.S. Art. 1446c-0, Sec. 3.002(9) (part).) 210-8 Sec. 51.004. PRICING FLEXIBILITY. (a) A discount or other 210-9 form of pricing flexibility may not be preferential, prejudicial, 210-10 or discriminatory. 210-11 (b) This title does not prohibit a volume discount or other 210-12 discount based on a reasonable business purpose. (V.A.C.S. 210-13 Art. 1446c-0, Secs. 3.002(8) (part), 3.051(m) (part).) 210-14 Sec. 51.005. ASSISTANCE TO MUNICIPALITY. On request of a 210-15 municipality, the commission may advise and assist the municipality 210-16 with respect to a question or proceeding arising under this title. 210-17 Assistance provided by the commission may include aid to a 210-18 municipality on a matter pending before the commission or a court, 210-19 such as making a staff member available as a witness or otherwise 210-20 providing evidence to the municipality. (V.A.C.S. Art. 1446c-0, 210-21 Sec. 3.102.) 210-22 Sec. 51.006. MUNICIPAL PARTICIPATION IN RATEMAKING 210-23 PROCEEDINGS. (a) The governing body of a municipality 210-24 participating in a ratemaking proceeding may engage rate 210-25 consultants, accountants, auditors, attorneys, and engineers to: 211-1 (1) conduct investigations, present evidence, and 211-2 advise and represent the governing body; and 211-3 (2) assist the governing body with litigation before 211-4 the commission or a court. 211-5 (b) The public utility in the ratemaking proceeding shall 211-6 reimburse the governing body of the municipality for the reasonable 211-7 cost of the services of a person engaged under Subsection (a) to 211-8 the extent the commission determines is reasonable. (V.A.C.S. 211-9 Art. 1446c-0, Sec. 3.101(a).) 211-10 Sec. 51.007. MUNICIPAL STANDING IN CERTAIN CASES. (a) A 211-11 municipality has standing in each case before the commission that 211-12 relates to a utility providing service in the municipality. 211-13 (b) A municipality's standing is subject to the right of the 211-14 commission to: 211-15 (1) determine standing in a case involving a retail 211-16 service area dispute that involves two or more utilities; and 211-17 (2) consolidate municipalities on an issue of common 211-18 interest. (V.A.C.S. Art. 1446c-0, Sec. 3.101(b) (part).) 211-19 Sec. 51.008. JUDICIAL REVIEW. A municipality is entitled to 211-20 judicial review of a commission order relating to a utility 211-21 providing services in the municipality as provided by Section 211-22 15.001. (V.A.C.S. Art. 1446c-0, Sec. 3.101(b) (part).) 211-23 Sec. 51.009. MUNICIPAL FEES. (a) Nothing in this title, 211-24 including Section 53.201, may be construed as in any way limiting 211-25 the right of a public utility to pass through a municipal fee, 212-1 including an increase in a municipal fee. 212-2 (b) A public utility that traditionally passes through 212-3 municipal fees shall promptly pass through any municipal fee 212-4 reduction. (V.A.C.S. Art. 1446c-0, Secs. 3.1015, 3.211(g) (part).) 212-5 Sec. 51.010. COMMISSION INVESTIGATION OF SALE, MERGER, OR 212-6 CERTAIN OTHER ACTIONS. (a) The commission, not later than the 212-7 180th day after the date a public utility reports to the commission 212-8 under Section 14.101, shall complete an investigation under that 212-9 section and enter a final order. 212-10 (b) If a final order is not entered as required by 212-11 Subsection (a), the commission is considered to have determined 212-12 that the action taken by the public utility is consistent with the 212-13 public interest. 212-14 (c) Section 14.101 does not apply to: 212-15 (1) a company that receives a certificate of operating 212-16 authority or a service provider certificate of operating authority 212-17 under Chapter 54; or 212-18 (2) a company electing under Chapter 58. (V.A.C.S. 212-19 Art. 1446c-0, Sec. 3.053.) 212-20 CHAPTER 52. COMMISSION JURISDICTION 212-21 SUBCHAPTER A. GENERAL POWERS AND DUTIES OF COMMISSION 212-22 Sec. 52.001. POLICY 212-23 Sec. 52.002. AUTHORITY TO REGULATE 212-24 Sec. 52.003. COOPERATION WITH OTHER REGULATORY 212-25 AUTHORITIES 213-1 Sec. 52.004. COMMISSION MAY ESTABLISH SEPARATE MARKETS 213-2 Sec. 52.005. MINIMUM REQUIREMENTS FOR DOMINANT CARRIERS 213-3 Sec. 52.006. COMMISSION TO REPORT TO LEGISLATURE 213-4 (Sections 52.007-52.050 reserved for expansion) 213-5 SUBCHAPTER B. INCUMBENT LOCAL EXCHANGE COMPANIES 213-6 Sec. 52.051. POLICY 213-7 Sec. 52.052. APPLICABILITY 213-8 Sec. 52.053. CERTAIN RATES PROHIBITED 213-9 Sec. 52.054. RULES AND PROCEDURES FOR INCUMBENT LOCAL 213-10 EXCHANGE COMPANIES 213-11 Sec. 52.055. HEARING TO DETERMINE LEVEL OF COMPETITION 213-12 Sec. 52.056. SPECIFICALLY AUTHORIZED REGULATORY 213-13 TREATMENTS 213-14 Sec. 52.057. CUSTOMER-SPECIFIC CONTRACTS 213-15 Sec. 52.058. NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL 213-16 RATES 213-17 Sec. 52.059. RATES TO COVER APPROPRIATE COSTS 213-18 Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT 213-19 (Sections 52.061-52.100 reserved for expansion) 213-20 SUBCHAPTER C. TELECOMMUNICATIONS UTILITIES 213-21 THAT ARE NOT DOMINANT CARRIERS 213-22 Sec. 52.101. APPLICABILITY 213-23 Sec. 52.102. LIMITED REGULATORY AUTHORITY 213-24 Sec. 52.103. REGISTRATION REQUIRED 213-25 Sec. 52.104. COMMISSION MAY INVESTIGATE 214-1 Sec. 52.105. ACCESS TO CERTAIN SERVICES REQUIRED 214-2 Sec. 52.106. QUALITY OF SERVICE REQUIRED 214-3 Sec. 52.107. PREDATORY PRICING 214-4 Sec. 52.108. OTHER PROHIBITED PRACTICES 214-5 Sec. 52.109. AVAILABILITY OF SERVICE 214-6 Sec. 52.110. BURDEN OF PROOF 214-7 Sec. 52.111. COMMISSION MAY EXEMPT 214-8 (Sections 52.112-52.150 reserved for expansion) 214-9 SUBCHAPTER D. CERTIFICATE HOLDERS 214-10 Sec. 52.151. APPLICABILITY 214-11 Sec. 52.152. LIMITED REGULATORY AUTHORITY 214-12 Sec. 52.153. BOOKS AND RECORDS 214-13 Sec. 52.154. COMMISSION MAY NOT OVERBURDEN 214-14 (Sections 52.155-52.200 reserved for expansion) 214-15 SUBCHAPTER E. DEREGULATION OF SERVICE 214-16 Sec. 52.201. DEREGULATION OF SERVICE 214-17 Sec. 52.202. DETERMINATION OF GEOGRAPHIC MARKET 214-18 Sec. 52.203. MARKET POWER TEST 214-19 Sec. 52.204. RATE FOR DEREGULATED SERVICE 214-20 Sec. 52.205. INVESTIGATION OF COMPETITION 214-21 Sec. 52.206. REREGULATION OF MARKET 214-22 Sec. 52.207. REPORTS; CONFIDENTIAL INFORMATION 214-23 (Sections 52.208-52.250 reserved for expansion) 214-24 SUBCHAPTER F. REQUIRED REPORTS AND FILINGS; RECORDS 214-25 Sec. 52.251. TARIFF FILINGS 215-1 Sec. 52.252. DEPRECIATION ACCOUNT 215-2 Sec. 52.253. ACCOUNTS OF PROFITS AND LOSSES 215-3 Sec. 52.254. REPORT OF CERTAIN EXPENSES 215-4 Sec. 52.255. AVAILABILITY OF RECORDS 215-5 CHAPTER 52. COMMISSION JURISDICTION 215-6 SUBCHAPTER A. GENERAL POWERS AND DUTIES OF COMMISSION 215-7 Sec. 52.001. POLICY. (a) It is the policy of this state to 215-8 protect the public interest in having adequate and efficient 215-9 telecommunications service available to each resident of this state 215-10 at just, fair, and reasonable rates. 215-11 (b) The telecommunications industry, through technical 215-12 advancements, federal legislative, judicial, and administrative 215-13 actions, and the formulation of new telecommunications enterprises, 215-14 has become and will continue to be in many and growing areas a 215-15 competitive industry that does not lend itself to traditional 215-16 public utility regulatory rules, policies, and principles. As a 215-17 result, the public interest requires that rules, policies, and 215-18 principles be formulated and applied to: 215-19 (1) protect the public interest; and 215-20 (2) provide equal opportunity to each 215-21 telecommunications utility in a competitive marketplace. (V.A.C.S. 215-22 Art. 1446c-0, Sec. 3.051(a).) 215-23 Sec. 52.002. AUTHORITY TO REGULATE. (a) To carry out the 215-24 public policy stated by Section 52.001 and to regulate rates, 215-25 operations, and services so that the rates are just, fair, and 216-1 reasonable and the services are adequate and efficient, the 216-2 commission has exclusive original jurisdiction over the business 216-3 and property of a telecommunications utility in this state subject 216-4 to the limitations imposed by this title. 216-5 (b) The commission's regulatory authority as to a 216-6 telecommunications utility other than a public utility is only as 216-7 prescribed by this title. (V.A.C.S. Art. 1446c-0, Secs. 3.002(9) 216-8 (part), 3.051(b) (part).) 216-9 Sec. 52.003. COOPERATION WITH OTHER REGULATORY AUTHORITIES. 216-10 In regulating the rates, operations, and services of a 216-11 telecommunications utility providing service in a municipality 216-12 located on the state line adjacent to a municipality in an 216-13 adjoining state, the commission may cooperate with the utility 216-14 regulatory commission of the adjoining state or of the federal 216-15 government and may hold a joint hearing or make a joint 216-16 investigation with that commission. (V.A.C.S. Art. 1446c-0, Sec. 216-17 3.051(b) (part).) 216-18 Sec. 52.004. COMMISSION MAY ESTABLISH SEPARATE MARKETS. 216-19 (a) The commission may establish separate telecommunications 216-20 markets in this state if the commission determines that the public 216-21 interest will be served. The commission shall hold hearings and 216-22 require evidence as necessary to: 216-23 (1) carry out the public purpose of this chapter; and 216-24 (2) determine the need and effect of establishing 216-25 separate markets. 217-1 (b) A provider determined to be a dominant carrier as to a 217-2 particular telecommunications service in a market may not be 217-3 presumed to be a dominant carrier of a different telecommunications 217-4 service in that market. (V.A.C.S. Art. 1446c-0, Sec. 3.002(2) 217-5 (part).) 217-6 Sec. 52.005. MINIMUM REQUIREMENTS FOR DOMINANT CARRIERS. 217-7 The commission shall impose as minimum requirements for a dominant 217-8 carrier the same requirements imposed by Subchapter C, except 217-9 Section 52.107. (V.A.C.S. Art. 1446c-0, Sec. 3.051(q) (part).) 217-10 Sec. 52.006. COMMISSION TO REPORT TO LEGISLATURE. 217-11 (a) Before January 15 of each odd-numbered year, the commission 217-12 shall report to the legislature on: 217-13 (1) the scope of competition in regulated 217-14 telecommunications markets; and 217-15 (2) the effect of competition on customers in both 217-16 competitive and noncompetitive markets, with a specific focus on 217-17 rural markets. 217-18 (b) The report shall include: 217-19 (1) an assessment of the effect of competition on the 217-20 rates and availability of telecommunications services for 217-21 residential and business customers; 217-22 (2) a summary of commission action over the preceding 217-23 two years that reflects changes in the scope of competition in 217-24 regulated telecommunications markets; and 217-25 (3) recommendations for legislation the commission 218-1 determines is appropriate to promote the public interest in the 218-2 context of a partially competitive telecommunications market. 218-3 (c) The commission, in its assessment under Subsection 218-4 (b)(1), shall specifically address any effects on universal 218-5 service. 218-6 (d) A telecommunications utility shall cooperate with the 218-7 commission as necessary for the commission to satisfy the 218-8 requirements of this section. (V.A.C.S. Art. 1446c-0, Secs. 218-9 3.051(k), (q) (part).) 218-10 (Sections 52.007-52.050 reserved for expansion) 218-11 SUBCHAPTER B. INCUMBENT LOCAL EXCHANGE COMPANIES 218-12 Sec. 52.051. POLICY. In adopting rules and establishing 218-13 procedures under this subchapter, the commission shall: 218-14 (1) attempt to balance the public interest in a 218-15 technologically advanced telecommunications system providing a wide 218-16 range of new and innovative services with traditional regulatory 218-17 concerns for: 218-18 (A) preserving universal service; 218-19 (B) prohibiting anticompetitive practices; and 218-20 (C) preventing the subsidization of competitive 218-21 services with revenues from regulated monopoly services; and 218-22 (2) incorporate an appropriate mix of regulatory and 218-23 market mechanisms reflecting the level and nature of competition in 218-24 the marketplace. (V.A.C.S. Art. 1446c-0, Sec. 3.051(g) (part).) 218-25 Sec. 52.052. APPLICABILITY. This subchapter does not apply 219-1 to basic local telecommunications service, including local measured 219-2 service. (V.A.C.S. Art. 1446c-0, Sec. 3.051(j) (part).) 219-3 Sec. 52.053. CERTAIN RATES PROHIBITED. A rate established 219-4 under this subchapter may not be: 219-5 (1) unreasonably preferential, prejudicial, or 219-6 discriminatory; 219-7 (2) subsidized either directly or indirectly by a 219-8 regulated monopoly service; or 219-9 (3) predatory or anticompetitive. (V.A.C.S. 219-10 Art. 1446c-0, Sec. 3.051(g) (part).) 219-11 Sec. 52.054. RULES AND PROCEDURES FOR INCUMBENT LOCAL 219-12 EXCHANGE COMPANIES. (a) To carry out the public policy stated in 219-13 Section 52.001, notwithstanding any other provision of this title, 219-14 the commission may adopt rules and establish procedures applicable 219-15 to incumbent local exchange companies to: 219-16 (1) determine the level of competition in a specific 219-17 telecommunications market or submarket; and 219-18 (2) provide appropriate regulatory treatment to allow 219-19 an incumbent local exchange company to respond to significant 219-20 competitive challenges. 219-21 (b) This section does not change the burden of proof on an 219-22 incumbent local exchange company under Sections 53.003, 53.006, 219-23 53.051, 53.052, 53.053, 53.054, 53.055, 53.057, 53.058, 53.060, and 219-24 53.062. (V.A.C.S. Art. 1446c-0, Sec. 3.051(e)(1).) 219-25 Sec. 52.055. HEARING TO DETERMINE LEVEL OF COMPETITION. In 220-1 determining the level of competition in a specific market or 220-2 submarket, the commission shall hold an evidentiary hearing to 220-3 consider: 220-4 (1) the number and size of telecommunications 220-5 utilities or other persons providing the same, equivalent, or 220-6 substitutable service; 220-7 (2) the extent to which the same, equivalent, or 220-8 substitutable service is available; 220-9 (3) the ability of a customer to obtain the same, 220-10 equivalent, or substitutable service at comparable rates and terms; 220-11 (4) the ability of a telecommunications utility or 220-12 other person to make the same, equivalent, or substitutable service 220-13 readily available at comparable rates and terms; 220-14 (5) the existence of a significant barrier to the 220-15 entry or exit of a provider of the service; and 220-16 (6) other relevant information the commission 220-17 determines is appropriate. (V.A.C.S. Art. 1446c-0, Sec. 220-18 3.051(e)(2).) 220-19 Sec. 52.056. SPECIFICALLY AUTHORIZED REGULATORY TREATMENTS. 220-20 The regulatory treatments the commission may implement under 220-21 Section 52.054 include: 220-22 (1) approval of a range of rates for a specific 220-23 service; 220-24 (2) approval of a customer-specific contract for a 220-25 specific service; and 221-1 (3) the detariffing of rates. (V.A.C.S. Art. 1446c-0, 221-2 Sec. 3.051(e)(3) (part).) 221-3 Sec. 52.057. CUSTOMER-SPECIFIC CONTRACTS. (a) The 221-4 commission shall approve a customer-specific contract that meets 221-5 the requirements of Subsection (b) to provide: 221-6 (1) central office based PBX-type services for a 221-7 system of 200 stations or more; 221-8 (2) billing and collection services; 221-9 (3) high-speed private line services of 1.544 megabits 221-10 or greater; or 221-11 (4) customized services. 221-12 (b) The commission shall approve a contract for a service 221-13 described by Subsection (a) if: 221-14 (1) the contract is filed before the 30th day before 221-15 the date the service contracted for is initiated; 221-16 (2) the contract is accompanied by an affidavit from 221-17 the person or entity contracting for the service stating that the 221-18 person or entity considered acquiring the same, equivalent, or 221-19 substitutable service by bid or quotation from a source other than 221-20 the incumbent local exchange company; 221-21 (3) the incumbent local exchange company recovers the 221-22 appropriate costs of providing the service; and 221-23 (4) approval of the contract is in the public 221-24 interest. 221-25 (c) The commission shall approve or deny a contract under 222-1 this section not later than the 30th day after the date the 222-2 contract is filed, unless the commission for good cause extends the 222-3 effective date for an additional 35 days. 222-4 (d) An incumbent local exchange company may not price 222-5 similar services provided under contracts governed by this section 222-6 in an unreasonably discriminatory manner. 222-7 (e) This section and Section 52.056(2) do not apply to: 222-8 (1) message telecommunications service; 222-9 (2) switched access service for an interexchange 222-10 carrier; or 222-11 (3) wide area telecommunications service. 222-12 (f) In this section, "similar services" means services that: 222-13 (1) are provided at or near the same point in time; 222-14 (2) have the same characteristics; and 222-15 (3) are provided under the same or similar 222-16 circumstances. (V.A.C.S. Art. 1446c-0, Secs. 3.051(e)(3) (part), 222-17 (j) (part).) 222-18 Sec. 52.058. NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL 222-19 RATES. (a) To encourage the rapid introduction of new or 222-20 experimental services or promotional rates, the commission shall 222-21 adopt rules and establish procedures that allow: 222-22 (1) the expedited introduction of new or experimental 222-23 services or promotional rates; 222-24 (2) the establishment and adjustment of rates; and 222-25 (3) the withdrawal of those services or promotional 223-1 rates. 223-2 (b) The rules and procedures described by Subsection (a) 223-3 must include rules and procedures to allow the governing body of a 223-4 municipality served by an incumbent local exchange company having 223-5 more than 500,000 access lines in this state to make requests to 223-6 the commission for new or experimental services or promotional 223-7 rates. 223-8 (c) A rate established or adjusted at the request of a 223-9 municipality may not: 223-10 (1) result in higher rates for ratepayers outside the 223-11 municipal boundaries; or 223-12 (2) include a rate for incumbent local exchange 223-13 company interexchange service or interexchange carrier access 223-14 service. (V.A.C.S. Art. 1446c-0, Sec. 3.051(f).) 223-15 Sec. 52.059. RATES TO COVER APPROPRIATE COSTS. (a) The 223-16 commission by rule shall adopt standards necessary to ensure that a 223-17 rate established under this subchapter covers appropriate costs as 223-18 determined by the commission. 223-19 (b) Until standards are set under Subsection (a), the 223-20 commission shall use a costing methodology that is in the public 223-21 interest to determine whether a rate established under this 223-22 subchapter covers appropriate costs. (V.A.C.S. Art. 1446c-0, Sec. 223-23 3.051(h).) 223-24 Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT. The 223-25 commission may prescribe and collect a fee or assessment from local 224-1 exchange companies necessary to recover the cost to the commission 224-2 and to the office of activities carried out and services provided 224-3 under this subchapter and Section 52.006. (V.A.C.S. Art. 1446c-0, 224-4 Sec. 3.051(i).) 224-5 (Sections 52.061-52.100 reserved for expansion) 224-6 SUBCHAPTER C. TELECOMMUNICATIONS UTILITIES 224-7 THAT ARE NOT DOMINANT CARRIERS 224-8 Sec. 52.101. APPLICABILITY. This subchapter applies only to 224-9 a telecommunications utility that is not: 224-10 (1) a dominant carrier; or 224-11 (2) the holder of a certificate of operating authority 224-12 or a service provider certificate of operating authority. 224-13 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 224-14 Sec. 52.102. LIMITED REGULATORY AUTHORITY. Except as 224-15 otherwise provided by this subchapter and Subchapter D, Chapter 55, 224-16 the commission has only the following jurisdiction over a 224-17 telecommunications utility subject to this subchapter: 224-18 (1) to require registration under Section 52.103; 224-19 (2) to conduct an investigation under Section 52.104; 224-20 (3) to require the filing of reports as the commission 224-21 periodically directs; 224-22 (4) to require the maintenance of statewide average 224-23 rates or prices of telecommunications service; 224-24 (5) to require access to telecommunications service 224-25 under Section 52.105; and 225-1 (6) to require the quality of telecommunications 225-2 service provided to be adequate under Section 52.106. (V.A.C.S. 225-3 Art. 1446c-0, Sec. 3.051(c) (part).) 225-4 Sec. 52.103. REGISTRATION REQUIRED. (a) A 225-5 telecommunications utility shall register with the commission not 225-6 later than the 30th day after the date the utility commences 225-7 service to the public. 225-8 (b) A telecommunications utility that registers under 225-9 Subsection (a) shall file with the commission a description of: 225-10 (1) the location and type of service provided; 225-11 (2) the price to the public of that service; and 225-12 (3) other registration information the commission 225-13 directs. 225-14 (c) An interexchange telecommunications utility doing 225-15 business in this state shall maintain on file with the commission 225-16 tariffs or lists governing the terms of providing its services. 225-17 (V.A.C.S. Art. 1446c-0, Sec. 3.051(d).) 225-18 Sec. 52.104. COMMISSION MAY INVESTIGATE. (a) The 225-19 commission may investigate as necessary to determine the effect and 225-20 scope of competition in the telecommunications industry. The 225-21 investigation may include: 225-22 (1) identifying dominant carriers in the local 225-23 telecommunications and intraLATA interexchange telecommunications 225-24 industry; and 225-25 (2) defining the telecommunications market or markets. 226-1 (b) In conducting an investigation under this section, the 226-2 commission may: 226-3 (1) hold a hearing; 226-4 (2) issue a subpoena to compel the attendance of a 226-5 witness or the production of a document; and 226-6 (3) make findings of fact and decisions to administer 226-7 this title or a rule, order, or other action of the commission. 226-8 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 226-9 Sec. 52.105. ACCESS TO CERTAIN SERVICES REQUIRED. (a) The 226-10 commission may require that each local exchange area have access to 226-11 local and interexchange telecommunications service, except as 226-12 otherwise provided by this section. 226-13 (b) The commission shall allow a telecommunications utility 226-14 to discontinue service to a local exchange area if: 226-15 (1) comparable service is available in the area; and 226-16 (2) discontinuing the service is not contrary to the 226-17 public interest. 226-18 (c) This section does not authorize the commission to 226-19 require a telecommunications utility to initiate service to a local 226-20 exchange area to which the telecommunications utility: 226-21 (1) did not provide service during the preceding 226-22 12-month period; and 226-23 (2) has not provided service previously for a 226-24 cumulative period of at least one year. (V.A.C.S. Art. 1446c-0, 226-25 Sec. 3.051(c) (part).) 227-1 Sec. 52.106. QUALITY OF SERVICE REQUIRED. The commission 227-2 may require the quality of telecommunications service provided in a 227-3 local exchange in which the commission determines that service has 227-4 deteriorated and become unreliable to be adequate to protect the 227-5 public interest and the interests of customers of that exchange. 227-6 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 227-7 Sec. 52.107. PREDATORY PRICING. (a) The commission may 227-8 enter an order necessary to protect the public interest if the 227-9 commission finds by a preponderance of the evidence after notice 227-10 and hearing that an interexchange telecommunications utility has: 227-11 (1) engaged in predatory pricing; or 227-12 (2) attempted to engage in predatory pricing. 227-13 (b) A hearing held by the commission under Subsection (a) 227-14 must be based on a complaint from another interexchange 227-15 telecommunications utility. 227-16 (c) An order entered under Subsection (a) may include the 227-17 imposition on a specific service of the commission's full 227-18 regulatory authority under: 227-19 (1) this chapter; 227-20 (2) Chapters 14, 15, 51, 53, and 54; and 227-21 (3) Subchapters A, D, and H, Chapter 55. 227-22 (d) This section applies only to an interexchange 227-23 telecommunications utility. (V.A.C.S. Art. 1446c-0, Sec. 227-24 3.051(l).) 227-25 Sec. 52.108. OTHER PROHIBITED PRACTICES. The commission may 228-1 enter any order necessary to protect the public interest if the 228-2 commission finds after notice and hearing that a telecommunications 228-3 utility has: 228-4 (1) failed to maintain statewide average rates; 228-5 (2) abandoned interexchange message telecommunications 228-6 service to a local exchange area in a manner contrary to the public 228-7 interest; or 228-8 (3) engaged in a pattern of preferential or 228-9 discriminatory activities prohibited by Section 53.003, 55.005, or 228-10 55.006. (V.A.C.S. Art. 1446c-0, Secs. 3.051(m) (part), (q) 228-11 (part).) 228-12 Sec. 52.109. AVAILABILITY OF SERVICE. (a) The commission 228-13 may require a telecommunications utility that provides a service to 228-14 make that service available in an exchange served by the 228-15 telecommunications utility within a reasonable time after receipt 228-16 of a bona fide request for the service in that exchange. 228-17 (b) A telecommunications utility may not be required to 228-18 extend a service to an area if: 228-19 (1) the local exchange company is unable to provide 228-20 the required access or other service; or 228-21 (2) extending the service would, after consideration 228-22 of the public interest to be served, impose unreasonable costs on 228-23 or require unreasonable investments by the telecommunications 228-24 utility. 228-25 (c) The commission may require from a telecommunications 229-1 utility or a local exchange company information necessary to 229-2 enforce this section. (V.A.C.S. Art. 1446c-0, Secs. 3.051(o), (q) 229-3 (part).) 229-4 Sec. 52.110. BURDEN OF PROOF. (a) In a proceeding before 229-5 the commission in which it is alleged that a telecommunications 229-6 utility engaged in conduct in violation of Section 52.107, 52.108, 229-7 or 52.109, the burden of proof is on: 229-8 (1) a telecommunications utility complaining of 229-9 conduct committed against it in violation of this subchapter; or 229-10 (2) except as provided by Subsection (b), the 229-11 responding telecommunications utility if the proceedings are: 229-12 (A) brought by a customer or customer 229-13 representative who is not a telecommunications utility; or 229-14 (B) initiated by the commission. 229-15 (b) The commission may impose the burden of proof on the 229-16 complaining party in a proceeding described by Subsection (a)(2) if 229-17 the commission determines that placing the burden of proof on the 229-18 complaining party is in the public interest. (V.A.C.S. 229-19 Art. 1446c-0, Secs. 3.051(n), (q) (part).) 229-20 Sec. 52.111. COMMISSION MAY EXEMPT. The commission may 229-21 exempt from a requirement of this subchapter a telecommunications 229-22 utility that: 229-23 (1) does not have a significant effect on the public 229-24 interest, as determined by the commission; or 229-25 (2) relies solely on the facilities of others to 230-1 complete long distance calls, if the commission determines that the 230-2 exemption is in the public interest. (V.A.C.S. Art. 1446c-0, Secs. 230-3 3.051(p), (q) (part).) 230-4 (Sections 52.112-52.150 reserved for expansion) 230-5 SUBCHAPTER D. CERTIFICATE HOLDERS 230-6 Sec. 52.151. APPLICABILITY. This subchapter applies only to 230-7 a telecommunications utility that holds a certificate of operating 230-8 authority or a service provider certificate of operating authority. 230-9 (V.A.C.S. Art. 1446c-0, Secs. 3.051(r) (part), (s)(1) (part), 230-10 (s)(2) (part).) 230-11 Sec. 52.152. LIMITED REGULATORY AUTHORITY. Except as 230-12 otherwise specifically provided by this title, the commission has 230-13 only the following authority over a telecommunications utility 230-14 subject to this subchapter: 230-15 (1) to enforce this title under Subchapter B, Chapter 230-16 15; 230-17 (2) to assert jurisdiction over a specific service 230-18 under Subchapter E; 230-19 (3) to require co-carriage reciprocity; and 230-20 (4) to regulate condemnation and building access. 230-21 (V.A.C.S. Art. 1446c-0, Sec. 3.051(s)(1).) 230-22 Sec. 52.153. BOOKS AND RECORDS. The commission may 230-23 prescribe forms of books, accounts, records, and memoranda to be 230-24 kept by a telecommunications utility, but only as necessary to 230-25 enforce the limited jurisdiction over those companies that this 231-1 title provides to the commission. (V.A.C.S. Art. 1446c-0, Sec. 231-2 3.051(r).) 231-3 Sec. 52.154. COMMISSION MAY NOT OVERBURDEN. The commission 231-4 may not, by a rule or regulatory practice adopted under this 231-5 chapter, impose on a telecommunications utility a greater 231-6 regulatory burden than is imposed on a holder of a certificate of 231-7 convenience and necessity serving the same area. (V.A.C.S. 231-8 Art. 1446c-0, Sec. 3.051(s)(2).) 231-9 (Sections 52.155-52.200 reserved for expansion) 231-10 SUBCHAPTER E. DEREGULATION OF SERVICE 231-11 Sec. 52.201. DEREGULATION OF SERVICE. Notwithstanding any 231-12 other provision of this title, the commission may deregulate the 231-13 price of a service in a geographic market if, after notice and 231-14 hearing, the commission determines that: 231-15 (1) the incumbent local exchange company is not 231-16 dominant for the service in that geographic market; or 231-17 (2) the holder of a certificate of operating authority 231-18 who is a dominant carrier is no longer dominant for the service in 231-19 that geographic market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) 231-20 (part).) 231-21 Sec. 52.202. DETERMINATION OF GEOGRAPHIC MARKET. In 231-22 determining the geographic market under Section 52.201, the 231-23 commission shall consider the economic and technical conditions of 231-24 the market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) (part).) 231-25 Sec. 52.203. MARKET POWER TEST. (a) To determine whether 232-1 an incumbent local exchange company or holder of a certificate of 232-2 operating authority who is a dominant carrier is no longer dominant 232-3 for a service in a geographic market, the commission must find 232-4 that: 232-5 (1) there is an effective competitive alternative; and 232-6 (2) the incumbent local exchange company or 232-7 certificate holder does not have market power sufficient to 232-8 control, in a manner that is adverse to the public interest, the 232-9 price of the service in the geographic area. 232-10 (b) To determine whether the incumbent local exchange 232-11 company or certificate holder is dominant for a service in the 232-12 geographic area, the commission shall consider: 232-13 (1) the number and size of telecommunications 232-14 utilities or other persons who provide the same, equivalent, or 232-15 substitutable service in the relevant market; 232-16 (2) the extent to which the service is available in 232-17 the relevant market; 232-18 (3) the ability of customers in the relevant market to 232-19 obtain the same, equivalent, or substitutable service at comparable 232-20 rates and on comparable terms; 232-21 (4) the ability of a telecommunications utility or 232-22 other person to make the same, equivalent, or substitutable service 232-23 readily available in the relevant market at comparable rates and on 232-24 comparable terms; 232-25 (5) the proportion of the relevant market that is 233-1 being provided the service by a telecommunications utility other 233-2 than the incumbent local exchange company or holder of a 233-3 certificate of operating authority who is a dominant carrier; and 233-4 (6) other relevant information the commission 233-5 considers necessary. (V.A.C.S. Art. 1446c-0, Secs. 3.2572(b), 233-6 (c).) 233-7 Sec. 52.204. RATE FOR DEREGULATED SERVICE. If the price of 233-8 a service in a geographic market is deregulated under this 233-9 subchapter, the incumbent local exchange company or holder of a 233-10 certificate of operating authority may set the rate for the service 233-11 at any level higher than the service's long run incremental cost. 233-12 (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) (part).) 233-13 Sec. 52.205. INVESTIGATION OF COMPETITION. (a) On request 233-14 of an incumbent local exchange company or holder of a certificate 233-15 of operating authority who is a dominant carrier made in 233-16 conjunction with an application under this subchapter, the 233-17 commission shall investigate to determine the effect and scope of 233-18 competition in the geographic and service markets at issue. 233-19 (b) The commission has the power necessary and convenient to 233-20 conduct the investigation. In conducting an investigation, the 233-21 commission may: 233-22 (1) hold a hearing; 233-23 (2) issue a subpoena to compel the attendance of a 233-24 witness and the production of a document; and 233-25 (3) make findings of fact and decisions with respect 234-1 to the markets. 234-2 (c) A party to a proceeding may use, in an application for 234-3 pricing flexibility, the results of an investigation conducted 234-4 under this section. (V.A.C.S. Art. 1446c-0, Secs. 3.2572(e), (f).) 234-5 Sec. 52.206. REREGULATION OF MARKET. The commission, on its 234-6 own motion or on a complaint that the commission considers to have 234-7 merit, may assert regulation over a service in a geographic market 234-8 if: 234-9 (1) the incumbent local exchange company or holder of 234-10 a certificate of operating authority who was previously a dominant 234-11 carrier is found to again be dominant for the service in that 234-12 geographic market; or 234-13 (2) the provider of services under a certificate of 234-14 operating authority or service provider certificate of operating 234-15 authority is found to be dominant for the service in that 234-16 geographic market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(d).) 234-17 Sec. 52.207. REPORTS; CONFIDENTIAL INFORMATION. (a) In 234-18 conjunction with the commission's authority to collect and compile 234-19 information, the commission may collect a report from a holder of 234-20 a: 234-21 (1) certificate of operating authority; or 234-22 (2) service provider certificate of operating 234-23 authority. 234-24 (b) The commission shall maintain the confidentiality of 234-25 information contained in a report collected under this section that 235-1 is claimed to be confidential for competitive purposes. The 235-2 confidential information is exempt from disclosure under Chapter 235-3 552, Government Code. 235-4 (c) To protect the confidential information, the commission 235-5 shall aggregate the information to the maximum extent possible 235-6 considering the purpose of the proceeding. (V.A.C.S. Art. 1446c-0, 235-7 Sec. 3.2572(g).) 235-8 (Sections 52.208-52.250 reserved for expansion) 235-9 SUBCHAPTER F. REQUIRED REPORTS AND FILINGS; RECORDS 235-10 Sec. 52.251. TARIFF FILINGS. (a) A public utility shall 235-11 file with the commission a tariff showing each rate that is: 235-12 (1) subject to the commission's jurisdiction; and 235-13 (2) in effect for a utility service, product, or 235-14 commodity offered by the utility. 235-15 (b) The public utility shall file as a part of the tariff 235-16 required under Subsection (a) each rule that relates to or affects: 235-17 (1) a rate of the utility; or 235-18 (2) a utility service, product, or commodity furnished 235-19 by the utility. (V.A.C.S. Art. 1446c-0, Sec. 3.154.) 235-20 Sec. 52.252. DEPRECIATION ACCOUNT. The commission shall 235-21 require each public utility to carry a proper and adequate 235-22 depreciation account in accordance with: 235-23 (1) the rates and methods prescribed by the commission 235-24 under Section 53.056; and 235-25 (2) any other rule the commission adopts. (V.A.C.S. 236-1 Art. 1446c-0, Sec. 3.151(a) (part).) 236-2 Sec. 52.253. ACCOUNTS OF PROFITS AND LOSSES. A public 236-3 utility shall keep separate accounts showing profits or losses from 236-4 the sale or lease of merchandise, including an appliance, a 236-5 fixture, or equipment. (V.A.C.S. Art. 1446c-0, Sec. 3.151(b) 236-6 (part).) 236-7 Sec. 52.254. REPORT OF CERTAIN EXPENSES. The commission may 236-8 require a public utility to annually report the utility's 236-9 expenditures for: 236-10 (1) business gifts and entertainment; and 236-11 (2) advertising or public relations, including 236-12 expenditures for institutional and consumption-inducing purposes. 236-13 (V.A.C.S. Art. 1446c-0, Sec. 3.152(a).) 236-14 Sec. 52.255. AVAILABILITY OF RECORDS. Notwithstanding 236-15 Section 14.152, a book, account, record, or memorandum of a public 236-16 utility may be removed from this state if the book, account, 236-17 record, or memorandum is returned to this state for any commission 236-18 inspection authorized by this title. (V.A.C.S. Art. 1446c-0, Sec. 236-19 3.1545.) 236-20 CHAPTER 53. RATES 236-21 SUBCHAPTER A. GENERAL PROVISIONS 236-22 Sec. 53.001. AUTHORIZATION TO ESTABLISH AND REGULATE 236-23 RATES 236-24 Sec. 53.002. COMPLIANCE WITH TITLE 236-25 Sec. 53.003. JUST AND REASONABLE RATES 237-1 Sec. 53.004. EQUALITY OF RATES AND SERVICES 237-2 Sec. 53.005. RATES FOR AREA NOT IN MUNICIPALITY 237-3 Sec. 53.006. BURDEN OF PROOF 237-4 Sec. 53.007. LIMIT ON RECONNECTION FEE 237-5 (Sections 53.008-53.050 reserved for expansion) 237-6 SUBCHAPTER B. COMPUTATION OF RATES 237-7 Sec. 53.051. ESTABLISHING OVERALL REVENUES 237-8 Sec. 53.052. ESTABLISHING REASONABLE RETURN 237-9 Sec. 53.053. COMPONENTS OF INVESTED CAPITAL 237-10 Sec. 53.054. CONSTRUCTION WORK IN PROGRESS 237-11 Sec. 53.055. SEPARATIONS AND ALLOCATIONS 237-12 Sec. 53.056. DEPRECIATION, AMORTIZATION, AND DEPLETION 237-13 Sec. 53.057. NET INCOME; DETERMINATION OF REVENUES AND 237-14 EXPENSES 237-15 Sec. 53.058. CONSIDERATION OF PAYMENT TO AFFILIATE 237-16 Sec. 53.059. TREATMENT OF CERTAIN TAX BENEFITS 237-17 Sec. 53.060. COMPUTATION OF INCOME TAX; CONSOLIDATED RETURN 237-18 Sec. 53.061. ALLOWANCE OF CERTAIN 237-19 EXPENSES 237-20 Sec. 53.062. CONSIDERATION OF CERTAIN EXPENSES 237-21 Sec. 53.063. CONSIDERATION OF PROFIT OR LOSS FROM 237-22 SALE OR LEASE OF MERCHANDISE 237-23 Sec. 53.064. SELF-INSURANCE 237-24 Sec. 53.065. INTEREXCHANGE SERVICES; RATES OF 237-25 INCUMBENT LOCAL EXCHANGE COMPANY 238-1 (Sections 53.066-53.100 reserved for expansion) 238-2 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE 238-3 CHANGE PROPOSED BY UTILITY 238-4 Sec. 53.101. DEFINITION 238-5 Sec. 53.102. STATEMENT OF INTENT TO CHANGE RATES 238-6 Sec. 53.103. NOTICE OF INTENT TO CHANGE RATES 238-7 Sec. 53.104. EARLY EFFECTIVE DATE OF RATE CHANGE 238-8 Sec. 53.105. DETERMINATION OF PROPRIETY OF CHANGE; HEARING 238-9 Sec. 53.106. REGIONAL HEARING 238-10 Sec. 53.107. PREFERENCE TO HEARING 238-11 Sec. 53.108. RATE SUSPENSION; DEADLINE 238-12 Sec. 53.109. TEMPORARY RATES 238-13 Sec. 53.110. BONDED RATES 238-14 Sec. 53.111. ESTABLISHMENT OF FINAL RATES 238-15 Sec. 53.112. EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN 238-16 RATES 238-17 Sec. 53.113. FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS 238-18 SERVICE 238-19 (Sections 53.114-53.150 reserved for expansion) 238-20 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 238-21 Sec. 53.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 238-22 Sec. 53.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 238-23 ANOTHER SOURCE 238-24 (Sections 53.153-53.200 reserved for expansion) 239-1 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENTS 239-2 Sec. 53.201. AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS 239-3 PROHIBITED 239-4 Sec. 53.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY 239-5 (Sections 53.203-53.250 reserved for expansion) 239-6 SUBCHAPTER F. REGULATORY POLICY FOR SMALL INCUMBENT LOCAL 239-7 EXCHANGE COMPANIES AND COOPERATIVES 239-8 Sec. 53.251. GENERAL POLICY 239-9 Sec. 53.252. ADOPTION OF CERTAIN POLICIES 239-10 (Sections 53.253-53.300 reserved for expansion) 239-11 SUBCHAPTER G. SPECIAL PROCEDURES FOR SMALL 239-12 LOCAL EXCHANGE COMPANIES AND COOPERATIVES 239-13 Sec. 53.301. DEFINITION 239-14 Sec. 53.302. APPLICABILITY 239-15 Sec. 53.303. PROVISIONS NOT EXCLUSIVE 239-16 Sec. 53.304. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE MINOR 239-17 CHANGES 239-18 Sec. 53.305. NOTICE TO AFFECTED CUSTOMERS 239-19 Sec. 53.306. COMMISSION REVIEW OF PROPOSED CHANGE 239-20 Sec. 53.307. COMPLIANCE WITH PRINCIPLES; REDUCED RATES 239-21 Sec. 53.308. FEES AND ASSESSMENTS 239-22 (Sections 53.309-53.350 reserved for expansion) 239-23 SUBCHAPTER H. PARTIAL DEREGULATION AVAILABLE TO 239-24 CERTAIN COOPERATIVE CORPORATIONS 239-25 Sec. 53.351. PROVISIONS NOT EXCLUSIVE 240-1 Sec. 53.352. PARTIAL DEREGULATION BY BALLOT 240-2 Sec. 53.353. VOTING PROCEDURES 240-3 Sec. 53.354. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE CERTAIN 240-4 CHANGES 240-5 Sec. 53.355. STATEMENT OF INTENT 240-6 Sec. 53.356. NOTICE TO AFFECTED PERSONS 240-7 Sec. 53.357. FILING OF AFFIDAVITS VERIFYING NOTICE 240-8 Sec. 53.358. COMMISSION REVIEW OF PROPOSED ACTION 240-9 Sec. 53.359. REVERSAL OF DEREGULATION BY BALLOT 240-10 CHAPTER 53. RATES 240-11 SUBCHAPTER A. GENERAL PROVISIONS 240-12 Sec. 53.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 240-13 (a) Except as otherwise provided by this title, the commission may 240-14 establish and regulate rates of a public utility and may adopt 240-15 rules for determining: 240-16 (1) the classification of customers and services; and 240-17 (2) the applicability of rates. 240-18 (b) A rule or order of the commission may not conflict with 240-19 a ruling of a federal regulatory body. (V.A.C.S. Art. 1446c-0, 240-20 Sec. 3.201.) 240-21 Sec. 53.002. COMPLIANCE WITH TITLE. A utility may not 240-22 charge or receive a rate for utility service except as provided by 240-23 this title. (V.A.C.S. Art. 1446c-0, Sec. 3.153 (part).) 240-24 Sec. 53.003. JUST AND REASONABLE RATES. (a) The commission 240-25 shall ensure that each rate a public utility or two or more public 241-1 utilities jointly make, demand, or receive is just and reasonable. 241-2 (b) A rate may not be unreasonably preferential, 241-3 prejudicial, or discriminatory but must be sufficient, equitable, 241-4 and consistent in application to each class of consumer. 241-5 (c) A public utility may not: 241-6 (1) grant an unreasonable preference or advantage 241-7 concerning rates to a person in a classification; 241-8 (2) subject a person in a classification to an 241-9 unreasonable prejudice or disadvantage concerning rates; or 241-10 (3) establish or maintain an unreasonable difference 241-11 concerning rates between localities or between classes of service. 241-12 (d) In establishing a public utility's rates, the commission 241-13 may treat as a single class two or more municipalities that a 241-14 public utility serves if the commission considers that treatment to 241-15 be appropriate. (V.A.C.S. Art. 1446c-0, Secs. 3.202 (part), 3.215 241-16 (part).) 241-17 Sec. 53.004. EQUALITY OF RATES AND SERVICES. (a) A public 241-18 utility may not directly or indirectly charge, demand, or receive 241-19 from a person a greater or lesser compensation for a service 241-20 provided or to be provided by the utility than the compensation 241-21 prescribed by the applicable tariff filed under Section 52.251. 241-22 (b) A person may not knowingly receive or accept a service 241-23 from a public utility for a compensation greater or less than the 241-24 compensation prescribed by the tariff. 241-25 (c) This title does not prevent a cooperative corporation 242-1 from returning to its members net earnings resulting from its 242-2 operations in proportion to the members' purchases from or through 242-3 the corporation. (V.A.C.S. Art. 1446c-0, Sec. 3.216.) 242-4 Sec. 53.005. RATES FOR AREA NOT IN MUNICIPALITY. Without 242-5 the approval of the commission, a public utility's rates for an 242-6 area not in a municipality may not exceed 115 percent of the 242-7 average of all rates for similar services for all municipalities 242-8 served by the same utility in the same county as that area. 242-9 (V.A.C.S. Art. 1446c-0, Sec. 3.214.) 242-10 Sec. 53.006. BURDEN OF PROOF. (a) In a proceeding 242-11 involving a proposed rate change, the public utility has the burden 242-12 of proving that: 242-13 (1) the rate change is just and reasonable, if the 242-14 utility proposes the change; or 242-15 (2) an existing rate is just and reasonable, if the 242-16 proposal is to reduce the rate. 242-17 (b) In a proceeding in which the rate of an incumbent local 242-18 exchange company is in issue, the incumbent local exchange company 242-19 has the burden of proving that the rate is just and reasonable. 242-20 (V.A.C.S. Art. 1446c-0, Sec. 3.204.) 242-21 Sec. 53.007. LIMIT ON RECONNECTION FEE. The commission 242-22 shall establish a reasonable limit on the amount that a local 242-23 exchange company may charge a customer for changing the location at 242-24 which the customer receives service. (V.A.C.S. Art. 1446c-0, Sec. 242-25 3.1556.) 243-1 (Sections 53.008-53.050 reserved for expansion) 243-2 SUBCHAPTER B. COMPUTATION OF RATES 243-3 Sec. 53.051. ESTABLISHING OVERALL REVENUES. In establishing 243-4 a public utility's rates, the commission shall establish the 243-5 utility's overall revenues at an amount that will permit the 243-6 utility a reasonable opportunity to earn a reasonable return on the 243-7 utility's invested capital used and useful in providing service to 243-8 the public in excess of the utility's reasonable and necessary 243-9 operating expenses. (V.A.C.S. Art. 1446c-0, Sec. 3.203(a).) 243-10 Sec. 53.052. ESTABLISHING REASONABLE RETURN. In 243-11 establishing a reasonable return on invested capital, the 243-12 commission shall consider applicable factors, including: 243-13 (1) the quality of the utility's services; 243-14 (2) the efficiency of the utility's operations; and 243-15 (3) the quality of the utility's management. 243-16 (V.A.C.S. Art. 1446c-0, Sec. 3.203(b).) 243-17 Sec. 53.053. COMPONENTS OF INVESTED CAPITAL. (a) Public 243-18 utility rates shall be based on the original cost, less 243-19 depreciation, of property used by and useful to the utility in 243-20 providing service. 243-21 (b) The original cost of property shall be determined at the 243-22 time the property is dedicated to public use, whether by the 243-23 utility that is the present owner or by a predecessor. 243-24 (c) In this section, "original cost" means the actual money 243-25 cost or the actual money value of consideration paid other than 244-1 money. (V.A.C.S. Art. 1446c-0, Secs. 3.206(a) (part), (c).) 244-2 Sec. 53.054. CONSTRUCTION WORK IN PROGRESS. 244-3 (a) Construction work in progress, at cost as recorded on the 244-4 public utility's books, may be included in the utility's rate base. 244-5 The inclusion of construction work in progress is an exceptional 244-6 form of rate relief that the commission may grant only if the 244-7 utility demonstrates that inclusion is necessary to the utility's 244-8 financial integrity. 244-9 (b) Construction work in progress may not be included in the 244-10 rate base for a major project under construction to the extent that 244-11 the project has been inefficiently or imprudently planned or 244-12 managed. (V.A.C.S. Art. 1446c-0, Secs. 3.206(a) (part), (b).) 244-13 Sec. 53.055. SEPARATIONS AND ALLOCATIONS. Costs of 244-14 facilities, revenues, expenses, taxes, and reserves shall be 244-15 separated or allocated as prescribed by the commission. (V.A.C.S. 244-16 Art. 1446c-0, Sec. 3.207.) 244-17 Sec. 53.056. DEPRECIATION, AMORTIZATION, AND DEPLETION. 244-18 (a) The commission shall establish proper and adequate rates and 244-19 methods of depreciation, amortization, or depletion for each class 244-20 of property of a public utility. 244-21 (b) On application of a utility, the commission shall 244-22 establish depreciation rates that promote the use of new technology 244-23 and infrastructure. In establishing rates under this subsection, 244-24 the commission shall consider depreciation practices of 244-25 nonregulated telecommunications providers. 245-1 (c) The rates and methods established under this section and 245-2 the depreciation account required by Section 52.252 shall be used 245-3 uniformly and consistently throughout rate-setting and appeal 245-4 proceedings. 245-5 (d) Notwithstanding this section, a company electing under 245-6 Chapter 58 may determine its own depreciation rates and 245-7 amortizations. The company shall notify the commission of any 245-8 change in those rates or amortizations. (V.A.C.S. Art. 1446c-0, 245-9 Sec. 3.151(a) (part).) 245-10 Sec. 53.057. NET INCOME; DETERMINATION OF REVENUES AND 245-11 EXPENSES. (a) A public utility's net income is the total revenues 245-12 of the utility less all reasonable and necessary expenses as 245-13 determined by the commission. 245-14 (b) The commission shall determine revenues and expenses in 245-15 a manner consistent with this subchapter. 245-16 (c) The commission may adopt reasonable rules with respect 245-17 to whether an expense is allowed for ratemaking purposes. 245-18 (V.A.C.S. Art. 1446c-0, Secs. 3.208(a), (e).) 245-19 Sec. 53.058. CONSIDERATION OF PAYMENT TO AFFILIATE. 245-20 (a) Except as provided by Subsection (b), the commission may not 245-21 allow as capital cost or as expense a payment to an affiliate for: 245-22 (1) cost of a service, property, right, or other item; 245-23 or 245-24 (2) interest expense. 245-25 (b) The commission may allow a payment described by 246-1 Subsection (a) only to the extent that the commission finds the 246-2 payment is reasonable and necessary for each item or class of items 246-3 as determined by the commission. 246-4 (c) A finding under Subsection (b) must include: 246-5 (1) a specific finding of the reasonableness and 246-6 necessity of each item or class of items allowed; and 246-7 (2) except as provided by Subsection (d), a finding 246-8 that the price to the utility is not higher than the prices charged 246-9 by the supplying affiliate to: 246-10 (A) its other affiliates or divisions for the 246-11 same item or class of items; or 246-12 (B) a nonaffiliated person within the same 246-13 market area or having the same market conditions. 246-14 (d) A finding under this section is not required as to the 246-15 prices charged by the supplying affiliate to its other affiliates 246-16 or divisions if the supplying affiliate computed its charges to the 246-17 utility in a manner consistent with Federal Communications 246-18 Commission rules. 246-19 (e) If the commission finds that the affiliate expense for 246-20 the test period is unreasonable, the commission shall: 246-21 (1) determine the reasonable level of the expense; and 246-22 (2) include that expense in determining the utility's 246-23 cost of service. (V.A.C.S. Art. 1446c-0, Sec. 3.208(b).) 246-24 Sec. 53.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 246-25 determining the allocation of tax savings derived from liberalized 247-1 depreciation and amortization, the investment tax credit, and the 247-2 application of similar methods, the commission shall: 247-3 (1) balance equitably the interests of present and 247-4 future customers; and 247-5 (2) apportion accordingly the benefits between 247-6 consumers and the public utility. 247-7 (b) If a public utility retains a portion of the investment 247-8 tax credit, that portion shall be deducted from the original cost 247-9 of the facilities or other addition to the rate base to which the 247-10 credit applied to the extent allowed by the Internal Revenue Code. 247-11 (V.A.C.S. Art. 1446c-0, Sec. 3.151(c).) 247-12 Sec. 53.060. COMPUTATION OF INCOME TAX; CONSOLIDATED RETURN. 247-13 (a) Unless it is shown to the satisfaction of the commission that 247-14 it was reasonable to choose not to consolidate returns, a public 247-15 utility's income taxes shall be computed as though a consolidated 247-16 return had been filed and the utility had realized its fair share 247-17 of the savings resulting from that return, if: 247-18 (1) the utility is a member of an affiliated group 247-19 eligible to file a consolidated income tax return; and 247-20 (2) it is advantageous to the utility to do so. 247-21 (b) The amount of income tax that a consolidated group of 247-22 which a public utility is a member saves, because the consolidated 247-23 return eliminates the intercompany profit on purchases by the 247-24 utility from an affiliate, shall be applied to reduce the cost of 247-25 the property or service purchased from the affiliate. 248-1 (c) The investment tax credit allowed against federal income 248-2 taxes, to the extent retained by the utility, shall be applied as a 248-3 reduction in the rate-based contribution of the assets to which the 248-4 credit applies, to the extent and at the rate allowed by the 248-5 Internal Revenue Code. (V.A.C.S. Art. 1446c-0, Sec. 3.208(c).) 248-6 Sec. 53.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The 248-7 commission may not allow as a cost or expense for ratemaking 248-8 purposes: 248-9 (1) an expenditure for legislative advocacy; or 248-10 (2) an expenditure described by Section 52.254 that 248-11 the commission determines to be not in the public interest. 248-12 (b) The commission may allow as a cost or expense reasonable 248-13 charitable or civic contributions not to exceed the amount approved 248-14 by the commission. (V.A.C.S. Art. 1446c-0, Secs. 3.152(b), (c), 248-15 (d).) 248-16 Sec. 53.062. CONSIDERATION OF CERTAIN EXPENSES. The 248-17 commission may not consider for ratemaking purposes: 248-18 (1) an expenditure for legislative advocacy, made 248-19 directly or indirectly, including legislative advocacy expenses 248-20 included in trade association dues; 248-21 (2) an expenditure for costs of processing a refund or 248-22 credit under Section 53.110; or 248-23 (3) any other expenditure, including an executive 248-24 salary, advertising expense, legal expense, or civil penalty or 248-25 fine the commission finds to be unreasonable, unnecessary, or not 249-1 in the public interest. (V.A.C.S. Art. 1446c-0, Sec. 3.208(d).) 249-2 Sec. 53.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 249-3 LEASE OF MERCHANDISE. In establishing a public utility's rates, 249-4 the commission may not consider a profit or loss that results from 249-5 the sale or lease of merchandise, including appliances, fixtures, 249-6 or equipment, to the extent that merchandise is not integral to 249-7 providing utility service. (V.A.C.S. Art. 1446c-0, Sec. 3.151(b) 249-8 (part).) 249-9 Sec. 53.064. SELF-INSURANCE. (a) A public utility may 249-10 self-insure all or part of the utility's potential liability or 249-11 catastrophic property loss, including windstorm, fire, and 249-12 explosion losses, that could not have been reasonably anticipated 249-13 and included under operating and maintenance expenses. 249-14 (b) The commission shall approve a self-insurance plan under 249-15 this section if the commission finds that: 249-16 (1) the coverage is in the public interest; 249-17 (2) the plan, considering all costs, is a lower cost 249-18 alternative to purchasing commercial insurance; and 249-19 (3) ratepayers will receive the benefits of the 249-20 savings. 249-21 (c) In computing a utility's reasonable and necessary 249-22 expenses under this subchapter, the commission, to the extent the 249-23 commission finds is in the public interest, shall allow as a 249-24 necessary expense money credited to a reserve account for 249-25 self-insurance. The commission shall determine reasonableness 250-1 under this subsection: 250-2 (1) from information provided at the time the 250-3 self-insurance plan and reserve account are established; and 250-4 (2) on the filing of a rate case by a utility that has 250-5 a reserve account. 250-6 (d) After a reserve account for self-insurance is 250-7 established, the commission shall: 250-8 (1) determine whether the account has a surplus or 250-9 shortage under Subsection (e); and 250-10 (2) subtract any surplus from or add any shortage to 250-11 the utility's rate base. 250-12 (e) A surplus in the reserve account exists if the charges 250-13 against the account are less than the money credited to the 250-14 account. A shortage in the reserve account exists if the charges 250-15 against the account are greater than the money credited to the 250-16 account. 250-17 (f) The commission shall adopt rules governing 250-18 self-insurance under this section. (V.A.C.S. Art. 1446c-0, Sec. 250-19 3.209.) 250-20 Sec. 53.065. INTEREXCHANGE SERVICES; RATES OF INCUMBENT 250-21 LOCAL EXCHANGE COMPANY. (a) An incumbent local exchange company's 250-22 rates for interexchange telecommunications services must be 250-23 statewide average rates except as ordered by the commission after 250-24 application and hearing. 250-25 (b) This section does not limit the ability of an incumbent 251-1 local exchange company to contract for high-speed private line 251-2 services of 1.544 megabits or greater under Section 52.057. 251-3 (V.A.C.S. Art. 1446c-0, Sec. 3.303.) 251-4 (Sections 53.066-53.100 reserved for expansion) 251-5 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE 251-6 CHANGE PROPOSED BY UTILITY 251-7 Sec. 53.101. DEFINITION. In this subchapter, "major change" 251-8 means an increase in rates that would increase the aggregate 251-9 revenues of the applicant more than the greater of $100,000 or 251-10 2-1/2 percent. The term does not include an increase in rates that 251-11 the commission allows to go into effect or the utility makes under 251-12 an order of the commission after hearings held with public notice. 251-13 (V.A.C.S. Art. 1446c-0, Sec. 3.211(b) (part).) 251-14 Sec. 53.102. STATEMENT OF INTENT TO CHANGE RATES. (a) A 251-15 utility may not change its rates unless the utility files a 251-16 statement of its intent with the commission at least 35 days before 251-17 the effective date of the proposed change. 251-18 (b) The utility shall also mail or deliver a copy of the 251-19 statement of intent to the appropriate officer of each affected 251-20 municipality. 251-21 (c) The statement of intent must include: 251-22 (1) proposed revisions of tariffs; and 251-23 (2) a detailed statement of: 251-24 (A) each proposed change; 251-25 (B) the effect the proposed change is expected 252-1 to have on the revenues of the utility; 252-2 (C) each class and number of utility consumers 252-3 affected; and 252-4 (D) any other information required by the 252-5 commission's rules. (V.A.C.S. Art. 1446c-0, Sec. 3.211(a) (part).) 252-6 Sec. 53.103. NOTICE OF INTENT TO CHANGE RATES. (a) The 252-7 utility shall: 252-8 (1) publish, in conspicuous form and place, notice to 252-9 the public of the proposed change once each week for four 252-10 successive weeks before the effective date of the proposed change 252-11 in a newspaper having general circulation in each county containing 252-12 territory affected by the proposed change; and 252-13 (2) mail notice of the proposed change to any other 252-14 affected person as required by the commission's rules. 252-15 (b) The commission may waive the publication of notice 252-16 requirement prescribed by Subsection (a) in a proceeding that 252-17 involves only a rate reduction for each affected ratepayer. The 252-18 applicant shall give notice of the proposed rate change by mail to 252-19 each affected utility customer. 252-20 (c) The commission by rule shall define other proceedings 252-21 for which the publication of notice requirement prescribed by 252-22 Subsection (a) may be waived on a showing of good cause. A waiver 252-23 may not be granted in a proceeding involving a rate increase to any 252-24 class or category of ratepayer. (V.A.C.S. Art. 1446c-0, Sec. 252-25 3.211(a) (part).) 253-1 Sec. 53.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For 253-2 good cause shown, the commission may allow a rate change, other 253-3 than a major change, to take effect: 253-4 (1) before the end of the 35-day period prescribed by 253-5 Section 53.102; and 253-6 (2) under conditions the commission prescribes, 253-7 subject to suspension as provided by this subchapter. 253-8 (b) The utility shall immediately revise its tariffs to 253-9 include the change. (V.A.C.S. Art. 1446c-0, Sec. 3.211(b) (part).) 253-10 Sec. 53.105. DETERMINATION OF PROPRIETY OF CHANGE; HEARING. 253-11 (a) If a tariff changing rates is filed with the commission, the 253-12 commission shall, on complaint by an affected person, or may, on 253-13 its own motion, not later than the 30th day after the effective 253-14 date of the change, enter on a hearing to determine the propriety 253-15 of the change. 253-16 (b) The commission shall hold a hearing in every case in 253-17 which the change constitutes a major change. The commission may, 253-18 however, use an informal proceeding if the commission does not 253-19 receive a complaint before the 46th day after the date notice of 253-20 the change is filed. 253-21 (c) The commission shall give reasonable notice of the 253-22 hearing, including notice to the governing body of each affected 253-23 municipality and county. The utility is not required to provide a 253-24 formal answer or file any other formal pleading in response to the 253-25 notice, and the absence of an answer does not affect an order for a 254-1 hearing. (V.A.C.S. Art. 1446c-0, Sec. 3.211(c) (part).) 254-2 Sec. 53.106. REGIONAL HEARING. The commission shall hold a 254-3 regional hearing at an appropriate location in a case in which the 254-4 commission determines it is in the public interest to hear 254-5 testimony at a regional hearing for inclusion in the record. 254-6 (V.A.C.S. Art. 1446c-0, Sec. 3.211(c) (part).) 254-7 Sec. 53.107. PREFERENCE TO HEARING. The commission shall: 254-8 (1) give preference to a hearing under this subchapter 254-9 and to deciding questions arising under this subchapter and 254-10 Subchapter E over any other question pending before it; and 254-11 (2) decide the questions as quickly as possible. 254-12 (V.A.C.S. Art. 1446c-0, Sec. 3.211(d) (part).) 254-13 Sec. 53.108. RATE SUSPENSION; DEADLINE. (a) Pending the 254-14 hearing and a decision, the commission, after delivering to the 254-15 utility a written statement of the commission's reasons, may 254-16 suspend the rate change for not longer than 150 days after the date 254-17 the rate change would otherwise be effective. 254-18 (b) The 150-day period prescribed by Subsection (a) shall be 254-19 extended two days for each day the actual hearing on the merits of 254-20 the case exceeds 15 days. 254-21 (c) If the commission does not make a final determination 254-22 concerning a rate change before expiration of the suspension 254-23 period, the commission is considered to have approved the change. 254-24 This approval is subject to the authority of the commission 254-25 thereafter to continue a hearing in progress. (V.A.C.S. 255-1 Art. 1446c-0, Sec. 3.211(d) (part).) 255-2 Sec. 53.109. TEMPORARY RATES. (a) The commission may 255-3 establish temporary rates to be in effect during the suspension 255-4 period under Section 53.108. 255-5 (b) If the commission does not establish temporary rates, 255-6 the rates in effect when the suspended tariff was filed continue in 255-7 effect during the suspension period. (V.A.C.S. Art. 1446c-0, Sec. 255-8 3.211(d) (part).) 255-9 Sec. 53.110. BONDED RATES. (a) A utility may put a changed 255-10 rate into effect by filing a bond with the commission if: 255-11 (1) the 150-day suspension period has been extended 255-12 under Section 53.108(b); and 255-13 (2) the commission fails to make a final determination 255-14 before the 151st day after the date the rate change would otherwise 255-15 be effective. 255-16 (b) The bonded rate may not exceed the proposed rate. 255-17 (c) The bond must be: 255-18 (1) payable to the commission in an amount, in a form, 255-19 and with a surety approved by the commission; and 255-20 (2) conditioned on refund. 255-21 (d) The utility shall refund or credit against future bills: 255-22 (1) money collected under the bonded rates in excess 255-23 of the rate finally ordered; and 255-24 (2) interest on that money, at the current interest 255-25 rate as determined by the commission. (V.A.C.S. Art. 1446c-0, Sec. 256-1 3.211(e).) 256-2 Sec. 53.111. ESTABLISHMENT OF FINAL RATES. (a) If, after 256-3 hearing, the commission finds the rates are unreasonable or in 256-4 violation of law, the commission shall: 256-5 (1) enter an order establishing the rates the utility 256-6 shall charge or apply for the service in question; and 256-7 (2) serve a copy of the order on the utility. 256-8 (b) The rates established in the order shall be observed 256-9 thereafter until changed as provided by this title. 256-10 (c) This section does not apply to a company electing under 256-11 Chapter 58 or 59 except as otherwise provided by those chapters or 256-12 by Chapter 60. (V.A.C.S. Art. 1446c-0, Sec. 3.211(f).) 256-13 Sec. 53.112. EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN 256-14 RATES. (a) Notwithstanding Section 53.111(a), if the commission 256-15 does not make a final determination concerning an incumbent local 256-16 exchange company's rate change before expiration of the 150-day 256-17 suspension period, the rates finally approved by the commission 256-18 take effect on and the incumbent local exchange company is entitled 256-19 to collect those rates from the date the 150-day suspension period 256-20 expired. 256-21 (b) A surcharge or other charge necessary to effectuate this 256-22 section may not be recovered over a period of less than 90 days 256-23 from the date of the commission's final order. (V.A.C.S. 256-24 Art. 1446c-0, Sec. 3.211(h).) 256-25 Sec. 53.113. FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS 257-1 SERVICE. (a) An incumbent local exchange company may file with 257-2 the commission tariffs for switched-access service that have been 257-3 approved by the Federal Communications Commission. The tariffs 257-4 must include all rate elements in the company's interstate access 257-5 tariff other than end-user charges. 257-6 (b) Not later than the 60th day after the date a company 257-7 files tariffs under Subsection (a), the commission shall order the 257-8 rates and terms to be the incumbent local exchange company's 257-9 intrastate switched-access rates and terms if, on review, the 257-10 tariffs contain the same rates and terms, excluding end-user 257-11 charges, as approved by the Federal Communications Commission. 257-12 (V.A.C.S. Art. 1446c-0, Sec. 3.211(j).) 257-13 (Sections 53.114-53.150 reserved for expansion) 257-14 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 257-15 Sec. 53.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. 257-16 (a) If the commission, on its own motion or on complaint by an 257-17 affected person, after reasonable notice and hearing, finds that 257-18 the existing rates of a public utility for a service are 257-19 unreasonable or in violation of law, the commission shall: 257-20 (1) enter an order establishing the just and 257-21 reasonable rates to be observed thereafter, including maximum or 257-22 minimum rates; and 257-23 (2) serve a copy of the order on the utility. 257-24 (b) The rates established under Subsection (a) constitute 257-25 the legal rates of the public utility until changed as provided by 258-1 this title. 258-2 (c) This section does not apply to a company electing under 258-3 Chapter 58 or Chapter 59 except as otherwise provided by those 258-4 chapters. (V.A.C.S. Art. 1446c-0, Secs. 3.210(a), (c) (part).) 258-5 Sec. 53.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 258-6 ANOTHER SOURCE. If a public utility does not produce or generate 258-7 the service that it distributes, transmits, or furnishes to the 258-8 public for compensation but obtains the service from another 258-9 source, the commission may investigate the cost of that production 258-10 or generation in an investigation of the reasonableness of the 258-11 utility's rates. (V.A.C.S. Art. 1446c-0, Sec. 3.210(b).) 258-12 (Sections 53.153-53.200 reserved for expansion) 258-13 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENTS 258-14 Sec. 53.201. AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS 258-15 PROHIBITED. The commission may not establish a rate or tariff that 258-16 authorizes a utility to automatically adjust and pass through to 258-17 the utility's customers a change in the utility's costs. (V.A.C.S. 258-18 Art. 1446c-0, Sec 3.211(g) (part).) 258-19 Sec. 53.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY. 258-20 (a) The commission, on its own motion or on the petition of a 258-21 utility, shall provide for the adjustment of the utility's billing 258-22 to reflect an increase or decrease in the utility's tax liability 258-23 to this state if the increase or decrease: 258-24 (1) results from Chapter 5, Acts of the 72nd 258-25 Legislature, 1st Called Session, 1991; and 259-1 (2) is attributable to an activity subject to the 259-2 commission's jurisdiction. 259-3 (b) The commission shall apportion pro rata to each type and 259-4 class of service provided by the utility any billing adjustment 259-5 under this section. The adjustment: 259-6 (1) shall be made effective at the same time as the 259-7 increase or decrease of tax liability described by Subsection 259-8 (a)(1), or as soon after that increase or decrease as is reasonably 259-9 practical; and 259-10 (2) remains effective only until the commission alters 259-11 the adjustment as provided by this section or enters an order for 259-12 the utility under Subchapter C or Subchapter D. 259-13 (c) Each year after an original adjustment, the commission 259-14 shall: 259-15 (1) review the utility's increase or decrease of tax 259-16 liability described by Subsection (a)(1); and 259-17 (2) alter the adjustment as necessary to reflect the 259-18 increase or decrease. 259-19 (d) A proceeding under this section is not a rate case under 259-20 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 3.211(i).) 259-21 (Sections 53.203-53.250 reserved for expansion) 259-22 SUBCHAPTER F. REGULATORY POLICY FOR SMALL INCUMBENT LOCAL 259-23 EXCHANGE COMPANIES AND COOPERATIVES 259-24 Sec. 53.251. GENERAL POLICY. Regulatory policy should 259-25 recognize that: 260-1 (1) there are differences between small and large 260-2 incumbent local exchange companies; 260-3 (2) there are a large number of customer-owned 260-4 telephone cooperatives and small, locally owned investor companies; 260-5 and 260-6 (3) it is appropriate to provide incentives and 260-7 flexibility to allow an incumbent local exchange company that 260-8 serves a rural area to: 260-9 (A) provide existing services; and 260-10 (B) introduce new technology and new services in 260-11 a prompt, efficient, and economical manner. (V.A.C.S. 260-12 Art. 1446c-0, Sec. 3.213(a).) 260-13 Sec. 53.252. ADOPTION OF CERTAIN POLICIES. Notwithstanding 260-14 any other provision of this title, the commission shall consider 260-15 and may adopt policies to: 260-16 (1) provide for evaluation of the overall 260-17 reasonableness of the rates of a rural or small incumbent local 260-18 exchange company or cooperative not more frequently than once every 260-19 three years; 260-20 (2) permit consideration of future construction plans 260-21 and operational changes in evaluating the reasonableness of the 260-22 rates of a rural or small incumbent local exchange company or 260-23 cooperative; or 260-24 (3) allow a rural or small incumbent local exchange 260-25 company or cooperative to: 261-1 (A) provide required information by report or by 261-2 other means, as necessary, including a required rate filing 261-3 package, in substantially less burdensome and complex form than is 261-4 required of a larger incumbent local exchange company; 261-5 (B) change depreciation and amortization rates, 261-6 if customer rates are not affected, after notice to the commission, 261-7 subject to commission review in a proceeding under Subchapter C or 261-8 Subchapter D; 261-9 (C) adopt for a new service the rates for the 261-10 same or a substantially similar service offered by a larger 261-11 incumbent local exchange company, without additional cost 261-12 justification; and 261-13 (D) submit to the commission, instead of a 261-14 management audit otherwise required by law, policy, or rule, 261-15 financial audits regularly performed by an independent auditor or 261-16 required and performed as a result of the company's or 261-17 cooperative's participation in a federal or state financing or 261-18 revenue-sharing program. (V.A.C.S. Art. 1446c-0, Sec. 3.213(j) 261-19 (part).) 261-20 (Sections 53.253-53.300 reserved for expansion) 261-21 SUBCHAPTER G. SPECIAL PROCEDURES FOR SMALL 261-22 LOCAL EXCHANGE COMPANIES AND COOPERATIVES 261-23 Sec. 53.301. DEFINITION. (a) In this subchapter, "minor 261-24 change" means a change, including the restructuring of rates of 261-25 existing services, that: 262-1 (1) decreases the rates or revenues of an incumbent 262-2 local exchange company; or 262-3 (2) together with any other rate or proposed or 262-4 approved tariff changes in the 12 months preceding the effective 262-5 date of the proposed change, increases the company's total 262-6 regulated intrastate gross annual revenues by not more than five 262-7 percent. 262-8 (b) With regard to a change to a basic local access line 262-9 rate, a "minor change" does not include a change that, together 262-10 with any other change to the basic local access line rate that took 262-11 effect during the 12 months preceding the effective date of the 262-12 proposed change, results in an increase of more than 10 percent. 262-13 (V.A.C.S. Art. 1446c-0, Sec. 3.213(h).) 262-14 Sec. 53.302. APPLICABILITY. This subchapter does not apply 262-15 to an incumbent local exchange company that is a cooperative 262-16 corporation partially deregulated under Subchapter H. (V.A.C.S. 262-17 Art. 1446c-0, Sec. 3.213(l).) 262-18 Sec. 53.303. PROVISIONS NOT EXCLUSIVE. This subchapter does 262-19 not prohibit: 262-20 (1) an incumbent local exchange company from filing 262-21 for a new service or rate change under another section of this 262-22 title; or 262-23 (2) the commission from conducting a review under 262-24 Subchapter D. (V.A.C.S. Art. 1446c-0, Sec. 3.213(g).) 262-25 Sec. 53.304. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE 263-1 MINOR CHANGES. (a) An incumbent local exchange company may offer 263-2 an extended local calling service or a new service on an optional 263-3 basis or make a minor change in its rates or tariffs if the 263-4 company: 263-5 (1) is a cooperative corporation or has, together with 263-6 all affiliated incumbent local exchange companies, fewer than 263-7 31,000 access lines in service in this state; 263-8 (2) files with the commission and the office a 263-9 statement of intent, as prescribed by Subsection (b), not later 263-10 than the 91st day before the effective date of the proposed change; 263-11 (3) provides notice as prescribed by Section 53.305; 263-12 and 263-13 (4) files with the commission affidavits verifying 263-14 that notice as prescribed by Section 53.305 was provided. 263-15 (b) The statement of intent must include: 263-16 (1) a copy of a resolution adopted by the incumbent 263-17 local exchange company's board of directors approving the proposed 263-18 change; 263-19 (2) a description of the services affected by the 263-20 proposed change; 263-21 (3) a copy of the proposed tariff for the affected 263-22 service; 263-23 (4) a copy of the customer notice required by 263-24 Subsection (a)(3); 263-25 (5) the number of access lines the company and each 264-1 affiliate have in service in this state; and 264-2 (6) the amount by which the company's total regulated 264-3 intrastate gross annual revenues will increase or decrease as a 264-4 result of the proposed change. (V.A.C.S. Art. 1446c-0, Secs. 264-5 3.213(b), (c).) 264-6 Sec. 53.305. NOTICE TO AFFECTED CUSTOMERS. (a) A company 264-7 shall provide notice of a proposed change to affected customers in 264-8 the manner prescribed by the commission. 264-9 (b) Notice must: 264-10 (1) be provided not later than the 61st day before the 264-11 effective date of the proposed change; and 264-12 (2) include: 264-13 (A) a description of the services affected by 264-14 the proposed change; 264-15 (B) the effective date of the proposed change; 264-16 (C) an explanation of the customer's right to 264-17 petition the commission for a review under Section 53.306, 264-18 including the number of persons required to petition before a 264-19 commission review will occur; 264-20 (D) an explanation of the customer's right to 264-21 information concerning how to obtain a copy of the proposed tariff 264-22 from the company; 264-23 (E) the amount by which the company's total 264-24 regulated intrastate gross annual revenues will increase or 264-25 decrease as a result of the proposed change; and 265-1 (F) a list of rates that are affected by the 265-2 proposed rate change. (V.A.C.S. Art. 1446c-0, Sec. 3.213(d).) 265-3 Sec. 53.306. COMMISSION REVIEW OF PROPOSED CHANGE. (a) The 265-4 commission shall review a proposed change filed under this 265-5 subchapter if: 265-6 (1) the commission receives complaints relating to the 265-7 proposed change signed by a number of affected local service 265-8 customers equal at least to the lesser of 1,500 or five percent of 265-9 those customers; 265-10 (2) the commission receives a complaint relating to 265-11 the proposed change from an affected intrastate access customer, or 265-12 a group of affected intrastate access customers, that in the 265-13 preceding 12 months accounted for more than 10 percent of the 265-14 company's total intrastate gross access revenues; 265-15 (3) the proposed change is not a minor change; 265-16 (4) the company does not comply with the procedural 265-17 requirements of this subchapter; or 265-18 (5) the proposed change is inconsistent with the 265-19 commission's substantive policies as expressed in its rules. 265-20 (b) The commission may suspend a tariff proposed under this 265-21 subchapter during the review. (V.A.C.S. Art. 1446c-0, Secs. 265-22 3.213(e), (f).) 265-23 Sec. 53.307. COMPLIANCE WITH PRINCIPLES; REDUCED RATES. A 265-24 rate established under this subchapter must be in accordance with 265-25 the rate-setting principles of this chapter, except that a company 266-1 may provide to its board members, officers, employees, or agents 266-2 free or reduced rates for services. (V.A.C.S. Art. 1446c-0, Sec. 266-3 3.213(i).) 266-4 Sec. 53.308. FEES AND ASSESSMENTS. The commission may 266-5 prescribe and collect a fee or assessment from incumbent local 266-6 exchange companies necessary to recover the cost to the commission 266-7 and to the office of activities carried out and services provided 266-8 under: 266-9 (1) this subchapter; 266-10 (2) Section 53.112; 266-11 (3) Subchapter H; and 266-12 (4) Section 55.004. (V.A.C.S. Art. 1446c-0, Sec. 266-13 3.213(k).) 266-14 (Sections 53.309-53.350 reserved for expansion) 266-15 SUBCHAPTER H. PARTIAL DEREGULATION AVAILABLE TO 266-16 CERTAIN COOPERATIVE CORPORATIONS 266-17 Sec. 53.351. PROVISIONS NOT EXCLUSIVE. (a) This subchapter 266-18 does not: 266-19 (1) prohibit a cooperative from filing for a new 266-20 service or a rate change under another applicable provision of this 266-21 title; or 266-22 (2) affect the application of a provision of this 266-23 title not directly related to: 266-24 (A) establishing rates; or 266-25 (B) the authority of the commission to require a 267-1 cooperative to file a report required under this title or the 267-2 commission's rules. 267-3 (b) Notwithstanding any other provision of this subchapter, 267-4 the commission may conduct a review under Subchapter D. (V.A.C.S. 267-5 Art. 1446c-0, Secs. 3.2135(j), (k).) 267-6 Sec. 53.352. PARTIAL DEREGULATION BY BALLOT. (a) An 267-7 incumbent local exchange company that is a cooperative corporation 267-8 may vote to partially deregulate the cooperative by sending a 267-9 ballot to each cooperative member. The incumbent local exchange 267-10 company may include the ballot in a bill or send the ballot 267-11 separately. The ballot shall be printed to permit voting for or 267-12 against the proposition: "Authorizing the partial deregulation of 267-13 the (name of the cooperative)." 267-14 (b) The cooperative is partially deregulated if a majority 267-15 of the ballots returned to the cooperative not later than the 45th 267-16 day after the date the ballots are mailed favor deregulation. 267-17 (V.A.C.S. Art. 1446c-0, Secs. 3.2135(a), (b).) 267-18 Sec. 53.353. VOTING PROCEDURES. The commission by rule 267-19 shall prescribe the voting procedures a cooperative must use under 267-20 this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(i).) 267-21 Sec. 53.354. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE 267-22 CERTAIN CHANGES. After the initial balloting, a cooperative may 267-23 offer extended local calling services, offer new services on an 267-24 optional basis, or make changes in its rates or tariffs if the 267-25 cooperative: 268-1 (1) files a statement of intent under Section 53.355; 268-2 (2) provides notice of the proposed action to each 268-3 customer and municipality as prescribed by Section 53.356; and 268-4 (3) files with the commission affidavits verifying 268-5 that notice was provided as prescribed by Section 53.357. 268-6 (V.A.C.S. Art. 1446c-0, Sec. 3.2135(c).) 268-7 Sec. 53.355. STATEMENT OF INTENT. (a) A cooperative must 268-8 file a statement of intent to use this subchapter with the 268-9 commission and the office not later than the 61st day before the 268-10 effective date of the proposed change. 268-11 (b) The statement must include: 268-12 (1) a copy of a resolution, signed by a majority of 268-13 the members of the cooperative's board of directors, approving the 268-14 proposed action and authorizing the filing of the statement of 268-15 intent; 268-16 (2) a description of the services affected by the 268-17 proposed action; 268-18 (3) a copy of the proposed tariff for the affected 268-19 service; and 268-20 (4) a copy of the customer notice required by Section 268-21 53.356. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(d).) 268-22 Sec. 53.356. NOTICE TO AFFECTED PERSONS. (a) The 268-23 cooperative shall provide to each affected customer or party, 268-24 including a municipality, at least two notices of the proposed 268-25 action by bill insert or by individual notice. 269-1 (b) The cooperative shall provide: 269-2 (1) the first notice not later than the 61st day 269-3 before the effective date of the proposed action; and 269-4 (2) the last notice not later than the 31st day before 269-5 the effective date of the proposed action. 269-6 (c) A notice prescribed by this section must include: 269-7 (1) a description of the services affected by the 269-8 proposed action; 269-9 (2) the effective date of the proposed action; 269-10 (3) an explanation of the customer's right to: 269-11 (A) obtain a copy of the proposed tariff from 269-12 the cooperative; and 269-13 (B) petition the commission for a review under 269-14 Section 53.358; 269-15 (4) a statement of the amount by which the 269-16 cooperative's total gross annual revenues will increase or decrease 269-17 and a statement explaining the effect on the cooperative revenues 269-18 as a result of the proposed action; and 269-19 (5) a list of rates that are affected by the proposed 269-20 rate action, showing the effect of the proposed action on each of 269-21 those rates. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(e).) 269-22 Sec. 53.357. FILING OF AFFIDAVITS VERIFYING NOTICE. Not 269-23 later than the 15th day before the effective date of a proposed 269-24 action, the cooperative shall file with the commission affidavits 269-25 that verify that the cooperative provided each notice required by 270-1 Section 53.356. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(f).) 270-2 Sec. 53.358. COMMISSION REVIEW OF PROPOSED ACTION. (a) The 270-3 commission shall review a proposed action filed under this 270-4 subchapter if: 270-5 (1) the commission receives, not later than the 45th 270-6 day after the date the first notice is provided under Section 270-7 53.356, complaints relating to the proposed action: 270-8 (A) signed by at least five percent of the 270-9 affected local service customers; or 270-10 (B) from an affected intrastate access customer, 270-11 or group of affected intrastate access customers, that in the 270-12 preceding 12 months accounted for more than 10 percent of the 270-13 cooperative's total intrastate access revenues; 270-14 (2) the cooperative does not comply with the 270-15 procedural requirements of this subchapter; or 270-16 (3) the proposed action is inconsistent with the 270-17 commission's substantive policies as expressed in its rules. 270-18 (b) If the commission conducts a review of the proposed 270-19 action under this section before the action's effective date, the 270-20 commission may suspend the proposed action during the review. 270-21 (V.A.C.S. Art. 1446c-0, Sec. 3.2135(g).) 270-22 Sec. 53.359. REVERSAL OF DEREGULATION BY BALLOT. (a) A 270-23 cooperative that is partially deregulated under this subchapter may 270-24 vote to reverse the deregulation by sending a ballot to each 270-25 cooperative member. 271-1 (b) The cooperative's board of directors may order 271-2 reballoting on its own motion. If the board receives a written 271-3 request for that action from at least 10 percent of its members, 271-4 the board shall reballot not later than the 60th day after the date 271-5 the board receives that request. 271-6 (c) The cooperative may include the ballot in a bill or send 271-7 the ballot separately. The ballot shall be printed to permit 271-8 voting for or against the proposition: "Reversing the partial 271-9 deregulation of the (name of the cooperative)." 271-10 (d) The partial deregulation is reversed if a majority of 271-11 the ballots returned to the cooperative not later than the 45th day 271-12 after the date the ballots are mailed favor reversal. (V.A.C.S. 271-13 Art. 1446c-0, Sec. 3.2135(h).) 271-14 CHAPTER 54. CERTIFICATES 271-15 SUBCHAPTER A. GENERAL PROVISIONS 271-16 Sec. 54.001. CERTIFICATE REQUIRED 271-17 Sec. 54.002. EXCEPTIONS TO CERTIFICATE REQUIREMENT 271-18 FOR SERVICE EXTENSION 271-19 Sec. 54.003. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 271-20 CERTAIN SERVICES 271-21 Sec. 54.004. RELINQUISHMENT PLAN 271-22 Sec. 54.005. NOTICE OF AND HEARING ON APPLICATION 271-23 Sec. 54.006. REQUEST FOR PRELIMINARY ORDER 271-24 Sec. 54.007. FLEXIBILITY PLAN 271-25 Sec. 54.008. REVOCATION OR AMENDMENT OF CERTIFICATE 272-1 (Sections 54.009-54.050 reserved for expansion) 272-2 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 272-3 Sec. 54.051. DEFINITION 272-4 Sec. 54.052. CERTIFICATE REQUIRED FOR PUBLIC UTILITY 272-5 Sec. 54.053. APPLICATION FOR CERTIFICATE 272-6 Sec. 54.054. GRANT OR DENIAL OF CERTIFICATE 272-7 (Sections 54.055-54.100 reserved for expansion) 272-8 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY 272-9 Sec. 54.101. DEFINITION 272-10 Sec. 54.102. APPLICATION FOR CERTIFICATE 272-11 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE 272-12 Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS 272-13 Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES 272-14 Sec. 54.106. TIME OF SERVICE REQUIREMENTS 272-15 Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES 272-16 Sec. 54.108. BUILD-OUT PLAN COMPLIANCE 272-17 Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR 272-18 CERTAIN PROVIDERS 272-19 Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS 272-20 Sec. 54.111. PENALTY FOR VIOLATION OF TITLE 272-21 (Sections 54.112-54.150 reserved for expansion) 272-22 SUBCHAPTER D. SERVICE PROVIDER CERTIFICATE 272-23 OF OPERATING AUTHORITY 272-24 Sec. 54.151. DEFINITION 272-25 Sec. 54.152. LIMITATION ON GRANT OF CERTIFICATE 273-1 Sec. 54.153. ELIGIBILITY FOR CERTIFICATE 273-2 Sec. 54.154. APPLICATION FOR CERTIFICATE 273-3 Sec. 54.155. GRANT OR DENIAL OF CERTIFICATE 273-4 Sec. 54.156. RESALE OF SERVICES 273-5 Sec. 54.157. OPTIONAL EXTENDED AREA SERVICE OR EXPANDED 273-6 LOCAL CALLING SERVICE 273-7 Sec. 54.158. INTERFERENCE WITH RESOLD SERVICES PROHIBITED 273-8 Sec. 54.159. RETENTION OF ACCESS SERVICE AND INTRALATA 273-9 TOLL SERVICE 273-10 (Sections 54.160-54.200 reserved for expansion) 273-11 SUBCHAPTER E. MUNICIPALITIES 273-12 Sec. 54.201. CERTIFICATION PROHIBITED 273-13 Sec. 54.202. PROHIBITED MUNICIPAL SERVICES 273-14 Sec. 54.203. SERVICE IN ANNEXED OR INCORPORATED AREA 273-15 Sec. 54.204. DISCRIMINATION BY MUNICIPALITY PROHIBITED 273-16 Sec. 54.205. MUNICIPALITY'S RIGHT TO CONTROL ACCESS 273-17 Sec. 54.206. RECOVERY OF MUNICIPAL FEE 273-18 (Sections 54.207-54.250 reserved for expansion) 273-19 SUBCHAPTER F. REGULATION OF SERVICES, AREAS, AND FACILITIES 273-20 Sec. 54.251. PROVISION OF SERVICE 273-21 Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER 273-22 OF CERTIFICATE OF CONVENIENCE 273-23 AND NECESSITY 273-24 Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN 273-25 CERTIFICATE HOLDERS 274-1 Sec. 54.254. REQUIRED REFUSAL OF SERVICE 274-2 Sec. 54.255. TRANSFER OF CERTAIN CERTIFICATES 274-3 Sec. 54.256. APPLICATION OF CONTRACTS 274-4 Sec. 54.257. INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS 274-5 UTILITY 274-6 Sec. 54.258. MAPS 274-7 Sec. 54.259. DISCRIMINATION BY PROPERTY OWNER 274-8 PROHIBITED 274-9 Sec. 54.260. PROPERTY OWNER'S CONDITIONS 274-10 Sec. 54.261. SHARED TENANT SERVICES CONTRACT 274-11 CHAPTER 54. CERTIFICATES 274-12 SUBCHAPTER A. GENERAL PROVISIONS 274-13 Sec. 54.001. CERTIFICATE REQUIRED. A person may not provide 274-14 local exchange telephone service, basic local telecommunications 274-15 service, or switched access service unless the person obtains a: 274-16 (1) certificate of convenience and necessity; 274-17 (2) certificate of operating authority; or 274-18 (3) service provider certificate of operating 274-19 authority. (V.A.C.S. Art. 1446c-0, Sec. 3.251(c).) 274-20 Sec. 54.002. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 274-21 SERVICE EXTENSION. (a) A telecommunications utility is not 274-22 required to obtain a certificate of convenience and necessity, a 274-23 certificate of operating authority, or a service provider 274-24 certificate of operating authority for an: 274-25 (1) extension into territory that is: 275-1 (A) contiguous to the territory the 275-2 telecommunications utility serves; 275-3 (B) not receiving similar service from another 275-4 telecommunications utility; and 275-5 (C) not in another telecommunications utility's 275-6 certificated area; 275-7 (2) extension in or to territory the 275-8 telecommunications utility serves or is authorized to serve under a 275-9 certificate of public convenience and necessity, a certificate of 275-10 operating authority, or a service provider certificate of operating 275-11 authority; or 275-12 (3) operation, extension, or service in progress on 275-13 September 1, 1975. 275-14 (b) An extension allowed by Subsection (a) is limited to a 275-15 device used: 275-16 (1) to interconnect existing facilities; or 275-17 (2) solely to transmit telecommunications utility 275-18 services from an existing facility to a customer of retail utility 275-19 service. (V.A.C.S. Art. 1446c-0, Secs. 3.252(a) (part), (b).) 275-20 Sec. 54.003. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 275-21 CERTAIN SERVICES. A telecommunications utility is not required to 275-22 obtain a certificate of convenience and necessity, a certificate of 275-23 operating authority, or a service provider certificate of operating 275-24 authority for: 275-25 (1) an interexchange telecommunications service; 276-1 (2) a nonswitched private line service; 276-2 (3) a shared tenant service; 276-3 (4) a specialized communications common carrier 276-4 service; 276-5 (5) a commercial mobile service; or 276-6 (6) an operator service as defined by Section 55.081. 276-7 (V.A.C.S. Art. 1446c-0, Sec. 3.252(a) (part).) 276-8 Sec. 54.004. RELINQUISHMENT PLAN. A holder of a service 276-9 provider certificate of operating authority who applies for a 276-10 certificate of operating authority or a certificate of convenience 276-11 and necessity for the same territory must include with the 276-12 application a plan to relinquish the service provider certificate 276-13 of operating authority. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(e) 276-14 (part).) 276-15 Sec. 54.005. NOTICE OF AND HEARING ON APPLICATION. 276-16 (a) When an application for a certificate of convenience and 276-17 necessity, a certificate of operating authority, or a service 276-18 provider certificate of operating authority is filed, the 276-19 commission shall: 276-20 (1) give notice of the application to interested 276-21 parties; and 276-22 (2) if requested: 276-23 (A) set a time and place for a hearing; and 276-24 (B) give notice of the hearing. 276-25 (b) A person interested in the application may intervene at 277-1 the hearing. (V.A.C.S. Art. 1446c-0, Secs. 3.2531(b) (part), 277-2 3.254(a).) 277-3 Sec. 54.006. REQUEST FOR PRELIMINARY ORDER. (a) A 277-4 telecommunications utility that wants to exercise a right or 277-5 privilege under a franchise or permit that the utility anticipates 277-6 obtaining but has not been granted may apply to the commission for 277-7 a preliminary order under this section. 277-8 (b) The commission may issue a preliminary order declaring 277-9 that the commission, on application and under commission rules, 277-10 will grant the requested certificate of convenience and necessity, 277-11 certificate of operating authority, or service provider certificate 277-12 of operating authority, on terms the commission designates, after 277-13 the telecommunications utility obtains the franchise or permit. 277-14 (c) The commission shall grant the certificate on 277-15 presentation of evidence satisfactory to the commission that the 277-16 telecommunications utility has obtained the franchise or permit. 277-17 (V.A.C.S. Art. 1446c-0, Sec. 3.257.) 277-18 Sec. 54.007. FLEXIBILITY PLAN. (a) After the commission 277-19 grants an application for a certificate of convenience and 277-20 necessity, a certificate of operating authority, or a service 277-21 provider certificate of operating authority or determines that a 277-22 certificate is not needed for the applicant to provide the relevant 277-23 services, the commission shall conduct appropriate proceedings to 277-24 establish a transitional flexibility plan for the incumbent local 277-25 exchange company in the same area or areas as the new certificate 278-1 holder. 278-2 (b) A basic local telecommunications service price of the 278-3 incumbent local exchange company may not be increased before the 278-4 fourth anniversary of the date the certificate is granted to the 278-5 applicant except that the price may be increased: 278-6 (1) as provided by this title; 278-7 (2) when the new certificate holder has completed the 278-8 build-out plan required by Subchapter C, if applicable; or 278-9 (3) when a competitor for basic local 278-10 telecommunications service provides the service in an area in which 278-11 the build-out requirements have been eliminated. (V.A.C.S. 278-12 Art. 1446c-0, Sec. 3.2571.) 278-13 Sec. 54.008. REVOCATION OR AMENDMENT OF CERTIFICATE. 278-14 (a) The commission may revoke or amend a certificate of 278-15 convenience and necessity, a certificate of operating authority or 278-16 a service provider certificate of operating authority after notice 278-17 and hearing if the commission finds that the certificate holder has 278-18 never provided or is no longer providing service in all or any part 278-19 of the certificated area. 278-20 (b) The commission may require one or more public utilities 278-21 to provide service in an area affected by the revocation or 278-22 amendment of a certificate held by a public utility. (V.A.C.S. 278-23 Art. 1446c-0, Sec. 3.263.) 278-24 (Sections 54.009-54.050 reserved for expansion) 279-1 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 279-2 Sec. 54.051. DEFINITION. In this subchapter, "certificate" 279-3 means a certificate of convenience and necessity. (New.) 279-4 Sec. 54.052. CERTIFICATE REQUIRED FOR PUBLIC UTILITY. 279-5 (a) A public utility may not directly or indirectly provide 279-6 service to the public under a franchise or permit unless the 279-7 utility first obtains from the commission a certificate that states 279-8 that the public convenience and necessity requires or will require 279-9 the installation, operation, or extension of the service. 279-10 (b) Except as otherwise provided by this chapter, a public 279-11 utility may not furnish or make available retail public utility 279-12 service to an area in which retail utility service is being 279-13 lawfully furnished by another public utility unless the utility 279-14 first obtains a certificate that includes the area in which the 279-15 consuming facility is located. (V.A.C.S. Art. 1446c-0, Secs. 279-16 3.251(a), (b).) 279-17 Sec. 54.053. APPLICATION FOR CERTIFICATE. (a) A public 279-18 utility that wants to obtain or amend a certificate must submit an 279-19 application to the commission. 279-20 (b) The applicant shall file with the commission evidence 279-21 the commission requires to show the applicant has received the 279-22 consent, franchise, or permit required by the proper municipal or 279-23 other public authority. (V.A.C.S. Art. 1446c-0, Secs. 3.253(a), 279-24 (c).) 279-25 Sec. 54.054. GRANT OR DENIAL OF CERTIFICATE. (a) The 280-1 commission may approve an application and grant a certificate only 280-2 if the commission finds that the certificate is necessary for the 280-3 service, accommodation, convenience, or safety of the public. 280-4 (b) The commission may: 280-5 (1) grant the certificate as requested; 280-6 (2) grant the certificate for the construction of a 280-7 portion of the requested system, facility, or extension or the 280-8 partial exercise of the requested right or privilege; or 280-9 (3) refuse to grant the certificate. 280-10 (c) The commission shall grant each certificate on a 280-11 nondiscriminatory basis after considering: 280-12 (1) the adequacy of existing service; 280-13 (2) the need for additional service; 280-14 (3) the effect of granting the certificate on the 280-15 recipient of the certificate and any public utility of the same 280-16 kind serving the proximate area; and 280-17 (4) other factors, such as: 280-18 (A) community values; 280-19 (B) recreational and park areas; 280-20 (C) historical and aesthetic values; 280-21 (D) environmental integrity; and 280-22 (E) the probable improvement of service or 280-23 lowering of cost to consumers in the area if the certificate is 280-24 granted. (V.A.C.S. Art. 1446c-0, Secs. 3.254(b), (c).) 280-25 (Sections 54.055-54.100 reserved for expansion) 281-1 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY 281-2 Sec. 54.101. DEFINITION. In this subchapter, "certificate" 281-3 means a certificate of operating authority. (New.) 281-4 Sec. 54.102. APPLICATION FOR CERTIFICATE. (a) In lieu of 281-5 applying for a certificate of convenience and necessity, a person 281-6 may apply for a certificate of operating authority. 281-7 (b) An applicant for a facilities-based certificate of 281-8 operating authority must include with the application a proposed 281-9 build-out plan in compliance with this subchapter that demonstrates 281-10 how the applicant will, over a six-year period, deploy facilities 281-11 throughout the geographic area of the certificated service area. 281-12 (c) The applicant must file with the application a sworn 281-13 statement that the applicant has applied for each municipal 281-14 consent, franchise, or permit required for the type of services and 281-15 facilities for which the applicant has applied. (V.A.C.S. 281-16 Art. 1446c-0, Secs. 3.2531(a), (c) (part), 3.2555(a) (part).) 281-17 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE. (a) The 281-18 commission must grant or deny a certificate not later than the 60th 281-19 day after the date the application for the certificate is filed. 281-20 The commission may extend the deadline on good cause shown. 281-21 (b) The commission shall grant each certificate on a 281-22 nondiscriminatory basis after considering factors such as: 281-23 (1) the adequacy of the applicant's build-out plan; 281-24 (2) the technical and financial qualifications of the 281-25 applicant; and 282-1 (3) the applicant's ability to meet the commission's 282-2 quality of service requirements. 282-3 (c) In an exchange of an incumbent local exchange company 282-4 that serves fewer than 31,000 access lines, in addition to the 282-5 factors described by Subsection (b), the commission shall consider: 282-6 (1) the effect of granting the certificate on a public 282-7 utility serving the area and on that utility's customers; 282-8 (2) the ability of that public utility to provide 282-9 adequate service at reasonable rates; 282-10 (3) the effect of granting the certificate on the 282-11 ability of that public utility to act as the provider of last 282-12 resort; and 282-13 (4) the ability of the exchange, not the company, to 282-14 support more than one provider of service. 282-15 (d) Except as provided by Subsections (e) and (f), the 282-16 commission may grant an application for a certificate only for an 282-17 area or areas that are contiguous and reasonably compact and cover 282-18 an area of at least 27 square miles. 282-19 (e) In an exchange in a county that has a population of less 282-20 than 500,000 and that is served by an incumbent local exchange 282-21 company that has more than 31,000 access lines, an area covering 282-22 less than 27 square miles may be approved if the area is contiguous 282-23 and reasonably compact and has at least 20,000 access lines. 282-24 (f) In an exchange of a company that serves fewer than 282-25 31,000 access lines in this state, the commission may grant an 283-1 application only for an area that has boundaries similar to the 283-2 boundaries of the serving central office that is served by the 283-3 incumbent local exchange company that holds the certificate of 283-4 convenience and necessity for the area. 283-5 (g) The commission may not grant a certificate in an 283-6 exchange of an incumbent local exchange company that serves fewer 283-7 than 31,000 access lines. The commission shall require an 283-8 applicant to meet the other appropriate certification provisions of 283-9 this chapter. This subsection expires September 1, 1998. 283-10 (V.A.C.S. Art. 1446c-0, Secs. 3.2531(e), (f) (part), (g), (h).) 283-11 Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS. (a) The 283-12 build-out plan required by Section 54.102 must provide that, by the 283-13 end of the: 283-14 (1) first year, 10 percent of the area to be served 283-15 must be served with facilities that are not facilities of the 283-16 incumbent local exchange company; 283-17 (2) third year, 50 percent of the area to be served 283-18 must be served with facilities that are not facilities of the 283-19 incumbent local exchange company; and 283-20 (3) sixth year, 100 percent of the area to be served 283-21 must be served with facilities that are not facilities of the 283-22 incumbent local exchange company. 283-23 (b) The build-out plan may permit the certificate holder to 283-24 serve not more than 40 percent of the certificate holder's service 283-25 area by reselling the incumbent local exchange company's 284-1 facilities. The resale must be in accordance with: 284-2 (1) Section 54.105; and 284-3 (2) the resale tariff approved by the commission under 284-4 Subchapter C, Chapter 60. 284-5 (c) The resale limitation applies to an incumbent local 284-6 exchange facility that a certificate holder resells in providing 284-7 local exchange telephone service, regardless of whether: 284-8 (1) the certificate holder purchases the facility 284-9 directly from the incumbent local exchange company; or 284-10 (2) an intermediary carrier purchases the facility 284-11 from the incumbent local exchange company and then provides the 284-12 facility to the certificate holder for resale. 284-13 (d) To meet the build-out requirement prescribed by this 284-14 subchapter, a certificate holder: 284-15 (1) may not use commercial mobile service; and 284-16 (2) may use personal communication services (PCS) or 284-17 other wireless technology licensed or allocated by the Federal 284-18 Communications Commission after January 1, 1995. (V.A.C.S. 284-19 Art. 1446c-0, Secs. 3.2531(c) (part), (d) (part).) 284-20 Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES. 284-21 Before the sixth anniversary of the date a certificate is granted, 284-22 the certificate holder may extend service by resale only: 284-23 (1) in the area it is obligated to serve under the 284-24 approved build-out plan; and 284-25 (2) to the distant premises of one of its 285-1 multi-premises customers beyond the approved build-out area but in 285-2 its certificated service area. (V.A.C.S. Art. 1446c-0, Sec. 285-3 3.2531(d) (part).) 285-4 Sec. 54.106. TIME OF SERVICE REQUIREMENTS. (a) The 285-5 commission by rule may prescribe the period within which a 285-6 certificate holder must be able to serve customers. 285-7 (b) Notwithstanding Subsection (a), a certificate holder 285-8 must serve a customer in the build-out area not later than the 30th 285-9 day after the date the customer requests service. (V.A.C.S. 285-10 Art. 1446c-0, Sec. 3.2531(c) (part).) 285-11 Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES. 285-12 As part of the build-out requirements, the commission may not 285-13 require a certificate holder to: 285-14 (1) place a drop facility on each customer's premises; 285-15 or 285-16 (2) activate a fiber optic facility in advance of a 285-17 customer request. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(c) (part).) 285-18 Sec. 54.108. BUILD-OUT PLAN COMPLIANCE. (a) A certificate 285-19 holder shall file periodic reports with the commission 285-20 demonstrating compliance with: 285-21 (1) the plan approved by the commission; and 285-22 (2) the resale limitation prescribed by Section 285-23 54.104(b). 285-24 (b) The commission may administratively and temporarily 285-25 waive compliance with the six-year build-out plan on a showing of 286-1 good cause. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(f) (part).) 286-2 Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR 286-3 CERTAIN PROVIDERS. (a) The commission may waive the build-out 286-4 requirements of this subchapter for an additional applicant in a 286-5 particular area: 286-6 (1) on or after the sixth anniversary of the date a 286-7 certificate is granted for that area; or 286-8 (2) on or after the date a certificate holder 286-9 completes the holder's build-out plan in that area. 286-10 (b) The build-out requirements of this subchapter do not 286-11 apply to a service area: 286-12 (1) that is served by an incumbent local exchange 286-13 company that: 286-14 (A) has more than one million access lines; and 286-15 (B) on September 1, 1995, was subject to a 286-16 prohibition under federal law on the provision of interLATA 286-17 service; and 286-18 (2) for which all prohibitions on the incumbent local 286-19 exchange company's provision of interLATA services are removed so 286-20 the company can offer interLATA service together with local and 286-21 intraLATA toll service. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(i).) 286-22 Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS. 286-23 (a) The commission on application may conduct a hearing to 286-24 determine: 286-25 (1) whether the build-out requirements of Sections 287-1 54.102(b), 54.103(e) and (f), 54.104, 54.105, 54.106, and 54.107 287-2 have created a barrier to the entry of facilities-based local 287-3 exchange telephone service competition in an exchange in a county 287-4 that has a population of more than 500,000 and that is served by a 287-5 company that has more than 31,000 access lines; and 287-6 (2) the effect of the resale provisions on the 287-7 development of competition, other than the development of 287-8 competition in the certificated areas of companies that serve fewer 287-9 than 31,000 access lines as provided by Section 54.156(a). 287-10 (b) In making a determination under Subsection (a), the 287-11 commission shall consider: 287-12 (1) this title's policy to encourage construction of 287-13 local exchange networks; 287-14 (2) the number and type of competitors that have 287-15 sought to provide local exchange competition under the existing 287-16 rules prescribed by this title; and 287-17 (3) whether adopting new build-out and resale rules 287-18 would make innovative and competitive local exchange telephone 287-19 services more likely to be provided. 287-20 (c) The commission may change a requirement described by 287-21 Subsection (a)(1) or prescribed by Subchapter D if: 287-22 (1) the commission determines that the build-out 287-23 requirements have created a barrier to facilities-based local 287-24 exchange competition in an exchange described by Subsection (a)(1); 287-25 and 288-1 (2) the changes will encourage additional 288-2 facilities-based competition. 288-3 (d) Notwithstanding Subsection (c), the commission may not 288-4 reduce an exchange size to below 12 square miles or increase the 288-5 resale percentage prescribed by Section 54.104(b) to more than 50 288-6 percent. 288-7 (e) A rule adopted under Subsection (c) may apply only to a 288-8 person who files an application for a certificate after the date 288-9 the rule is adopted. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(j).) 288-10 Sec. 54.111. PENALTY FOR VIOLATION OF TITLE. If a 288-11 certificate holder fails to comply with a requirement of this 288-12 title, the commission may: 288-13 (1) revoke the holder's certificate; 288-14 (2) impose against the holder administrative penalties 288-15 under Subchapter B, Chapter 15; or 288-16 (3) take another action under Subchapter B, Chapter 288-17 15. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(k).) 288-18 (Sections 54.112-54.150 reserved for expansion) 288-19 SUBCHAPTER D. SERVICE PROVIDER CERTIFICATE 288-20 OF OPERATING AUTHORITY 288-21 Sec. 54.151. DEFINITION. In this subchapter, "certificate" 288-22 means a service provider certificate of operating authority. 288-23 (New.) 288-24 Sec. 54.152. LIMITATION ON GRANT OF CERTIFICATE. The 288-25 commission may not grant a certificate to a holder of a: 289-1 (1) certificate of convenience and necessity for the 289-2 same territory; or 289-3 (2) certificate of operating authority for the same 289-4 territory. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(e) (part).) 289-5 Sec. 54.153. ELIGIBILITY FOR CERTIFICATE. (a) A company is 289-6 not eligible to obtain a certificate under this subchapter if the 289-7 company, together with affiliates, had more than six percent of the 289-8 total intrastate switched access minutes of use as measured for the 289-9 most recent 12-month period: 289-10 (1) that precedes the date the application is filed; 289-11 and 289-12 (2) for which the access information is available. 289-13 (b) The commission shall obtain information necessary to 289-14 determine eligibility from the incumbent local exchange telephone 289-15 companies and the applicant. 289-16 (c) The commission shall certify eligibility not later than 289-17 the 10th day after the date the application is filed. 289-18 (d) In this section: 289-19 (1) "Affiliate" means an entity that, directly or 289-20 indirectly, owns or controls, is owned or controlled by, or is 289-21 under common ownership or control with a company that applies for a 289-22 certificate under this subchapter. 289-23 (2) "Control" means to exercise substantial influence 289-24 over the policies and actions of another. (V.A.C.S. Art. 1446c-0, 289-25 Secs. 3.2532(b) (part), (h).) 290-1 Sec. 54.154. APPLICATION FOR CERTIFICATE. (a) The 290-2 commission may grant a certificate to encourage an innovative, 290-3 competitive, and entrepreneurial business to provide 290-4 telecommunications services. 290-5 (b) An applicant for a certificate must: 290-6 (1) file with the application: 290-7 (A) a sworn statement that the applicant has 290-8 applied for each municipal consent, franchise, or permit required 290-9 for the type of services and facilities for which the applicant has 290-10 applied; and 290-11 (B) a description of the services the applicant 290-12 will provide; 290-13 (2) show the areas in which the applicant will provide 290-14 the services; 290-15 (3) demonstrate that the applicant has the financial 290-16 and technical ability to provide services; and 290-17 (4) demonstrate that the services will meet the 290-18 requirements of this subchapter. (V.A.C.S. Art. 1446c-0, Secs. 290-19 3.2532(a), (c); 3.2555(a) (part).) 290-20 Sec. 54.155. GRANT OR DENIAL OF CERTIFICATE. (a) The 290-21 commission must grant or deny a certificate not later than the 60th 290-22 day after the date the application for the certificate is filed. 290-23 The commission may extend the deadline on good cause shown. 290-24 (b) The commission shall grant each certificate on a 290-25 nondiscriminatory basis after considering factors such as: 291-1 (1) the technical and financial qualifications of the 291-2 applicant; and 291-3 (2) the applicant's ability to meet the commission's 291-4 quality of service requirements. (V.A.C.S. Art. 1446c-0, Sec. 291-5 3.2532(b) (part).) 291-6 Sec. 54.156. RESALE OF SERVICES. (a) A certificate holder 291-7 may obtain services under the resale tariffs approved by the 291-8 commission under Subchapter C, Chapter 60, except in a certificated 291-9 area of a company that serves fewer than 31,000 access lines. 291-10 (b) A certificate holder may obtain for resale the monthly 291-11 recurring flat rate local exchange telephone service and associated 291-12 nonrecurring charges, including any mandatory extended area 291-13 service, of an incumbent local exchange company at a five percent 291-14 discount to the tariffed rate. 291-15 (c) The incumbent local exchange company shall sell a 291-16 feature service that may be provided to a customer in conjunction 291-17 with local exchange service at a five percent discount to the 291-18 tariffed rate, including any associated nonrecurring charge for 291-19 those services, provided that the incumbent local exchange company 291-20 shall make available to a certificate holder, at an additional five 291-21 percent discount, any discounts made available to customers of the 291-22 incumbent local exchange company who are similarly situated to the 291-23 customers of the certificate holder. In this subsection "feature 291-24 service" includes: 291-25 (1) toll restriction; 292-1 (2) call control options; 292-2 (3) tone dialing; 292-3 (4) custom calling; and 292-4 (5) caller identification. 292-5 (d) A certificate holder and an incumbent local exchange 292-6 company may agree to a rate lower than the tariffed rate or 292-7 discounted rate. 292-8 (e) The five percent discounts provided by this section do 292-9 not apply in an exchange of a company that has fewer than 31,000 292-10 access lines in this state. 292-11 (f) If the tariffed rate for a resold service changes, the 292-12 five percent discount prescribed by this section applies to the 292-13 changed rate. The commission may not, for certificate holders, 292-14 create a special class for purposes of resold services. 292-15 (g) A certificate holder: 292-16 (1) may not use a resold flat rate local exchange 292-17 telephone service to avoid the rates and terms of an incumbent 292-18 local exchange company's tariffs; 292-19 (2) may not terminate both flat rate local exchange 292-20 telephone service and services obtained under the resale tariff 292-21 approved under Section 60.041 on the same end user customer's 292-22 premises; 292-23 (3) may not use resold flat rate local exchange 292-24 telephone services to provide access services to another 292-25 interexchange carrier, cellular carrier, competitive access 293-1 provider, or retail telecommunications provider, but may permit 293-2 customers to use resold local exchange telephone services to access 293-3 such a carrier or provider; 293-4 (4) may sell the flat rate local exchange telephone 293-5 service only to the same class of customers to which the incumbent 293-6 local exchange company sells that service; 293-7 (5) may obtain services offered by or negotiated with 293-8 a holder of a certificate of convenience and necessity or a 293-9 certificate of operating authority; and 293-10 (6) may obtain for resale single or multiple line flat 293-11 rate intraLATA calling service when provided by the local exchange 293-12 company at the tariffed rate for online digital communications. 293-13 (V.A.C.S. Art. 1446c-0, Sec. 3.2532(d) (part).) 293-14 Sec. 54.157. OPTIONAL EXTENDED AREA SERVICE OR EXPANDED 293-15 LOCAL CALLING SERVICE. (a) A certificate holder may purchase for 293-16 resale: 293-17 (1) optional extended area service; and 293-18 (2) expanded local calling service. 293-19 (b) The purchase of optional extended area service and 293-20 expanded local calling service may not be discounted. (V.A.C.S. 293-21 Art. 1446c-0, Sec. 3.2532(d) (part).) 293-22 Sec. 54.158. INTERFERENCE WITH RESOLD SERVICES PROHIBITED. 293-23 An incumbent local exchange company may not: 293-24 (1) delay providing or maintaining a service provided 293-25 under this subchapter; 294-1 (2) degrade the quality of access the company provides 294-2 to another provider; 294-3 (3) impair the speed, quality, or efficiency of a line 294-4 used by another provider; 294-5 (4) fail to fully disclose in a timely manner after a 294-6 request all available information necessary for a certificate 294-7 holder to provide resale services; or 294-8 (5) refuse to take a reasonable action to allow a 294-9 certificate holder efficient access to the company's ordering, 294-10 billing, or repair management system. (V.A.C.S. Art. 1446c-0, Sec. 294-11 3.2532(g).) 294-12 Sec. 54.159. RETENTION OF ACCESS SERVICE AND INTRALATA TOLL 294-13 SERVICE. An incumbent local exchange company that sells flat rate 294-14 local exchange telephone service to a certificate holder may retain 294-15 all access service and "1-plus" intraLATA toll service that 294-16 originates over the resold flat rate local exchange telephone 294-17 service. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(f).) 294-18 (Sections 54.160-54.200 reserved for expansion) 294-19 SUBCHAPTER E. MUNICIPALITIES 294-20 Sec. 54.201. CERTIFICATION PROHIBITED. The commission may 294-21 not grant to a municipality a: 294-22 (1) certificate of convenience and necessity; 294-23 (2) certificate of operating authority; or 294-24 (3) service provider certificate of operating 294-25 authority. (V.A.C.S. Art. 1446c-0, Sec. 3.251(d) (part).) 295-1 Sec. 54.202. PROHIBITED MUNICIPAL SERVICES. (a) A 295-2 municipality or municipal electric system may not offer for sale to 295-3 the public: 295-4 (1) a service for which a certificate of convenience 295-5 and necessity, a certificate of operating authority, or a service 295-6 provider certificate of operating authority is required; or 295-7 (2) a nonswitched telecommunications service used to 295-8 connect a customer's premises with: 295-9 (A) another customer's premises within the 295-10 exchange; or 295-11 (B) a long distance provider that serves the 295-12 exchange. 295-13 (b) Subsection (a) applies to a service offered either 295-14 directly or indirectly through a telecommunications provider. 295-15 (V.A.C.S. Art. 1446c-0, Sec. 3.251(d) (part).) 295-16 Sec. 54.203. SERVICE IN ANNEXED OR INCORPORATED AREA. 295-17 (a) If an area is or will be included within a municipality as the 295-18 result of annexation, incorporation, or another reason, each 295-19 telecommunications utility that holds or is entitled to hold a 295-20 certificate under this title to provide service or operate a 295-21 facility in the area before the inclusion has the right to continue 295-22 to provide the service or operate the facility and extend service 295-23 in the utility's certificated area within the annexed or 295-24 incorporated area under the rights granted by the certificate and 295-25 this title. 296-1 (b) Notwithstanding any other law, a certificated 296-2 telecommunications utility has the right to: 296-3 (1) continue and extend service within the utility's 296-4 certificated area; and 296-5 (2) use roads, streets, highways, alleys, and public 296-6 property to furnish retail utility service. 296-7 (c) The governing body of a municipality may require a 296-8 certificated telecommunications utility to relocate the utility's 296-9 facility at the utility's expense to permit the widening or 296-10 straightening of a street by: 296-11 (1) giving the utility 30 days' notice; and 296-12 (2) specifying the new location for the facility along 296-13 the right-of-way of the street. 296-14 (d) This section does not limit the power of a city, town, 296-15 or village to incorporate or of a municipality to extend its 296-16 boundaries by annexation. (V.A.C.S. Art. 1446c-0, Sec. 3.255.) 296-17 Sec. 54.204. DISCRIMINATION BY MUNICIPALITY PROHIBITED. 296-18 (a) Notwithstanding Section 14.008, a municipality may not 296-19 discriminate against a telecommunications utility regarding: 296-20 (1) the authorization or placement of a 296-21 telecommunications facility in a public right-of-way; 296-22 (2) access to a building; or 296-23 (3) a municipal utility pole attachment rate or term, 296-24 to the extent not addressed by federal law. 296-25 (b) In granting consent, a franchise, or a permit for the 297-1 use of a public street, alley, or right-of-way within its municipal 297-2 boundaries, a municipality may not discriminate in favor of or 297-3 against a telecommunications utility that holds or has applied for 297-4 a certificate of convenience and necessity, a certificate of 297-5 operating authority, or a service provider certificate of operating 297-6 authority regarding: 297-7 (1) municipal utility pole attachment or underground 297-8 conduit rates or terms, to the extent not addressed by federal law; 297-9 or 297-10 (2) the authorization, placement, replacement, or 297-11 removal of a telecommunications facility in a public right-of-way 297-12 and the reasonable compensation for the authorization, placement, 297-13 replacement, or removal regardless of whether the compensation is 297-14 in the form of: 297-15 (A) money; 297-16 (B) services; 297-17 (C) use of facilities; or 297-18 (D) another kind of consideration. 297-19 (c) Notwithstanding Subsection (b)(1), a municipal utility 297-20 may not charge a pole attachment rate or underground conduit rate 297-21 that exceeds the fee the utility would be permitted to charge if 297-22 the utility's rates were regulated under federal law and the rules 297-23 of the Federal Communications Commission. 297-24 (d) Notwithstanding any other law, the commission has the 297-25 jurisdiction necessary to enforce this section. (V.A.C.S. 298-1 Art. 1446c-0, Secs. 3.2555(a) (part), (b), (e).) 298-2 Sec. 54.205. MUNICIPALITY'S RIGHT TO CONTROL ACCESS. This 298-3 title does not restrict a municipality's historical right to 298-4 control and receive reasonable compensation for access to the 298-5 municipality's public streets, alleys, or rights-of-way or to other 298-6 public property. (V.A.C.S. Art. 1446c-0, Sec. 3.2555(f).) 298-7 Sec. 54.206. RECOVERY OF MUNICIPAL FEE. (a) A holder of a 298-8 certificate of convenience and necessity, a certificate of 298-9 operating authority, or a service provider certificate of operating 298-10 authority has the right to collect a fee that a municipality 298-11 imposes under Section 54.204 or 54.205 through a pro rata charge to 298-12 the customers in the boundaries of the municipality. 298-13 (b) The charge may be shown on the customer's bill as a 298-14 separate line item. (V.A.C.S. Art. 1446c-0, Sec. 3.2555(h).) 298-15 (Sections 54.207-54.250 reserved for expansion) 298-16 SUBCHAPTER F. REGULATION OF SERVICES, AREAS, AND FACILITIES 298-17 Sec. 54.251. PROVISION OF SERVICE. (a) Except as provided 298-18 by this section, Section 54.252, Section 54.253, and Section 298-19 54.254, a telecommunications utility that holds a certificate of 298-20 convenience and necessity or a certificate of operating authority 298-21 shall: 298-22 (1) offer all basic local telecommunications services 298-23 to each customer in the utility's certificated area; and 298-24 (2) provide continuous and adequate service in that 298-25 area. 299-1 (b) The holder of a certificate of convenience and necessity 299-2 for an area has the obligations of a provider of last resort 299-3 regardless of whether another provider has a certificate of 299-4 operating authority for that area. (V.A.C.S. Art. 1446c-0, Sec. 299-5 3.258(a).) 299-6 Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF 299-7 CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) Unless the 299-8 commission issues a certificate that the present and future 299-9 convenience and necessity will not be adversely affected, the 299-10 holder of a certificate of convenience and necessity may not 299-11 discontinue, reduce, or impair service to any part of the holder's 299-12 certificated service area except for: 299-13 (1) nonpayment of charges; 299-14 (2) nonuse; or 299-15 (3) another similar reason that occurs in the usual 299-16 course of business. 299-17 (b) A discontinuance, reduction, or impairment of service 299-18 must be in compliance with and is subject to any condition or 299-19 restriction the commission prescribes. (V.A.C.S. Art. 1446c-0, 299-20 Secs. 3.258(b), (c).) 299-21 Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN 299-22 CERTIFICATE HOLDERS. (a) A telecommunications utility that holds 299-23 a certificate of operating authority or a service provider 299-24 certificate of operating authority may: 299-25 (1) cease operations in the utility's certificated 300-1 area; or 300-2 (2) discontinue an optional service that is not 300-3 essential to providing basic local telecommunications service. 300-4 (b) Before the telecommunications utility ceases operations 300-5 or discontinues an optional service, the utility, in the manner 300-6 required by the commission, must give notice of the intended action 300-7 to: 300-8 (1) the commission; and 300-9 (2) each affected customer. 300-10 (c) The telecommunications utility is entitled to 300-11 discontinue an optional service on or after the 61st day after the 300-12 date the utility gives the notice. 300-13 (d) The telecommunications utility may not cease operations 300-14 in its certificated area unless: 300-15 (1) another provider of basic local telecommunications 300-16 services has adequate facilities and capacity to serve the 300-17 customers in the certificated area; and 300-18 (2) the commission authorizes the utility to cease 300-19 operations. 300-20 (e) The commission may not authorize the telecommunications 300-21 utility to cease operations under Subsection (d) before the 61st 300-22 day after the date the utility gives the notice required by 300-23 Subsection (b). Unless the commission receives a complaint from an 300-24 affected person, the commission may enter an order under this 300-25 subsection administratively. (V.A.C.S. Art. 1446c-0, Sec. 3.2595.) 301-1 Sec. 54.254. REQUIRED REFUSAL OF SERVICE. A holder of a 301-2 certificate of convenience and necessity, a certificate of 301-3 operating authority, or a service provider certificate of operating 301-4 authority shall refuse to serve a customer in the holder's 301-5 certificated area if the holder is prohibited from providing the 301-6 service under Section 212.012 or 232.029, Local Government Code. 301-7 (V.A.C.S. Art. 1446c-0, Sec. 3.259.) 301-8 Sec. 54.255. TRANSFER OF CERTAIN CERTIFICATES. (a) A 301-9 telecommunications utility may sell, assign, or lease a certificate 301-10 of convenience and necessity or a certificate of operating 301-11 authority or a right obtained under such a certificate if the 301-12 commission determines that the purchaser, assignee, or lessee can 301-13 provide adequate service. 301-14 (b) The sale, assignment, or lease of a certificate or a 301-15 right is subject to conditions the commission prescribes. 301-16 (V.A.C.S. Art. 1446c-0, Sec. 3.260.) 301-17 Sec. 54.256. APPLICATION OF CONTRACTS. A contract approved 301-18 by the commission between telecommunications utilities that 301-19 designates areas and customers to be served by the utilities: 301-20 (1) is valid and enforceable; and 301-21 (2) shall be incorporated into the appropriate areas 301-22 of certification. (V.A.C.S. Art. 1446c-0, Sec. 3.256.) 301-23 Sec. 54.257. INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS 301-24 UTILITY. If a telecommunications utility constructing or extending 301-25 the utility's lines, plant, or system interferes or attempts to 302-1 interfere with the operation of a line, plant, or system of another 302-2 utility, the commission by order may: 302-3 (1) prohibit the construction or extension; or 302-4 (2) prescribe terms for locating the affected lines, 302-5 plants, or systems. (V.A.C.S. Art. 1446c-0, Sec. 3.261.) 302-6 Sec. 54.258. MAPS. A public utility shall file with the 302-7 commission one or more maps that show each utility facility and 302-8 that separately illustrate each utility facility for transmission 302-9 or distribution of the utility's services on a date the commission 302-10 orders. (V.A.C.S. Art. 1446c-0, Sec. 3.253(b).) 302-11 Sec. 54.259. DISCRIMINATION BY PROPERTY OWNER PROHIBITED. 302-12 (a) If a telecommunications utility holds a consent, franchise, or 302-13 permit as determined to be the appropriate grants of authority by 302-14 the municipality and holds a certificate if required by this title, 302-15 a public or private property owner may not: 302-16 (1) prevent the utility from installing on the owner's 302-17 property a telecommunications service facility a tenant requests; 302-18 (2) interfere with the utility's installation on the 302-19 owner's property of a telecommunications service facility a tenant 302-20 requests; 302-21 (3) discriminate against such a utility regarding 302-22 installation, terms, or compensation of a telecommunications 302-23 service facility to a tenant on the owner's property; 302-24 (4) demand or accept an unreasonable payment of any 302-25 kind from a tenant or the utility for allowing the utility on or in 303-1 the owner's property; or 303-2 (5) discriminate in favor of or against a tenant in 303-3 any manner, including rental charge discrimination, because of the 303-4 utility from which the tenant receives a telecommunications 303-5 service. 303-6 (b) Subsection (a) does not apply to an institution of 303-7 higher education. In this subsection, "institution of higher 303-8 education" means: 303-9 (1) an institution of higher education as defined by 303-10 Section 61.003, Education Code; or 303-11 (2) a private or independent institution of higher 303-12 education as defined by Section 61.003, Education Code. 303-13 (c) Notwithstanding any other law, the commission has the 303-14 jurisdiction to enforce this section. (V.A.C.S. Art. 1446c-0, 303-15 Secs. 3.2555(c), (e), (g).) 303-16 Sec. 54.260. PROPERTY OWNER'S CONDITIONS. 303-17 (a) Notwithstanding Section 54.259, if a telecommunications 303-18 utility holds a municipal consent, franchise, or permit as 303-19 determined to be the appropriate grant of authority by the 303-20 municipality and holds a certificate if required by this title, a 303-21 public or private property owner may: 303-22 (1) impose a condition on the utility that is 303-23 reasonably necessary to protect: 303-24 (A) the safety, security, appearance, and 303-25 condition of the property; and 304-1 (B) the safety and convenience of other persons; 304-2 (2) impose a reasonable limitation on the time at 304-3 which the utility may have access to the property to install a 304-4 telecommunications service facility; 304-5 (3) impose a reasonable limitation on the number of 304-6 such utilities that have access to the owner's property, if the 304-7 owner can demonstrate a space constraint that requires the 304-8 limitation; 304-9 (4) require the utility to agree to indemnify the 304-10 owner for damage caused installing, operating, or removing a 304-11 facility; 304-12 (5) require the tenant or the utility to bear the 304-13 entire cost of installing, operating, or removing a facility; and 304-14 (6) require the utility to pay compensation that is 304-15 reasonable and nondiscriminatory among such telecommunications 304-16 utilities. 304-17 (b) Notwithstanding any other law, the commission has the 304-18 jurisdiction to enforce this section. (V.A.C.S. Art. 1446c-0, 304-19 Secs. 3.2555(d), (e).) 304-20 Sec. 54.261. SHARED TENANT SERVICES CONTRACT. Sections 304-21 54.259 and 54.260 do not require a public or private property owner 304-22 to enter into a contract with a telecommunications utility to 304-23 provide shared tenant services on a property. (V.A.C.S. 304-24 Art. 1446c-0, Sec. 3.2555(i).) 305-1 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 305-2 SUBCHAPTER A. GENERAL PROVISIONS 305-3 Sec. 55.001. GENERAL STANDARD 305-4 Sec. 55.002. COMMISSION AUTHORITY CONCERNING STANDARDS 305-5 Sec. 55.003. RULE OR STANDARD 305-6 Sec. 55.004. LOCAL EXCHANGE COMPANY RULE OR PRACTICE 305-7 CHANGE 305-8 Sec. 55.005. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 305-9 SERVICE PROHIBITED 305-10 Sec. 55.006. DISCRIMINATION AND RESTRICTION ON COMPETITION 305-11 Sec. 55.007. MINIMUM SERVICES 305-12 Sec. 55.008. IMPROVEMENTS IN SERVICE; INTERCONNECTING 305-13 SERVICE 305-14 Sec. 55.009. INTRALATA CALLS 305-15 Sec. 55.010. BILLING FOR SERVICE TO THE STATE 305-16 (Sections 55.011-55.020 reserved for expansion) 305-17 SUBCHAPTER B. EXTENDED AREA SERVICE 305-18 Sec. 55.021. EXTENDED AREA SERVICE 305-19 Sec. 55.022. MANDATORY SERVICE 305-20 Sec. 55.023. OPTIONAL EXTENDED AREA SERVICE 305-21 Sec. 55.024. CHARGE FOR EXTENDED AREA SERVICE 305-22 Sec. 55.025. HUNTING SERVICE 305-23 (Sections 55.026-55.040 reserved for expansion) 305-24 SUBCHAPTER C. EXPANDED TOLL-FREE LOCAL CALLING AREAS 305-25 Sec. 55.041. DEFINITIONS 306-1 Sec. 55.042. CONTIGUOUS EXCHANGE 306-2 Sec. 55.043. SPLITTING EXCHANGES PROHIBITED 306-3 Sec. 55.044. EXEMPTION 306-4 Sec. 55.045. ELIGIBILITY TO PETITION 306-5 Sec. 55.046. PETITION REQUIREMENTS 306-6 Sec. 55.047. BALLOTING AND CONSIDERATION 306-7 Sec. 55.048. CHARGES 306-8 (Sections 55.049-55.080 reserved for expansion) 306-9 SUBCHAPTER D. OPERATOR SERVICE PROVIDERS 306-10 Sec. 55.081. DEFINITION 306-11 Sec. 55.082. APPLICABILITY 306-12 Sec. 55.083. RULES AND PROCEDURES 306-13 Sec. 55.084. INFORMATION DISPLAYED ON PUBLIC USE TELEPHONE 306-14 Sec. 55.085. CONNECTION ANNOUNCEMENT 306-15 Sec. 55.086. INFORMATION REQUIRED ON ACCESS TO LOCAL 306-16 EXCHANGE COMPANY OPERATOR 306-17 Sec. 55.087. ACCESS TO LOCAL EXCHANGE COMPANY AND OTHER 306-18 UTILITIES REQUIRED 306-19 Sec. 55.088. ACCESS TO LIVE OPERATOR REQUIRED 306-20 Sec. 55.089. COMMISSION MAY INVESTIGATE AND ACT ON VIOLATION 306-21 (Sections 55.090-55.100 reserved for expansion) 306-22 SUBCHAPTER E. CALLER IDENTIFICATION SERVICE 306-23 Sec. 55.101. DEFINITIONS 306-24 Sec. 55.102. APPLICABILITY 306-25 Sec. 55.103. PROVISION OF SERVICE 307-1 Sec. 55.104. USE OF INFORMATION 307-2 Sec. 55.105. PER-CALL BLOCKING 307-3 Sec. 55.106. PER-LINE BLOCKING 307-4 Sec. 55.107. LIMITATION ON COMMISSION AUTHORITY 307-5 Sec. 55.108. CALLER ID CONSUMER EDUCATION PANEL 307-6 Sec. 55.109. IMPLEMENTATION OF PANEL RECOMMENDATIONS 307-7 Sec. 55.110. REPORT OF BLOCKING FAILURE 307-8 (Sections 55.111-55.120 reserved for expansion) 307-9 SUBCHAPTER F. AUTOMATIC DIAL ANNOUNCING DEVICES 307-10 Sec. 55.121. DEFINITION 307-11 Sec. 55.122. EXEMPTIONS 307-12 Sec. 55.123. NOTICE OF USE OF DEVICE TO TELECOMMUNICATIONS 307-13 UTILITY 307-14 Sec. 55.124. RANDOM OR SEQUENTIAL NUMBER CALLING 307-15 Sec. 55.125. HOURS WHEN USE PROHIBITED 307-16 Sec. 55.126. DEVICE DISCONNECTION 307-17 Sec. 55.127. CONTENTS OF RECORDED MESSAGE 307-18 Sec. 55.128. DURATION OF RECORDED MESSAGE 307-19 Sec. 55.129. PERMIT REQUIRED 307-20 Sec. 55.130. PERMIT 307-21 Sec. 55.131. PERMIT FEE 307-22 Sec. 55.132. NOTIFICATION OF CHANGE 307-23 Sec. 55.133. NOTIFICATION OF LOCAL EXCHANGE COMPANY 307-24 Sec. 55.134. COMPLAINTS AND ENFORCEMENT 307-25 Sec. 55.135. REVOCATION OF PERMIT 308-1 Sec. 55.136. DISCONNECTION OF SERVICE 308-2 Sec. 55.137. ADMINISTRATIVE PENALTY 308-3 Sec. 55.138. CRIMINAL PENALTY 308-4 (Sections 55.139-55.150 reserved for expansion) 308-5 SUBCHAPTER G. TELEPHONE SOLICITATION 308-6 Sec. 55.151. COMPLIANCE WITH REQUEST NOT TO BE CALLED 308-7 Sec. 55.152. NOTICE TO CONSUMERS 308-8 (Sections 55.153-55.170 reserved for expansion) 308-9 SUBCHAPTER H. PAY TELEPHONES 308-10 Sec. 55.171. DEFINITION 308-11 Sec. 55.172. LIMITATION 308-12 Sec. 55.173. REGISTRATION 308-13 Sec. 55.174. PROHIBITION ON CHARGE FOR CERTAIN CALLS 308-14 Sec. 55.175. CHARGE FOR LOCAL CALLS 308-15 Sec. 55.176. CHARGE FOR 800-TYPE CALLS 308-16 Sec. 55.177. CHARGE FOR CREDIT CARD, CALLING CARD, OR 308-17 OPERATOR-ASSISTED CALLS 308-18 Sec. 55.178. NOTICE OF INABILITY TO RECEIVE CALLS 308-19 Sec. 55.179. INFORMATION REQUIREMENTS 308-20 Sec. 55.180. VIOLATIONS 308-21 (Sections 55.181-55.200 reserved for expansion) 308-22 SUBCHAPTER I. DIRECTORY LISTINGS AND ASSISTANCE 308-23 Sec. 55.201. TERMS OF DIRECTORY LISTINGS AND ASSISTANCE 308-24 Sec. 55.202. DIRECTORY PUBLISHED BY TELECOMMUNICATIONS 308-25 UTILITY 309-1 Sec. 55.203. DIRECTORY PUBLISHED BY PRIVATE PUBLISHER 309-2 (Sections 55.204-55.250 reserved for expansion) 309-3 SUBCHAPTER J. TELECOMMUNICATIONS SERVICE BY CERTAIN PROVIDERS 309-4 Sec. 55.251. CHARGE FOR HOTEL OR MOTEL CALL 309-5 Sec. 55.252. 900 SERVICE USED BY PROBATIONERS OR PAROLEES 309-6 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 309-7 SUBCHAPTER A. GENERAL PROVISIONS 309-8 Sec. 55.001. GENERAL STANDARD. A public utility shall 309-9 furnish service, instrumentalities, and facilities that are safe, 309-10 adequate, efficient, and reasonable. (V.A.C.S. Art. 1446c-0, Sec. 309-11 3.155(a).) 309-12 Sec. 55.002. COMMISSION AUTHORITY CONCERNING STANDARDS. The 309-13 commission, on its own motion or on complaint and after reasonable 309-14 notice and hearing, may: 309-15 (1) adopt just and reasonable standards, 309-16 classifications, rules, or practices a public utility must follow 309-17 in furnishing a service; 309-18 (2) adopt adequate and reasonable standards for 309-19 measuring a condition, including quantity and quality, relating to 309-20 the furnishing of a service; 309-21 (3) adopt reasonable rules for examining, testing, and 309-22 measuring a service; and 309-23 (4) adopt or approve reasonable rules, specifications, 309-24 and standards to ensure the accuracy of equipment, including meters 309-25 and instruments, used to measure a service. (V.A.C.S. 310-1 Art. 1446c-0, Sec. 3.155(b).) 310-2 Sec. 55.003. RULE OR STANDARD. (a) A public utility may 310-3 not impose a rule except as provided by this title. 310-4 (b) A public utility may file with the commission a 310-5 standard, classification, rule, or practice the utility follows. 310-6 (c) The standard, classification, rule, or practice 310-7 continues in force until: 310-8 (1) amended by the utility; or 310-9 (2) changed by the commission as provided by this 310-10 subtitle. (V.A.C.S. Art. 1446c-0, Secs. 3.153 (part), 3.155(c).) 310-11 Sec. 55.004. LOCAL EXCHANGE COMPANY RULE OR PRACTICE CHANGE. 310-12 (a) To make a change in an incumbent local exchange company's 310-13 tariffed rules or practices that does not affect the company's 310-14 charges or rates, the company must file the proposed change with 310-15 the commission at least 35 days before the effective date of the 310-16 change. The commission may require the incumbent local exchange 310-17 company to provide to ratepayers appropriate notice as determined 310-18 by the commission. 310-19 (b) The commission, on complaint by an affected person or on 310-20 its own motion and after reasonable notice, may hold a hearing to 310-21 determine the propriety of a change proposed under this section. 310-22 Pending the hearing and decision, the commission may suspend the 310-23 change for not longer than 120 days after the date the change would 310-24 otherwise be effective. The commission shall approve, deny, or 310-25 modify the change before the period of suspension expires. 311-1 (c) In a proceeding under this section, the incumbent local 311-2 exchange company has the burden of proving the proposed change: 311-3 (1) is in the public interest; and 311-4 (2) complies with this title. (V.A.C.S. Art. 1446c-0, 311-5 Sec. 3.212.) 311-6 Sec. 55.005. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 311-7 SERVICE PROHIBITED. In providing a service to persons in a 311-8 classification, a public utility may not: 311-9 (1) grant an unreasonable preference or advantage to a 311-10 person in the classification; or 311-11 (2) subject a person in the classification to an 311-12 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 311-13 Sec. 3.215 (part).) 311-14 Sec. 55.006. DISCRIMINATION AND RESTRICTION ON COMPETITION. 311-15 A public utility may not: 311-16 (1) discriminate against a person who sells or leases 311-17 equipment or performs services in competition with the public 311-18 utility; or 311-19 (2) engage in a practice that tends to restrict or 311-20 impair that competition. (V.A.C.S. Art. 1446c-0, Sec. 3.217.) 311-21 Sec. 55.007. MINIMUM SERVICES. (a) The commission shall 311-22 require a holder of a certificate of convenience and necessity or a 311-23 certificate of operating authority to provide at the applicable 311-24 tariff rate, if any, to each customer, regardless of race, national 311-25 origin, income, or residence in an urban or rural area: 312-1 (1) single-party service; 312-2 (2) tone-dialing service; 312-3 (3) basic custom calling features; 312-4 (4) equal access for an interLATA interexchange 312-5 carrier on a bona fide request; and 312-6 (5) digital switching capability in an exchange on 312-7 customer request, provided by a digital switch in the exchange or 312-8 by connection to a digital switch in another exchange. 312-9 (b) Notwithstanding Subsection (a), an electing incumbent 312-10 local exchange company serving more than 175,000 but fewer than 312-11 1,500,000 access lines on January 1, 1995, shall install a digital 312-12 switch in each central office that serves an exchange of fewer than 312-13 20,000 access lines. 312-14 (c) The commission may temporarily waive a requirement 312-15 imposed by Subsection (a) or (b) on a showing of good cause. 312-16 (d) The commission may not consider the cost of implementing 312-17 this section in determining whether an electing company is entitled 312-18 to: 312-19 (1) a rate increase under Chapter 58 or 59; or 312-20 (2) increased universal service funds under Subchapter 312-21 B, Chapter 56. 312-22 (e) A holder of a certificate of convenience and necessity 312-23 or a certificate of operating authority shall comply with 312-24 Subsection (a) not later than December 31, 2000. This subsection 312-25 expires September 1, 2003. 313-1 (f) An electing incumbent local exchange company subject to 313-2 Subsection (b) shall comply with that subsection not later than 313-3 December 31, 1998. This subsection expires September 1, 2001. 313-4 (V.A.C.S. Art. 1446c-0, Secs. 3.1555(a), (b), (c).) 313-5 Sec. 55.008. IMPROVEMENTS IN SERVICE; INTERCONNECTING 313-6 SERVICE. The commission, after notice and hearing, may: 313-7 (1) order a public utility to provide specified 313-8 improvements in its service in a specified area if: 313-9 (A) service in the area is inadequate or 313-10 substantially inferior to service in a comparable area; and 313-11 (B) requiring the company to provide the 313-12 improved service is reasonable; or 313-13 (2) order two or more utilities to establish specified 313-14 facilities for interconnecting service. (V.A.C.S. Art. 1446c-0, 313-15 Sec. 3.262(a) (part).) 313-16 Sec. 55.009. INTRALATA CALLS. (a) If federal law prohibits 313-17 a local exchange company in this state from providing interLATA 313-18 telecommunications services, the local exchange companies in this 313-19 state designated or de facto authorized to receive a "0-plus" or 313-20 "1-plus" dialed intraLATA call are exclusively designated or 313-21 authorized to receive such a call. 313-22 (b) A telecommunications utility operating under a 313-23 certificate of operating authority or a service provider 313-24 certificate of operating authority is de facto authorized to 313-25 receive a "0-plus" or "1-plus" dialed intraLATA call on the date 314-1 the utility receives its certificate, to the extent the utility is 314-2 not restricted by Section 54.159. 314-3 (c) If federal law allows all local exchange companies to 314-4 provide interLATA telecommunications services, the commission shall 314-5 ensure that: 314-6 (1) a customer may designate a provider of the 314-7 customer's choice to carry the customer's "0-plus" and "1-plus" 314-8 dialed intraLATA calls; and 314-9 (2) equal access in the public network is implemented 314-10 to allow the provider to carry those calls. (V.A.C.S. 314-11 Art. 1446c-0, Sec. 3.219.) 314-12 Sec. 55.010. BILLING FOR SERVICE TO THE STATE. A 314-13 telecommunications utility providing service to the state, 314-14 including service to an agency in any branch of state government, 314-15 may not impose a fee, a penalty, interest, or any other charge for 314-16 delinquent payment of a bill for that service. (V.A.C.S. 314-17 Art. 1446c-0, Sec. 3.218.) 314-18 (Sections 55.011-55.020 reserved for expansion) 314-19 SUBCHAPTER B. EXTENDED AREA SERVICE 314-20 Sec. 55.021. EXTENDED AREA SERVICE. After notice and a 314-21 hearing, the commission may order one or more local exchange 314-22 companies that are dominant carriers to provide: 314-23 (1) mandatory extended area service in accordance with 314-24 Section 55.022; or 314-25 (2) optional extended area service in accordance with 315-1 Section 55.023. (V.A.C.S. Art. 1446c-0, Sec. 3.262(a) (part).) 315-2 Sec. 55.022. MANDATORY SERVICE. The commission may order 315-3 mandatory extended area service in a specified metropolitan area 315-4 if: 315-5 (1) there is a sufficient community of interest in the 315-6 area; and 315-7 (2) the company can reasonably provide the service. 315-8 (V.A.C.S. Art. 1446c-0, Sec. 3.262(a) (part).) 315-9 Sec. 55.023. OPTIONAL EXTENDED AREA SERVICE. (a) The 315-10 commission may order optional extended area service in a specified 315-11 calling area if: 315-12 (1) each affected company and the representatives of 315-13 at least one political subdivision in the proposed calling area 315-14 agree to the service; and 315-15 (2) the proposed common calling area has a single, 315-16 continuous boundary. 315-17 (b) The commission may not adopt rules that diminish in any 315-18 manner the ability of an affected company or a political 315-19 subdivision to enter into joint agreements for optional extended 315-20 area service under this section. 315-21 (c) In this section, "political subdivision" means: 315-22 (1) a county; 315-23 (2) a municipality; or 315-24 (3) an unincorporated town or village that has 275 or 315-25 more access lines. (V.A.C.S. Art. 1446c-0, Secs. 3.262(a) (part), 316-1 (b).) 316-2 Sec. 55.024. CHARGE FOR EXTENDED AREA SERVICE. (a) An 316-3 incumbent local exchange company that provides mandatory two-way 316-4 extended area service to customers shall impose for that service a 316-5 separately stated monthly charge of $3.50 a line for a residential 316-6 customer and $7 a line for a business customer if, on September 1, 316-7 1995, the company: 316-8 (1) served more than 1,000,000 access lines in this 316-9 state; and 316-10 (2) imposed a separately stated monthly charge for 316-11 mandatory two-way extended area service of more than $3.50 a line 316-12 for a residential customer and more than $7 a line for a business 316-13 customer. 316-14 (b) The company shall recover all costs incurred and all 316-15 loss of revenue that results from imposition of the rates 316-16 prescribed by Subsection (a) in the manner prescribed by Section 316-17 55.048(c). 316-18 (c) The rate limitation prescribed by Subsection (a) does 316-19 not apply to a separately stated monthly charge for: 316-20 (1) extended area service in or into a metropolitan 316-21 exchange; or 316-22 (2) extended metropolitan service. (V.A.C.S. 316-23 Art. 1446c-0, Sec. 3.308.) 316-24 Sec. 55.025. HUNTING SERVICE. (a) A local exchange company 316-25 shall make available, at a reasonable tariffed rate, hunting 317-1 service from local exchange lines to extended metropolitan service 317-2 lines. 317-3 (b) The company may not require a customer to purchase 317-4 additional extended metropolitan service to obtain the hunting 317-5 service. (V.A.C.S. Art. 1446c-0, Sec. 3.311.) 317-6 (Sections 55.026-55.040 reserved for expansion) 317-7 SUBCHAPTER C. EXPANDED TOLL-FREE LOCAL CALLING AREAS 317-8 Sec. 55.041. DEFINITIONS. In this subchapter, "metropolitan 317-9 exchange," "local calling area of a metropolitan exchange," and 317-10 "exchange" have the meanings and boundaries assigned by the 317-11 commission on September 1, 1993. (V.A.C.S. Art. 1446c-0, Sec. 317-12 3.304(b)(2) (part).) 317-13 Sec. 55.042. CONTIGUOUS EXCHANGE. The commission may expand 317-14 a toll-free local calling area into an exchange that is not in a 317-15 metropolitan exchange but is in a local calling area that is 317-16 contiguous to a metropolitan exchange that the commission 317-17 determines has a community of interest with the exchange for which 317-18 a petition is filed under this subchapter. (V.A.C.S. Art. 1446c-0, 317-19 Sec. 3.304(b)(2) (part).) 317-20 Sec. 55.043. SPLITTING EXCHANGES PROHIBITED. 317-21 Notwithstanding any other provision of this subchapter, the 317-22 commission may not split a petitioning or requested exchange in 317-23 establishing a toll-free local calling area. (V.A.C.S. 317-24 Art. 1446c-0, Sec. 3.304(b)(2) (part).) 317-25 Sec. 55.044. EXEMPTION. (a) The commission may not require 318-1 an incumbent local exchange company serving the petitioning or 318-2 requested exchange to expand the company's toll-free local calling 318-3 area under this subchapter if: 318-4 (1) the incumbent local exchange company has fewer 318-5 than 10,000 access lines; 318-6 (2) the petitioning or requested exchange is served by 318-7 a telephone cooperative corporation; 318-8 (3) extended area service or extended metropolitan 318-9 service is available between the exchanges; 318-10 (4) the petitioning or requested exchange is a 318-11 metropolitan exchange; or 318-12 (5) the commission determines that the company has 318-13 shown that to serve the area is not geographically or 318-14 technologically feasible. 318-15 (b) To promote the wide dispersion of pay telephones, the 318-16 commission may: 318-17 (1) exempt pay telephones from this subchapter; or 318-18 (2) change the rates charged for calls from pay 318-19 telephones. (V.A.C.S. Art. 1446c-0, Secs. 3.304(b)(1), (c).) 318-20 Sec. 55.045. ELIGIBILITY TO PETITION. The telephone 318-21 subscribers of an incumbent local exchange company exchange that 318-22 serves not more than 10,000 access lines may petition the 318-23 commission for expansion of the company's toll-free local calling 318-24 area if: 318-25 (1) the petitioning exchange's central switching 319-1 office is located within 22 miles, using vertical and horizontal 319-2 geographic coordinates, of the central switching office of the 319-3 exchange requested for expanded local calling service; or 319-4 (2) the petitioning exchange's central office is not 319-5 more than 50 miles from the central office of the exchange 319-6 requested for expanded local calling service and the exchanges 319-7 share a community of interest. (V.A.C.S. Art. 1446c-0, Sec. 319-8 3.304(a) (part).) 319-9 Sec. 55.046. PETITION REQUIREMENTS. (a) A petition under 319-10 this subchapter must be signed by a number of the exchange's 319-11 subscribers equal at least to the lesser of 100 of the exchange's 319-12 subscribers or five percent of the exchange's subscribers. 319-13 (b) An exchange that petitions under Section 55.045(2) must 319-14 demonstrate in the petition that the exchange shares a community of 319-15 interest with the requested exchange. 319-16 (c) For purposes of this section, the relationships between 319-17 exchanges that create a community of interest include: 319-18 (1) a relationship because of schools, hospitals, 319-19 local governments, or business centers; or 319-20 (2) other relationships that would make the 319-21 unavailability of expanded local calling service a hardship for the 319-22 residents of the area. (V.A.C.S. Art. 1446c-0, Sec. 3.304(a) 319-23 (part).) 319-24 Sec. 55.047. BALLOTING AND CONSIDERATION. (a) If the 319-25 commission receives a petition that complies with this subchapter, 320-1 the commission shall order the incumbent local exchange company to 320-2 provide ballots to the subscribers in the petitioning exchange. 320-3 (b) The commission shall consider the request for expansion 320-4 of the toll-free local calling area if at least 70 percent of the 320-5 subscribers who vote do so in favor of the expansion. 320-6 (c) The commission by rule shall provide for an expedited 320-7 hearing on the issue of expansion. (V.A.C.S. Art. 1446c-0, Sec. 320-8 3.304(a) (part).) 320-9 Sec. 55.048. CHARGES. (a) The incumbent local exchange 320-10 company shall recover all costs incurred and all loss of revenue 320-11 from an expansion of a toll-free local calling area under this 320-12 subchapter through a request other than a revenue requirement 320-13 showing by imposing a monthly fee under Subsection (b) or (c), or 320-14 both. 320-15 (b) The company may impose a monthly fee against each 320-16 residential and business customer in the petitioning exchange. The 320-17 fee may not exceed $3.50 a line for a residential customer and $7 a 320-18 line for a business customer unless the customer's toll-free local 320-19 calling area includes more than five exchanges. The company may 320-20 impose an additional monthly fee of $1.50 for each exchange in 320-21 excess of five. This subsection applies regardless of the number 320-22 of petitions required to obtain access to the exchanges. A company 320-23 may impose a fee under this subsection only until the company's 320-24 next general rate case. 320-25 (c) The company may impose a monthly fee against each of the 321-1 company's local exchange service customers in this state. This fee 321-2 is in addition to the company's local exchange rates. 321-3 (d) The company may not recover regulatory case expenses 321-4 under this subchapter by imposing a surcharge on the subscribers of 321-5 the petitioning exchange. (V.A.C.S. Art. 1446c-0, Sec. 3.304(a) 321-6 (part).) 321-7 (Sections 55.049-55.080 reserved for expansion) 321-8 SUBCHAPTER D. OPERATOR SERVICE PROVIDERS 321-9 Sec. 55.081. DEFINITION. In this subchapter, "operator 321-10 service" means a service using live operator or automated operator 321-11 functions to handle telephone service such as toll calling using 321-12 collect, third-number billing, and calling card services. The term 321-13 does not include a call for which the called party has arranged to 321-14 be billed (800 service). (V.A.C.S. Art. 1446c-0, Sec. 3.052(a).) 321-15 Sec. 55.082. APPLICABILITY. Except as provided by Section 321-16 55.088, this subchapter applies only to a telecommunications 321-17 utility that is not a dominant carrier. (V.A.C.S. Art. 1446c-0, 321-18 Sec. 3.052(h) (part).) 321-19 Sec. 55.083. RULES AND PROCEDURES. (a) The commission may 321-20 adopt rules and establish procedures to enforce and implement this 321-21 subchapter. 321-22 (b) A rule adopted under this subchapter must be 321-23 nondiscriminatory and designed to promote competition that 321-24 facilitates consumer choice. (V.A.C.S. Art. 1446c-0, Secs. 321-25 3.052(f) (part), (h) (part).) 322-1 Sec. 55.084. INFORMATION DISPLAYED ON PUBLIC USE TELEPHONE. 322-2 (a) An operator service provider shall furnish each entity with 322-3 which it contracts to provide operator service a sticker, card, or 322-4 other form of information approved by the commission for each 322-5 telephone that: 322-6 (1) has access to the service; and 322-7 (2) is intended for use by the public. 322-8 (b) The commission may grant the owner of a telephone 322-9 approval for an alternative form of information. 322-10 (c) The information must state: 322-11 (1) the provider's name; 322-12 (2) that the operator service provider will provide 322-13 rate information on a caller's request; 322-14 (3) that a caller, on the caller's request, will be 322-15 informed of the method of access to the local exchange carrier 322-16 operator; and 322-17 (4) that a complaint about the service may be made to 322-18 the provider or to the commission at the designated telephone 322-19 number. 322-20 (d) The operator service provider shall by contract require 322-21 an entity receiving information to display the information on or 322-22 near each telephone for which the operator service provider is 322-23 required to furnish the information. (V.A.C.S. Art. 1446c-0, Sec. 322-24 3.052(c).) 322-25 Sec. 55.085. CONNECTION ANNOUNCEMENT. Before connecting a 323-1 call, the operator service provider shall: 323-2 (1) announce the provider's name; and 323-3 (2) at the caller's request, quote the rate and any 323-4 other fee or surcharge that applies to the call and is charged by 323-5 the provider. (V.A.C.S. Art. 1446c-0, Sec. 3.052(b).) 323-6 Sec. 55.086. INFORMATION REQUIRED ON ACCESS TO LOCAL 323-7 EXCHANGE COMPANY OPERATOR. (a) An operator service provider, on a 323-8 caller's request, shall inform the caller of the method of access 323-9 to the local exchange carrier operator serving the exchange from 323-10 which the call is made. 323-11 (b) A charge may not be made for information provided under 323-12 this section. (V.A.C.S. Art. 1446c-0, Sec. 3.052(d).) 323-13 Sec. 55.087. ACCESS TO LOCAL EXCHANGE COMPANY AND OTHER 323-14 UTILITIES REQUIRED. (a) The commission by rule shall require an 323-15 operator service provider to include in its contract with each 323-16 entity through which it provides operator service a provision that 323-17 requires each telephone subscribed to its service to allow access 323-18 to: 323-19 (1) the local exchange carrier operator serving the 323-20 exchange from which the call is made; and 323-21 (2) other telecommunications utilities. 323-22 (b) To prevent fraudulent use of its service, an operator 323-23 service provider or an entity through which it provides operator 323-24 service may block the access described by Subsection (a) by 323-25 obtaining a waiver for this purpose from the commission or the 324-1 Federal Communications Commission. The commission by rule shall 324-2 establish the procedure and criteria for obtaining a waiver from 324-3 the commission. (V.A.C.S. Art. 1446c-0, Sec. 3.052(e).) 324-4 Sec. 55.088. ACCESS TO LIVE OPERATOR REQUIRED. (a) A 324-5 dominant or nondominant telecommunications utility that provides 324-6 operator service shall ensure that a caller has access to a live 324-7 operator at the beginning of a live or mechanized operator-assisted 324-8 call through a method designed to be easily and clearly 324-9 understandable and accessible to the caller. 324-10 (b) A telecommunications utility described by Subsection (a) 324-11 shall submit to the commission for review the method by which the 324-12 utility will provide access to a live operator. 324-13 (c) This section applies regardless of the method by which 324-14 the telecommunications utility provides operator service. 324-15 (d) This section does not apply to a telephone located in a 324-16 prison or jail facility. (V.A.C.S. Art. 1446c-0, Sec. 3.052(i).) 324-17 Sec. 55.089. COMMISSION MAY INVESTIGATE AND ACT ON 324-18 VIOLATION. (a) If the commission determines that an operator 324-19 service provider has violated or is about to violate this 324-20 subchapter, the commission, after notice and evidentiary hearing, 324-21 may take action to stop, correct, or prevent the violation. 324-22 (b) The commission may investigate a complaint that it 324-23 receives concerning an operator service. (V.A.C.S. Art. 1446c-0, 324-24 Sec. 3.052(g).) 324-25 (Sections 55.090-55.100 reserved for expansion) 325-1 SUBCHAPTER E. CALLER IDENTIFICATION SERVICE 325-2 Sec. 55.101. DEFINITIONS. In this subchapter: 325-3 (1) "Caller identification information" means any 325-4 information that may be used to identify the specific originating 325-5 number or originating location of a wire or electronic 325-6 communication transmitted by a telephone, including the telephone 325-7 listing number or the name of the customer from whose telephone a 325-8 telephone number is dialed. 325-9 (2) "Caller identification service" means a service 325-10 that provides caller identification information to a device that 325-11 can display the information. 325-12 (3) "Per-call blocking" means a telecommunications 325-13 service that prevents caller identification information from being 325-14 transmitted to a called party on an individual call when the 325-15 calling party affirmatively acts to prevent the transmission. 325-16 (4) "Per-line blocking" means a telecommunications 325-17 service that prevents caller identification information from being 325-18 transmitted to a called party on each call unless the calling party 325-19 affirmatively acts to permit the transmission. (V.A.C.S. 325-20 Art. 1446c-0, Secs. 3.302(h)(1), (2) (part), (3), (4).) 325-21 Sec. 55.102. APPLICABILITY. (a) This subchapter applies 325-22 only to the provision of caller identification service. 325-23 (b) This subchapter does not apply to: 325-24 (1) an identification service that is used in a 325-25 limited system, including a central office based PBX-type system; 326-1 (2) information that is used on a public agency's 326-2 emergency telephone line or on a line that receives the primary 326-3 emergency telephone number (911); 326-4 (3) information exchanged between telecommunications 326-5 utilities, enhanced service providers, or other entities that is 326-6 necessary for the setting up, processing, transmission, or billing 326-7 of telecommunications or related services; 326-8 (4) information provided in compliance with applicable 326-9 law or legal process; or 326-10 (5) an identification service provided in connection 326-11 with a 700, 800, or 900 access code telecommunications service. 326-12 (V.A.C.S. Art. 1446c-0, Secs. 3.302(a), (g).) 326-13 Sec. 55.103. PROVISION OF SERVICE. A telecommunications 326-14 utility or commercial mobile service provider may offer caller 326-15 identification services under this subchapter only if the utility 326-16 or provider obtains written authorization from the commission. 326-17 (V.A.C.S. Art. 1446c-0, Sec. 3.302(b), (h)(2) (part), (i).) 326-18 Sec. 55.104. USE OF INFORMATION. (a) A person may not use 326-19 a caller identification service to compile and sell specific local 326-20 call information without the affirmative approval of the 326-21 originating telephone customer. 326-22 (b) This section does not prohibit a provider of caller 326-23 identification service from: 326-24 (1) verifying network performance or testing the 326-25 caller identification service; 327-1 (2) compiling, using, and disclosing aggregate caller 327-2 identification information; or 327-3 (3) complying with applicable law or legal process. 327-4 (V.A.C.S. Art. 1446c-0, Sec. 3.302(f).) 327-5 Sec. 55.105. PER-CALL BLOCKING. The commission shall 327-6 require that a provider of caller identification service offer free 327-7 per-call blocking to each telephone subscriber in the specific area 327-8 in which the service is offered. (V.A.C.S. Art. 1446c-0, Sec. 327-9 3.302(c).) 327-10 Sec. 55.106. PER-LINE BLOCKING. (a) The commission shall 327-11 require that a provider of caller identification service offer free 327-12 per-line blocking to a particular customer if the commission 327-13 receives from the customer written certification that the customer 327-14 has a compelling need for per-line blocking. 327-15 (b) A provider who is ordered to offer per-line blocking 327-16 under this section shall notify the customer by mail of the date 327-17 the blocking will begin. 327-18 (c) If a customer removes and later reinstates the per-line 327-19 block, the provider may assess a service order charge in an amount 327-20 approved by the commission for the provider's administrative 327-21 expenses relating to the reinstatement. 327-22 (d) The commission may impose a fee or assessment on a 327-23 provider in an amount sufficient to cover the additional expenses 327-24 the commission incurs in implementing the customer certification 327-25 provisions of this section. 328-1 (e) Information received under this section by the 328-2 commission or by a provider is confidential and may be used only to 328-3 administer this section. (V.A.C.S. Art. 1446c-0, Secs. 3.302(d), 328-4 3.3025(a) (part).) 328-5 Sec. 55.107. LIMITATION ON COMMISSION AUTHORITY. The 328-6 commission may prescribe in relation to blocking only a requirement 328-7 authorized by Sections 55.105 and 55.106. (V.A.C.S. Art. 1446c-0, 328-8 Sec. 3.302(e).) 328-9 Sec. 55.108. CALLER ID CONSUMER EDUCATION PANEL. (a) The 328-10 Caller ID Consumer Education Panel is composed of: 328-11 (1) one person appointed by the governor; 328-12 (2) one person appointed by the presiding officer of 328-13 the commission after the presiding officer consults with the Texas 328-14 Council on Family Violence; and 328-15 (3) one person appointed by the counsellor. 328-16 (b) The panel shall: 328-17 (1) meet at least quarterly; 328-18 (2) file an annual report with the commission 328-19 regarding: 328-20 (A) the level of effort and effectiveness of 328-21 consumer education materials; and 328-22 (B) the panel's recommendations for: 328-23 (i) increasing the safe use of caller ID 328-24 services and the privacy of the calling customer; and 328-25 (ii) decreasing the likelihood of harm 329-1 resulting from the use of caller ID services; and 329-2 (3) investigate whether educational caller ID 329-3 materials are distributed in as effective a manner as marketing 329-4 caller ID materials. 329-5 (c) A provider of caller ID services shall file with the 329-6 panel all caller ID materials as the materials become available. 329-7 (d) The panel is abolished and this section expires 329-8 September 1, 1999. 329-9 (e) In this section: 329-10 (1) "Caller ID service" has the meaning assigned by 329-11 Section 55.110. 329-12 (2) "Caller ID materials" means any disseminated 329-13 information relating to caller ID services, including 329-14 advertisements, educational material, training material, and audio 329-15 and video marketing devices. (V.A.C.S. Art. 1446c-0, Secs. 329-16 3.3025(b) (part), (c), (d), (e).) 329-17 Sec. 55.109. IMPLEMENTATION OF PANEL RECOMMENDATIONS. The 329-18 commission may implement the recommendations of the Caller ID 329-19 Consumer Education Panel and interested parties to the extent 329-20 consistent with the public interest. (V.A.C.S. Art. 1446c-0, Sec. 329-21 3.3025(b) (part).) 329-22 Sec. 55.110. REPORT OF BLOCKING FAILURE. (a) A provider of 329-23 caller ID services who becomes aware of the failure of per-call or 329-24 per-line blocking to block identification of a customer shall 329-25 report that failure to the commission, the Caller ID Consumer 330-1 Education Panel, and the customer whose identification was not 330-2 blocked. 330-3 (b) The provider shall make a reasonable effort to notify 330-4 the customer within 24 hours after the provider becomes aware of 330-5 the failure. The provider is not required to notify the customer 330-6 if the customer reported the failure. 330-7 (c) In this section, "caller ID service" means a service 330-8 that permits the called party to determine the identity, telephone 330-9 number, or address of the calling party. The term does not include 330-10 911 services. (V.A.C.S. Art. 1446c-0, Secs. 3.3025(a) (part), 330-11 (d).) 330-12 (Sections 55.111-55.120 reserved for expansion) 330-13 SUBCHAPTER F. AUTOMATIC DIAL ANNOUNCING DEVICES 330-14 Sec. 55.121. DEFINITION. In this subchapter, "automated 330-15 dial announcing device" means automated equipment used for 330-16 telephone solicitation or collection that can: 330-17 (1) store telephone numbers to be called or produce 330-18 numbers to be called through use of a random or sequential number 330-19 generator; and 330-20 (2) convey, alone or in conjunction with other 330-21 equipment, a prerecorded or synthesized voice message to the number 330-22 called without the use of a live operator. (V.A.C.S. Art. 1446c-0, 330-23 Sec. 3.651(1).) 330-24 Sec. 55.122. EXEMPTIONS. This subchapter does not apply to 330-25 the use of an automated dial announcing device: 331-1 (1) to make a call relating to an emergency or a 331-2 public service under a program developed or approved by the 331-3 emergency management coordinator of the county in which the call is 331-4 received; or 331-5 (2) by a public or private primary or secondary school 331-6 system to locate or account for a truant student. (V.A.C.S. 331-7 Art. 1446c-0, Sec. 3.652.) 331-8 Sec. 55.123. NOTICE OF USE OF DEVICE TO TELECOMMUNICATIONS 331-9 UTILITY. A person may not use an automated dial announcing device 331-10 to make a telephone call in which the device plays a recorded 331-11 message when the connection is completed unless the person gives to 331-12 each telecommunications utility over whose system the device is to 331-13 be used written notice specifying the type of device to be used. 331-14 (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 331-15 Sec. 55.124. RANDOM OR SEQUENTIAL NUMBER CALLING. A person 331-16 may not use an automated dial announcing device for random number 331-17 dialing or to dial numbers determined by successively increasing or 331-18 decreasing integers if the person uses the device to make a 331-19 telephone call in which the device plays a recorded message when 331-20 the connection is completed. (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) 331-21 (part).) 331-22 Sec. 55.125. HOURS WHEN USE PROHIBITED. (a) A person may 331-23 not use an automated dial announcing device to make a telephone 331-24 solicitation call terminating in this state in which the device 331-25 plays a recorded message when the connection is completed if the 332-1 call is made: 332-2 (1) before noon or after 9 p.m. on a Sunday; or 332-3 (2) before 9 a.m. or after 9 p.m. on a weekday or a 332-4 Saturday. 332-5 (b) A person may not use an automated dial announcing device 332-6 to make a telephone collection call terminating in this state in 332-7 which the device plays a recorded message when the connection is 332-8 completed if the call is made at an hour at which collection calls 332-9 are prohibited under the federal Fair Debt Collection Practices Act 332-10 (15 U.S.C. Section 1692 et seq.). (V.A.C.S. Art. 1446c-0, Sec. 332-11 3.653(a) (part).) 332-12 Sec. 55.126. DEVICE DISCONNECTION. A person may not use an 332-13 automated dial announcing device to make a telephone call in which 332-14 the device plays a recorded message when the connection is 332-15 completed unless the device disconnects from the called person's 332-16 line not later than 30 seconds after the call is terminated by 332-17 either party. If the device cannot disconnect during that period, 332-18 a live operator must introduce the call and receive the called 332-19 person's oral consent before beginning a prerecorded or synthesized 332-20 voice message. (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 332-21 Sec. 55.127. CONTENTS OF RECORDED MESSAGE. (a) A person 332-22 may not use an automated dial announcing device to make a telephone 332-23 call in which the device plays a recorded message when the 332-24 connection is completed unless the recorded message states during 332-25 the first 30 seconds of the call: 333-1 (1) the nature of the call; 333-2 (2) the identity of the person, company, or 333-3 organization making the call; and 333-4 (3) the telephone number from which the call is made. 333-5 (b) In addition to the requirements prescribed by Subsection 333-6 (a), a call during which a cross-promotion or reference to a 333-7 pay-per-call information service is made must include a statement 333-8 of: 333-9 (1) the fact that a caller who makes a call to a 333-10 pay-per-call information service's telephone number will be charged 333-11 for that call; 333-12 (2) the amount of the flat-rate or cost-per-minute 333-13 charge the caller will incur or the amount of both if both charges 333-14 will be incurred; and 333-15 (3) the estimated amount of time required to receive 333-16 all the information offered by the service during a call. 333-17 (c) Subsection (a) does not apply to the use of a device if 333-18 the device is used: 333-19 (1) for debt collection purposes in compliance with 333-20 applicable federal law and regulations; and 333-21 (2) by a live operator for automated dialing or hold 333-22 announcement purposes. 333-23 (d) In this section, "pay-per-call information service" 333-24 means a service that routinely delivers, for a predetermined and 333-25 sometimes time-sensitive fee, a prerecorded or live message or 334-1 interactive program after the caller dials a specified 900 or 976 334-2 number. (V.A.C.S. Art. 1446c-0, Secs. 3.653(a) (part), (b), (c).) 334-3 Sec. 55.128. DURATION OF RECORDED MESSAGE. A person may not 334-4 use an automated dial announcing device to make for solicitation 334-5 purposes a telephone call in which the device plays a recorded 334-6 message when the connection is completed unless: 334-7 (1) the recorded message is shorter than one minute; 334-8 or 334-9 (2) the device has the technical capacity to: 334-10 (A) recognize a telephone answering device on 334-11 the called person's line; and 334-12 (B) terminate the call within one minute. 334-13 (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 334-14 Sec. 55.129. PERMIT REQUIRED. A person may not use an 334-15 automated dial announcing device to make a telephone call in which 334-16 the device plays a recorded message when the connection is 334-17 completed unless the person has a permit under Section 55.130. 334-18 (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 334-19 Sec. 55.130. PERMIT. (a) A person may not use an automated 334-20 dial announcing device without a permit issued by the commission. 334-21 (b) An applicant for an original permit must submit to the 334-22 commission an application on a form that: 334-23 (1) is prescribed by the commission; and 334-24 (2) contains: 334-25 (A) the telephone number of each automated dial 335-1 announcing device that the person will use; and 335-2 (B) the physical address from which each 335-3 automated dial announcing device will operate. 335-4 (c) An original permit is valid for one year and may be 335-5 renewed annually by filing with the commission the information 335-6 required by Subsection (b)(2). 335-7 (d) An application for an original permit or a filing 335-8 required for the renewal of the permit must be accompanied by the 335-9 appropriate fee prescribed by Section 55.131. 335-10 (e) In determining whether to deny an application for an 335-11 original permit or renewal of the permit, the commission shall 335-12 consider the compliance record of the owner or operator of the 335-13 automated dial announcing device and may deny the application based 335-14 on that record. (V.A.C.S. Art. 1446c-0, Secs. 3.655(a) (part), (b) 335-15 (part), (c).) 335-16 Sec. 55.131. PERMIT FEE. (a) The commission shall 335-17 prescribe a fee for an original permit or renewal of a permit. 335-18 (b) The amount of the original permit fee must be reasonable 335-19 and cover the enforcement cost to the commission but may not exceed 335-20 $500. 335-21 (c) The fee for renewal of a permit may not exceed $100. 335-22 (V.A.C.S. Art. 1446c-0, Sec. 3.655(a) (part).) 335-23 Sec. 55.132. NOTIFICATION OF CHANGE. (a) The owner or 335-24 operator of an automated dial announcing device shall notify the 335-25 commission if the telephone number of the device or the physical 336-1 address from which the device operates changes. 336-2 (b) The owner or operator shall give the notice by certified 336-3 mail not later than the 48th hour before the hour the device begins 336-4 operating with the new telephone number or at the new address. 336-5 (c) If the owner or operator of a device fails to give 336-6 notice as required by Subsection (b), the person's permit is 336-7 invalid. (V.A.C.S. Art. 1446c-0, Sec. 3.655(b) (part).) 336-8 Sec. 55.133. NOTIFICATION OF LOCAL EXCHANGE COMPANY. The 336-9 commission shall provide to a local exchange company on request a 336-10 copy of a permit issued under this subchapter and of any change 336-11 relating to the permit. (V.A.C.S. Art. 1446c-0, Sec. 3.655(d).) 336-12 Sec. 55.134. COMPLAINTS AND ENFORCEMENT. (a) The 336-13 commission shall: 336-14 (1) investigate complaints relating to the use of an 336-15 automated dial announcing device; and 336-16 (2) enforce this subchapter. 336-17 (b) A local exchange company that receives a complaint 336-18 relating to the use of an automated dial announcing device shall 336-19 send the complaint to the commission. The commission by rule shall 336-20 prescribe the procedures and requirements for sending a complaint 336-21 to the commission. (V.A.C.S. Art. 1446c-0, Secs. 3.654(a), 336-22 3.655(e).) 336-23 Sec. 55.135. REVOCATION OF PERMIT. The commission may 336-24 revoke a person's permit if the person fails to comply with this 336-25 subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.657(a).) 337-1 Sec. 55.136. DISCONNECTION OF SERVICE. (a) If the 337-2 commission or a court determines that a person has violated this 337-3 subchapter, the commission or court shall require a 337-4 telecommunications utility to disconnect service to the person. 337-5 (b) The telecommunications utility may reconnect service to 337-6 the person only on a determination by the commission that the 337-7 person will comply with this subchapter. 337-8 (c) Not later than the third day before the date of the 337-9 disconnection, the telecommunications utility shall give notice to 337-10 the person using the device of its intent to disconnect service. 337-11 However, if the device is causing network congestion or blockage, 337-12 the notice may be given on the day before the date of 337-13 disconnection. 337-14 (d) A telecommunications utility, without an order by the 337-15 commission or a court, may disconnect or refuse to connect service 337-16 to a person using or intending to use an automated dial announcing 337-17 device if the utility determines that the device would cause or is 337-18 causing network harm. (V.A.C.S. Art. 1446c-0, Secs. 3.654(b), 337-19 (c).) 337-20 Sec. 55.137. ADMINISTRATIVE PENALTY. (a) The commission 337-21 may impose an administrative penalty against a person who owns or 337-22 operates an automated dial announcing device in violation of this 337-23 subchapter or a commission rule or order. 337-24 (b) The penalty for a violation may be in an amount not to 337-25 exceed $1,000 for each day or portion of a day during which the 338-1 device operates in violation of this subchapter or a commission 338-2 rule or order. 338-3 (c) The administrative penalty is civil in nature and is in 338-4 addition to any other penalty provided by law. 338-5 (d) The commission by rule shall prescribe the procedures 338-6 for assessing an administrative penalty under this section. The 338-7 procedures must require proper notice and hearing in accordance 338-8 with Chapter 2001, Government Code. 338-9 (e) A person may appeal the final order of the commission 338-10 under Chapter 2001, Government Code. The substantial evidence rule 338-11 applies on appeal. (V.A.C.S. Art. 1446c-0, Secs. 3.656(a), (b), 338-12 (c), (d).) 338-13 Sec. 55.138. CRIMINAL PENALTY. (a) A person commits an 338-14 offense if the person owns or operates an automated dial announcing 338-15 device that the person knows is operating in violation of this 338-16 subchapter. 338-17 (b) An offense under this section is a Class A misdemeanor. 338-18 (V.A.C.S. Art. 1446c-0, Sec. 3.657(b).) 338-19 (Sections 55.139-55.150 reserved for expansion) 338-20 SUBCHAPTER G. TELEPHONE SOLICITATION 338-21 Sec. 55.151. COMPLIANCE WITH REQUEST NOT TO BE CALLED. 338-22 (a) A telephone solicitor operating in this state who makes a 338-23 consumer telephone call subject to Section 37.02, Business & 338-24 Commerce Code, shall implement in-house systems and procedures so 338-25 that every effort is made by the solicitor not to call consumers 339-1 who ask not to be called again by the solicitor. 339-2 (b) The commission may enforce this section. (V.A.C.S. 339-3 Art. 1446c-0, Sec. 3.659.) 339-4 Sec. 55.152. NOTICE TO CONSUMERS. The commission by rule 339-5 shall require a local exchange company or telephone cooperative to: 339-6 (1) notify its customers of the provisions of: 339-7 (A) Chapter 37, Business & Commerce Code; and 339-8 (B) Section 55.151; and 339-9 (2) provide the notice by: 339-10 (A) inserting the notice annually in the billing 339-11 statement mailed to a customer; or 339-12 (B) publishing the notice in the consumer 339-13 information pages of its local telephone directory. (V.A.C.S. 339-14 Art. 1446c-0, Sec. 3.660.) 339-15 (Sections 55.153-55.170 reserved for expansion) 339-16 SUBCHAPTER H. PAY TELEPHONES 339-17 Sec. 55.171. DEFINITION. In this subchapter, "provider" 339-18 means an entity that provides pay telephone service, including: 339-19 (1) an incumbent local exchange company; and 339-20 (2) a subscriber to a customer-owned pay telephone 339-21 service. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(i).) 339-22 Sec. 55.172. LIMITATION. This subchapter prescribes the 339-23 limits of: 339-24 (1) the right of a provider to set the provider's 339-25 rates and charges for pay telephone services; and 340-1 (2) the commission's authority over the pay telephone 340-2 service rates of an incumbent local exchange company. (V.A.C.S. 340-3 Art. 1446c-0, Sec. 3.2625(a).) 340-4 Sec. 55.173. REGISTRATION. (a) A person may not provide 340-5 pay telephone service in this state unless the person is registered 340-6 with the commission. 340-7 (b) This section does not apply to a provider who holds a 340-8 certificate of convenience and necessity. (V.A.C.S. Art. 1446c-0, 340-9 Sec. 3.2625(f).) 340-10 Sec. 55.174. PROHIBITION ON CHARGE FOR CERTAIN CALLS. A 340-11 provider may not charge a person making a call on a pay telephone 340-12 for: 340-13 (1) local directory assistance; or 340-14 (2) a call made under Chapter 771 or 772, Health and 340-15 Safety Code. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(b).) 340-16 Sec. 55.175. CHARGE FOR LOCAL CALLS. (a) The commission 340-17 shall establish the limit on the amount a provider may charge for a 340-18 pay telephone coin sent-paid call in the local exchange company's 340-19 toll-free calling area. 340-20 (b) The commission may establish a statewide ceiling on the 340-21 amount a provider may charge for a local pay telephone call that 340-22 is: 340-23 (1) collect; 340-24 (2) operator assisted; or 340-25 (3) paid by credit card or calling card. 341-1 (c) The commission may not establish the ceiling under 341-2 Subsection (b) at an amount that is less than the applicable local 341-3 rates for such a call imposed by any of the four largest 341-4 interexchange telecommunications carriers operating in this state. 341-5 (V.A.C.S. Art. 1446c-0, Sec. 3.2625(c).) 341-6 Sec. 55.176. CHARGE FOR 800-TYPE CALLS. (a) A provider may 341-7 charge at a pay telephone a fee of not more than 25 cents for 341-8 initiating an 800-type call. 341-9 (b) A provider may impose the fee only if: 341-10 (1) the pay telephone is registered with the 341-11 commission; and 341-12 (2) the provider certifies that the pay telephone 341-13 complies with commission rules regarding the provision of pay 341-14 telephone service. 341-15 (c) Subsection (b) does not apply to a local exchange 341-16 company pay telephone. 341-17 (d) A provider may not impose the fee if imposition is 341-18 inconsistent with federal law. 341-19 (e) A provider may not impose the fee for a: 341-20 (1) local call; 341-21 (2) 911 call; 341-22 (3) local directory assistance call; or 341-23 (4) call that is covered by the Telephone Operator 341-24 Consumer Services Improvement Act of 1990 (47 U.S.C. Section 226). 341-25 (f) A provider who imposes the fee must post on each pay 342-1 telephone notice that the fee will be charged. The provider must 342-2 post the notice: 342-3 (1) in plain sight of the user; and 342-4 (2) in a manner consistent with existing commission 342-5 requirements for posting information. 342-6 (g) The commission may not impose on a local exchange 342-7 company the duty or obligation to: 342-8 (1) record the use of pay telephone service; 342-9 (2) bill or collect for the use of the pay telephone; 342-10 or 342-11 (3) remit to the provider the fee authorized by this 342-12 section. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(d).) 342-13 Sec. 55.177. CHARGE FOR CREDIT CARD, CALLING CARD, OR 342-14 OPERATOR-ASSISTED CALLS. (a) A provider may not impose for a 342-15 credit card, calling card, or live or automated operator-assisted 342-16 call a rate or charge that is greater than the authorized rates and 342-17 charges published on March 18, 1995, in the eight newspapers having 342-18 the largest circulation in this state. 342-19 (b) The published rates may not be changed. 342-20 (c) This section does not apply to a local exchange company. 342-21 Chapter 58 governs the pay telephone rates of an incumbent local 342-22 exchange company that elects incentive regulation under that 342-23 chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(e).) 342-24 Sec. 55.178. NOTICE OF INABILITY TO RECEIVE CALLS. (a) A 342-25 provider may not display the telephone number of a pay telephone 343-1 that cannot receive telephone calls. 343-2 (b) A provider shall place in a conspicuous location on each 343-3 pay telephone that cannot receive telephone calls a notice stating 343-4 in letters one-fourth inch high: "THIS TELEPHONE CANNOT RECEIVE 343-5 TELEPHONE CALLS." 343-6 (c) A provider that violates this section or a rule or order 343-7 adopted by the commission under this section is subject to a civil 343-8 penalty as provided by Section 15.028 unless the provider takes 343-9 corrective action to comply with this section or the rule or order 343-10 not later than the 14th day after the date the provider receives 343-11 written notice of the violation. 343-12 (d) The commission has jurisdiction over a provider to the 343-13 extent necessary to enforce this section regardless of whether a 343-14 provider is a telecommunications utility regulated under this 343-15 title. 343-16 (e) The commission may establish procedures to enforce this 343-17 section. (V.A.C.S. Art. 1446c-0, Sec. 3.305.) 343-18 Sec. 55.179. INFORMATION REQUIREMENTS. (a) The commission 343-19 by rule may prescribe the information that must be posted on a pay 343-20 telephone. 343-21 (b) A commission rule may not require a provider or an 343-22 affiliate of a provider to police compliance by another provider 343-23 with the commission's rules. (V.A.C.S. Art. 1446c-0, Sec. 343-24 3.2625(h).) 343-25 Sec. 55.180. VIOLATIONS. The commission may order the 344-1 disconnection of pay telephone service for not more than one year 344-2 for repeat violations of commission rules. (V.A.C.S. Art. 1446c-0, 344-3 Sec. 3.2625(g).) 344-4 (Sections 55.181-55.200 reserved for expansion) 344-5 SUBCHAPTER I. DIRECTORY LISTINGS AND ASSISTANCE 344-6 Sec. 55.201. TERMS OF DIRECTORY LISTINGS AND ASSISTANCE. 344-7 (a) Each company that provides local exchange telephone service in 344-8 overlapping certificated areas shall negotiate the terms of printed 344-9 directory listings and directory assistance in those areas. 344-10 (b) On complaint by the incumbent local exchange company or 344-11 the holder of a certificate of convenience and necessity, a 344-12 certificate of operating authority, or a service provider 344-13 certificate of operating authority, the commission may: 344-14 (1) resolve a dispute between the parties; and 344-15 (2) issue an order setting the terms of the directory 344-16 listings or directory assistance, if necessary. 344-17 (c) This section does not affect the authority of an 344-18 incumbent local exchange company to voluntarily conduct 344-19 negotiations with an applicant for a certificate of convenience and 344-20 necessity, a certificate of operating authority, or a service 344-21 provider certificate of operating authority. (V.A.C.S. 344-22 Art. 1446c-0, Sec. 3.2615.) 344-23 Sec. 55.202. DIRECTORY PUBLISHED BY TELECOMMUNICATIONS 344-24 UTILITY. A telecommunications utility or an affiliate of that 344-25 utility that publishes a residential or business telephone 345-1 directory that is distributed to the public shall publish in the 345-2 directory the name of each state senator or representative who 345-3 represents all or part of the geographical area for which the 345-4 directory contains listings. (V.A.C.S. Art. 1446c-0, Sec. 3.310.) 345-5 Sec. 55.203. DIRECTORY PUBLISHED BY PRIVATE PUBLISHER. 345-6 (a) A private for-profit publisher of a residential telephone 345-7 directory that is distributed to the public at minimal or no cost 345-8 shall include in the directory a listing of any toll-free and local 345-9 telephone numbers of: 345-10 (1) state agencies; 345-11 (2) state public services; and 345-12 (3) each state elected official who represents all or 345-13 part of the geographical area for which the directory contains 345-14 listings. 345-15 (b) The listing required by this section: 345-16 (1) must be: 345-17 (A) clearly identified; and 345-18 (B) located or clearly referenced at the front 345-19 of the directory before the main listing of residential and 345-20 business telephone numbers; and 345-21 (2) is not required to exceed a length equivalent to 345-22 two 8-1/2-inch by 11-inch pages, single-spaced in eight-point type. 345-23 (c) The commission by rule may specify: 345-24 (1) the format of the listing; and 345-25 (2) criteria for inclusion of agencies, services, and 346-1 officials. 346-2 (d) The commission, with the cooperation of other state 346-3 agencies, shall: 346-4 (1) compile relevant information to ensure accuracy of 346-5 information in the listing; and 346-6 (2) provide the information to a telecommunications 346-7 utility or telephone directory publisher within a reasonable time 346-8 after a request by the utility or publisher. (V.A.C.S. 346-9 Art. 1446c-0, Sec. 3.309.) 346-10 (Sections 55.204-55.250 reserved for expansion) 346-11 SUBCHAPTER J. TELECOMMUNICATIONS SERVICE BY CERTAIN PROVIDERS 346-12 Sec. 55.251. CHARGE FOR HOTEL OR MOTEL CALL. A hotel or 346-13 motel may not charge more than 50 cents for: 346-14 (1) a local telephone call; 346-15 (2) a credit card telephone call; 346-16 (3) a collect telephone call; or 346-17 (4) any other local telephone call for which 346-18 assistance from the hotel or motel operator is not required. 346-19 (V.A.C.S. Art. 1446c-0, Sec. 3.306.) 346-20 Sec. 55.252. 900 SERVICE USED BY PROBATIONERS OR PAROLEES. 346-21 (a) This section applies only to a telecommunications utility that 346-22 transports or provides an intrastate 900 service that is: 346-23 (1) covered by a contract authorized by Chapter 76, 346-24 Government Code, or Section 28, Article 42.18, Code of Criminal 346-25 Procedure; and 347-1 (2) used by a defendant under the supervision of a 347-2 community supervision and corrections department or the pardons and 347-3 paroles division of the Texas Department of Criminal Justice to: 347-4 (A) pay a fee or cost; or 347-5 (B) comply with telephone reporting 347-6 requirements. 347-7 (b) A telecommunications utility may adjust or authorize the 347-8 adjustment of an end-user's bill for 900 service described by 347-9 Subsection (a) only with the consent of the contracting community 347-10 supervision and corrections department or the contracting pardons 347-11 and paroles division of the Texas Department of Criminal Justice. 347-12 (V.A.C.S. Art. 1446c-0, Sec. 3.307.) 347-13 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE 347-14 AND UNIVERSAL SERVICE FUND 347-15 SUBCHAPTER A. GENERAL PROVISIONS 347-16 Sec. 56.001. DEFINITION 347-17 Sec. 56.002. CONFLICT OF PROVISIONS 347-18 (Sections 56.003-56.020 reserved for expansion) 347-19 SUBCHAPTER B. UNIVERSAL SERVICE FUND 347-20 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED 347-21 Sec. 56.022. UNIFORM CHARGE 347-22 Sec. 56.023. COMMISSION POWERS AND DUTIES 347-23 Sec. 56.024. REPORTS; CONFIDENTIALITY 347-24 Sec. 56.025. MAINTENANCE OF RATES AND EXPANSION OF FUND 347-25 FOR CERTAIN COMPANIES 348-1 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS 348-2 (Sections 56.027-56.070 reserved for expansion) 348-3 SUBCHAPTER C. TEL-ASSISTANCE SERVICE PROGRAM 348-4 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS 348-5 Sec. 56.072. CONSUMER ELIGIBILITY AND APPLICATION 348-6 Sec. 56.073. ELIGIBLE CONSUMERS 348-7 Sec. 56.074. PROGRAM BILLING 348-8 Sec. 56.075. SERVICES ELIGIBLE; LIMIT 348-9 Sec. 56.076. SERVICES PROHIBITED 348-10 Sec. 56.077. ADAPTIVE EQUIPMENT 348-11 Sec. 56.078. RECOVERY OF LOST REVENUE 348-12 (Sections 56.079-56.100 reserved for expansion) 348-13 SUBCHAPTER D. STATEWIDE TELECOMMUNICATIONS RELAY 348-14 ACCESS SERVICE 348-15 Sec. 56.101. PURPOSE 348-16 Sec. 56.102. TELECOMMUNICATIONS RELAY ACCESS SERVICE 348-17 Sec. 56.103. TELECOMMUNICATIONS RELAY ACCESS SERVICE 348-18 REQUIREMENTS 348-19 Sec. 56.104. TELECOMMUNICATIONS RELAY ACCESS SERVICE 348-20 CHARGES 348-21 Sec. 56.105. TRIAL SERVICE COSTS AND DESIGN INFORMATION 348-22 Sec. 56.106. TELECOMMUNICATIONS RELAY ACCESS SERVICE 348-23 ASSESSMENTS 348-24 Sec. 56.107. UNIVERSAL SERVICE FUND SURCHARGE 349-1 Sec. 56.108. SELECTION OF TELECOMMUNICATIONS RELAY ACCESS 349-2 SERVICE CARRIER 349-3 Sec. 56.109. COMPENSATION OF CARRIER 349-4 Sec. 56.110. ADVISORY COMMITTEE 349-5 Sec. 56.111. ADVISORY COMMITTEE DUTIES 349-6 Sec. 56.112. ADVISORY COMMITTEE SUPPORT AND COSTS 349-7 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE 349-8 AND UNIVERSAL SERVICE FUND 349-9 SUBCHAPTER A. GENERAL PROVISIONS 349-10 Sec. 56.001. DEFINITION. In this chapter, "department" 349-11 means the Texas Department of Human Services. (New.) 349-12 Sec. 56.002. CONFLICT OF PROVISIONS. If this chapter 349-13 conflicts with another provision of this title, this chapter 349-14 prevails. (V.A.C.S. Art. 1446c-0, Sec. 3.610.) 349-15 (Sections 56.003-56.020 reserved for expansion) 349-16 SUBCHAPTER B. UNIVERSAL SERVICE FUND 349-17 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The 349-18 commission shall adopt and enforce rules requiring local exchange 349-19 companies to establish a universal service fund to: 349-20 (1) assist local exchange companies in providing basic 349-21 local telecommunications service at reasonable rates in high cost 349-22 rural areas; 349-23 (2) reimburse local exchange companies for revenue 349-24 lost by providing tel-assistance service under Subchapter C; 349-25 (3) reimburse the telecommunications carrier that 350-1 provides the statewide telecommunications relay access service 350-2 under Subchapter D; and 350-3 (4) reimburse the department and the commission for 350-4 costs incurred in implementing this chapter and Chapter 57. 350-5 (V.A.C.S. Art. 1446c-0, Sec. 3.608(a).) 350-6 Sec. 56.022. UNIFORM CHARGE. (a) The universal service 350-7 fund is funded by a statewide uniform charge payable by each 350-8 telecommunications provider that has access to the customer base. 350-9 (b) A telecommunications provider shall pay the charge in 350-10 accordance with procedures approved by the commission. 350-11 (c) The uniform charge is on services and at rates the 350-12 commission determines. In establishing the charge and the services 350-13 to which the charge will apply, the commission may not: 350-14 (1) grant an unreasonable preference or advantage to a 350-15 telecommunications provider; or 350-16 (2) subject a telecommunications provider to 350-17 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 350-18 Sec. 3.608(c).) 350-19 Sec. 56.023. COMMISSION POWERS AND DUTIES. (a) The 350-20 commission shall: 350-21 (1) in a manner that assures reasonable rates for 350-22 basic local telecommunications service, adopt eligibility criteria 350-23 and review procedures, including a method for administrative 350-24 review, the commission finds necessary to fund the universal 350-25 service fund and make distributions from that fund; 351-1 (2) determine which local exchange companies meet the 351-2 eligibility criteria; 351-3 (3) determine the amount of and approve a procedure 351-4 for reimbursement to local exchange companies of revenue lost in 351-5 providing tel-assistance service under Subchapter C; 351-6 (4) establish and collect fees from the universal 351-7 service fund necessary to recover the costs the department and the 351-8 commission incur in administering this chapter and Chapter 57; and 351-9 (5) approve procedures for the collection and 351-10 disbursal of the revenue of the universal service fund. 351-11 (b) The eligibility criteria must require that a local 351-12 exchange company, in compliance with the commission's quality of 351-13 service requirements: 351-14 (1) offer service to each consumer within the 351-15 company's certificated area; and 351-16 (2) render continuous and adequate service within the 351-17 company's certificated area. 351-18 (c) The commission shall adopt rules for the administration 351-19 of the universal service fund and may act as necessary and 351-20 convenient to administer the fund. (V.A.C.S. Art. 1446c-0, Secs. 351-21 3.608(d), (e), (f) (part).) 351-22 Sec. 56.024. REPORTS; CONFIDENTIALITY. (a) The commission 351-23 may require a local exchange company or another telecommunications 351-24 provider to provide a report or information necessary to assess 351-25 contributions to the universal service fund. 352-1 (b) A report or information is confidential and not subject 352-2 to disclosure under Chapter 552, Government Code. (V.A.C.S. 352-3 Art. 1446c-0, Sec. 3.608(f) (part).) 352-4 Sec. 56.025. MAINTENANCE OF RATES AND EXPANSION OF FUND FOR 352-5 CERTAIN COMPANIES. (a) In addition to the authority provided by 352-6 Section 56.021, for each local exchange company that serves fewer 352-7 than five million access lines, the commission: 352-8 (1) may adopt a mechanism necessary to maintain 352-9 reasonable rates for local exchange telephone service; and 352-10 (2) shall adopt rules to expand the universal service 352-11 fund in the circumstances prescribed by this section. 352-12 (b) The commission shall implement a mechanism through the 352-13 universal service fund to replace the reasonably projected 352-14 reduction in high cost assistance revenue caused by a commission 352-15 order, rule, or policy. This subsection does not apply to an order 352-16 entered in a proceeding related to an individual company's revenue 352-17 requirements. 352-18 (c) The commission shall implement a mechanism to replace 352-19 the reasonably projected change in revenue caused by a Federal 352-20 Communications Commission order, rule, or policy that changes: 352-21 (1) the federal universal service fund revenue of a 352-22 local exchange company; or 352-23 (2) costs or revenue assigned to the intrastate 352-24 jurisdiction. 352-25 (d) The commission shall implement a mechanism to replace 353-1 the reasonably projected reduction in contribution caused by a 353-2 change of commission policy regarding intraLATA "1-plus" dialing 353-3 access. In this subsection, "contribution" means the average 353-4 intraLATA long distance message telecommunications service revenue 353-5 per minute, including intraLATA toll pooling and associated 353-6 impacts, less the average message telecommunications service cost 353-7 per minute less the average contribution from switched access 353-8 multiplied by the projected change in intraLATA "1-plus" minutes of 353-9 use. 353-10 (e) The commission shall implement a mechanism to replace 353-11 the reasonably projected increase in costs or decrease in revenue 353-12 of the intrastate jurisdiction caused by another governmental 353-13 agency's order, rule, or policy. 353-14 (f) A mechanism implemented under Subsection (c), (d), or 353-15 (e) must be through: 353-16 (1) an increase in rates, if the increase would not 353-17 adversely affect universal service; or 353-18 (2) the universal service fund. (V.A.C.S. 353-19 Art. 1446c-0, Secs. 3.608(b)(1), (2), (3), (4), (5).) 353-20 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS. (a) A 353-21 revenue requirement showing is not required for a disbursement from 353-22 the universal service fund under this subchapter. 353-23 (b) The commission shall make each disbursement from the 353-24 universal service fund promptly and efficiently so that a 353-25 telecommunications provider or local exchange company does not 354-1 experience an unnecessary cash-flow change as a result of a change 354-2 in governmental policy. (V.A.C.S. Art. 1446c-0, Sec. 3.608(b)(6).) 354-3 (Sections 56.027-56.070 reserved for expansion) 354-4 SUBCHAPTER C. TEL-ASSISTANCE SERVICE PROGRAM 354-5 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS. (a) The 354-6 commission shall adopt and enforce rules requiring a local exchange 354-7 company to establish a telecommunications service assistance 354-8 program to provide a reduction in the cost of telecommunications 354-9 service to each eligible consumer in the company's certificated 354-10 area. The reduction must be a reduction on the consumer's 354-11 telephone bill. 354-12 (b) Except as provided by Section 56.075(b), the reduction 354-13 allowed by the program is 65 percent of the applicable tariff rate 354-14 for the service provided. 354-15 (c) The program is named "tel-assistance service." (V.A.C.S. 354-16 Art. 1446c-0, Secs. 3.601, 3.603(a) (part), (c).) 354-17 Sec. 56.072. CONSUMER ELIGIBILITY AND APPLICATION. (a) The 354-18 department shall develop procedures for taking an application for 354-19 certification of eligibility for the tel-assistance service program 354-20 and for determining eligibility for that program. 354-21 (b) To be eligible for the tel-assistance service program, 354-22 an applicant must: 354-23 (1) be a head of household and disabled, as determined 354-24 by the department; and 354-25 (2) have a household income at or below the poverty 355-1 level, as determined by the United States Office of Management and 355-2 Budget and reported annually in the Federal Register. 355-3 (c) The burden of proving eligibility for the tel-assistance 355-4 service program is on the consumer applying for the program. 355-5 (V.A.C.S. Art. 1446c-0, Sec. 3.602(a).) 355-6 Sec. 56.073. ELIGIBLE CONSUMERS. (a) Each six months, the 355-7 department shall provide to each local exchange company a list of 355-8 all persons eligible for the tel-assistance service program that 355-9 includes each person's: 355-10 (1) name; 355-11 (2) address; and 355-12 (3) if applicable, telephone number. 355-13 (b) From the list of eligible persons, a local exchange 355-14 company shall identify the consumers to whom the company provides 355-15 service who are eligible for the program. (V.A.C.S. Art. 1446c-0, 355-16 Sec. 3.602(b) (part).) 355-17 Sec. 56.074. PROGRAM BILLING. (a) A local exchange company 355-18 shall begin tel-assistance service program billing for an eligible 355-19 consumer not later than the 60th day after the date the company 355-20 receives the list the department provides under Section 56.073(a). 355-21 (b) The local exchange company shall continue tel-assistance 355-22 service program billing for a consumer until the department 355-23 notifies the company that the consumer is not eligible for the 355-24 program. (V.A.C.S. Art. 1446c-0, Sec. 3.602(b) (part).) 355-25 Sec. 56.075. SERVICES ELIGIBLE; LIMIT. (a) The reduction 356-1 provided under the tel-assistance service program applies only to: 356-2 (1) residential flat rate basic local exchange 356-3 service; 356-4 (2) residential local exchange access service; and 356-5 (3) residential local area calling. 356-6 (b) The reduction for local area calling is limited to an 356-7 amount such that together with the reduction for local exchange 356-8 access service the rate does not exceed the comparable reduced flat 356-9 rate for the service. (V.A.C.S. Art. 1446c-0, Sec. 3.603(a) 356-10 (part).) 356-11 Sec. 56.076. SERVICES PROHIBITED. (a) A local exchange 356-12 company may not provide to the dwelling of a consumer participating 356-13 in the tel-assistance service program a local voice service other 356-14 than a service described by Section 56.075. 356-15 (b) A local exchange company may not provide a consumer 356-16 participating in the tel-assistance service program with: 356-17 (1) single or party line optional extended area 356-18 service; 356-19 (2) optional extended area calling service; 356-20 (3) foreign zone service; or 356-21 (4) foreign exchange service. (V.A.C.S. Art. 1446c-0, 356-22 Sec. 3.603(b) (part).) 356-23 Sec. 56.077. ADAPTIVE EQUIPMENT. This subchapter does not 356-24 prohibit a person who is eligible for the tel-assistance service 356-25 program from obtaining or using telecommunications equipment 357-1 designed to help a person use a telecommunications service. 357-2 (V.A.C.S. Art. 1446c-0, Sec. 3.603(b) (part).) 357-3 Sec. 56.078. RECOVERY OF LOST REVENUE. A local exchange 357-4 company is entitled to recover from the universal service fund any 357-5 loss of revenue that results solely from the provision of 357-6 tel-assistance service. (V.A.C.S. Art. 1446c-0, Sec. 3.607.) 357-7 (Sections 56.079-56.100 reserved for expansion) 357-8 SUBCHAPTER D. STATEWIDE TELECOMMUNICATIONS RELAY 357-9 ACCESS SERVICE 357-10 Sec. 56.101. PURPOSE. The purpose of this subchapter is to 357-11 provide for the uniform and coordinated provision by one 357-12 telecommunications carrier of a statewide telecommunications relay 357-13 access service for persons with an impairment of hearing or speech. 357-14 (V.A.C.S. Art. 1446c-0, Sec. 3.604(a) (part).) 357-15 Sec. 56.102. TELECOMMUNICATIONS RELAY ACCESS SERVICE. 357-16 (a) The commission shall adopt and enforce rules establishing a 357-17 statewide telecommunications relay access service for the use of a 357-18 person with an impairment of hearing or speech. 357-19 (b) The commission rules shall provide that the service 357-20 must: 357-21 (1) use specialized communications equipment, such as 357-22 a telecommunications device for the deaf, and operator 357-23 translations; and 357-24 (2) meet the criteria provided by Sections 56.103, 357-25 56.104, and 56.105. (V.A.C.S. Art. 1446c-0, Secs. 3.604(a) (part), 358-1 (b) (part).) 358-2 Sec. 56.103. TELECOMMUNICATIONS RELAY ACCESS SERVICE 358-3 REQUIREMENTS. (a) The telecommunications relay access service 358-4 shall provide a person with an impairment of hearing or speech with 358-5 access to the telecommunications network in this state equivalent 358-6 to the access provided other customers. 358-7 (b) The service consists of: 358-8 (1) switching and transmission of the call; 358-9 (2) live or automated verbal and print translations of 358-10 communications between a person with an impairment of hearing or 358-11 speech who uses a telecommunications device for the deaf or a 358-12 similar automated device and a person who does not have such 358-13 equipment; and 358-14 (3) other service enhancements proposed by the carrier 358-15 and approved by the commission. (V.A.C.S. Art. 1446c-0, Sec. 358-16 3.604(b) (part).) 358-17 Sec. 56.104. TELECOMMUNICATIONS RELAY ACCESS SERVICE 358-18 CHARGES. (a) For a call made using the telecommunications relay 358-19 access service, the person calling or called: 358-20 (1) may not be charged for a call that originates and 358-21 terminates in the same local calling area; and 358-22 (2) shall pay one-half of the total charges 358-23 established by contract with the commission for intrastate 358-24 interexchange calls. 358-25 (b) Charges related to providing the service that, under 359-1 Subsection (a), are not charged to a person calling or called shall 359-2 be funded from the universal service fund, as specified by the 359-3 service provider's contract with the commission. 359-4 (c) A local exchange company may not impose an interexchange 359-5 carrier access charge on a call using the service that originates 359-6 and terminates in the same local calling area. 359-7 (d) A local exchange company shall provide billing and 359-8 collection services for the service at just and reasonable rates. 359-9 (V.A.C.S. Art. 1446c-0, Sec. 3.604(b) (part).) 359-10 Sec. 56.105. TRIAL SERVICE COSTS AND DESIGN INFORMATION. If 359-11 the commission orders a local exchange company to provide for a 359-12 trial telecommunications relay access service for persons with an 359-13 impairment of hearing or speech, all pertinent costs and design 359-14 information from the trial must be made available to the public. 359-15 (V.A.C.S. Art. 1446c-0, Sec. 3.604(b) (part).) 359-16 Sec. 56.106. TELECOMMUNICATIONS RELAY ACCESS SERVICE 359-17 ASSESSMENTS. (a) The commission shall set appropriate assessments 359-18 for all telecommunications utilities to fund the telecommunications 359-19 relay access service. 359-20 (b) In setting an assessment, the commission shall consider: 359-21 (1) the aggregate calling pattern of service users; 359-22 and 359-23 (2) any other factor the commission finds appropriate 359-24 and in the public interest. 359-25 (c) The commission shall: 360-1 (1) review the assessments annually; and 360-2 (2) adjust the assessments as appropriate. (V.A.C.S. 360-3 Art. 1446c-0, Sec. 3.604(d).) 360-4 Sec. 56.107. UNIVERSAL SERVICE FUND SURCHARGE. (a) A 360-5 telecommunications utility may recover the utility's universal 360-6 service fund assessment for the telecommunications relay access 360-7 service through a surcharge added to the utility customers' bills. 360-8 (b) The commission shall specify how each telecommunications 360-9 utility is to determine the amount of the surcharge. 360-10 (c) If a telecommunications utility imposes the surcharge, 360-11 the bill shall list the surcharge as the "universal service fund 360-12 surcharge." (V.A.C.S. Art. 1446c-0, Sec. 3.604(c).) 360-13 Sec. 56.108. SELECTION OF TELECOMMUNICATIONS RELAY ACCESS 360-14 SERVICE CARRIER. (a) The commission shall select one 360-15 telecommunications carrier to provide the statewide 360-16 telecommunications relay access service. 360-17 (b) The commission shall make a written award of the 360-18 contract to the telecommunications carrier whose proposal is the 360-19 most advantageous to this state, considering: 360-20 (1) price; 360-21 (2) the interests of the community of persons with an 360-22 impairment of hearing or speech in having access to a high quality 360-23 and technologically advanced telecommunications system; and 360-24 (3) any other factor listed in the commission's 360-25 request for proposals. 361-1 (c) The commission shall consider each proposal in a manner 361-2 that does not disclose the contents of the proposal to a 361-3 telecommunications carrier making a competing proposal. 361-4 (d) The commission's evaluation of a telecommunications 361-5 carrier's proposal shall include the: 361-6 (1) charges for the service; 361-7 (2) service enhancements proposed by the carrier; 361-8 (3) technological sophistication of the network 361-9 proposed by the carrier; and 361-10 (4) date proposed for beginning the service. 361-11 (V.A.C.S. Art. 1446c-0, Sec. 3.604(e).) 361-12 Sec. 56.109. COMPENSATION OF CARRIER. (a) The 361-13 telecommunications carrier that provides the telecommunications 361-14 relay access service shall be compensated at rates and on terms 361-15 provided by the carrier's contract with the commission. 361-16 (b) The compensation may include: 361-17 (1) a return on the investment required to provide the 361-18 service; and 361-19 (2) compensation for unbillable or uncollectible calls 361-20 placed through the service. 361-21 (c) Compensation for unbillable or uncollectible calls is 361-22 subject to a reasonable limitation determined by the commission. 361-23 (V.A.C.S. Art. 1446c-0, Sec. 3.604(f).) 361-24 Sec. 56.110. ADVISORY COMMITTEE. (a) An advisory committee 361-25 to assist the commission in administering this subchapter is 362-1 composed of the following persons appointed by the commission: 362-2 (1) two deaf persons recommended by the Texas 362-3 Association of the Deaf; 362-4 (2) one person with a hearing impairment recommended 362-5 by Self-Help for the Hard of Hearing; 362-6 (3) one person with a hearing impairment recommended 362-7 by the American Association of Retired Persons; 362-8 (4) one deaf and blind person recommended by the Texas 362-9 Deaf/Blind Association; 362-10 (5) one person with a speech impairment and one person 362-11 with a speech and hearing impairment recommended by the Coalition 362-12 of Texans with Disabilities; 362-13 (6) two representatives of telecommunications 362-14 utilities, one representing a nonlocal exchange utility and one 362-15 representing a local exchange company, chosen from a list of 362-16 candidates provided by the Texas Telephone Association; 362-17 (7) two persons, at least one of whom is deaf, with 362-18 experience in providing relay services recommended by the Texas 362-19 Commission for the Deaf and Hard of Hearing; and 362-20 (8) two public members recommended by organizations 362-21 representing consumers of telecommunications services. 362-22 (b) Members of the advisory committee serve two-year terms. 362-23 A member whose term has expired shall continue to serve until a 362-24 qualified replacement is appointed. (V.A.C.S. Art. 1446c-0, Secs. 362-25 3.604(g), (h) (part).) 363-1 Sec. 56.111. ADVISORY COMMITTEE DUTIES. The advisory 363-2 committee shall: 363-3 (1) monitor the establishment, administration, and 363-4 promotion of the statewide telecommunications relay access service; 363-5 and 363-6 (2) advise the commission in pursuing a service that 363-7 meets the needs of persons with an impairment of hearing or speech 363-8 in communicating with other telecommunications services users. 363-9 (V.A.C.S. Art. 1446c-0, Sec. 3.604(h) (part).) 363-10 Sec. 56.112. ADVISORY COMMITTEE SUPPORT AND COSTS. (a) The 363-11 commission shall provide to the advisory committee: 363-12 (1) clerical and staff support; and 363-13 (2) a secretary to record committee meetings. 363-14 (b) The commission's costs associated with the advisory 363-15 committee shall be reimbursed from the universal service fund. 363-16 (V.A.C.S. Art. 1446c-0, Sec. 3.604(h) (part).) 363-17 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 363-18 SUBCHAPTER A. GENERAL PROVISIONS 363-19 Sec. 57.001. CONFLICT OF PROVISIONS 363-20 (Sections 57.002-57.020 reserved for expansion) 363-21 SUBCHAPTER B. DISTANCE LEARNING AND INFORMATION SHARING 363-22 Sec. 57.021. DEFINITIONS 363-23 Sec. 57.022. REDUCED RATES FOR DISTANCE LEARNING OR 363-24 INFORMATION SHARING SERVICES 363-25 Sec. 57.023. SERVICE AND RATE REQUIREMENTS 364-1 Sec. 57.024. TARIFF FILINGS 364-2 Sec. 57.025. CHANGES IN RATE PROGRAM 364-3 (Sections 57.026-57.040 reserved for expansion) 364-4 SUBCHAPTER C. TELECOMMUNICATIONS INFRASTRUCTURE FUND 364-5 Sec. 57.041. FINDINGS AND POLICY 364-6 Sec. 57.042. DEFINITIONS 364-7 Sec. 57.043. TELECOMMUNICATIONS INFRASTRUCTURE FUND AND 364-8 ACCOUNTS 364-9 Sec. 57.044. TELECOMMUNICATIONS INFRASTRUCTURE FUND BOARD 364-10 Sec. 57.045. POWERS AND DUTIES OF BOARD 364-11 Sec. 57.046. USE OF ACCOUNTS 364-12 Sec. 57.047. GRANT AND LOAN PROGRAM 364-13 Sec. 57.048. ASSESSMENTS AND COLLECTIONS 364-14 Sec. 57.049. ISSUANCE OF WARRANTS 364-15 Sec. 57.050. ASSISTANCE OF OTHER AGENCIES 364-16 Sec. 57.051. SUNSET PROVISION 364-17 (Sections 57.052-57.070 reserved for expansion) 364-18 SUBCHAPTER D. INTERACTIVE MULTIMEDIA COMMUNICATIONS 364-19 Sec. 57.071. DEFINITION 364-20 Sec. 57.072. RATES FOR INTERACTIVE MULTIMEDIA 364-21 COMMUNICATIONS 364-22 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 364-23 SUBCHAPTER A. GENERAL PROVISIONS 364-24 Sec. 57.001. CONFLICT OF PROVISIONS. If this chapter 364-25 conflicts with another provision of this title, this chapter 365-1 prevails. (V.A.C.S. Art. 1446c-0, Sec. 3.610.) 365-2 (Sections 57.002-57.020 reserved for expansion) 365-3 SUBCHAPTER B. DISTANCE LEARNING AND INFORMATION SHARING 365-4 Sec. 57.021. DEFINITIONS. In this subchapter: 365-5 (1) "Distance learning" means an instruction, 365-6 learning, or training resource, including video, data, voice, or 365-7 electronic information, that is: 365-8 (A) used by an educational institution 365-9 predominantly for instruction, learning, or training; and 365-10 (B) transmitted from a site to one or more other 365-11 sites by a telecommunications service. 365-12 (2) "Educational institution" includes: 365-13 (A) an accredited primary or secondary school; 365-14 (B) an institution of higher education as 365-15 defined by Section 61.003, Education Code; 365-16 (C) a private institution of higher education 365-17 accredited by a recognized accrediting agency as defined by Section 365-18 61.003, Education Code; 365-19 (D) the Texas Education Agency and its 365-20 successors and assigns; 365-21 (E) a regional education service center 365-22 established and operated in accordance with Chapter 8, Education 365-23 Code; or 365-24 (F) the Texas Higher Education Coordinating 365-25 Board and its successors and assigns. 366-1 (3) "Library" means: 366-2 (A) a public library or regional library system 366-3 as defined by Section 441.122, Government Code; or 366-4 (B) a library operated by an institution of 366-5 higher education or a school district. (V.A.C.S. Art. 1446c-0, 366-6 Sec. 3.605(h).) 366-7 Sec. 57.022. REDUCED RATES FOR DISTANCE LEARNING OR 366-8 INFORMATION SHARING SERVICES. (a) The commission by rule shall 366-9 require a dominant carrier to file a tariff that includes a reduced 366-10 rate for a telecommunications service the commission finds is 366-11 directly related to: 366-12 (1) a distance learning activity that is or could be 366-13 conducted by an educational institution in this state; or 366-14 (2) an information sharing program that is or could be 366-15 conducted by a library in this state. 366-16 (b) The commission rules shall specify: 366-17 (1) each telecommunications service to which 366-18 Subsection (a) applies; 366-19 (2) the process for an educational institution or 366-20 library to qualify for a reduced rate; 366-21 (3) the date by which a dominant carrier is required 366-22 to file a tariff; 366-23 (4) guidelines and criteria that require the services 366-24 and reduced rates to further the goals prescribed by Section 366-25 57.023; and 367-1 (5) any other requirement or term that the commission 367-2 determines to be in the public interest. 367-3 (c) The commission is not required to determine the long run 367-4 incremental cost of providing a service before approving a reduced 367-5 rate for the service. 367-6 (d) Until cost determination rules are developed and the 367-7 rates established under this section are changed as necessary to 367-8 ensure proper cost recovery, the reduced rates established by the 367-9 commission shall be equal to 75 percent of the otherwise applicable 367-10 rate. 367-11 (e) After the commission develops cost determination rules 367-12 for telecommunications services generally, the commission shall 367-13 ensure that a reduced rate approved under this section: 367-14 (1) recovers service-specific long run incremental 367-15 costs; and 367-16 (2) avoids subsidizing an educational institution or a 367-17 library. (V.A.C.S. Art. 1446c-0, Secs. 3.605(a), (b), (e).) 367-18 Sec. 57.023. SERVICE AND RATE REQUIREMENTS. The services 367-19 and reduced rates must be designed to: 367-20 (1) encourage the development and offering of: 367-21 (A) distance learning activities by educational 367-22 institutions; and 367-23 (B) information sharing programs of libraries; 367-24 (2) meet the: 367-25 (A) distance learning needs identified by the 368-1 educational community; and 368-2 (B) information sharing needs identified by 368-3 libraries; and 368-4 (3) recover the long run incremental costs of 368-5 providing the services, to the extent those costs can be 368-6 identified, to avoid subsidizing an educational institution or a 368-7 library. (V.A.C.S. Art. 1446c-0, Sec. 3.605(d).) 368-8 Sec. 57.024. TARIFF FILINGS. A tariff filed by a dominant 368-9 carrier under Section 57.022: 368-10 (1) may concern the implementation of this subchapter 368-11 only; 368-12 (2) is not a rate change under Subchapter C, Chapter 368-13 53; and 368-14 (3) does not affect the carrier's other rates or 368-15 services. (V.A.C.S. Art. 1446c-0, Sec. 3.605(c).) 368-16 Sec. 57.025. CHANGES IN RATE PROGRAM. (a) An educational 368-17 institution, library, or dominant carrier may request the 368-18 commission to: 368-19 (1) provide for a reduced rate for a service that: 368-20 (A) is directly related to a distance learning 368-21 activity or an information sharing program; and 368-22 (B) is not covered by commission rules; 368-23 (2) change a rate; 368-24 (3) amend a tariff; or 368-25 (4) amend a commission rule. 369-1 (b) The commission shall take the action requested under 369-2 Subsection (a) if the commission determines the action is 369-3 appropriate. (V.A.C.S. Art. 1446c-0, Secs. 3.605(f), (g).) 369-4 (Sections 57.026-57.040 reserved for expansion) 369-5 SUBCHAPTER C. TELECOMMUNICATIONS INFRASTRUCTURE FUND 369-6 Sec. 57.041. FINDINGS AND POLICY. (a) The legislature 369-7 finds that commercial mobile service providers: 369-8 (1) benefit from the public telecommunications network 369-9 by the ability to originate and terminate calls that traverse the 369-10 mobile and cellular network; and 369-11 (2) will benefit by the advancement of the public 369-12 telecommunications network through projects funded under this 369-13 subchapter. 369-14 (b) It is the policy of this state that commercial mobile 369-15 service providers contribute an appropriate amount to the 369-16 telecommunications infrastructure fund. (V.A.C.S. Art. 1446c-0, 369-17 Sec. 3.606(b).) 369-18 Sec. 57.042. DEFINITIONS. In this subchapter: 369-19 (1) "Board" means the telecommunications 369-20 infrastructure fund board. 369-21 (2) "Commercial mobile service provider" means a 369-22 provider of commercial mobile service as defined by Section 332(d), 369-23 Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal 369-24 Communications Commission rules, and the Omnibus Budget 369-25 Reconciliation Act of 1993 (Pub. L. No. 103-66). 370-1 (3) "Fund" means the telecommunications infrastructure 370-2 fund. 370-3 (4) "Institution of higher education" means: 370-4 (A) an institution of higher education as 370-5 defined by Section 61.003, Education Code; or 370-6 (B) a private or independent institution of 370-7 higher education as defined by Section 61.003, Education Code. 370-8 (5) "Library" means: 370-9 (A) a public library or regional library system 370-10 as those terms are defined by Section 441.122, Government Code; or 370-11 (B) a library operated by an institution of 370-12 higher education or a school district. 370-13 (6) "Public not-for-profit health care facility" means 370-14 a rural or regional hospital or other entity such as a rural health 370-15 clinic that: 370-16 (A) is supported by local or regional tax 370-17 revenue; or 370-18 (B) is a certified not-for-profit health 370-19 corporation, under federal law. 370-20 (7) "School district" includes an independent school 370-21 district, a common school district, and a rural high school 370-22 district. 370-23 (8) "Telemedicine": 370-24 (A) means medical services delivered by 370-25 telecommunications technologies to rural or underserved public 371-1 not-for-profit health care facilities or primary health care 371-2 facilities in collaboration with an academic health center and an 371-3 associated teaching hospital or tertiary center; and 371-4 (B) includes consultive services, diagnostic 371-5 services, interactive video consultation, teleradiology, 371-6 telepathology, and distance education for working health care 371-7 professionals. (V.A.C.S. Art. 1446c-0, Secs. 3.606(a)(1), (2), 371-8 (3), (4), (5), (7), (8), (9).) 371-9 Sec. 57.043. TELECOMMUNICATIONS INFRASTRUCTURE FUND AND 371-10 ACCOUNTS. (a) The telecommunications infrastructure fund is 371-11 composed of the telecommunications utilities account and the 371-12 commercial mobile service providers account. 371-13 (b) The telecommunications utilities account is financed by 371-14 an annual assessment on each telecommunications utility doing 371-15 business in this state. A telecommunications utility shall pay the 371-16 annual assessment according to the ratio that the annual taxable 371-17 telecommunications receipts reported by that telecommunications 371-18 utility under Chapter 151, Tax Code, bears to the total annual 371-19 taxable telecommunications receipts reported by all 371-20 telecommunications utilities under that chapter. 371-21 (c) The commercial mobile service providers account is 371-22 financed by an annual assessment on each commercial mobile service 371-23 provider doing business in this state. Each commercial mobile 371-24 service provider shall pay the annual assessment according to the 371-25 ratio that the annual taxable telecommunications receipts reported 372-1 by that provider under Chapter 151, Tax Code, bears to the total 372-2 annual taxable telecommunications receipts reported by all 372-3 commercial mobile service providers under that chapter. 372-4 (d) Money in the fund may be appropriated only for a use 372-5 consistent with the purposes of this subchapter. (V.A.C.S. 372-6 Art. 1446c-0, Secs. 3.606(j), (k), (n) (part).) 372-7 Sec. 57.044. TELECOMMUNICATIONS INFRASTRUCTURE FUND BOARD. 372-8 (a) The telecommunications infrastructure fund board consists of: 372-9 (1) three members appointed by the governor; 372-10 (2) three members appointed by the governor from a 372-11 list of individuals provided by the speaker of the house of 372-12 representatives; and 372-13 (3) three members appointed by the lieutenant 372-14 governor. 372-15 (b) The governor shall designate the presiding officer of 372-16 the board. 372-17 (c) The governor and the lieutenant governor, in making 372-18 appointments to the board, and the speaker of the house of 372-19 representatives, in compiling a list of recommended persons, shall 372-20 attempt to select members who are representative of, but not 372-21 limited to: 372-22 (1) urban and rural school districts; 372-23 (2) institutions of higher education; 372-24 (3) libraries; and 372-25 (4) the public. 373-1 (d) A person may not serve on the board if the person is 373-2 required to register as a lobbyist under Chapter 305, Government 373-3 Code, because of the person's activities for compensation on behalf 373-4 of a profession related to the operation of the board. 373-5 (e) Members of the board: 373-6 (1) serve without pay; and 373-7 (2) are entitled to reimbursement for their actual 373-8 expenses incurred in attending meetings of the board or attending 373-9 to other work of the board if approved by the presiding officer. 373-10 (f) Members of the board serve for staggered, six-year 373-11 terms, with three members' terms expiring on August 31 of each 373-12 odd-numbered year. (V.A.C.S. Art. 1446c-0, Secs. 3.606(c) (part), 373-13 (d), (e).) 373-14 Sec. 57.045. POWERS AND DUTIES OF BOARD. (a) The board 373-15 shall administer the fund and the two accounts in the fund. 373-16 (b) The board shall prepare an annual report that: 373-17 (1) details the revenues deposited to the credit of 373-18 the fund, including each account; and 373-19 (2) summarizes the grants and loans made from each 373-20 account. 373-21 (c) Not later than January 15 of each year, the board shall 373-22 submit the report for the preceding year to the governor and to 373-23 each standing committee in the senate and house of representatives 373-24 that has jurisdiction over public or higher education. 373-25 (d) The board may: 374-1 (1) enter into contracts with state agencies or 374-2 private entities necessary to perform the board's duties; 374-3 (2) employ personnel reasonably necessary to perform 374-4 duties delegated by the board; 374-5 (3) appoint one or more committees to assist the board 374-6 in performing the board's duties; and 374-7 (4) accept a gift or grant and use it for the purposes 374-8 of this subchapter. (V.A.C.S. Art. 1446c-0, Secs. 3.606(c) (part), 374-9 (g), (h), (i), (p).) 374-10 Sec. 57.046. USE OF ACCOUNTS. (a) The board shall use 374-11 money in the telecommunications utilities account to award grants 374-12 and loans in accordance with this subchapter to fund: 374-13 (1) purchases of equipment for public schools, 374-14 including computers, printers, computer labs, and video equipment; 374-15 and 374-16 (2) intracampus and intercampus wiring to enable those 374-17 public schools to use the equipment. 374-18 (b) The board shall use money in the commercial mobile 374-19 service providers account for any purpose authorized by this 374-20 subchapter, including: 374-21 (1) equipment purchases; 374-22 (2) wiring; 374-23 (3) material; 374-24 (4) program development; 374-25 (5) training; 375-1 (6) installation costs; and 375-2 (7) a statewide telecommunications network. (V.A.C.S. 375-3 Art. 1446c-0, Sec. 3.606(q).) 375-4 Sec. 57.047. GRANT AND LOAN PROGRAM. (a) The board may 375-5 award a grant to a project or proposal that: 375-6 (1) provides equipment and infrastructure necessary 375-7 for: 375-8 (A) distance learning; 375-9 (B) an information sharing program of a library; 375-10 or 375-11 (C) telemedicine services; 375-12 (2) develops and implements the initial or 375-13 prototypical delivery of a course or other distance learning 375-14 material; 375-15 (3) trains teachers, faculty, librarians, or 375-16 technicians in the use of distance learning or information sharing 375-17 materials and equipment; 375-18 (4) develops a curriculum or instructional material 375-19 specially suited for telecommunications delivery; 375-20 (5) provides electronic information; or 375-21 (6) establishes or carries out an information sharing 375-22 program. 375-23 (b) The board may award a loan to a project or proposal to 375-24 acquire equipment needed for distance learning and telemedicine 375-25 projects. 376-1 (c) In awarding a grant or loan under this subchapter, the 376-2 board shall give priority to a project or proposal that: 376-3 (1) represents collaborative efforts involving more 376-4 than one school, university, or library; 376-5 (2) contributes matching funds from another source; 376-6 (3) shows promise of becoming self-sustaining; 376-7 (4) helps users of information learn new ways to 376-8 acquire and use information through telecommunications; 376-9 (5) extends specific educational information and 376-10 knowledge services to a group not previously served, especially a 376-11 group in a rural or remote area; 376-12 (6) results in more efficient or effective learning 376-13 than through conventional teaching; 376-14 (7) improves the effectiveness and efficiency of 376-15 health care delivery; or 376-16 (8) takes advantage of distance learning opportunities 376-17 in a rural or urban school district with a: 376-18 (A) disproportionate number of at-risk youths; 376-19 or 376-20 (B) high dropout rate. 376-21 (d) In distributing money to public schools, the board 376-22 shall: 376-23 (1) consider the relative property wealth per student 376-24 of the school districts that receive the money; and 376-25 (2) recognize the unique needs of rural communities. 377-1 (e) A grant or loan awarded under this section is subject to 377-2 the limitations prescribed by Section 57.046. (V.A.C.S. 377-3 Art. 1446c-0, Secs. 3.606(r), (s), (t), (v).) 377-4 Sec. 57.048. ASSESSMENTS AND COLLECTIONS. (a) For each 377-5 fiscal year beginning before September 1, 2005, the comptroller 377-6 shall assess and collect an annual total of $75 million from 377-7 telecommunications utilities and an annual total of $75 million 377-8 from commercial mobile service providers. 377-9 (b) The comptroller shall assess and collect the money each 377-10 year without respect to whether the money previously collected and 377-11 deposited in either account has been disbursed or spent. 377-12 (c) The comptroller may require a telecommunications utility 377-13 or commercial mobile service provider to provide any report or 377-14 information necessary to fulfill the comptroller's duties under 377-15 this section. Information provided to the comptroller under this 377-16 section is confidential and exempt from disclosure under Chapter 377-17 552, Government Code. 377-18 (d) Money collected by the comptroller from a 377-19 telecommunications utility under this section shall be deposited to 377-20 the credit of the telecommunications utilities account in the fund. 377-21 (e) Money collected by the comptroller from a commercial 377-22 mobile service provider under this section shall be deposited to 377-23 the credit of the commercial mobile service providers account in 377-24 the fund. (V.A.C.S. Art. 1446c-0, Secs. 3.606(l), (m), (n) 377-25 (part).) 378-1 Sec. 57.049. ISSUANCE OF WARRANTS. From money appropriated 378-2 to the board, the comptroller shall issue warrants the board 378-3 requests in accordance with the purposes of this subchapter, 378-4 including warrants to grantees of the board in amounts the board 378-5 certifies to the comptroller. (V.A.C.S. Art. 1446c-0, Sec. 378-6 3.606(o).) 378-7 Sec. 57.050. ASSISTANCE OF OTHER AGENCIES. The following 378-8 agencies, in consultation with the board, shall adopt policies and 378-9 procedures that are designed to aid the board in achieving the 378-10 purposes of this subchapter: 378-11 (1) the Texas Higher Education Coordinating Board; 378-12 (2) the Texas Education Agency; and 378-13 (3) the Texas State Library and Archives Commission. 378-14 (V.A.C.S. Art. 1446c-0, Sec. 3.606(u).) 378-15 Sec. 57.051. SUNSET PROVISION. The board is subject to 378-16 Chapter 325, Government Code (Texas Sunset Act). Unless continued 378-17 in existence as provided by that chapter, the board is abolished 378-18 and this subchapter expires September 1, 2006. (V.A.C.S. 378-19 Art. 1446c-0, Sec. 3.606(f) (part).) 378-20 (Sections 57.052-57.070 reserved for expansion) 378-21 SUBCHAPTER D. INTERACTIVE MULTIMEDIA COMMUNICATIONS 378-22 Sec. 57.071. DEFINITION. In this subchapter, "interactive 378-23 multimedia communications" means real-time, two-way, interactive 378-24 voice, video, and data communications conducted over networks that 378-25 link geographically dispersed locations. (V.A.C.S. Art. 1446c-0, 379-1 Sec. 3.609(b).) 379-2 Sec. 57.072. RATES FOR INTERACTIVE MULTIMEDIA 379-3 COMMUNICATIONS. (a) The commission shall permit a local exchange 379-4 company that provides an interactive multimedia communications 379-5 service to establish, using sound ratemaking principles, rates 379-6 necessary to recover costs associated with providing the service. 379-7 (b) A local exchange company may not establish a rate under 379-8 Subsection (a) that is less than the local exchange company's long 379-9 run incremental costs of providing the interactive multimedia 379-10 communications service, unless the commission determines it to be 379-11 in the public interest to do so. (V.A.C.S. Art. 1446c-0, Sec. 379-12 3.609(a).) 379-13 CHAPTER 58. INCENTIVE REGULATION 379-14 SUBCHAPTER A. GENERAL PROVISIONS 379-15 Sec. 58.001. POLICY 379-16 Sec. 58.002. DEFINITION 379-17 (Sections 58.003-58.020 reserved for expansion) 379-18 SUBCHAPTER B. ELECTION OF INCENTIVE REGULATION 379-19 Sec. 58.021. ELECTION 379-20 Sec. 58.022. CHAPTER CONTROLS 379-21 Sec. 58.023. SERVICE CLASSIFICATION 379-22 Sec. 58.024. SERVICE RECLASSIFICATION 379-23 Sec. 58.025. COMPLAINT OR HEARING 379-24 Sec. 58.026. CONSUMER COMPLAINTS REGARDING TARIFFS 380-1 Sec. 58.027. CONSUMER COMPLAINTS REGARDING SERVICES; 380-2 ENFORCEMENT OF STANDARDS 380-3 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION 380-4 (Sections 58.029-58.050 reserved for expansion) 380-5 SUBCHAPTER C. BASIC NETWORK SERVICES 380-6 Sec. 58.051. SERVICES INCLUDED 380-7 Sec. 58.052. REGULATION OF SERVICES 380-8 Sec. 58.053. INVESTMENT LIMITATION ON SERVICE STANDARDS 380-9 Sec. 58.054. RATES CAPPED 380-10 Sec. 58.055. RATE ADJUSTMENT BY COMPANY 380-11 Sec. 58.056. RATE ADJUSTMENT FOR CHANGES IN FCC SEPARATIONS 380-12 Sec. 58.057. RATE ADJUSTMENT FOR CERTAIN COMPANIES 380-13 Sec. 58.058. RATE GROUP RECLASSIFICATION 380-14 Sec. 58.059. COMMISSION RATE ADJUSTMENT PROCEDURE 380-15 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION 380-16 Sec. 58.061. EFFECT ON CERTAIN CHARGES 380-17 Sec. 58.062. SWITCHED ACCESS RATES 380-18 (Sections 58.063-58.100 reserved for expansion) 380-19 SUBCHAPTER D. DISCRETIONARY SERVICES 380-20 Sec. 58.101. SERVICE INCLUDED 380-21 Sec. 58.102. MAXIMUM PRICE 380-22 Sec. 58.103. PRICE FOR SERVICE 380-23 Sec. 58.104. USE OF CERTAIN REGULATORY TREATMENT 380-24 (Sections 58.105-58.150 reserved for expansion) 381-1 SUBCHAPTER E. COMPETITIVE SERVICES 381-2 Sec. 58.151. SERVICES INCLUDED 381-3 Sec. 58.152. PRICES 381-4 (Sections 58.153-58.200 reserved for expansion) 381-5 SUBCHAPTER F. GENERAL INFRASTRUCTURE COMMITMENT 381-6 Sec. 58.201. STATEMENT OF STATE GOAL 381-7 Sec. 58.202. POLICY GOALS FOR IMPLEMENTATION 381-8 Sec. 58.203. INFRASTRUCTURE GOALS OF ALL ELECTING COMPANIES 381-9 Sec. 58.204. ADDITIONAL INFRASTRUCTURE COMMITMENT OF CERTAIN 381-10 COMPANIES 381-11 Sec. 58.205. EXTENSION OR WAIVER OF INFRASTRUCTURE 381-12 REQUIREMENTS 381-13 Sec. 58.206. IMPLEMENTATION COSTS; INCREASE IN RATES AND 381-14 UNIVERSAL SERVICE FUNDS 381-15 (Sections 58.207-58.250 reserved for expansion) 381-16 SUBCHAPTER G. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 381-17 Sec. 58.251. INTENT AND GOAL OF SUBCHAPTER 381-18 Sec. 58.252. DEFINITIONS 381-19 Sec. 58.253. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES 381-20 Sec. 58.254. PRIORITIES 381-21 Sec. 58.255. CONTRACTS FOR PRIVATE NETWORK SERVICES 381-22 Sec. 58.256. PREFERRED RATE TREATMENT WARRANTED 381-23 Sec. 58.257. ELECTION OF RATE TREATMENT 381-24 Sec. 58.258. PRIVATE NETWORK SERVICES RATES AND TARIFFS 381-25 Sec. 58.259. TARIFF RATE FOR CERTAIN INTRALATA SERVICE 382-1 Sec. 58.260. POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA 382-2 SERVICE 382-3 Sec. 58.261. BROADBAND DIGITAL SPECIAL ACCESS SERVICE 382-4 Sec. 58.262. EXPANDED INTERCONNECTION 382-5 Sec. 58.263. INTERNET ACCESS 382-6 Sec. 58.264. COMPLAINTS LIMITED 382-7 Sec. 58.265. INTERCONNECTION OF NETWORK SERVICES 382-8 Sec. 58.266. SHARING OR RESALE OF NETWORK SERVICES 382-9 Sec. 58.267. IMPLEMENTATION COSTS; INCREASE IN RATES AND 382-10 UNIVERSAL SERVICE FUNDS 382-11 CHAPTER 58. INCENTIVE REGULATION 382-12 SUBCHAPTER A. GENERAL PROVISIONS 382-13 Sec. 58.001. POLICY. Considering the status of competition 382-14 in the telecommunications industry, it is the policy of this state 382-15 to: 382-16 (1) provide a framework for an orderly transition from 382-17 the traditional regulation of return on invested capital to a fully 382-18 competitive telecommunications marketplace in which all 382-19 telecommunications providers compete on fair terms; 382-20 (2) preserve and enhance universal telecommunications 382-21 service at affordable rates; 382-22 (3) upgrade the telecommunications infrastructure of 382-23 this state; 382-24 (4) promote network interconnectivity; and 382-25 (5) promote diversity in the supply of 383-1 telecommunications services and innovative products and services 383-2 throughout the entire state, including urban and rural areas. 383-3 (V.A.C.S. Art. 1446c-0, Sec. 3.351.) 383-4 Sec. 58.002. DEFINITION. In this chapter, "electing 383-5 company" means an incumbent local exchange company that elects to 383-6 be subject to incentive regulation and to make the corresponding 383-7 infrastructure commitment under this chapter. (V.A.C.S. 383-8 Art. 1446c-0, Sec. 3.352(b)(1) (part).) 383-9 (Sections 58.003-58.020 reserved for expansion) 383-10 SUBCHAPTER B. ELECTION OF INCENTIVE REGULATION 383-11 Sec. 58.021. ELECTION. (a) An incumbent local exchange 383-12 company may elect to be subject to incentive regulation and to make 383-13 the corresponding infrastructure commitment under this chapter by 383-14 notifying the commission in writing of its election. 383-15 (b) The notice must include a statement that the company 383-16 agrees to: 383-17 (1) limit for four years any increase in a rate the 383-18 company charges for basic network services as prescribed by 383-19 Subchapter C; and 383-20 (2) fulfill the infrastructure commitment prescribed 383-21 by Subchapters F and G. (V.A.C.S. Art. 1446c-0, Sec. 3.352(a).) 383-22 Sec. 58.022. CHAPTER CONTROLS. This chapter governs the 383-23 regulation of an electing company's telecommunications services 383-24 regardless of whether the company is a dominant carrier. (V.A.C.S. 383-25 Art. 1446c-0, Sec. 3.352(c).) 384-1 Sec. 58.023. SERVICE CLASSIFICATION. On election, the 384-2 services provided by an electing company are classified into three 384-3 categories: 384-4 (1) basic network services governed by Subchapter C; 384-5 (2) discretionary services governed by Subchapter D; 384-6 and 384-7 (3) competitive services governed by Subchapter E. 384-8 (V.A.C.S. Art. 1446c-0, Sec. 3.352(b)(1).) 384-9 Sec. 58.024. SERVICE RECLASSIFICATION. (a) The commission 384-10 may reclassify a: 384-11 (1) basic network service as a discretionary or 384-12 competitive service; or 384-13 (2) discretionary service as a competitive service. 384-14 (b) The commission shall establish criteria for determining 384-15 whether a service should be reclassified. The criteria must 384-16 include consideration of the: 384-17 (1) availability of the service from other providers; 384-18 (2) proportion of the market that receives the 384-19 service; 384-20 (3) effect of the reclassification on service 384-21 subscribers; and 384-22 (4) nature of the service. 384-23 (c) The commission may not reclassify a service until each 384-24 competitive safeguard prescribed by Subchapters B-G, Chapter 60, is 384-25 fully implemented. (V.A.C.S. Art. 1446c-0, Secs. 3.352(b)(2), 385-1 3.355(c), 3.356(b), 3.357.) 385-2 Sec. 58.025. COMPLAINT OR HEARING. (a) An electing company 385-3 is not, under any circumstances, subject to a complaint, hearing, 385-4 or determination regarding the reasonableness of the company's: 385-5 (1) rates; 385-6 (2) overall revenues; 385-7 (3) return on invested capital; or 385-8 (4) net income. 385-9 (b) This section does not prohibit a complaint, hearing, or 385-10 determination on an electing company's implementation and 385-11 enforcement of a competitive safeguard required by Chapter 60. 385-12 (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 385-13 Sec. 58.026. CONSUMER COMPLAINTS REGARDING TARIFFS. 385-14 (a) This chapter does not restrict: 385-15 (1) a consumer's right to complain to the commission 385-16 about the application of an ambiguous tariff; or 385-17 (2) the commission's right to determine: 385-18 (A) the proper application of that tariff; or 385-19 (B) the proper rate if that tariff does not 385-20 apply. 385-21 (b) This section does not permit the commission to: 385-22 (1) lower a tariff rate except as specifically 385-23 provided by this title; 385-24 (2) change the commission's interpretation of a 385-25 tariff; or 386-1 (3) extend the application of a tariff to a new class 386-2 of customers. (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 386-3 Sec. 58.027. CONSUMER COMPLAINTS REGARDING SERVICES; 386-4 ENFORCEMENT OF STANDARDS. This chapter does not restrict: 386-5 (1) a consumer's right to complain to the commission 386-6 about quality of service; or 386-7 (2) the commission's right to enforce a quality of 386-8 service standard. (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 386-9 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION. 386-10 (a) Not later than January 1, 2000, the commission shall begin a 386-11 review and evaluation of each company that elects under this 386-12 chapter or Chapter 59. 386-13 (b) The review must include an evaluation of the effects of 386-14 the election, including: 386-15 (1) consumer benefits; 386-16 (2) impact of competition; 386-17 (3) infrastructure investments; and 386-18 (4) quality of service. 386-19 (c) The commission shall file a report with the legislature 386-20 not later than January 1, 2001. The report must include the 386-21 commission's recommendations as to whether the incentive regulation 386-22 provided by this chapter and Chapter 59 should be extended, 386-23 modified, eliminated, or replaced with another form of regulation. 386-24 (d) This section expires September 1, 2001. (V.A.C.S. 386-25 Art. 1446c-0, Sec. 3.356(d) (part).) 387-1 (Sections 58.029-58.050 reserved for expansion) 387-2 SUBCHAPTER C. BASIC NETWORK SERVICES 387-3 Sec. 58.051. SERVICES INCLUDED. Unless reclassified under 387-4 Section 58.024, the following services are basic network services: 387-5 (1) flat rate residential and business local exchange 387-6 telephone service, including primary directory listings and the 387-7 receipt of a directory and any applicable mileage or zone charges; 387-8 (2) tone dialing service; 387-9 (3) lifeline and tel-assistance service; 387-10 (4) service connection for basic services; 387-11 (5) direct inward dialing service for basic services; 387-12 (6) private pay telephone access service; 387-13 (7) call trap and trace service; 387-14 (8) access to 911 service provided by a local 387-15 authority and access to dual party relay service; 387-16 (9) switched access service; 387-17 (10) interconnection to competitive providers; 387-18 (11) mandatory extended area service arrangements; 387-19 (12) mandatory extended metropolitan service or other 387-20 mandatory toll-free calling arrangements; 387-21 (13) interconnection for commercial mobile service 387-22 providers; 387-23 (14) directory assistance; and 387-24 (15) "1-plus" intraLATA message toll service. 387-25 (V.A.C.S. Art. 1446c-0, Sec. 3.353(a).) 388-1 Sec. 58.052. REGULATION OF SERVICES. (a) Except as 388-2 provided by Subchapter E, Chapter 52, basic network services of an 388-3 electing company are regulated: 388-4 (1) in accordance with this chapter; and 388-5 (2) to the extent not inconsistent with this chapter, 388-6 in accordance with: 388-7 (A) Subtitle A; 388-8 (B) Chapters 51, 54, 60, 62, and 63; 388-9 (C) Chapter 52, except for Subchapter F; 388-10 (D) Subchapters C, D, and E, Chapter 53; 388-11 (E) Chapter 55, except for: 388-12 (i) Subchapters F and G; and 388-13 (ii) Sections 55.001, 55.002, 55.003, and 388-14 55.004; 388-15 (F) Sections 53.001, 53.003, 53.004, 53.006, 388-16 53.065, 55.005, 55.006, 55.009, and 55.010; and 388-17 (G) commission rules and procedures. 388-18 (b) The commission must approve a change in the terms of the 388-19 tariff offering of a basic network service. (V.A.C.S. 388-20 Art. 1446c-0, Sec. 3.353(d).) 388-21 Sec. 58.053. INVESTMENT LIMITATION ON SERVICE STANDARDS. 388-22 (a) The commission may not raise a service standard applicable to 388-23 the provision of local exchange telephone service by an electing 388-24 company if the increased investment required to comply with the 388-25 raised standard in any year exceeds 10 percent of the company's 389-1 average annual intrastate additions in capital investment for the 389-2 most recent five-year period. 389-3 (b) In computing the average under Subsection (a), the 389-4 company shall exclude: 389-5 (1) extraordinary investments made during the 389-6 five-year period; and 389-7 (2) investments required by Section 58.203. (V.A.C.S. 389-8 Art. 1446c-0, Secs. 3.353(b) (part), 3.358(b) (part).) 389-9 Sec. 58.054. RATES CAPPED. (a) As a condition of election 389-10 under this chapter, an electing company shall commit to not 389-11 increasing a rate for a basic network service on or before the 389-12 fourth anniversary of its election date. 389-13 (b) The rates an electing company may charge on or before 389-14 that fourth anniversary are the rates charged by the company on 389-15 June 1, 1995, without regard to a proceeding pending under: 389-16 (1) Section 15.001; 389-17 (2) Subchapter D, Chapter 53; or 389-18 (3) Subchapter G, Chapter 2001, Government Code. 389-19 (V.A.C.S. Art. 1446c-0, Secs. 3.352(a) (part), 3.353(e) (part).) 389-20 Sec. 58.055. RATE ADJUSTMENT BY COMPANY. (a) An electing 389-21 company may increase a rate for a basic network service during the 389-22 four-year period prescribed by Section 58.054 only: 389-23 (1) with commission approval that the proposed change 389-24 is included in Section 58.056, 58.057, or 58.058; and 389-25 (2) as provided by Sections 58.056, 58.057, 58.058, 390-1 and 58.059. 390-2 (b) Notwithstanding Subchapter F, Chapter 60, an electing 390-3 company may, on its own initiative, decrease a rate for a basic 390-4 network service during the four-year period. 390-5 (c) The company may decrease the rate for switched access 390-6 service to an amount above the service's long run incremental cost. 390-7 (d) The company may decrease the rate for a basic local 390-8 telecommunications service other than switched access to an amount 390-9 above the service's appropriate cost. If the company has been 390-10 required to perform or has elected to perform a long run 390-11 incremental cost study, the appropriate cost for the service is the 390-12 service's long run incremental cost. (V.A.C.S. Art. 1446c-0, Secs. 390-13 3.353(b) (part), (c)(1).) 390-14 Sec. 58.056. RATE ADJUSTMENT FOR CHANGES IN FCC SEPARATIONS. 390-15 The commission, on motion of the electing company or on its own 390-16 motion, shall proportionally adjust rates for services to reflect 390-17 changes in Federal Communications Commission separations that 390-18 affect intrastate net income by at least 10 percent. (V.A.C.S. 390-19 Art. 1446c-0, Sec. 3.353(c)(2).) 390-20 Sec. 58.057. RATE ADJUSTMENT FOR CERTAIN COMPANIES. (a) An 390-21 electing company, after the 42nd month after the date the company 390-22 elects incentive regulation under this chapter, may file an 390-23 application for a commission review of the company's need for 390-24 changes in the rates of its services if the company: 390-25 (1) has fewer than five million access lines in this 391-1 state; and 391-2 (2) is complying with: 391-3 (A) the company's infrastructure commitment; 391-4 (B) each requirement relating to quality of 391-5 service; and 391-6 (C) each commission rule adopted under Chapter 391-7 60. 391-8 (b) The company's application may request that the 391-9 commission adjust rates, implement new pricing plans, restructure 391-10 rates, or rebalance revenues between services to recognize changed 391-11 market conditions and the effects of competitive entry. 391-12 (c) The commission may use an index and a productivity 391-13 offset in determining the requested changes. 391-14 (d) The commission may not: 391-15 (1) order an increase in the rate for residential 391-16 local exchange telephone service that would cause the rate to 391-17 increase by more than the United States Consumer Price Index in any 391-18 12-month period; or 391-19 (2) set the monthly rate for residential local 391-20 exchange telephone service in an amount that exceeds the nationwide 391-21 average rates for similar local exchange telephone services. 391-22 (V.A.C.S. Art. 1446c-0, Sec. 3.353(c)(3).) 391-23 Sec. 58.058. RATE GROUP RECLASSIFICATION. Notwithstanding 391-24 Subchapter B, the commission, on request of the electing company, 391-25 shall allow a rate group reclassification that results from access 392-1 line growth. (V.A.C.S. Art. 1446c-0, Sec. 3.353(c)(4).) 392-2 Sec. 58.059. COMMISSION RATE ADJUSTMENT PROCEDURE. (a) In 392-3 accordance with this section, an electing company may request and 392-4 the commission may authorize a rate adjustment under Section 392-5 58.056, 58.057, or 58.058. 392-6 (b) The electing company must provide to the commission 392-7 notice of its intent to adjust rates. The notice must be 392-8 accompanied by sufficient documentary evidence to demonstrate that 392-9 the rate adjustment is authorized under Section 58.056, 58.057, or 392-10 58.058. The commission by rule or order shall prescribe the 392-11 documentation required under this subsection. 392-12 (c) The electing company must also provide notice to its 392-13 customers after providing notice to the commission. The notice to 392-14 the customers must: 392-15 (1) within a reasonable period after notice to the 392-16 commission, be published once in a newspaper of general circulation 392-17 in the affected service area; 392-18 (2) be included in or printed on each affected 392-19 consumer's bill in the first billing that occurs after notice is 392-20 filed with the commission; 392-21 (3) have a title that includes the name of the company 392-22 and the words "NOTICE OF POSSIBLE RATE CHANGE"; and 392-23 (4) include: 392-24 (A) a statement that the consumer's rate may 392-25 change; 393-1 (B) an estimate of the amount of the annual 393-2 change for the typical residential, business, or access consumer if 393-3 the commission approves the rate change; 393-4 (C) a statement that a consumer who wants to 393-5 comment on the rate change or who wants additional information 393-6 regarding the rate change may call or write the commission and that 393-7 the information will be provided without cost to the consumer and 393-8 at the expense of the electing company; and 393-9 (D) the commission's telephone number and 393-10 address. 393-11 (d) The estimate of the amount of the annual change required 393-12 by Subsection (c)(4)(B) must be printed in a type style and size 393-13 that is distinct from and larger than the type style and size of 393-14 the body of the notice. 393-15 (e) The commission shall review the proposed rates to 393-16 determine if the rate adjustment is authorized under Section 393-17 58.056, 58.057, or 58.058. 393-18 (f) The rate adjustment takes effect on the 90th day after 393-19 the date the electing company completes the notice required by this 393-20 section unless the commission suspends the effective date under 393-21 Subsection (g). 393-22 (g) At any time before a rate adjustment is scheduled to 393-23 take effect, the commission, on its own motion or on complaint by 393-24 an affected party, may suspend the effective date of the rate 393-25 adjustment and conduct a hearing to review the proposed adjustment. 394-1 After the hearing, the commission may issue an order approving the 394-2 adjustment, or if it finds that the adjustment is not authorized 394-3 under Section 58.056, 58.057, or 58.058, issue an order modifying 394-4 or rejecting the adjustment. An order modifying or rejecting a 394-5 rate adjustment must specify: 394-6 (1) each reason why the proposed adjustment was not 394-7 authorized by Section 58.056, 58.057, or 58.058; and 394-8 (2) how the proposed adjustment may be changed so that 394-9 it is authorized. 394-10 (h) Except as provided by this section, a request for a 394-11 rate restructure must comply with the notice and hearing 394-12 requirements prescribed by Sections 53.101-53.106. 394-13 (i) An electing company that has not more than five percent 394-14 of the total access lines in this state may adopt as the cost for 394-15 a service the cost for the same or substantially similar service 394-16 offered by a larger incumbent local exchange company. The electing 394-17 company may adopt the larger company's cost only if the cost was 394-18 determined based on a long run incremental cost study. An electing 394-19 company that adopts a cost under this subsection is not required to 394-20 present its own long run incremental cost study to support the 394-21 adopted cost. (V.A.C.S. Art. 1446c-0, Sec. 3.354.) 394-22 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After 394-23 the four-year period prescribed by Section 58.054 expires, an 394-24 electing company may increase a rate for a basic network service 394-25 only: 395-1 (1) with commission approval subject to this title; 395-2 and 395-3 (2) to the extent consistent with achieving universal 395-4 affordable service. (V.A.C.S. Art. 1446c-0, Sec. 3.353(e) (part).) 395-5 Sec. 58.061. EFFECT ON CERTAIN CHARGES. This subchapter 395-6 does not affect a charge permitted under: 395-7 (1) Section 55.024; 395-8 (2) Subchapter C, Chapter 55; or 395-9 (3) Subchapter B, Chapter 56. (V.A.C.S. Art. 1446c-0, 395-10 Sec. 3.353(b) (part).) 395-11 Sec. 58.062. SWITCHED ACCESS RATES. Notwithstanding any 395-12 other provision of this title, the commission may not reduce an 395-13 electing company's rates for switched access services before the 395-14 expiration of the cap on basic network services. (V.A.C.S. 395-15 Art. 1446c-0, Sec. 3.352(d) (part).) 395-16 (Sections 58.063-58.100 reserved for expansion) 395-17 SUBCHAPTER D. DISCRETIONARY SERVICES 395-18 Sec. 58.101. SERVICE INCLUDED. Unless reclassified under 395-19 Section 58.024, the following services are discretionary services: 395-20 (1) "1-plus" intraLATA message toll services, if 395-21 intraLATA equal access is available; 395-22 (2) 0+ and 0- operator services; 395-23 (3) call waiting, call forwarding, and custom calling 395-24 features that are not classified as a competitive service under 395-25 Section 58.151; 396-1 (4) call return, caller identification, and call 396-2 control options that are not classified as a competitive service 396-3 under Section 58.151; 396-4 (5) central office based PBX-type services; 396-5 (6) billing and collection services; 396-6 (7) integrated services digital network (ISDN) 396-7 services; 396-8 (8) new services; and 396-9 (9) each service or function: 396-10 (A) for which pricing flexibility has not been 396-11 granted in a particular geographic market; and 396-12 (B) that is not classified as a basic network 396-13 service under Section 58.051 or a competitive service under Section 396-14 58.151. (V.A.C.S. Art. 1446c-0, Secs. 3.355(a), (b).) 396-15 Sec. 58.102. MAXIMUM PRICE. (a) The commission shall set 396-16 the maximum price an electing company may charge for a 396-17 discretionary service. 396-18 (b) The initial maximum price for a service is the price in 396-19 effect on September 1, 1995, without regard to a proceeding pending 396-20 under: 396-21 (1) Section 15.001; 396-22 (2) Subchapter D, Chapter 53; or 396-23 (3) Subchapter G, Chapter 2001, Government Code. 396-24 (c) The commission may not increase the initial maximum 396-25 price until after the proceedings required by Chapter 60. 397-1 (d) After the proceedings required by Chapter 60, the 397-2 commission, on its own motion or on application by the electing 397-3 company, may change the initial maximum price. However, the 397-4 commission may not increase the price more than 10 percent 397-5 annually. (V.A.C.S. Art. 1446c-0, Sec. 3.355(d) (part).) 397-6 Sec. 58.103. PRICE FOR SERVICE. (a) An electing company 397-7 may set the price for a discretionary service at any price that is: 397-8 (1) above the service's long run incremental cost; and 397-9 (2) at or below the service's maximum price set under 397-10 Section 58.102. 397-11 (b) The electing company may change the price within the 397-12 limits prescribed by Subsection (a). A price change may include 397-13 the use of pricing flexibility. 397-14 (c) The electing company shall notify the commission of each 397-15 change. (V.A.C.S. Art. 1446c-0, Sec. 3.355(d) (part).) 397-16 Sec. 58.104. USE OF CERTAIN REGULATORY TREATMENT. The 397-17 classification of a service as a discretionary service does not 397-18 preclude an electing company from using a regulatory treatment 397-19 authorized by or under Subchapters A-D, Chapter 52. (V.A.C.S. 397-20 Art. 1446c-0, Sec. 3.355(d) (part).) 397-21 (Sections 58.105-58.150 reserved for expansion) 397-22 SUBCHAPTER E. COMPETITIVE SERVICES 397-23 Sec. 58.151. SERVICES INCLUDED. The following services are 397-24 classified as competitive services: 397-25 (1) services described in the WATS tariff as the 398-1 tariff existed on January 1, 1995; 398-2 (2) 800 and foreign exchange services; 398-3 (3) private line service; 398-4 (4) special access service; 398-5 (5) services from public pay telephones; 398-6 (6) paging services and mobile services (IMTS); 398-7 (7) 911 premises equipment; 398-8 (8) speed dialing; and 398-9 (9) three-way calling. (V.A.C.S. Art. 1446c-0, Sec. 398-10 3.356(a) (part).) 398-11 Sec. 58.152. PRICES. (a) An electing company may set the 398-12 price for a competitive service at any level above the service's 398-13 long run incremental cost in accordance with the imputation rules 398-14 prescribed by or under Subchapter D, Chapter 60. 398-15 (b) Subject to the requirements of Sections 60.001 and 398-16 60.002, the company may use pricing flexibility for a competitive 398-17 service. 398-18 (c) Notwithstanding Subsection (a) or (b), the company may 398-19 not increase the price of a competitive service in a geographic 398-20 area in which that service or a functionally equivalent service is 398-21 not readily available from another provider. (V.A.C.S. 398-22 Art. 1446c-0, Secs. 3.356(a) (part), (c) (part).) 398-23 (Sections 58.153-58.200 reserved for expansion) 398-24 SUBCHAPTER F. GENERAL INFRASTRUCTURE COMMITMENT 398-25 Sec. 58.201. STATEMENT OF STATE GOAL. (a) It is the goal 399-1 of this state to facilitate and promote the deployment of an 399-2 advanced telecommunications infrastructure to spur economic 399-3 development throughout this state. This state should be among the 399-4 leaders in achieving this objective. 399-5 (b) The primary means of achieving this goal is through 399-6 encouraging private investment in this state's telecommunications 399-7 infrastructure by creating incentives for that investment and 399-8 promoting the development of competition. 399-9 (c) The best way to bring the benefits of an advanced 399-10 telecommunications network infrastructure to communities in this 399-11 state is through innovation and competition among all the state's 399-12 communications providers. Competition will provide residents of 399-13 this state with a choice of telecommunications providers and will 399-14 drive technology deployment, innovation, service quality, and 399-15 cost-based prices as competing firms try to satisfy customer needs. 399-16 (V.A.C.S. Art. 1446c-0, Sec. 3.358(a).) 399-17 Sec. 58.202. POLICY GOALS FOR IMPLEMENTATION. In 399-18 implementing this subchapter, the commission shall consider this 399-19 state's policy goals to: 399-20 (1) ensure the availability of the widest possible 399-21 range of competitive choices in the provision of telecommunications 399-22 services and facilities; 399-23 (2) foster competition and rely on market forces where 399-24 competition exists to determine the price, terms, and availability 399-25 of service; 400-1 (3) ensure the universal availability of basic local 400-2 telecommunications services at reasonable rates; 400-3 (4) encourage the continued development and deployment 400-4 of advanced and reliable capabilities and services in 400-5 telecommunications networks; 400-6 (5) ensure interconnection and interoperability, based 400-7 on uniform technical standards, among telecommunications carriers; 400-8 (6) eliminate unnecessary administrative procedures 400-9 that impose regulatory barriers to competition and ensure that 400-10 competitive entry is fostered on an economically rational basis; 400-11 (7) ensure consumer protection and protection against 400-12 anticompetitive conduct; 400-13 (8) regulate a provider of services only to the extent 400-14 the provider has market power to control the price of services to 400-15 customers; 400-16 (9) encourage cost-based pricing of telecommunications 400-17 services so that consumers pay a fair price for services they use; 400-18 and 400-19 (10) subject to Subchapter C, develop appropriate 400-20 quality of service standards for local exchange companies so as to 400-21 place this state among the leaders in deployment of an advanced 400-22 telecommunications infrastructure. (V.A.C.S. Art. 1446c-0, 400-23 Sec. 3.358(b) (part).) 400-24 Sec. 58.203. INFRASTRUCTURE GOALS OF ALL ELECTING COMPANIES. 400-25 (a) Recognizing that it will take time for competition to develop 401-1 in the local exchange market, the commission shall, in the absence 401-2 of competition, ensure that each electing company achieves the 401-3 infrastructure goals described by this section. 401-4 (b) Not later than December 31, 1996, an electing company 401-5 shall make available to each customer in the company's territory 401-6 access to end-to-end digital connectivity. 401-7 (c) Each new central office switch installed for an electing 401-8 company after September 1, 1995, must be digital or technically 401-9 equal to or superior to digital. In addition, a switch installed 401-10 after September 1, 1997, must, at a minimum, be capable of 401-11 providing integrated services digital network (ISDN) services in a 401-12 manner consistent with generally accepted national standards. 401-13 (d) Not later than January 1, 2000, 50 percent of the local 401-14 exchange access lines in each electing company's territory must be 401-15 served by a digital central office switch. 401-16 (e) Not later than January 1, 2000, an electing company's 401-17 public switched network backbone interoffice facilities must employ 401-18 broadband facilities capable of 45 or more megabits a second. The 401-19 company may employ facilities at a lower bandwidth if technology 401-20 permits the delivery of video signal at the lower bandwidth at a 401-21 quality level comparable to a television broadcast signal. The 401-22 requirements of this subsection do not apply to local loop 401-23 facilities. (V.A.C.S. Art. 1446c-0, Sec. 3.358(c).) 401-24 Sec. 58.204. ADDITIONAL INFRASTRUCTURE COMMITMENT OF CERTAIN 401-25 COMPANIES. (a) Not later than December 31, 1998, an electing 402-1 company serving more than one million but fewer than five million 402-2 access lines shall provide digital switching central offices in all 402-3 exchanges. 402-4 (b) Not later than January 1, 2000, an electing company 402-5 serving more than five million access lines shall: 402-6 (1) install Common Channel Signaling 7 capability in 402-7 each central office; and 402-8 (2) connect all of the company's serving central 402-9 offices to their respective LATA tandem central offices with 402-10 optical fiber or equivalent facilities. (V.A.C.S. Art. 1446c-0, 402-11 Sec. 3.358(d).) 402-12 Sec. 58.205. EXTENSION OR WAIVER OF INFRASTRUCTURE 402-13 REQUIREMENTS. (a) For an electing company that serves more than 402-14 one million but fewer than two million access lines, the commission 402-15 may temporarily extend a deadline prescribed by Section 58.203 if 402-16 the company demonstrates that the extension is in the public 402-17 interest. 402-18 (b) For an electing company that serves fewer than one 402-19 million access lines, the commission may waive a requirement 402-20 prescribed by Section 58.203 if the company demonstrates that the 402-21 investment is not viable economically. 402-22 (c) Before granting a waiver under Subsection (b), the 402-23 commission must consider the public benefits that would result from 402-24 compliance with the requirement. (V.A.C.S. Art. 1446c-0, Sec. 402-25 3.358(e).) 403-1 Sec. 58.206. IMPLEMENTATION COSTS; INCREASE IN RATES AND 403-2 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 403-3 of implementing Section 58.203 or 58.204 in determining whether an 403-4 electing company is entitled to: 403-5 (1) a rate increase under this chapter; or 403-6 (2) increased universal service funds under Subchapter 403-7 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.358(f).) 403-8 (Sections 58.207-58.250 reserved for expansion) 403-9 SUBCHAPTER G. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 403-10 Sec. 58.251. INTENT AND GOAL OF SUBCHAPTER. (a) It is the 403-11 intent of this subchapter to establish a telecommunications 403-12 infrastructure that interconnects the public entities described in 403-13 this subchapter. The interconnection of these entities requires 403-14 ubiquitous, broadband, digital services for voice, video, and data 403-15 in the local serving area. The ubiquitous nature of these 403-16 connections must allow individual networks of these entities to 403-17 interconnect and interoperate across the broadband digital service 403-18 infrastructure. The delivery of these advanced telecommunications 403-19 services requires collaborations and partnerships of public, 403-20 private, and commercial telecommunications service network 403-21 providers. 403-22 (b) The goal of this subchapter is to interconnect and 403-23 aggregate the connections to every entity described in this 403-24 subchapter, in the local serving area. It is further intended that 403-25 the infrastructure implemented under this subchapter connect each 404-1 entity that requests a service offered under this subchapter. 404-2 (V.A.C.S. Art. 1446c-0, Sec. 3.359(a).) 404-3 Sec. 58.252. DEFINITIONS. In this subchapter: 404-4 (1) "Educational institution" has the meaning assigned 404-5 by Section 57.021. 404-6 (2) "Library" has the meaning assigned by Section 404-7 57.042. 404-8 (3) "Private network services" means: 404-9 (A) broadband digital service that is capable of 404-10 providing transmission speeds of 45 megabits a second or greater 404-11 for customer applications; and 404-12 (B) other customized or packaged network 404-13 services. 404-14 (4) "Telemedicine center" means a facility that is 404-15 equipped to transmit, by video, data, or voice service, medical 404-16 information for the diagnosis or treatment of illness or disease 404-17 and that is: 404-18 (A) owned or operated by a public or 404-19 not-for-profit hospital, including an academic health center; or 404-20 (B) owned by one or more state-licensed health 404-21 care practitioners and operated on a nonprofit basis. (V.A.C.S. 404-22 Art. 1446c-0, Secs. 3.359(b)(1)(A) (part), (e).) 404-23 Sec. 58.253. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES. 404-24 (a) On customer request, an electing company shall provide private 404-25 network services to: 405-1 (1) an educational institution; 405-2 (2) a library; 405-3 (3) a nonprofit telemedicine center; 405-4 (4) a public or not-for-profit hospital; 405-5 (5) a project funded by the telecommunications 405-6 infrastructure fund under Subchapter C, Chapter 57; or 405-7 (6) a legally constituted consortium or group of 405-8 entities listed in this subsection. 405-9 (b) Except as provided by Section 58.266, the electing 405-10 company shall provide the private network services for the private 405-11 and sole use of the receiving entity. (V.A.C.S. Art. 1446c-0, Sec. 405-12 3.359(b)(1)(A) (part).) 405-13 Sec. 58.254. PRIORITIES. An electing company shall give 405-14 priority to serving: 405-15 (1) rural areas; 405-16 (2) areas designated as critically underserved either 405-17 medically or educationally; and 405-18 (3) educational institutions with high percentages of 405-19 economically disadvantaged students. (V.A.C.S. Art. 1446c-0, Sec. 405-20 3.359(b)(6).) 405-21 Sec. 58.255. CONTRACTS FOR PRIVATE NETWORK SERVICES. 405-22 (a) An electing company shall provide a private network service 405-23 under a customer specific contract. 405-24 (b) An electing company shall offer private network service 405-25 contracts under this subchapter at 105 percent of the long run 406-1 incremental cost of providing the private network service, 406-2 including installation. 406-3 (c) Each contract shall be filed with the commission. 406-4 Commission approval of a contract is not required. 406-5 (d) Subtitle D, Title 10, Government Code, does not apply to 406-6 a contract entered into under this subchapter. (V.A.C.S. 406-7 Art. 1446c-0, Secs. 3.359(b)(1)(B), (b)(1)(C), (f).) 406-8 Sec. 58.256. PREFERRED RATE TREATMENT WARRANTED. An entity 406-9 described by Section 58.253(a) warrants preferred rate treatment. 406-10 However, a rate charged for a service must cover the service's long 406-11 run incremental cost. (V.A.C.S. Art. 1446c-0, Sec. 406-12 3.359(b)(1)(H).) 406-13 Sec. 58.257. ELECTION OF RATE TREATMENT. An educational 406-14 institution or a library may elect the rate treatment provided by 406-15 this subchapter or the discount provided by Subchapter B, Chapter 406-16 57. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(3).) 406-17 Sec. 58.258. PRIVATE NETWORK SERVICES RATES AND TARIFFS. 406-18 (a) Notwithstanding the pricing flexibility authorized by this 406-19 subtitle, an electing company's rates for private network services 406-20 may not be increased on or before the sixth anniversary of the 406-21 company's date of election. However, an electing company may 406-22 increase a rate in accordance with the provisions of a customer 406-23 specific contract. 406-24 (b) An electing company may not charge an entity described 406-25 by Section 58.253(a) a special construction or installation charge. 407-1 (V.A.C.S. Art. 1446c-0, Secs. 3.359(b)(2), (4).) 407-2 Sec. 58.259. TARIFF RATE FOR CERTAIN INTRALATA SERVICE. 407-3 (a) An electing company shall file a flat monthly tariff rate for 407-4 point-to-point intraLATA 1.544 megabits a second service for the 407-5 entities described by Section 58.253(a). 407-6 (b) The tariff rate may not be: 407-7 (1) distance sensitive; or 407-8 (2) higher than 105 percent of the service's statewide 407-9 average long run incremental cost, including installation. 407-10 (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(D).) 407-11 Sec. 58.260. POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA 407-12 SERVICE. (a) On request of an entity described by Section 407-13 58.253(a), an electing company shall provide to the entity 407-14 point-to-point 45 megabits a second intraLATA services. 407-15 (b) The service must be provided under a customer specific 407-16 contract except that any interoffice portion of the service must be 407-17 recovered on a statewide average basis that is not distance 407-18 sensitive. 407-19 (c) The rate for the service may not be higher than 105 407-20 percent of the service's long run incremental cost, including 407-21 installation. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(E).) 407-22 Sec. 58.261. BROADBAND DIGITAL SPECIAL ACCESS SERVICE. 407-23 (a) An electing company shall provide to an entity described by 407-24 Section 58.253(a) broadband digital special access service to 407-25 interexchange carriers. 408-1 (b) The rate for the service may not be higher than 105 408-2 percent of the service's long run incremental cost, including 408-3 installation. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(F).) 408-4 Sec. 58.262. EXPANDED INTERCONNECTION. (a) On request of 408-5 an entity described by Section 58.253(a), an electing company shall 408-6 provide to the entity expanded interconnection (virtual 408-7 colocation). 408-8 (b) The company shall provide expanded interconnection: 408-9 (1) in accordance with commission rules adopted under 408-10 Subchapter H, Chapter 60; and 408-11 (2) at 105 percent of long run incremental cost, 408-12 including installation. 408-13 (c) An entity described by Section 58.253(a) is not required 408-14 to qualify for expanded interconnection if expanded interconnection 408-15 is ordered by the commission. (V.A.C.S. Art. 1446c-0, 408-16 Sec. 3.359(b)(1)(G).) 408-17 Sec. 58.263. INTERNET ACCESS. (a) This section applies 408-18 only to an educational institution or library in an exchange of an 408-19 electing company serving more than five million access lines in 408-20 which toll-free access to the Internet is not available. 408-21 (b) On request of the educational institution or library, 408-22 the electing company shall make available a toll-free connection or 408-23 toll-free dialing arrangement that the institution or library may 408-24 use to obtain access to the Internet in an exchange in which 408-25 toll-free access to the Internet is available. 409-1 (c) The electing company shall provide the connection or 409-2 dialing arrangement at no charge to the educational institution or 409-3 library until Internet access becomes available in the exchange of 409-4 the requesting educational institution or library. 409-5 (d) The electing company is not required to arrange for 409-6 Internet access or to pay Internet charges for the requesting 409-7 educational institution or library. (V.A.C.S. Art. 1446c-0, Sec. 409-8 3.359(b)(5).) 409-9 Sec. 58.264. COMPLAINTS LIMITED. (a) Notwithstanding any 409-10 other provision of this title, an electing company is subject to a 409-11 complaint under this subchapter only by an entity described by 409-12 Section 58.253(a). 409-13 (b) An entity may only complain that the company provided a 409-14 private network service under this subchapter preferentially to a 409-15 similarly situated customer. (V.A.C.S. Art. 1446c-0, Sec. 409-16 3.359(b)(1)(I).) 409-17 Sec. 58.265. INTERCONNECTION OF NETWORK SERVICES. The 409-18 private network services provided under this subchapter may be 409-19 interconnected with other similar networks for distance learning, 409-20 telemedicine, and information-sharing purposes. (V.A.C.S. 409-21 Art. 1446c-0, Sec. 3.359(c).) 409-22 Sec. 58.266. SHARING OR RESALE OF NETWORK SERVICES. (a) A 409-23 private network service may be used by and shared among the 409-24 entities described by Section 58.253(a) but may not be otherwise 409-25 shared or resold to other customers. 410-1 (b) A service provided under this subchapter may not be 410-2 required to be resold to another customer at a rate provided by 410-3 this subchapter. 410-4 (c) This section does not prohibit an otherwise permitted 410-5 resale of another service that an electing company may offer 410-6 through the use of the same facilities used to provide a private 410-7 network service offered under this subchapter. (V.A.C.S. 410-8 Art. 1446c-0, Sec. 3.359(d).) 410-9 Sec. 58.267. IMPLEMENTATION COSTS; INCREASE IN RATES AND 410-10 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 410-11 of implementing this subchapter in determining whether an electing 410-12 company is entitled to: 410-13 (1) a rate increase under this chapter; or 410-14 (2) increased universal service funds under Subchapter 410-15 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.359(g).) 410-16 CHAPTER 59. INFRASTRUCTURE PLAN 410-17 SUBCHAPTER A. GENERAL PROVISIONS 410-18 Sec. 59.001. POLICY 410-19 Sec. 59.002. DEFINITIONS 410-20 (Sections 59.003-59.020 reserved for expansion) 410-21 SUBCHAPTER B. INFRASTRUCTURE INCENTIVES 410-22 Sec. 59.021. ELECTION 410-23 Sec. 59.022. WITHDRAWAL OF ELECTION 410-24 Sec. 59.023. ELECTION UNDER CHAPTER 58 410-25 Sec. 59.024. RATE CHANGES 411-1 Sec. 59.025. SWITCHED ACCESS RATES 411-2 Sec. 59.026. COMPLAINT OR HEARING 411-3 Sec. 59.027. CONSUMER COMPLAINTS REGARDING TARIFFS 411-4 Sec. 59.028. CONSUMER COMPLAINTS REGARDING SERVICES; ENFORCEMENT 411-5 OF STANDARDS 411-6 Sec. 59.029. INVESTMENT LIMITATION ON SERVICE STANDARDS 411-7 (Sections 59.030-59.050 reserved for expansion) 411-8 SUBCHAPTER C. INFRASTRUCTURE COMMITMENT AND GOALS 411-9 Sec. 59.051. INFRASTRUCTURE COMMITMENT 411-10 Sec. 59.052. INFRASTRUCTURE GOALS 411-11 Sec. 59.053. WAIVER OF INFRASTRUCTURE REQUIREMENTS 411-12 Sec. 59.054. PROGRESS REPORT 411-13 Sec. 59.055. IMPLEMENTATION COSTS; INCREASE IN RATES AND 411-14 UNIVERSAL SERVICE FUNDS 411-15 (Sections 59.056-59.070 reserved for expansion) 411-16 SUBCHAPTER D. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 411-17 Sec. 59.071. DEFINITIONS 411-18 Sec. 59.072. PRIVATE NETWORK SERVICES FOR CERTAIN 411-19 ENTITIES 411-20 Sec. 59.073. INVESTMENT PRIORITIES 411-21 Sec. 59.074. CONTRACTS FOR PRIVATE NETWORK SERVICES 411-22 Sec. 59.075. PREFERRED RATE TREATMENT WARRANTED 411-23 Sec. 59.076. ELECTION OF RATE TREATMENT 411-24 Sec. 59.077. PRIVATE NETWORK SERVICES RATES AND TARIFFS 411-25 Sec. 59.078. PRIVATE LINE OR SPECIAL ACCESS RATES 412-1 Sec. 59.079. COMPLAINTS LIMITED 412-2 Sec. 59.080. INTERCONNECTION OF NETWORK SERVICES 412-3 Sec. 59.081. SHARING OR RESALE OF NETWORK SERVICES 412-4 Sec. 59.082. IMPLEMENTATION COSTS; INCREASE IN RATES AND 412-5 UNIVERSAL SERVICE FUNDS 412-6 CHAPTER 59. INFRASTRUCTURE PLAN 412-7 SUBCHAPTER A. GENERAL PROVISIONS 412-8 Sec. 59.001. POLICY. It is the policy of this state that an 412-9 incumbent local exchange company that does not elect to be 412-10 regulated under Chapter 58 should have incentives to deploy 412-11 infrastructure that will benefit the residents of this state while 412-12 maintaining reasonable local rates and universal service. 412-13 (V.A.C.S. Art. 1446c-0, Sec. 3.401.) 412-14 Sec. 59.002. DEFINITIONS. In this chapter: 412-15 (1) "Electing company" means an incumbent local 412-16 exchange company that elects for an infrastructure commitment and 412-17 corresponding regulation under this chapter. 412-18 (2) "Election date" means the date on which the 412-19 commission receives notice of election under Subchapter B. 412-20 (V.A.C.S. Art. 1446c-0, Sec. 3.402(h); New.) 412-21 (Sections 59.003-59.020 reserved for expansion) 412-22 SUBCHAPTER B. INFRASTRUCTURE INCENTIVES 412-23 Sec. 59.021. ELECTION. (a) An incumbent local exchange 412-24 company may elect to make an infrastructure commitment and to be 412-25 subject to corresponding regulation under this chapter if the 413-1 company: 413-2 (1) serves less than five percent of the access lines 413-3 in this state; and 413-4 (2) has not elected incentive regulation under Chapter 413-5 58. 413-6 (b) A company makes the election by notifying the commission 413-7 in writing of the company's election. (V.A.C.S. Art. 1446c-0, Sec. 413-8 3.402(a).) 413-9 Sec. 59.022. WITHDRAWAL OF ELECTION. (a) The commission 413-10 may allow an electing company to withdraw the company's election 413-11 under this chapter: 413-12 (1) on application by the company; and 413-13 (2) only for good cause. 413-14 (b) In this section, "good cause" includes only matters 413-15 beyond the control of the company. (V.A.C.S. Art. 1446c-0, Sec. 413-16 3.402(e).) 413-17 Sec. 59.023. ELECTION UNDER CHAPTER 58. (a) This chapter 413-18 does not prohibit a company electing under this chapter from 413-19 electing incentive regulation under Chapter 58. 413-20 (b) If a company makes an election under Chapter 58, the 413-21 infrastructure commitment made under this chapter offsets the 413-22 infrastructure commitment required in connection with the Chapter 413-23 58 election. (V.A.C.S. Art. 1446c-0, Sec. 3.402(f).) 413-24 Sec. 59.024. RATE CHANGES. (a) Except for the charges 413-25 permitted under Subchapter C, Chapter 55, Subchapter B, Chapter 56, 414-1 and Section 55.024, an electing company may not, on or before the 414-2 sixth anniversary of its election date, increase a rate previously 414-3 established for that company under this title unless the commission 414-4 approves the proposed change as authorized under Subsection (c) or 414-5 (d). 414-6 (b) For purposes of Subsection (a), the company's previously 414-7 established rates are the rates charged by the company on its 414-8 election date without regard to a proceeding pending under: 414-9 (1) Section 15.001; 414-10 (2) Subchapter D, Chapter 53; or 414-11 (3) Subchapter G, Chapter 2001, Government Code. 414-12 (c) The commission, on motion of the electing company or on 414-13 its own motion, shall adjust prices for services to reflect changes 414-14 in Federal Communications Commission separations that affect 414-15 intrastate net income by at least 10 percent. 414-16 (d) The commission, on request of the electing company, 414-17 shall allow a rate group reclassification that results from access 414-18 line growth. 414-19 (e) Section 58.059 applies to a rate change under this 414-20 section. (V.A.C.S. Art. 1446c-0, Secs. 3.402(b), (c), (g) (part).) 414-21 Sec. 59.025. SWITCHED ACCESS RATES. Notwithstanding any 414-22 other provision of this title, the commission may not reduce an 414-23 electing company's rates for switched access services before the 414-24 expiration of the six-year period prescribed by Section 59.024. 414-25 (V.A.C.S. Art. 1446c-0, Sec. 3.402(g) (part).) 415-1 Sec. 59.026. COMPLAINT OR HEARING. (a) On or before the 415-2 sixth anniversary of the company's election date, an electing 415-3 company is not, under any circumstances, subject to: 415-4 (1) a complaint or hearing regarding the 415-5 reasonableness of the company's: 415-6 (A) rates; 415-7 (B) overall revenues; 415-8 (C) return on invested capital; or 415-9 (D) net income; or 415-10 (2) a complaint that a rate is excessive. 415-11 (b) Subsection (a) applies only to a company that is in 415-12 compliance with the company's infrastructure commitment under this 415-13 chapter. 415-14 (c) This section does not prohibit a complaint, hearing, or 415-15 determination on an electing company's implementation of a 415-16 competitive safeguard required by Chapter 60. (V.A.C.S. 415-17 Art. 1446c-0, Sec. 3.402(d) (part).) 415-18 Sec. 59.027. CONSUMER COMPLAINTS REGARDING TARIFFS. 415-19 (a) This chapter does not restrict: 415-20 (1) a consumer's right to complain to the commission 415-21 about the application of an ambiguous tariff; or 415-22 (2) the commission's right to determine: 415-23 (A) the proper application of that tariff; or 415-24 (B) the proper tariff rate if that tariff does 415-25 not apply. 416-1 (b) This section does not permit the commission to: 416-2 (1) lower a tariff rate except as specifically 416-3 provided by this title; 416-4 (2) change the commission's interpretation of a 416-5 tariff; or 416-6 (3) extend the application of a tariff to a new class 416-7 of customers. (V.A.C.S. Art. 1446c-0, Sec. 3.402(d) (part).) 416-8 Sec. 59.028. CONSUMER COMPLAINTS REGARDING SERVICES; 416-9 ENFORCEMENT OF STANDARDS. This chapter does not restrict: 416-10 (1) a consumer's right to complain to the commission 416-11 about quality of service; or 416-12 (2) the commission's right to enforce a quality of 416-13 service standard. (V.A.C.S. Art. 1446c-0, Sec. 3.402(d) (part).) 416-14 Sec. 59.029. INVESTMENT LIMITATION ON SERVICE STANDARDS. 416-15 (a) The commission may not raise a service standard applicable to 416-16 the provision of local exchange telephone service by an electing 416-17 company if the increased investment required to comply with the 416-18 raised standard in any year exceeds 10 percent of the company's 416-19 average annual intrastate additions in capital investment for the 416-20 most recent five-year period. 416-21 (b) In computing the average under Subsection (a), the 416-22 electing company shall exclude: 416-23 (1) extraordinary investments made during the 416-24 five-year period; and 416-25 (2) investments required by Section 59.052. (V.A.C.S. 417-1 Art. 1446c-0, Secs. 3.402(d) (part), 3.403(b)(6).) 417-2 (Sections 59.030-59.050 reserved for expansion) 417-3 SUBCHAPTER C. INFRASTRUCTURE COMMITMENT AND GOALS 417-4 Sec. 59.051. INFRASTRUCTURE COMMITMENT. (a) An electing 417-5 company shall commit to make in this state, during the six years 417-6 after the election date, the telecommunications infrastructure 417-7 investment prescribed by this chapter. 417-8 (b) The company shall make the commitment to the governor 417-9 and the commission in writing. (V.A.C.S. Art. 1446c-0, Sec. 417-10 3.403(a).) 417-11 Sec. 59.052. INFRASTRUCTURE GOALS. (a) The commission 417-12 shall ensure that each electing company achieves the infrastructure 417-13 goals described by this section. 417-14 (b) Each new central office switch installed for an electing 417-15 company in this state after September 1, 1995, must be digital. 417-16 (c) An electing company shall make available to each 417-17 customer in the company's territory access to end-to-end digital 417-18 connectivity. In this subsection, "make available" has the meaning 417-19 assigned by 16 T.A.C. Section 23.69. 417-20 (d) In each electing company's territory, 50 percent of the 417-21 local exchange access lines must be served by a digital central 417-22 office switch. 417-23 (e) An electing company's public switched network backbone 417-24 interoffice facilities must employ broadband facilities that serve 417-25 at least 50 percent of the local exchange access lines and are 418-1 capable of 45 or more megabits a second. The company may employ 418-2 facilities at a lower bandwidth if technology permits the delivery 418-3 of video signal at the lower bandwidth at a quality level 418-4 comparable to a television broadcast signal. The requirements of 418-5 this subsection do not apply to local loop facilities. 418-6 (f) An electing company shall install Common Channel 418-7 Signaling 7 capability in each access tandem office. 418-8 (g) The infrastructure goals specified by Subsections 418-9 (c)-(f) must be achieved not later than January 1, 2000. (V.A.C.S. 418-10 Art. 1446c-0, Secs. 3.403(b)(1), (2), (3), (4), (5).) 418-11 Sec. 59.053. WAIVER OF INFRASTRUCTURE REQUIREMENTS. 418-12 (a) For an electing company that serves fewer than one million 418-13 lines, the commission may waive a requirement prescribed by Section 418-14 59.052 if the company demonstrates that the investment is not 418-15 viable economically. 418-16 (b) Before granting a waiver under Subsection (a), the 418-17 commission must consider the public benefits that would result from 418-18 compliance with the requirement. (V.A.C.S. Art. 1446c-0, Sec. 418-19 3.403(d).) 418-20 Sec. 59.054. PROGRESS REPORT. (a) On each anniversary of 418-21 the company's election date, an electing company shall file with 418-22 the commission a report on the company's progress on its 418-23 infrastructure commitment. 418-24 (b) The report must include a statement of: 418-25 (1) the institutions requesting service under 419-1 Subchapter D; 419-2 (2) the institutions served under Subchapter D; 419-3 (3) the investments and expenses for the previous 419-4 period and the total investments and expenses for all periods; and 419-5 (4) other information the commission considers 419-6 necessary. (V.A.C.S. Art. 1446c-0, Sec. 3.403(g).) 419-7 Sec. 59.055. IMPLEMENTATION COSTS; INCREASE IN RATES AND 419-8 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 419-9 of implementing Section 59.052 in determining whether an electing 419-10 company is entitled to: 419-11 (1) a rate increase under this chapter; or 419-12 (2) increased universal service funds under Subchapter 419-13 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.403(e) (part).) 419-14 (Sections 59.056-59.070 reserved for expansion) 419-15 SUBCHAPTER D. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 419-16 Sec. 59.071. DEFINITIONS. In this subchapter: 419-17 (1) "Educational institution" has the meaning assigned 419-18 by Section 57.021. 419-19 (2) "Library" has the meaning assigned by Section 419-20 57.042. 419-21 (3) "Private network services" means 419-22 telecommunications services provided to an entity described by 419-23 Section 59.072(a), including broadband services, customized 419-24 services, and packaged network services. 419-25 (4) "Telemedicine center" means a facility that is 420-1 equipped to transmit, by video or data service, medical information 420-2 for the diagnosis or treatment of illness or disease and that is: 420-3 (A) owned or operated by a public or 420-4 not-for-profit hospital; or 420-5 (B) owned by a state-licensed health care 420-6 practitioner and operated on a nonprofit basis. (V.A.C.S. 420-7 Art. 1446c-0, Secs. 3.403(f)(1) (part), (2); New.) 420-8 Sec. 59.072. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES. 420-9 (a) On customer request, an electing company shall provide private 420-10 network services to: 420-11 (1) an educational institution; 420-12 (2) a library; 420-13 (3) a telemedicine center; or 420-14 (4) a legally constituted consortium or group of 420-15 entities listed in this subsection. 420-16 (b) Except as provided by Section 59.081, the electing 420-17 company shall provide the private network services for the private 420-18 and sole use of the receiving entity. However, the company may 420-19 provide the services with a facility that is used to provide 420-20 another service to another customer. 420-21 (c) The customers listed in Subsection (a) are a special 420-22 class of customers for purposes of the private network for distance 420-23 learning, telemedicine, and information-sharing purposes. 420-24 (V.A.C.S. Art. 1446c-0, Secs. 3.403(c)(1), (12), (f)(1) (part).) 420-25 Sec. 59.073. INVESTMENT PRIORITIES. An electing company 421-1 shall give investment priority to serving: 421-2 (1) rural areas; 421-3 (2) areas designated as critically underserved 421-4 medically or educationally; and 421-5 (3) educational institutions with high percentages of 421-6 economically disadvantaged students. (V.A.C.S. Art. 1446c-0, Sec. 421-7 3.403(c)(2).) 421-8 Sec. 59.074. CONTRACTS FOR PRIVATE NETWORK SERVICES. 421-9 (a) An electing company shall provide a private network service 421-10 under a customer-specific contract. 421-11 (b) An electing company shall offer private network service 421-12 contracts under this subchapter at 110 percent of the long run 421-13 incremental cost of providing the private network service, 421-14 including installation costs. 421-15 (c) Each contract shall be filed with the commission. 421-16 Commission approval of a contract is not required. (V.A.C.S. 421-17 Art. 1446c-0, Secs. 3.403(c)(3), (4), (5).) 421-18 Sec. 59.075. PREFERRED RATE TREATMENT WARRANTED. The 421-19 classes of customers described by Section 59.072(a) warrant 421-20 preferred rate treatment. However, a rate charged for a service 421-21 must cover the service's long run incremental cost. (V.A.C.S. 421-22 Art. 1446c-0, Sec. 3.403(c)(6).) 421-23 Sec. 59.076. ELECTION OF RATE TREATMENT. An educational 421-24 institution or a library may elect the rate treatment provided by 421-25 this subchapter or the discount provided by Subchapter B, Chapter 422-1 57. (V.A.C.S. Art. 1446c-0, Sec. 3.403(c)(9).) 422-2 Sec. 59.077. PRIVATE NETWORK SERVICES RATES AND TARIFFS. 422-3 (a) Notwithstanding the pricing flexibility authorized by this 422-4 subtitle, an electing company's rates for private network services 422-5 may not be increased on or before the sixth anniversary of the 422-6 company's election date. 422-7 (b) An electing company may not assess an entity described 422-8 by Section 59.072(a) a tariffed special construction or 422-9 installation charge unless the company and the entity agree on the 422-10 assessment. (V.A.C.S. Art. 1446c-0, Secs. 3.403(c)(8), (10).) 422-11 Sec. 59.078. PRIVATE LINE OR SPECIAL ACCESS RATES. (a) On 422-12 request by an educational institution or a library, an electing 422-13 company shall provide 1.544 megabits a second private line or 422-14 special access service at 110 percent of the service's long run 422-15 incremental cost, including installation costs. 422-16 (b) The rate provided by Subsection (a) is in lieu of the 422-17 discount provided by Subchapter B, Chapter 57. (V.A.C.S. 422-18 Art. 1446c-0, Sec. 3.403(c)(11).) 422-19 Sec. 59.079. COMPLAINTS LIMITED. Notwithstanding any other 422-20 provision of this title, an electing company is subject to a 422-21 complaint under Subchapter C or this subchapter only by an entity 422-22 described by Section 59.072(a). (V.A.C.S. Art. 1446c-0, Sec. 422-23 3.403(c)(7).) 422-24 Sec. 59.080. INTERCONNECTION OF NETWORK SERVICES. The 422-25 private network services provided under this subchapter may be 423-1 interconnected with other similar networks for distance learning, 423-2 telemedicine, and information-sharing purposes. (V.A.C.S. 423-3 Art. 1446c-0, Sec. 3.403(c)(13).) 423-4 Sec. 59.081. SHARING OR RESALE OF NETWORK SERVICES. (a) A 423-5 private network service may be used and shared among the entities 423-6 described by Section 59.072(a) but may not be otherwise shared or 423-7 resold to other customers. 423-8 (b) A service provided under this subchapter may not be 423-9 required to be resold to other customers at a rate provided by this 423-10 subchapter. 423-11 (c) This section does not prohibit an otherwise permitted 423-12 resale of another service that an electing company may offer 423-13 through the use of the same facilities used to provide a private 423-14 network service offered under this subchapter. (V.A.C.S. 423-15 Art. 1446c-0, Sec. 3.403(c)(14).) 423-16 Sec. 59.082. IMPLEMENTATION COSTS; INCREASE IN RATES AND 423-17 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 423-18 of implementing this subchapter in determining whether an electing 423-19 company is entitled to: 423-20 (1) a rate increase under this chapter; or 423-21 (2) increased universal service funds under Subchapter 423-22 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.403(e) (part).) 423-23 CHAPTER 60. COMPETITIVE SAFEGUARDS 423-24 SUBCHAPTER A. GENERAL PROVISIONS 423-25 Sec. 60.001. FAIR COMPETITION 424-1 Sec. 60.002. EXCLUSIVE JURISDICTION; ENFORCEMENT 424-2 Sec. 60.003. COMMISSION AUTHORITY 424-3 Sec. 60.004. APPLICABILITY TO CERTAIN SMALLER INCUMBENT LOCAL 424-4 EXCHANGE COMPANIES; RULES 424-5 Sec. 60.0041. APPLICABILITY TO CERTAIN SMALLER INCUMBENT LOCAL 424-6 EXCHANGE COMPANIES 424-7 Sec. 60.005. APPLICABILITY TO CERTAIN LARGER INCUMBENT LOCAL 424-8 EXCHANGE COMPANIES; RULES 424-9 Sec. 60.006. BULLETIN BOARD SYSTEMS UNAFFECTED 424-10 (Sections 60.007-60.020 reserved for expansion) 424-11 SUBCHAPTER B. UNBUNDLING 424-12 Sec. 60.021. MINIMUM UNBUNDLING REQUIREMENT 424-13 Sec. 60.022. COMMISSION UNBUNDLING ORDERS 424-14 Sec. 60.023. ASSIGNMENT OF UNBUNDLED COMPONENT TO CATEGORY 424-15 OF SERVICE 424-16 (Sections 60.024-60.040 reserved for expansion) 424-17 SUBCHAPTER C. RESALE 424-18 Sec. 60.041. LOOP RESALE TARIFF 424-19 Sec. 60.042. PROHIBITED RESALE OR SHARING 424-20 Sec. 60.043. RESALE OBLIGATION 424-21 Sec. 60.044. ELIMINATION OF RESALE PROHIBITIONS 424-22 Sec. 60.045. RESALE OR SHARING ARRANGEMENTS UNAFFECTED 424-23 (Sections 60.046-60.060 reserved for expansion) 424-24 SUBCHAPTER D. IMPUTATION 424-25 Sec. 60.061. RULES 425-1 Sec. 60.062. EXCEPTION FOR CAPPED PRICE 425-2 Sec. 60.063. IMPUTATION FOR SWITCHED ACCESS 425-3 Sec. 60.064. RECOVERY OF COST OF PROVIDING SERVICE 425-4 Sec. 60.065. WAIVERS 425-5 (Sections 60.066-60.080 reserved for expansion) 425-6 SUBCHAPTER E. TELECOMMUNICATIONS NUMBER PORTABILITY 425-7 Sec. 60.081. DEFINITION 425-8 Sec. 60.082. PORTABILITY GUIDELINES 425-9 Sec. 60.083. INTERIM RETENTION OF CONSUMER NUMBERS 425-10 Sec. 60.084. RATES FOR INTERIM PORTABILITY MEASURES 425-11 (Sections 60.085-60.100 reserved for expansion) 425-12 SUBCHAPTER F. PRICING 425-13 Sec. 60.101. PRICING RULE 425-14 Sec. 60.102. ADOPTION OF COST STUDIES BY CERTAIN COMPANIES 425-15 (Sections 60.103-60.120 reserved for expansion) 425-16 SUBCHAPTER G. INTERCONNECTION 425-17 Sec. 60.121. DEFINITION 425-18 Sec. 60.122. EXCLUSIVE JURISDICTION 425-19 Sec. 60.123. INAPPLICABILITY OF SUBCHAPTER 425-20 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED 425-21 Sec. 60.125. DETERMINATION OF INTERCONNECTION RATES 425-22 Sec. 60.126. INTERCONNECTIVITY NEGOTIATIONS; DISPUTE 425-23 RESOLUTION 425-24 Sec. 60.127. ADOPTION OF APPROVED INTERCONNECTION RATES 425-25 Sec. 60.128. USE OF RATES RESTRICTED 426-1 (Sections 60.129-60.140 reserved for expansion) 426-2 SUBCHAPTER H. EXPANDED INTERCONNECTION 426-3 Sec. 60.141. EXPANDED INTERCONNECTION RULES 426-4 (Sections 60.142-60.160 reserved for expansion) 426-5 SUBCHAPTER I. LOCAL EXCHANGE COMPANY REQUIREMENTS 426-6 Sec. 60.161. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS 426-7 Sec. 60.162. EXPANDED INTERCONNECTION 426-8 Sec. 60.163. INFRASTRUCTURE SHARING 426-9 CHAPTER 60. COMPETITIVE SAFEGUARDS 426-10 SUBCHAPTER A. GENERAL PROVISIONS 426-11 Sec. 60.001. FAIR COMPETITION. To the extent necessary to 426-12 ensure that competition in telecommunications is fair to each 426-13 participant and to accelerate the improvement of telecommunications 426-14 in this state, the commission shall ensure that the rates and rules 426-15 of an incumbent local exchange company: 426-16 (1) are not unreasonably preferential, prejudicial, or 426-17 discriminatory; and 426-18 (2) are applied equitably and consistently. (V.A.C.S. 426-19 Art. 1446c-0, Sec. 3.451(a).) 426-20 Sec. 60.002. EXCLUSIVE JURISDICTION; ENFORCEMENT. (a) The 426-21 commission has exclusive jurisdiction to implement competitive 426-22 safeguards. 426-23 (b) Section 58.025 does not prevent the commission from 426-24 enforcing this chapter. (V.A.C.S. Art. 1446c-0, Secs. 3.451(b), 426-25 (c).) 427-1 Sec. 60.003. COMMISSION AUTHORITY. (a) The commission may: 427-2 (1) establish procedures with respect to a policy 427-3 stated in this subchapter or Subchapters B-H; and 427-4 (2) resolve a dispute that arises under a policy 427-5 described by Subdivision (1). 427-6 (b) The commission shall adopt procedures for a proceeding 427-7 under Subchapters B and C. A procedure may: 427-8 (1) limit discovery; and 427-9 (2) for purposes of cross-examination align any party, 427-10 other than the office, with another party that has a similar 427-11 position. 427-12 (c) In adopting a procedure under this section and in 427-13 resolving a dispute, the commission shall consider the action's 427-14 effect on: 427-15 (1) consumers; 427-16 (2) competitors; and 427-17 (3) the incumbent local exchange company. 427-18 (d) The commission, by order or rule, may not implement a 427-19 requirement that is contrary to a federal law or rule. (V.A.C.S. 427-20 Art. 1446c-0, Sec. 3.460.) 427-21 Sec. 60.004. APPLICABILITY TO CERTAIN SMALLER INCUMBENT 427-22 LOCAL EXCHANGE COMPANIES; RULES. (a) Subchapters B, C, and H may 427-23 be applied to an incumbent local exchange company that serves fewer 427-24 than 31,000 access lines only on a bona fide request from a 427-25 certificated telecommunications utility. 428-1 (b) In applying the rules adopted under Subchapters B, C, 428-2 and H to a company described by Subsection (a), the commission may 428-3 modify the rules in the public interest. 428-4 (c) This section takes effect September 1, 1998. (V.A.C.S. 428-5 Art. 1446c-0, Sec. 3.461 (part).) 428-6 Sec. 60.0041. APPLICABILITY TO CERTAIN SMALLER INCUMBENT 428-7 LOCAL EXCHANGE COMPANIES. (a) Subchapters B, C, E, G, and H do 428-8 not apply to an incumbent local exchange company that serves fewer 428-9 than 31,000 access lines. 428-10 (b) This section expires September 1, 1998. (V.A.C.S. 428-11 Art. 1446c-0, Sec. 3.461 (part).) 428-12 Sec. 60.005. APPLICABILITY TO CERTAIN LARGER INCUMBENT LOCAL 428-13 EXCHANGE COMPANIES; RULES. (a) Subchapters B, D, and F may be 428-14 applied to an incumbent local exchange company that, as of 428-15 September 1, 1995, has 31,000 or more access lines in this state 428-16 but fewer than 1,000,000 access lines in this state only on a bona 428-17 fide request from a holder of a certificate of operating authority 428-18 or a service provider certificate of operating authority. 428-19 (b) In applying the rules adopted under Subchapters B, D, 428-20 and F to a company described by Subsection (a), the commission may 428-21 modify the rules in the public interest. (V.A.C.S. Art. 1446c-0, 428-22 Sec. 3.462.) 428-23 Sec. 60.006. BULLETIN BOARD SYSTEMS UNAFFECTED. This 428-24 subtitle does not: 428-25 (1) require the commission to change the rate 429-1 treatment established by the commission in Docket No. 8387 for a 429-2 bulletin board system in a residence; 429-3 (2) regulate or tax a bulletin board system or 429-4 Internet service provider that provides only enhanced or 429-5 information services and that does not provide a telecommunications 429-6 service; or 429-7 (3) require a change in a rate charged to an entity 429-8 described by Subdivision (2) under a tariff in effect on September 429-9 1, 1995. (V.A.C.S. Art. 1446c-0, Sec. 3.459(c).) 429-10 (Sections 60.007-60.020 reserved for expansion) 429-11 SUBCHAPTER B. UNBUNDLING 429-12 Sec. 60.021. MINIMUM UNBUNDLING REQUIREMENT. At a minimum, 429-13 an incumbent local exchange company shall unbundle its network to 429-14 the extent the Federal Communications Commission orders. (V.A.C.S. 429-15 Art. 1446c-0, Sec. 3.452(a).) 429-16 Sec. 60.022. COMMISSION UNBUNDLING ORDERS. (a) The 429-17 commission may adopt an order relating to the issue of unbundling 429-18 of local exchange company services in addition to the unbundling 429-19 required by Section 60.021. 429-20 (b) Before ordering further unbundling, the commission must 429-21 consider the public interest and competitive merits of further 429-22 unbundling. 429-23 (c) On the request of a party, the commission shall proceed 429-24 by evidentiary hearing. If a request for a hearing is not made, 429-25 the commission may proceed by rulemaking. (V.A.C.S. Art. 1446c-0, 430-1 Secs. 3.452(b), (c).) 430-2 Sec. 60.023. ASSIGNMENT OF UNBUNDLED COMPONENT TO CATEGORY 430-3 OF SERVICE. The commission may assign an unbundled component to 430-4 the appropriate category of services under Chapter 58 according to 430-5 the purposes and intents of the categories. (V.A.C.S. 430-6 Art. 1446c-0, Sec. 3.452(d).) 430-7 (Sections 60.024-60.040 reserved for expansion) 430-8 SUBCHAPTER C. RESALE 430-9 Sec. 60.041. LOOP RESALE TARIFF. (a) An incumbent local 430-10 exchange company that on September 1, 1995, serves one million or 430-11 more access lines or that on or before September 1, 1995, elects 430-12 regulation under Chapter 58 shall file a usage sensitive loop 430-13 resale tariff. 430-14 (b) An incumbent local exchange company shall file a usage 430-15 sensitive loop resale tariff not later than the 60th day after the 430-16 date a certificate of operating authority or a service provider 430-17 certificate of operating authority is granted under Chapter 54 if 430-18 the company: 430-19 (1) serves fewer than one million access lines; and 430-20 (2) is not an electing company under Chapter 58. 430-21 (c) The commission shall conduct an appropriate proceeding 430-22 to determine the rates and terms of the resale tariff not later 430-23 than the 180th day after the date the tariff is filed. 430-24 (d) The commission may not approve a usage sensitive rate 430-25 unless the rate recovers: 431-1 (1) the total long run incremental cost of the loop on 431-2 an unseparated basis; and 431-3 (2) an appropriate contribution to joint and common 431-4 costs. 431-5 (e) Except as provided by Section 60.044, a person may not 431-6 purchase from the resale tariff unless the person is the holder of: 431-7 (1) a certificate of convenience and necessity; 431-8 (2) a certificate of operating authority; or 431-9 (3) a service provider certificate of operating 431-10 authority. 431-11 (f) In this section, "loop resale" means the purchase of the 431-12 local distribution channel or loop facility from the incumbent 431-13 local exchange company to resell to end user customers. (V.A.C.S. 431-14 Art. 1446c-0, Secs. 3.453(a), (b), (c).) 431-15 Sec. 60.042. PROHIBITED RESALE OR SHARING. A provider of 431-16 telecommunications service may not impose a restriction on the 431-17 resale or sharing of a service: 431-18 (1) for which the provider is not a dominant provider; 431-19 or 431-20 (2) entitled to regulatory treatment as a competitive 431-21 service under Subchapter E, Chapter 58, if the provider is a 431-22 company electing regulation under Chapter 58. (V.A.C.S. 431-23 Art. 1446c-0, Sec. 3.453(d).) 431-24 Sec. 60.043. RESALE OBLIGATION. A holder of a certificate 431-25 of operating authority or a service provider certificate of 432-1 operating authority shall permit a local exchange company to resell 432-2 the holder's loop facilities at the holder's regularly published 432-3 rates if the local exchange company: 432-4 (1) does not have loop facilities; and 432-5 (2) has a request for service. (V.A.C.S. 432-6 Art. 1446c-0, Sec. 3.453(e).) 432-7 Sec. 60.044. ELIMINATION OF RESALE PROHIBITIONS. 432-8 (a) Except as provided by Subsections (c) and (d), the commission 432-9 shall eliminate all resale prohibitions in the tariffs of an 432-10 electing company on the: 432-11 (1) completion of the commission's costing and pricing 432-12 rulemaking; 432-13 (2) completion of rate rebalancing of the incumbent 432-14 local exchange company rates under Subchapter F; and 432-15 (3) removal of all prohibitions on an incumbent local 432-16 exchange company's provision of interLATA services. 432-17 (b) Except as provided by Subsections (c) and (d), the 432-18 commission shall eliminate all resale prohibitions in the tariffs 432-19 of an electing company that has one million access lines or more on 432-20 removal of all prohibitions on the company's provision of interLATA 432-21 service. 432-22 (c) After the resale prohibitions are eliminated under this 432-23 section: 432-24 (1) the commission shall continue to prohibit the 432-25 resale of local exchange or directory assistance flat rate services 433-1 as a substitute for usage sensitive services; and 433-2 (2) residence service may not be resold to a business 433-3 customer. 433-4 (d) A service or function may be offered for resale only to 433-5 the same class of customer to which the incumbent local exchange 433-6 company sells the service if the commission finds that: 433-7 (1) as a result of the costing and pricing proceeding 433-8 the rate for the service or function will be less than the cost of 433-9 providing the service or function; and 433-10 (2) the difference in rate and cost will not be 433-11 recovered from the universal service fund. (V.A.C.S. Art. 1446c-0, 433-12 Sec. 3.453(f).) 433-13 Sec. 60.045. RESALE OR SHARING ARRANGEMENTS UNAFFECTED. 433-14 This subchapter does not change a resale or sharing arrangement 433-15 permitted in an incumbent local exchange company tariff that: 433-16 (1) existed on September 1, 1995; or 433-17 (2) was filed on or before May 1, 1995, by an 433-18 incumbent local exchange company that serves more than five million 433-19 access lines in this state. (V.A.C.S. Art. 1446c-0, Sec. 433-20 3.453(g).) 433-21 (Sections 60.046-60.060 reserved for expansion) 433-22 SUBCHAPTER D. IMPUTATION 433-23 Sec. 60.061. RULES. (a) The commission shall adopt rules 433-24 governing imputation of the price of a service. 433-25 (b) Imputation is a regulatory policy the commission shall 434-1 apply to prevent an incumbent local exchange company from selling a 434-2 service or function to another telecommunications utility at a 434-3 price that is higher than the rate the incumbent local exchange 434-4 company implicitly includes in services it provides to the 434-5 company's retail customers. 434-6 (c) The commission may require imputation only of the price 434-7 of a service that is: 434-8 (1) not generally available from a source other than 434-9 the incumbent local exchange company; and 434-10 (2) necessary for the competitor to provide a 434-11 competing service. 434-12 (d) The commission may require imputation only on a 434-13 service-by-service basis and may not require imputation on a 434-14 rate-element-by-element basis. 434-15 (e) For a service for which the commission may require 434-16 imputation under Subsection (c) and that is provided under a 434-17 customer specific contract, the commission: 434-18 (1) may require imputation only on a 434-19 service-by-service basis within the contract; and 434-20 (2) may not require imputation on a 434-21 rate-element-by-element basis. (V.A.C.S. Art. 1446c-0, Secs. 434-22 3.454(a), (b), (c), (f), (g).) 434-23 Sec. 60.062. EXCEPTION FOR CAPPED PRICE. The commission may 434-24 not require imputation of the price to a local exchange telephone 434-25 service while the price is capped under Chapter 58 or 59. 435-1 (V.A.C.S. Art. 1446c-0, Sec. 3.454(d).) 435-2 Sec. 60.063. IMPUTATION FOR SWITCHED ACCESS. The commission 435-3 shall impute the price of switched access service to the price of 435-4 each service for which switched access service is a component until 435-5 switched access service is competitively available. (V.A.C.S. 435-6 Art. 1446c-0, Sec. 3.454(e).) 435-7 Sec. 60.064. RECOVERY OF COST OF PROVIDING SERVICE. (a) An 435-8 incumbent local exchange company shall demonstrate that the price 435-9 it charges for retail service recovers the cost of providing the 435-10 service. 435-11 (b) For purposes of this section, the cost of providing the 435-12 service is the sum of: 435-13 (1) each specifically tariffed premium rate for each 435-14 noncompetitive service or service function, or each element of a 435-15 noncompetitive service or service function, or the functional 435-16 equivalent, that is used to provide the service; 435-17 (2) the total service long run incremental cost of the 435-18 competitive services or service functions that are used; 435-19 (3) each cost, not reflected in Subdivision (1) or 435-20 (2), that is specifically associated with providing the service or 435-21 group of services; and 435-22 (4) each cost or surcharge associated with an explicit 435-23 subsidy applied to all providers of the service to promote 435-24 universal service. (V.A.C.S. Art. 1446c-0, Sec. 3.454(h).) 435-25 Sec. 60.065. WAIVERS. If the commission determines that a 436-1 waiver is in the public interest, the commission may waive an 436-2 imputation requirement for a public interest service such as: 436-3 (1) 9-1-1 service; or 436-4 (2) dual party relay service. (V.A.C.S. Art. 1446c-0, 436-5 Sec. 3.454(i).) 436-6 (Sections 60.066-60.080 reserved for expansion) 436-7 SUBCHAPTER E. TELECOMMUNICATIONS NUMBER PORTABILITY 436-8 Sec. 60.081. DEFINITION. In this subchapter, 436-9 "telecommunications number portability" means the ability of a 436-10 telecommunications services user who is changing from one 436-11 telecommunications service provider to another provider to retain a 436-12 telephone number, to the extent technically feasible, without 436-13 impairing the quality, reliability, or convenience of service. 436-14 (V.A.C.S. Art. 1446c-0, Sec. 3.455(b).) 436-15 Sec. 60.082. PORTABILITY GUIDELINES. (a) Because a uniform 436-16 national number plan is valuable and necessary to this state, the 436-17 commission by rule shall adopt guidelines governing 436-18 telecommunications number portability and the assignment of 436-19 telephone numbers in a competitively neutral manner. 436-20 (b) The rules may not be inconsistent with the rules and 436-21 regulations of the Federal Communications Commission regarding 436-22 telecommunications number portability. (V.A.C.S. Art. 1446c-0, 436-23 Sec. 3.455(a).) 436-24 Sec. 60.083. INTERIM RETENTION OF CONSUMER NUMBERS. As an 436-25 interim measure, the commission shall adopt reasonable mechanisms, 437-1 including, at minimum, the use of call forwarding and direct inward 437-2 dialing, to allow consumers to retain their telephone numbers. 437-3 (V.A.C.S. Art. 1446c-0, Sec. 3.455(c) (part).) 437-4 Sec. 60.084. RATES FOR INTERIM PORTABILITY MEASURES. 437-5 (a) An incumbent local exchange company with one million or more 437-6 access lines shall file tariffs, and the commission shall determine 437-7 reasonable rates to be charged by the company for: 437-8 (1) call forwarding; 437-9 (2) direct inward dialing; and 437-10 (3) any other mechanism the commission determines 437-11 should be used as an interim telecommunications number portability 437-12 measure by a new entrant. 437-13 (b) An incumbent local exchange company with fewer than one 437-14 million access lines that serves an area in which a certificate of 437-15 operating authority or a service provider certificate of operating 437-16 authority has been granted shall, not later than the 60th day after 437-17 the date of a bona fide request, file tariffs in accordance with 437-18 Subsection (a). 437-19 (c) Not later than the 60th day after the date a company 437-20 files tariffs under Subsection (b), the commission shall determine 437-21 reasonable rates in accordance with Subsection (a). (V.A.C.S. 437-22 Art. 1446c-0, Sec. 3.455(c) (part).) 437-23 (Sections 60.085-60.100 reserved for expansion) 437-24 SUBCHAPTER F. PRICING 437-25 Sec. 60.101. PRICING RULE. (a) The commission shall adopt 438-1 a pricing rule. 438-2 (b) In adopting the pricing rule, the commission shall: 438-3 (1) ensure that each price for a monopoly service 438-4 remains affordable; 438-5 (2) ensure that each price for competitive service is 438-6 not: 438-7 (A) unreasonably preferential, prejudicial, or 438-8 discriminatory; 438-9 (B) directly or indirectly subsidized by a 438-10 noncompetitive service; or 438-11 (C) predatory or anticompetitive; and 438-12 (3) require that each service recover the appropriate 438-13 costs, including joint and common costs, of each facility and 438-14 function used to provide the service. (V.A.C.S. Art. 1446c-0, 438-15 Secs. 3.457(a)(1) (part), (b).) 438-16 Sec. 60.102. ADOPTION OF COST STUDIES BY CERTAIN COMPANIES. 438-17 The commission shall allow an incumbent local exchange company that 438-18 is not a Tier 1 local exchange company on September 1, 1995, to 438-19 adopt, at that company's option, the cost studies approved by the 438-20 commission for a Tier 1 local exchange company. (V.A.C.S. 438-21 Art. 1446c-0, Sec. 3.457(c).) 438-22 (Sections 60.103-60.120 reserved for expansion) 438-23 SUBCHAPTER G. INTERCONNECTION 438-24 Sec. 60.121. DEFINITION. In this subchapter, 438-25 "interconnection" means, for calls that originate and terminate in 439-1 this state, the termination of local intraexchange traffic of 439-2 another local exchange company or holder of a service provider 439-3 certificate of operating authority within the local calling area of 439-4 the terminating local exchange company or certificate holder. 439-5 (V.A.C.S. Art. 1446c-0, Sec. 3.458(a) (part).) 439-6 Sec. 60.122. EXCLUSIVE JURISDICTION. The commission has 439-7 exclusive jurisdiction to determine rates and terms for 439-8 interconnection for a holder of a certificate of convenience and 439-9 necessity, a certificate of operating authority, or a service 439-10 provider certificate of operating authority. (V.A.C.S. 439-11 Art. 1446c-0, Sec. 3.458(h).) 439-12 Sec. 60.123. INAPPLICABILITY OF SUBCHAPTER. This subchapter 439-13 does not apply to a rate for the existing termination of cellular 439-14 or interexchange traffic. (V.A.C.S. Art. 1446c-0, Sec. 3.458(a) 439-15 (part).) 439-16 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED. (a) The 439-17 commission shall require each telecommunications provider to 439-18 maintain interoperable networks. 439-19 (b) The commission may: 439-20 (1) adopt rules, including generic rules that are 439-21 responsive to changes in federal law or a development in the local 439-22 exchange market; and 439-23 (2) set policies governing interconnection 439-24 arrangements. (V.A.C.S. Art. 1446c-0, Secs. 3.458(b) (part), (f).) 439-25 Sec. 60.125. DETERMINATION OF INTERCONNECTION RATES. 440-1 (a) Telecommunications providers shall negotiate network 440-2 interconnectivity, charges, and terms. 440-3 (b) If interconnectivity, charges, and terms are 440-4 successfully negotiated, the commission shall approve the 440-5 interconnection rates. 440-6 (c) If telecommunications providers do not enter into a 440-7 mutually agreed compensation rate under this section, each provider 440-8 shall reciprocally terminate the other provider's traffic at no 440-9 charge for the first nine months after the date the first call is 440-10 terminated between the providers. 440-11 (d) During the nine-month period prescribed by Subsection 440-12 (c), the commission shall complete a proceeding to establish 440-13 reciprocal interconnection rates and terms. The commission shall 440-14 establish reciprocal interconnection rates and terms based solely 440-15 on the commission proceeding. 440-16 (e) In establishing the initial interconnection rate, the 440-17 commission may not require cost studies from the new entrant. 440-18 (f) On or after the third anniversary of the date the first 440-19 call is terminated between the providers, the commission, on 440-20 receipt of a complaint, may require cost studies by a new entrant 440-21 to establish interconnection rates. (V.A.C.S. Art. 1446c-0, Secs. 440-22 3.458(b) (part), (c), (d).) 440-23 Sec. 60.126. INTERCONNECTIVITY NEGOTIATIONS; DISPUTE 440-24 RESOLUTION. The commission may resolve a dispute filed by a party 440-25 to a negotiation under Section 60.125(a). (V.A.C.S. Art. 1446c-0, 441-1 Sec. 3.458(b) (part).) 441-2 Sec. 60.127. ADOPTION OF APPROVED INTERCONNECTION RATES. 441-3 (a) An incumbent local exchange company may adopt the 441-4 interconnection rates the commission approves for a larger 441-5 incumbent local exchange company without additional cost 441-6 justification. 441-7 (b) If an incumbent local exchange company does not adopt 441-8 the interconnection rates of a larger company or negotiates under 441-9 Section 60.125(a), the company is governed by Sections 441-10 60.125(c)-(f). 441-11 (c) If the incumbent local exchange company adopts the 441-12 interconnection rates of another incumbent local exchange company, 441-13 the new entrant may adopt those rates as the new entrant's 441-14 interconnection rates. 441-15 (d) If the incumbent local exchange company elects to file 441-16 its own tariff, the new entrant must also file its own 441-17 interconnection tariff. (V.A.C.S. Art. 1446c-0, Sec. 3.458(e).) 441-18 Sec. 60.128. USE OF RATES RESTRICTED. The commission may 441-19 not use interconnection rates under this subchapter as a basis to 441-20 alter interconnection rates for other services. (V.A.C.S. 441-21 Art. 1446c-0, Sec. 3.458(g).) 441-22 (Sections 60.129-60.140 reserved for expansion) 441-23 SUBCHAPTER H. EXPANDED INTERCONNECTION 441-24 Sec. 60.141. EXPANDED INTERCONNECTION RULES. The commission 441-25 shall adopt rules for expanded interconnection that: 442-1 (1) are consistent with the rules and regulations of 442-2 the Federal Communications Commission relating to expanded 442-3 interconnection; 442-4 (2) treat intrastate private line services as special 442-5 access service; and 442-6 (3) provide that if an incumbent local exchange 442-7 company is required to provide expanded interconnection to another 442-8 local exchange company, the second local exchange company shall in 442-9 a similar manner provide expanded interconnection to the first 442-10 company. (V.A.C.S. Art. 1446c-0, Sec. 3.456(a).) 442-11 (Sections 60.142-60.160 reserved for expansion) 442-12 SUBCHAPTER I. LOCAL EXCHANGE COMPANY REQUIREMENTS 442-13 Sec. 60.161. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS. 442-14 An incumbent local exchange company may not unreasonably: 442-15 (1) discriminate against another provider by refusing 442-16 access to the local exchange; 442-17 (2) refuse or delay an interconnection to another 442-18 provider; 442-19 (3) degrade the quality of access the company provides 442-20 to another provider; 442-21 (4) impair the speed, quality, or efficiency of a line 442-22 used by another provider; 442-23 (5) fail to fully disclose in a timely manner on 442-24 request all available information necessary to design equipment 442-25 that will meet the specifications of the local exchange network; or 443-1 (6) refuse or delay access by a person to another 443-2 provider. (V.A.C.S. Art. 1446c-0, Sec. 3.459(a).) 443-3 Sec. 60.162. EXPANDED INTERCONNECTION. This subchapter does 443-4 not require an incumbent local exchange company to provide expanded 443-5 interconnection as that term is defined by the Federal 443-6 Communications Commission. (V.A.C.S. Art. 1446c-0, Sec. 3.459(b).) 443-7 Sec. 60.163. INFRASTRUCTURE SHARING. (a) The commission 443-8 shall adopt rules that require a local exchange company to share 443-9 public switched network infrastructure and technology with a 443-10 requesting local exchange company that lacks economies of scale or 443-11 scope, to enable the requesting company to provide 443-12 telecommunications services in each geographic area for which the 443-13 requesting company is designated as the sole carrier of last 443-14 resort. 443-15 (b) The rules governing the sharing: 443-16 (1) may not require a local exchange company to make a 443-17 decision that is uneconomic or adverse to the public; 443-18 (2) shall permit, but may not require, joint ownership 443-19 and operation of public switched network infrastructure and 443-20 services by or among the local exchange companies that share 443-21 infrastructure; and 443-22 (3) shall establish conditions that promote 443-23 cooperation between local exchange companies. (V.A.C.S. 443-24 Art. 1446c-0, Sec. 3.463.) 444-1 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 444-2 SUBCHAPTER A. GENERAL PROVISIONS 444-3 Sec. 61.001. DEFINITIONS 444-4 (Sections 61.002-61.020 reserved for expansion) 444-5 SUBCHAPTER B. PROVISION OF INFORMATION TECHNOLOGY SERVICES 444-6 Sec. 61.021. PROVISION OF CERTAIN SERVICES OR PRODUCTS 444-7 PROHIBITED 444-8 Sec. 61.022. PERMISSIBLE SERVICES AND PRODUCTS 444-9 Sec. 61.023. SEPARATE AFFILIATE REQUIREMENTS 444-10 Sec. 61.024. ARM'S-LENGTH TRANSACTIONS 444-11 Sec. 61.025. CONTRACTS AND RECORDS 444-12 Sec. 61.026. JOINT OWNERSHIP OR USE PROHIBITED 444-13 (Sections 61.027-61.040 reserved for expansion) 444-14 SUBCHAPTER C. ADDITIONAL COMPETITIVE SAFEGUARDS 444-15 Sec. 61.041. PROHIBITED DISCRIMINATION 444-16 Sec. 61.042. SUBSIDIZATION OF SERVICES PROHIBITED 444-17 Sec. 61.043. PERMISSIBLE INVESTMENT 444-18 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 444-19 SUBCHAPTER A. GENERAL PROVISIONS 444-20 Sec. 61.001. DEFINITIONS. In this chapter: 444-21 (1) "Management consulting" means the development, 444-22 refinement, and coordination of a strategy to support a client's 444-23 business direction, positively affect business performance, and 444-24 improve an operating result, in a field such as business planning, 444-25 operations, information technology, marketing, finance, and human 445-1 resources. 445-2 (2) "Process management" means the ongoing 445-3 responsibility for direction and operation of a business process in 445-4 an enterprise in a field such as administration, finance, human 445-5 resources, operations, sales, or marketing. 445-6 (3) "Systems development" means the creation, 445-7 migration, or improvement of a computer system, including hardware 445-8 and software, to: 445-9 (A) meet a specific business need; or 445-10 (B) take advantage of a change in information 445-11 technology. 445-12 (4) "Systems integration" means the acquisition, 445-13 installation, and integration of hardware, software, 445-14 communications, and related support components or services. 445-15 (5) "Systems management" means the ongoing management 445-16 and operation of information technology components, ranging from 445-17 specialized system applications to an enterprise's entire 445-18 information technology function, including related facilities and 445-19 personnel. (V.A.C.S. Art. 1446c-0, Sec. 3.581.) 445-20 (Sections 61.002-61.020 reserved for expansion) 445-21 SUBCHAPTER B. PROVISION OF INFORMATION 445-22 TECHNOLOGY SERVICES 445-23 Sec. 61.021. PROVISION OF CERTAIN SERVICES OR PRODUCTS 445-24 PROHIBITED. (a) A local exchange company that serves more than 445-25 five million access lines in this state may not provide the 446-1 following customized business services or products to a customer 446-2 who has 50 or more access lines in this state: 446-3 (1) management consulting, except for consulting 446-4 related exclusively to telecommunications; 446-5 (2) information technology process or systems 446-6 development; 446-7 (3) information technology process or systems 446-8 integration; or 446-9 (4) information technology process or systems 446-10 management. 446-11 (b) This section does not apply to a service or product 446-12 provided on September 1, 1995. (V.A.C.S. Art. 1446c-0, Sec. 446-13 3.582(a).) 446-14 Sec. 61.022. PERMISSIBLE SERVICES AND PRODUCTS. Section 446-15 61.021 does not prohibit: 446-16 (1) an affiliate of the local exchange company from 446-17 providing a service or product described by that section in 446-18 accordance with this subchapter and Subchapter C; or 446-19 (2) a local exchange company from: 446-20 (A) providing a service or product described by 446-21 Section 61.021 to an affiliate if: 446-22 (i) the company is not providing a service 446-23 or product described by that section to a nonaffiliated third 446-24 party; and 446-25 (ii) there is not an affiliate of the 447-1 company engaged in providing a service or product described by that 447-2 section to a nonaffiliated third party; 447-3 (B) providing mass market and consumer market 447-4 products and services directly to a customer that: 447-5 (i) has fewer than 50 access lines in this 447-6 state; and 447-7 (ii) uses or relies on the use of 447-8 information services, information systems, or information 447-9 technology or processes; 447-10 (C) selling or leasing billing and collection 447-11 services, local area networks, wide area networks, or other 447-12 telecommunications services; or 447-13 (D) providing to itself a service or product 447-14 described by Section 61.021. (V.A.C.S. Art. 1446c-0, Secs. 447-15 3.582(b), (c) (part).) 447-16 Sec. 61.023. SEPARATE AFFILIATE REQUIREMENTS. (a) A local 447-17 exchange company's affiliate that provides a service or product 447-18 described by Section 61.021: 447-19 (1) shall: 447-20 (A) operate independently from the local 447-21 exchange company in providing the service or product; and 447-22 (B) maintain the affiliate's own books of 447-23 accounts; and 447-24 (2) may not have an officer, director, or employee in 447-25 common with the local exchange company. 448-1 (b) Notwithstanding Subsection (a)(2), an officer of a 448-2 corporate parent or holding company may serve as a director of the 448-3 local exchange company and as a director of another subsidiary of 448-4 the parent if the subsidiary existed on September 1, 1995. 448-5 (V.A.C.S. Art. 1446c-0, Sec. 3.583(a) (part).) 448-6 Sec. 61.024. ARM'S-LENGTH TRANSACTIONS. A local exchange 448-7 company and an affiliate shall conduct at arm's length each 448-8 transaction regarding the acquisition from the affiliate of a 448-9 service or product described by Section 61.021. (V.A.C.S. 448-10 Art. 1446c-0, Sec. 3.583(b).) 448-11 Sec. 61.025. CONTRACTS AND RECORDS. (a) A local exchange 448-12 company shall maintain and keep available for inspection by the 448-13 commission copies of each contract or arrangement between the 448-14 company and an affiliate that relates to the company's acquisition 448-15 from the affiliate of a service or product described by Section 448-16 61.021. 448-17 (b) The local exchange company's records must show each cash 448-18 or noncash transaction with the affiliate for the service or 448-19 product, including each payment for a good, service, or property 448-20 right. (V.A.C.S. Art. 1446c-0, Sec. 3.583(c).) 448-21 Sec. 61.026. JOINT OWNERSHIP OR USE PROHIBITED. A local 448-22 exchange company and an affiliate engaged in providing a service or 448-23 product described by Section 61.021 may not: 448-24 (1) own property jointly; or 448-25 (2) share in the use of property. (V.A.C.S. 449-1 Art. 1446c-0, Sec. 3.583(d).) 449-2 (Sections 61.027-61.040 reserved for expansion) 449-3 SUBCHAPTER C. ADDITIONAL COMPETITIVE SAFEGUARDS 449-4 Sec. 61.041. PROHIBITED DISCRIMINATION. A local exchange 449-5 company may not discriminate between an affiliate that provides a 449-6 service or product described by Section 61.021 and another person 449-7 in: 449-8 (1) providing or procuring a good, a service, a 449-9 facility, or information; or 449-10 (2) establishing a standard. (V.A.C.S. Art. 1446c-0, 449-11 Sec. 3.584(a).) 449-12 Sec. 61.042. SUBSIDIZATION OF SERVICES PROHIBITED. A local 449-13 exchange company or the company's affiliate may not subsidize the 449-14 provision of a service or product described by Section 61.021 with 449-15 revenue from: 449-16 (1) a local exchange telephone service; or 449-17 (2) an access service provided by the local exchange 449-18 company. (V.A.C.S. Art. 1446c-0, Sec. 3.584(b).) 449-19 Sec. 61.043. PERMISSIBLE INVESTMENT. This subchapter does 449-20 not prohibit a local exchange company's affiliate from investing a 449-21 dividend or profit derived from a local exchange company or 449-22 developing a service or product described by Section 61.021 for the 449-23 local exchange company if the investment or development complies 449-24 with Subchapter B. (V.A.C.S. Art. 1446c-0, Sec. 3.584(c).) 450-1 CHAPTER 62. BROADCASTER SAFEGUARDS 450-2 SUBCHAPTER A. GENERAL PROVISIONS 450-3 Sec. 62.001. APPLICABILITY OF CHAPTER 450-4 Sec. 62.002. DEFINITIONS 450-5 (Sections 62.003-62.020 reserved for expansion) 450-6 SUBCHAPTER B. CUSTOMER PROPRIETARY NETWORK INFORMATION 450-7 Sec. 62.021. DEFINITIONS 450-8 Sec. 62.022. USE OF SPECIFIC CUSTOMER PROPRIETARY NETWORK 450-9 INFORMATION 450-10 Sec. 62.023. RULES 450-11 (Sections 62.024-62.040 reserved for expansion) 450-12 SUBCHAPTER C. ADVERTISING 450-13 Sec. 62.041. DEFINITION 450-14 Sec. 62.042. APPLICABILITY OF SUBCHAPTER 450-15 Sec. 62.043. ADVERTISING AGENCY SERVICES PROHIBITED 450-16 Sec. 62.044. ADVERTISING ACTIVITIES OF AFFILIATE 450-17 Sec. 62.045. JOINT MARKETING PROHIBITED 450-18 Sec. 62.046. CHARITABLE TELEPHONE SOLICITATION 450-19 Sec. 62.047. WAIVER 450-20 (Sections 62.048-62.070 reserved for expansion) 450-21 SUBCHAPTER D. AUDIO AND VIDEO PROGRAMMING 450-22 Sec. 62.071. APPLICABILITY OF SUBCHAPTER 450-23 Sec. 62.072. AUDIO OR VIDEO PROGRAMMING PROHIBITED 451-1 Sec. 62.073. RELATIONSHIP BETWEEN EXCHANGE COMPANY AND 451-2 AFFILIATE THAT PROVIDES AUDIO OR VIDEO 451-3 PROGRAMMING 451-4 Sec. 62.074. REGULATION OF EXCHANGE COMPANY DEALINGS WITH 451-5 SEPARATE AFFILIATE 451-6 Sec. 62.075. BILLING OR COLLECTION SERVICES FOR NONAFFILIATED 451-7 PROGRAMMER 451-8 Sec. 62.076. COMPLIANCE AUDIT 451-9 Sec. 62.077. WAIVER 451-10 Sec. 62.078. LIMITATION OF JURISDICTION 451-11 (Sections 62.079-62.100 reserved for expansion) 451-12 SUBCHAPTER E. VIDEO CARRIAGE 451-13 Sec. 62.101. APPLICABILITY OF SUBCHAPTER 451-14 Sec. 62.102. RATE FOR BROADCAST STATION ACCESS TO 451-15 TELECOMMUNICATIONS SERVICES 451-16 Sec. 62.103. DUTIES OF LOCAL EXCHANGE COMPANY 451-17 Sec. 62.104. BROADCAST STATION ACCESS THROUGH 451-18 TELECOMMUNICATIONS SERVICES 451-19 Sec. 62.105. RETRANSMISSION CONSENT 451-20 Sec. 62.106. WAIVER 451-21 Sec. 62.107. LIMITATION OF JURISDICTION 451-22 Sec. 62.108. EXPIRATION 451-23 (Sections 62.109-62.130 reserved for expansion) 451-24 SUBCHAPTER F. AUDIO CARRIAGE 451-25 Sec. 62.131. APPLICABILITY OF SUBCHAPTER 452-1 Sec. 62.132. BROADCAST STATION ACCESS THROUGH 452-2 TELECOMMUNICATIONS SERVICES 452-3 Sec. 62.133. RETRANSMISSION CONSENT 452-4 Sec. 62.134. WAIVER 452-5 Sec. 62.135. LIMITATION OF JURISDICTION 452-6 Sec. 62.136. EXPIRATION 452-7 CHAPTER 62. BROADCASTER SAFEGUARDS 452-8 SUBCHAPTER A. GENERAL PROVISIONS 452-9 Sec. 62.001. APPLICABILITY OF CHAPTER. This chapter does 452-10 not apply to a cable company. (V.A.C.S. Art. 1446c-0, Sec. 3.506.) 452-11 Sec. 62.002. DEFINITIONS. In this chapter: 452-12 (1) "Audio programming": 452-13 (A) means programming: 452-14 (i) provided by an amplitude modulation or 452-15 frequency modulation broadcast radio station; or 452-16 (ii) generally considered comparable to 452-17 programming described by Subparagraph (i); and 452-18 (B) does not include an audio-related service 452-19 offered by an incumbent local exchange company on September 1, 452-20 1995. 452-21 (2) "Video programming" means programming provided by 452-22 or generally considered comparable to programming provided by a 452-23 television broadcast station as defined by Section 602, 452-24 Communications Act of 1934 (47 U.S.C. Section 522). (V.A.C.S. 452-25 Art. 1446c-0, Sec. 3.502(a).) 453-1 (Sections 62.003-62.020 reserved for expansion) 453-2 SUBCHAPTER B. CUSTOMER PROPRIETARY NETWORK INFORMATION 453-3 Sec. 62.021. DEFINITIONS. In this subchapter: 453-4 (1) "Specific customer proprietary network 453-5 information" means information, other than subscriber list 453-6 information: 453-7 (A) that concerns the customer and is available 453-8 to the telecommunications utility because of the customer's use of 453-9 the telecommunications utility service; 453-10 (B) that is contained in the bills relating to 453-11 telecommunications services received by a customer of a 453-12 telecommunications utility; or 453-13 (C) that: 453-14 (i) is made available to a 453-15 telecommunications utility by a customer of the utility, other than 453-16 a wireless telecommunications provider, solely because of the 453-17 utility-customer relationship; and 453-18 (ii) relates to the quantity, technical 453-19 configuration, type, destination, or amount of use of voice or data 453-20 telecommunications services to which the customer subscribes. 453-21 (2) "Subscriber list information" means information: 453-22 (A) that identifies the listed name of a 453-23 telecommunications utility subscriber or the subscriber's telephone 453-24 number, address, or primary advertising classification; and 453-25 (B) that the telecommunications utility or an 454-1 affiliate has published or accepted for publication. (V.A.C.S. 454-2 Art. 1446c-0, Sec. 3.501(a).) 454-3 Sec. 62.022. USE OF SPECIFIC CUSTOMER PROPRIETARY NETWORK 454-4 INFORMATION. (a) A telecommunications utility may not use 454-5 specific customer proprietary network information for a commercial 454-6 purpose other than the sale or provision of, or billing or 454-7 collection for, telecommunications or enhanced services. 454-8 (b) This section does not prohibit: 454-9 (1) the use of specific customer proprietary network 454-10 information with the customer's consent; or 454-11 (2) the provision of specific customer proprietary 454-12 network information to an affiliate telecommunications provider. 454-13 (c) Subsection (a) has no effect to the extent it is 454-14 preempted by an action of the Federal Communications Commission. 454-15 (V.A.C.S. Art. 1446c-0, Sec. 3.501(b).) 454-16 Sec. 62.023. RULES. (a) The commission shall adopt rules 454-17 that are consistent with rules on the use of specific customer 454-18 proprietary network information adopted by the Federal 454-19 Communications Commission. 454-20 (b) Rules adopted under Subsection (a) shall: 454-21 (1) require each telecommunications utility annually 454-22 to notify, by means approved by the commission, each subscriber of 454-23 the subscriber's right to reject the utility's use of specific 454-24 customer proprietary network information for marketing other 454-25 services; and 455-1 (2) require a telecommunications utility that makes 455-2 nonproprietary aggregate customer proprietary network information 455-3 available to its affiliates to make the information available to 455-4 nonaffiliated entities on the same terms. 455-5 (c) If the Federal Communications Commission adopts rules 455-6 regarding customer proprietary network information that no longer 455-7 preempt this state's authority to adopt inconsistent rules, the 455-8 commission shall conduct a proceeding to determine the appropriate 455-9 use of customer proprietary network information by a 455-10 telecommunications utility. A rule, policy, or order adopted by 455-11 the commission on customer proprietary network information may not 455-12 be discriminatory in its application to telecommunications 455-13 utilities. 455-14 (d) A commission rule governing customer proprietary network 455-15 information may not apply to an incumbent local exchange company 455-16 that has 100,000 or fewer access lines in service in this state if 455-17 the rule is more burdensome to the company than the customer 455-18 proprietary network information rules of the Federal Communications 455-19 Commission. This prohibition does not apply to a rule regarding a 455-20 use of customer proprietary network information that is not related 455-21 to a telecommunications service or product. (V.A.C.S. 455-22 Art. 1446c-0, Secs. 3.501(c), (d).) 455-23 (Sections 62.024-62.040 reserved for expansion) 455-24 SUBCHAPTER C. ADVERTISING 455-25 Sec. 62.041. DEFINITION. In this subchapter, "advertising 456-1 agency services" includes: 456-2 (1) advertising development; 456-3 (2) advertising purchase; 456-4 (3) advertising consultation; 456-5 (4) advertising copy writing; 456-6 (5) advertising research; and 456-7 (6) other functions generally performed by a general 456-8 advertising agency. (V.A.C.S. Art. 1446c-0, Sec. 3.503(a).) 456-9 Sec. 62.042. APPLICABILITY OF SUBCHAPTER. This subchapter 456-10 does not apply to an incumbent local exchange company that has 456-11 100,000 or fewer access lines in service in this state. (V.A.C.S. 456-12 Art. 1446c-0, Sec. 3.503(f).) 456-13 Sec. 62.043. ADVERTISING AGENCY SERVICES PROHIBITED. 456-14 (a) An incumbent local exchange company may not sell an 456-15 advertising agency service to a nonaffiliate in this state. 456-16 (b) Subsection (a) does not prohibit a local exchange 456-17 company from: 456-18 (1) promoting or selling a telecommunications service 456-19 or telecommunications equipment, including: 456-20 (A) voice service or equipment; 456-21 (B) data service or equipment; 456-22 (C) video dial tone service or equipment; 456-23 (D) video or audio programming service or 456-24 equipment; 456-25 (E) cellular service or equipment; 457-1 (F) interactive media service or equipment; 457-2 (G) software service or equipment; or 457-3 (H) another related service or piece of 457-4 equipment; or 457-5 (2) enhancing or promoting the use of the 457-6 telecommunications network. (V.A.C.S. Art. 1446c-0, Sec. 457-7 3.503(b).) 457-8 Sec. 62.044. ADVERTISING ACTIVITIES OF AFFILIATE. (a) A 457-9 separate corporate affiliate of an incumbent local exchange company 457-10 may engage in advertising agency activities. In conducting an 457-11 advertising agency activity, the affiliate shall comply with this 457-12 section. 457-13 (b) The affiliate shall prepare financial statements that 457-14 are not consolidated with the financial statements of the incumbent 457-15 local exchange company. Financial statements and consolidated tax 457-16 returns that consolidate the operation of the separate corporate 457-17 affiliate with a parent company and the parent company's other 457-18 subsidiaries may be prepared. 457-19 (c) The affiliate shall: 457-20 (1) maintain, in accordance with generally accepted 457-21 accounting principles, books, records, and accounts that are 457-22 separate from the books, records, and accounts of the incumbent 457-23 local exchange company; and 457-24 (2) maintain a corporate identity separate from the 457-25 incumbent local exchange company. 458-1 (d) The affiliate may not: 458-2 (1) incur debt in a manner that, on the affiliate's 458-3 default, would permit a creditor to have recourse against an asset 458-4 of the incumbent local exchange company; 458-5 (2) use a name, trademark, or service mark of the 458-6 incumbent local exchange company, unless the name, trademark, or 458-7 service mark is used in common with the parent, affiliate, or owner 458-8 of the incumbent local exchange company; or 458-9 (3) have a director, officer, or employee in common 458-10 with the incumbent local exchange company. (V.A.C.S. Art. 1446c-0, 458-11 Sec. 3.503(c).) 458-12 Sec. 62.045. JOINT MARKETING PROHIBITED. (a) Except as 458-13 permitted by Section 62.043, an incumbent local exchange company 458-14 that has an affiliate that provides advertising agency services on 458-15 behalf of a nonaffiliate in this state may not jointly market the 458-16 affiliate's advertising agency services in connection with a 458-17 telecommunications service or telecommunications equipment the 458-18 incumbent local exchange company provides. 458-19 (b) This section does not apply to advertising in a 458-20 telephone directory disseminated in any form. (V.A.C.S. 458-21 Art. 1446c-0, Sec. 3.503(d).) 458-22 Sec. 62.046. CHARITABLE TELEPHONE SOLICITATION. This 458-23 subchapter does not prohibit an incumbent local exchange company 458-24 from providing a telephone solicitation service for a charitable 458-25 organization. (V.A.C.S. Art. 1446c-0, Sec. 3.503(e).) 459-1 Sec. 62.047. WAIVER. (a) A company may petition the 459-2 commission for a waiver from a requirement this subchapter imposes 459-3 on the company. 459-4 (b) The commission shall grant the waiver if the waiver is 459-5 in the public interest, after considering whether there is a need 459-6 for the requirement in the affected market. 459-7 (c) The commission may revoke a waiver granted under this 459-8 section if: 459-9 (1) conditions under which the waiver was granted have 459-10 materially changed; and 459-11 (2) the revocation is in the public interest. 459-12 (V.A.C.S. Art. 1446c-0, Sec. 3.503(g).) 459-13 (Sections 62.048-62.070 reserved for expansion) 459-14 SUBCHAPTER D. AUDIO AND VIDEO PROGRAMMING 459-15 Sec. 62.071. APPLICABILITY OF SUBCHAPTER. This subchapter 459-16 does not apply to an incumbent local exchange company that has 459-17 100,000 or fewer access lines in service in this state. (V.A.C.S. 459-18 Art. 1446c-0, Sec. 3.502(h).) 459-19 Sec. 62.072. AUDIO OR VIDEO PROGRAMMING PROHIBITED. (a) An 459-20 incumbent local exchange company may not provide audio or video 459-21 programming in this state. 459-22 (b) This section does not prohibit a separate corporate 459-23 affiliate of an incumbent local exchange company from providing 459-24 audio or video programming. (V.A.C.S. Art. 1446c-0, Sec. 459-25 3.502(b).) 460-1 Sec. 62.073. RELATIONSHIP BETWEEN EXCHANGE COMPANY AND 460-2 AFFILIATE THAT PROVIDES AUDIO OR VIDEO PROGRAMMING. (a) This 460-3 section applies only to an incumbent local exchange company's 460-4 separate corporate affiliate that provides audio or video 460-5 programming. 460-6 (b) For a telecommunications service the affiliate obtains 460-7 from the incumbent local exchange company, the affiliate shall pay: 460-8 (1) a tariffed rate; 460-9 (2) the fair market value of the service, if the 460-10 service is not provided under a tariff; or 460-11 (3) the service's long run incremental cost, if: 460-12 (A) the service is not provided under a tariff; 460-13 and 460-14 (B) the service: 460-15 (i) does not have a fair market value; or 460-16 (ii) has a fair market value that is less 460-17 than the service's long run incremental cost. 460-18 (c) In making a transaction with the incumbent local 460-19 exchange company to purchase, use, rent, or access information, 460-20 services, space, or devices that are not telecommunications 460-21 services, the affiliate shall act in a manner consistent with the 460-22 affiliate transaction rules of the Federal Communications 460-23 Commission. The subject of a transaction described by this 460-24 subsection may not be valued at less than the greater of the 460-25 subject's net book value or fair market value, whichever is 461-1 applicable. 461-2 (d) The affiliate shall prepare financial statements that 461-3 are not consolidated with those of the incumbent local exchange 461-4 company. Financial statements and consolidated tax returns that 461-5 consolidate the operation of the separate corporate affiliate with 461-6 a parent company and the parent company's other subsidiaries may be 461-7 prepared. 461-8 (e) The affiliate shall: 461-9 (1) maintain, in accordance with generally accepted 461-10 accounting principles, books, records, and accounts that are 461-11 separate from the books, records, and accounts of the incumbent 461-12 local exchange company; 461-13 (2) perform its marketing and sales functions and 461-14 operation in compliance with open network architecture and the 461-15 affiliate transaction rules of the Federal Communications 461-16 Commission; and 461-17 (3) maintain a corporate identity separate from the 461-18 incumbent local exchange company. 461-19 (f) The affiliate may not: 461-20 (1) incur debt in a manner that, on the affiliate's 461-21 default, would permit a creditor to have recourse against an asset 461-22 of the incumbent local exchange company; 461-23 (2) use a name, trademark, or service mark of the 461-24 incumbent local exchange company, unless the name, trademark, or 461-25 service mark is used in common with the parent, affiliate, or owner 462-1 of the incumbent local exchange company; or 462-2 (3) have a director, officer, or employee in common 462-3 with the incumbent local exchange company. (V.A.C.S. Art. 1446c-0, 462-4 Sec. 3.502(c).) 462-5 Sec. 62.074. REGULATION OF EXCHANGE COMPANY DEALINGS WITH 462-6 SEPARATE AFFILIATE. (a) This section applies only to an incumbent 462-7 local exchange company's separate corporate affiliate that provides 462-8 audio or video programming. 462-9 (b) An incumbent local exchange company may not: 462-10 (1) develop a rate for a telecommunications service or 462-11 provide a telecommunications service to benefit primarily the 462-12 company's separate affiliate for the affiliate's video or audio 462-13 programming unless the rate or service is available to any 462-14 purchaser without discrimination; 462-15 (2) provide a telecommunications service for the 462-16 separate affiliate's audio or video programming in an unreasonably 462-17 preferential manner; 462-18 (3) transfer an asset to the separate affiliate for 462-19 less than the amount for which the asset is available to a third 462-20 party in an arm's-length transaction; 462-21 (4) have a director, officer, or employee in common 462-22 with the separate affiliate; 462-23 (5) own property in common with the separate 462-24 affiliate; or 462-25 (6) enter into a customer-specific contract with the 463-1 separate affiliate to provide tariffed telecommunications services 463-2 unless substantially the same contract terms are generally 463-3 available to nonaffiliated interests. 463-4 (c) An incumbent local exchange company shall: 463-5 (1) maintain and file with the commission copies of 463-6 each contract or arrangement between the company and the separate 463-7 affiliate and report the contract amount for each cash or noncash 463-8 transaction with the separate affiliate, including payments for: 463-9 (A) the cost of a good, service, property right, 463-10 or other item; or 463-11 (B) interest expense; 463-12 (2) value an asset the company transfers to the 463-13 separate affiliate at the greater of the asset's net book value or 463-14 fair market value; 463-15 (3) value an asset the separate affiliate transfers to 463-16 the company at the lesser of the asset's net book value or fair 463-17 market value except in an instance in which Federal Communications 463-18 Commission regulations or commission rules permit: 463-19 (A) in-arrears payment for a tariffed 463-20 telecommunications service; or 463-21 (B) an affiliate to invest a dividend or profit 463-22 derived from an incumbent local exchange company; 463-23 (4) comply with applicable Federal Communications 463-24 Commission cost and other accounting rules; and 463-25 (5) if the company offers telecommunications equipment 464-1 or services to an audio or video programmer, provide the equipment 464-2 or services: 464-3 (A) at just and reasonable rates that, if 464-4 commission rules require the provision to be under a tariff, are 464-5 tariffed on nondiscriminatory terms; and 464-6 (B) on similar terms to all video or audio 464-7 programmers, if the equipment or services are not subject to 464-8 regulation. (V.A.C.S. Art. 1446c-0, Sec. 3.502(d).) 464-9 Sec. 62.075. BILLING OR COLLECTION SERVICES FOR 464-10 NONAFFILIATED PROGRAMMER. (a) An incumbent local exchange company 464-11 that offers billing or collection service to a nonaffiliated audio 464-12 or video programmer shall provide the service on nondiscriminatory 464-13 terms. 464-14 (b) This section does not require an incumbent local 464-15 exchange company to offer billing or collection service to a 464-16 nonaffiliated programmer. 464-17 (c) An incumbent local exchange company may exclude a class 464-18 of programmers from the company's billing or collection service. 464-19 (V.A.C.S. Art. 1446c-0, Sec. 3.502(e).) 464-20 Sec. 62.076. COMPLIANCE AUDIT. (a) An incumbent local 464-21 exchange company shall have a compliance audit performed every 464-22 three years to determine whether the incumbent local exchange 464-23 company, during the preceding three years, complied with the 464-24 requirements this subchapter imposes on the company. 464-25 (b) An independent accounting firm: 465-1 (1) must conduct the audit; and 465-2 (2) shall file the audit report with the commission. 465-3 (c) If the audit report concludes that the incumbent local 465-4 exchange company is not in compliance with this subchapter, the 465-5 commission shall take appropriate action against the company. 465-6 (d) The audit report is confidential commercial or financial 465-7 information for the purposes of Chapter 552, Government Code. 465-8 (V.A.C.S. Art. 1446c-0, Sec. 3.502(f).) 465-9 Sec. 62.077. WAIVER. (a) A company may petition the 465-10 commission for a waiver from a requirement this subchapter imposes 465-11 on the company. 465-12 (b) The commission shall grant the waiver if the waiver is 465-13 in the public interest, after considering whether there is a need 465-14 for the requirement in the affected market. 465-15 (c) The commission may revoke a waiver granted under this 465-16 section if: 465-17 (1) conditions under which the waiver was granted have 465-18 materially changed; and 465-19 (2) the revocation is in the public interest. 465-20 (V.A.C.S. Art. 1446c-0, Sec. 3.502(i).) 465-21 Sec. 62.078. LIMITATION OF JURISDICTION. Except as 465-22 otherwise specifically provided by this title, the commission's 465-23 jurisdiction over an incumbent local exchange company's affiliate 465-24 that is an audio or video programmer is limited to the specific 465-25 requirements of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 466-1 3.502(g).) 466-2 (Sections 62.079-62.100 reserved for expansion) 466-3 SUBCHAPTER E. VIDEO CARRIAGE 466-4 Sec. 62.101. APPLICABILITY OF SUBCHAPTER. This subchapter 466-5 does not apply to: 466-6 (1) an incumbent local exchange company that has 466-7 100,000 or fewer access lines in service in this state; or 466-8 (2) a programmer on the video dial tone platform of an 466-9 incumbent local exchange company described by Subdivision (1). 466-10 (V.A.C.S. Art. 1446c-0, Sec. 3.504(e).) 466-11 Sec. 62.102. RATE FOR BROADCAST STATION ACCESS TO 466-12 TELECOMMUNICATIONS SERVICES. Unless the company is a programmer 466-13 subject to Section 62.104, an incumbent local exchange company that 466-14 provides a telecommunications service used to transmit video 466-15 programming directly to a subscriber or used to enable a customer 466-16 to access video programming shall give a local full-power broadcast 466-17 station licensed by the Federal Communications Commission access to 466-18 the telecommunications service at a tariffed rate, to the extent 466-19 capacity permits. If the service is not provided under a tariff, 466-20 the company shall provide the service on terms similar to those on 466-21 which the service is provided to other video programmers that 466-22 provide similar programming. (V.A.C.S. Art. 1446c-0, Sec. 3.504(a) 466-23 (part).) 466-24 Sec. 62.103. DUTIES OF LOCAL EXCHANGE COMPANY. (a) An 466-25 incumbent local exchange company shall transmit without material 467-1 degradation the signals a local broadcast station delivers. The 467-2 transmission quality offered the station may not be less than the 467-3 quality made available to another video programmer. 467-4 (b) An incumbent local exchange company that provides a 467-5 telecommunications service used to transmit video programming 467-6 directly to a subscriber or used to enable a customer to access 467-7 video programming may not: 467-8 (1) discriminate unreasonably among programming 467-9 providers regarding transmission of their signals; or 467-10 (2) delete, change, or alter a copyright 467-11 identification transmitted as part of the programming signal. 467-12 (c) An incumbent local exchange company described by 467-13 Subsection (b) that provides a video dial tone service with a level 467-14 one gateway, as that term is defined by the Federal Communications 467-15 Commission, shall make available to programmers a menu or 467-16 programming guide on which a programmer may display a listing of 467-17 the stations the programmer is required to carry under Section 467-18 62.104. (V.A.C.S. Art. 1446c-0, Secs. 3.504(a) (part), (b).) 467-19 Sec. 62.104. BROADCAST STATION ACCESS THROUGH 467-20 TELECOMMUNICATIONS SERVICES. (a) As permitted by federal law and 467-21 Federal Communications Commission rules and orders, a programmer 467-22 shall make available to subscribers local full-power television 467-23 stations licensed by the Federal Communications Commission if: 467-24 (1) the programmer is operating as a common channel 467-25 manager; 468-1 (2) for a commercial purpose, the programmer purchases 468-2 50 or more analog channels on a local exchange video dial tone 468-3 level one platform over which video programming is made available 468-4 to subscribers; and 468-5 (3) the television stations grant retransmission 468-6 consent. 468-7 (b) The programmer shall make available up to six television 468-8 stations under this section. If the programmer is in a market that 468-9 contains a county with a population of more than one million, the 468-10 programmer shall make available up to nine television stations 468-11 under this section. 468-12 (c) The programmer shall select the television stations the 468-13 programmer makes available to subscribers under this section. 468-14 (d) This title does not require a programmer or incumbent 468-15 local exchange company to provide valuable consideration in 468-16 exchange for carriage under this section. (V.A.C.S. Art. 1446c-0, 468-17 Secs. 3.504(c), (d) (part).) 468-18 Sec. 62.105. RETRANSMISSION CONSENT. A television station 468-19 licensed by the Federal Communications Commission that seeks 468-20 carriage under Section 62.104 shall grant consent for programming 468-21 retransmission to the programmer and the incumbent local exchange 468-22 company. (V.A.C.S. Art. 1446c-0, Sec. 3.504(d) (part).) 468-23 Sec. 62.106. WAIVER. (a) A company may petition the 468-24 commission for a waiver from a requirement this subchapter imposes 468-25 on the company. 469-1 (b) The commission shall grant the waiver if the waiver is 469-2 in the public interest, after considering whether there is a need 469-3 for the requirement in the affected market. 469-4 (c) The commission may revoke a waiver granted under this 469-5 section if: 469-6 (1) conditions under which the waiver was granted have 469-7 materially changed; and 469-8 (2) the revocation is in the public interest. 469-9 (V.A.C.S. Art. 1446c-0, Sec. 3.504(f).) 469-10 Sec. 62.107. LIMITATION OF JURISDICTION. Except as 469-11 otherwise specifically provided by this title, the commission's 469-12 jurisdiction over an incumbent local exchange company's affiliate 469-13 that is a video programmer is limited to the specific requirements 469-14 of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.504(g).) 469-15 Sec. 62.108. EXPIRATION. This subchapter expires August 31, 469-16 1999. (V.A.C.S. Art. 1446c-0, Sec. 3.504(h).) 469-17 (Sections 62.109-62.130 reserved for expansion) 469-18 SUBCHAPTER F. AUDIO CARRIAGE 469-19 Sec. 62.131. APPLICABILITY OF SUBCHAPTER. This subchapter 469-20 does not apply to: 469-21 (1) an incumbent local exchange company that has 469-22 100,000 or fewer access lines in service in this state; or 469-23 (2) a programmer on the video dial tone platform of an 469-24 incumbent local exchange company described by Subdivision (1). 469-25 (V.A.C.S. Art. 1446c-0, Sec. 3.505(c).) 470-1 Sec. 62.132. BROADCAST STATION ACCESS THROUGH 470-2 TELECOMMUNICATIONS SERVICES. (a) As permitted by federal law and 470-3 Federal Communications Commission rules and orders, and as 470-4 consistent with technical specifications, a programmer shall make 470-5 available to subscribers local radio stations licensed by the 470-6 Federal Communications Commission if: 470-7 (1) the programmer is operating as a common channel 470-8 manager; 470-9 (2) for a commercial purpose, the programmer makes 12 470-10 or more channels of audio programming available to subscribers on 470-11 an incumbent local exchange company's level one video dial tone 470-12 platform; 470-13 (3) the available audio programming is similar to a 470-14 broadcast of a radio station licensed by the Federal Communications 470-15 Commission; and 470-16 (4) the radio stations grant retransmission consent. 470-17 (b) The programmer is not required to make available more 470-18 than one-third of the programmer's analog audio channels to radio 470-19 stations. 470-20 (c) The programmer shall select the radio stations the 470-21 programmer makes available to subscribers under this section. 470-22 (d) This title does not require a programmer or incumbent 470-23 local exchange company to provide valuable consideration in 470-24 exchange for carriage under this section. (V.A.C.S. Art. 1446c-0, 470-25 Secs. 3.505(a), (b) (part).) 471-1 Sec. 62.133. RETRANSMISSION CONSENT. A local radio station 471-2 licensed by the Federal Communications Commission that seeks 471-3 carriage under Section 62.132 shall grant consent for programming 471-4 retransmission to the programmer and the incumbent local exchange 471-5 company. (V.A.C.S. Art. 1446c-0, Sec. 3.505(b) (part).) 471-6 Sec. 62.134. WAIVER. (a) A company may petition the 471-7 commission for a waiver from a requirement this subchapter imposes 471-8 on the company. 471-9 (b) The commission shall grant the waiver if the waiver is 471-10 in the public interest, after considering whether there is a need 471-11 for the requirement in the affected market. 471-12 (c) The commission may revoke a waiver granted under this 471-13 section if: 471-14 (1) conditions under which the waiver was granted have 471-15 materially changed; and 471-16 (2) the revocation is in the public interest. 471-17 (V.A.C.S. Art. 1446c-0, Sec. 3.505(d).) 471-18 Sec. 62.135. LIMITATION OF JURISDICTION. Except as 471-19 otherwise specifically provided by this title, the commission's 471-20 jurisdiction over an incumbent local exchange company's affiliate 471-21 that is an audio programmer is limited to the specific requirements 471-22 of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.505(e).) 471-23 Sec. 62.136. EXPIRATION. This subchapter expires August 31, 471-24 1999. (V.A.C.S. Art. 1446c-0, Sec. 3.505(f).) 472-1 CHAPTER 63. ELECTRONIC PUBLISHING 472-2 SUBCHAPTER A. GENERAL PROVISIONS 472-3 Sec. 63.001. GENERAL DEFINITIONS 472-4 Sec. 63.002. ELECTRONIC PUBLISHING DEFINED 472-5 Sec. 63.003. INCUMBENT LOCAL EXCHANGE COMPANY DEFINED 472-6 Sec. 63.004. CERTAIN SERVICES NOT PROHIBITED 472-7 Sec. 63.005. INVESTMENT OF DIVIDENDS 472-8 Sec. 63.006. JOINT VIOLATIONS 472-9 Sec. 63.007. PRIVATE COMPLAINT; APPLICATION FOR ORDER 472-10 Sec. 63.008. PRIVATE SUIT FOR INJUNCTION 472-11 Sec. 63.009. PRIVATE SUIT FOR DAMAGES 472-12 Sec. 63.010. APPLICABILITY OF ANTITRUST LAWS 472-13 Sec. 63.011. APPLICABILITY OF CHAPTER 472-14 (Sections 63.012-63.030 reserved for expansion) 472-15 SUBCHAPTER B. ELECTRONIC PUBLISHING SAFEGUARDS 472-16 Sec. 63.031. PUBLICATION BY BASIC TELEPHONE SERVICE 472-17 PROHIBITED 472-18 Sec. 63.032. SEPARATED AFFILIATE OR JOINT VENTURE 472-19 REQUIREMENTS 472-20 Sec. 63.033. INCUMBENT LOCAL EXCHANGE COMPANY 472-21 REQUIREMENTS 472-22 Sec. 63.034. COMPLIANCE REVIEW AND REPORT 472-23 Sec. 63.035. SERVICES TO ELECTRONIC PUBLISHER 472-24 Sec. 63.036. INFORMATION PROVIDED 472-25 Sec. 63.037. CUSTOMER PROPRIETARY NETWORK INFORMATION 473-1 Sec. 63.038. PROHIBITED JOINT ACTIVITIES 473-2 Sec. 63.039. PERMITTED JOINT MARKETING OR REFERRAL 473-3 ACTIVITIES 473-4 Sec. 63.040. ELECTRONIC PUBLISHING TEAMING OR BUSINESS 473-5 ARRANGEMENTS 473-6 Sec. 63.041. JOINT VENTURE PARTICIPATION 473-7 Sec. 63.042. OTHER ELECTRONIC PUBLISHERS 473-8 (Sections 63.043-63.060 reserved for expansion) 473-9 SUBCHAPTER C. ELECTRONIC PUBLISHING TRANSACTIONS 473-10 Sec. 63.061. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN INCUMBENT 473-11 LOCAL EXCHANGE COMPANY AND AFFILIATE 473-12 GENERALLY 473-13 Sec. 63.062. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN INCUMBENT 473-14 LOCAL EXCHANGE COMPANY AND SEPARATED 473-15 AFFILIATE 473-16 Sec. 63.063. EXCEPTION 473-17 CHAPTER 63. ELECTRONIC PUBLISHING 473-18 SUBCHAPTER A. GENERAL PROVISIONS 473-19 Sec. 63.001. GENERAL DEFINITIONS. In this chapter: 473-20 (1) "Affiliate" means an entity, other than a 473-21 separated affiliate, that, directly or indirectly, is: 473-22 (A) under common ownership or control with an 473-23 incumbent local exchange company; 473-24 (B) owned or controlled by an incumbent local 473-25 exchange company; or 474-1 (C) the owner or in control of an incumbent 474-2 local exchange company. 474-3 (2) "Basic telephone service" means a wireline 474-4 telephone exchange facility or service provided by an incumbent 474-5 local exchange company in a telephone exchange area, other than a: 474-6 (A) competitive wireline telephone exchange 474-7 service provided in a telephone exchange area in which another 474-8 entity provides a wireline telephone exchange service that was 474-9 provided on January 1, 1984; or 474-10 (B) commercial mobile service provided by an 474-11 affiliate that the Federal Communications Commission requires to be 474-12 a corporate entity separate from the local exchange company. 474-13 (3) "Basic telephone service information" means: 474-14 (A) an incumbent local exchange company's 474-15 network or customer information; and 474-16 (B) information acquired by an incumbent local 474-17 exchange company as a result of its provision of basic telephone 474-18 service. 474-19 (4) "Control" has the meaning assigned by: 474-20 (A) 17 C.F.R. Section 240.12b--2 as adopted by 474-21 the Securities and Exchange Commission under the Securities 474-22 Exchange Act of 1934 (15 U.S.C. Section 78a et seq.); or 474-23 (B) a successor to that section. 474-24 (5) "Electronic publishing joint venture" means a 474-25 joint venture owned by an incumbent local exchange company or 475-1 affiliate that provides electronic publishing disseminated by the 475-2 basic telephone service of: 475-3 (A) the incumbent local exchange company; or 475-4 (B) an affiliate of the incumbent local exchange 475-5 company. 475-6 (6) "Entity" means an organization and includes a 475-7 corporation, partnership, sole proprietorship, association, or 475-8 joint venture. 475-9 (7) "Inbound telemarketing" means marketing property, 475-10 goods, or services by telephone to a customer or potential customer 475-11 who initiates the call. 475-12 (8) "Modification of final judgment" means the order 475-13 entered August 24, 1982, in the antitrust action styled United 475-14 States v. Western Electric, Civil Action No. 82-0192, in the United 475-15 States District Court for the District of Columbia, and includes 475-16 any judgment or order with respect to that action issued on or 475-17 after August 24, 1982. 475-18 (9) "Own" means to have the: 475-19 (A) equivalent of a direct or indirect equity 475-20 interest of more than 10 percent of an entity; or 475-21 (B) right to more than 10 percent of the gross 475-22 revenues of an entity under a revenue sharing or royalty agreement. 475-23 (10) "Separated affiliate" means a corporation that: 475-24 (A) does not own or control an incumbent local 475-25 exchange company; 476-1 (B) is not owned or controlled by an incumbent 476-2 local exchange company; and 476-3 (C) is under common ownership or control with an 476-4 incumbent local exchange company and provides electronic publishing 476-5 that is disseminated by the basic telephone service of: 476-6 (i) the incumbent local exchange company; 476-7 or 476-8 (ii) an affiliate of the incumbent local 476-9 exchange company. (V.A.C.S. Art. 1446c-0, Secs. 3.551(1), (2), 476-10 (3), (4), (6), (7), (8), (9), (10); New.) 476-11 Sec. 63.002. ELECTRONIC PUBLISHING DEFINED. (a) In this 476-12 chapter, "electronic publishing" means the use of an incumbent 476-13 local exchange company's basic telephone service to disseminate, 476-14 provide, publish, or sell to a nonaffiliated entity or person: 476-15 (1) news; 476-16 (2) entertainment other than an interactive game; 476-17 (3) business, financial, legal, consumer, or credit 476-18 material; 476-19 (4) an editorial; 476-20 (5) a column; 476-21 (6) sports reporting; 476-22 (7) a feature; 476-23 (8) advertising; 476-24 (9) a photograph or image; 476-25 (10) archival or research material; 477-1 (11) a legal notice or public record; 477-2 (12) scientific, educational, instructional, 477-3 technical, professional, trade, or other literary material; or 477-4 (13) other similar information. 477-5 (b) In this chapter, "electronic publishing" does not 477-6 include providing the following network services: 477-7 (1) information access, as that term is defined by the 477-8 modification of final judgment; 477-9 (2) transmission of information as a common carrier; 477-10 (3) transmission of information as part of a gateway 477-11 to an information service that does not involve the generation or 477-12 alteration of the content of information, including data 477-13 transmission, address translation, protocol conversion, billing 477-14 management, introductory information content, or navigational 477-15 systems that enable users to access electronic publishing services 477-16 and that do not affect the presentation of those electronic 477-17 publishing services to users; 477-18 (4) a voice storage and retrieval service, including 477-19 voice messaging and electronic mail service; 477-20 (5) level two gateway services as those services are 477-21 defined by the Federal Communications Commission's Second Report 477-22 and Order, Recommendation to Congress and Second Further Notice of 477-23 Proposed Rulemaking in CC Docket No. 87-266 dated August 14, 1992 477-24 (7 FCC Record 5781 (1992)); 477-25 (6) a data processing service that does not involve 478-1 the generation or alteration of the content of information; 478-2 (7) a transaction processing system that does not 478-3 involve the generation or alteration of the content of information; 478-4 (8) electronic billing or advertising of a regulated 478-5 telecommunications service of an incumbent local exchange company; 478-6 (9) language translation; 478-7 (10) conversion of information from one format to 478-8 another; 478-9 (11) information necessary for the management, 478-10 control, or operation of a telephone company telecommunications 478-11 system; 478-12 (12) directory assistance that: 478-13 (A) provides names, addresses, and telephone 478-14 numbers; and 478-15 (B) does not include advertising; 478-16 (13) a caller identification service; 478-17 (14) repairing and provisioning a database for a 478-18 telephone company operation; 478-19 (15) credit card and billing validation for a 478-20 telephone company operation; 478-21 (16) a 911-E or another emergency assistance database; 478-22 (17) another network service of a type that: 478-23 (A) is similar to the network services listed in 478-24 this subsection; and 478-25 (B) does not involve the generation or 479-1 alteration of the content of information; 479-2 (18) an upgrade to a network service listed in this 479-3 subsection that does not involve the generation or alteration of 479-4 the content of information; 479-5 (19) full motion video entertainment on demand; or 479-6 (20) video programming, as defined by Section 602, 479-7 Communications Act of 1934 (47 U.S.C. Section 522). (V.A.C.S. 479-8 Art. 1446c-0, Sec. 3.551(5).) 479-9 Sec. 63.003. INCUMBENT LOCAL EXCHANGE COMPANY DEFINED. 479-10 (a) Except as provided by Subsection (b), in this chapter, 479-11 "incumbent local exchange company" means: 479-12 (1) a corporation that: 479-13 (A) serves more than five million access lines 479-14 in this state; and 479-15 (B) is subject to the modification of final 479-16 judgment; 479-17 (2) an entity owned or controlled by a corporation 479-18 described by Subdivision (1); or 479-19 (3) a successor or assign of a corporation described 479-20 by Subdivision (1). 479-21 (b) In this chapter "incumbent local exchange company" does 479-22 not include an electronic publishing joint venture that is: 479-23 (1) owned by a corporation or entity described by 479-24 Subsection (a); and 479-25 (2) permitted by Section 63.039, 63.040, or 63.041. 480-1 (V.A.C.S. Art. 1446c-0, Sec. 3.551(11).) 480-2 Sec. 63.004. CERTAIN SERVICES NOT PROHIBITED. This chapter 480-3 does not prohibit: 480-4 (1) a separated affiliate or electronic publishing 480-5 joint venture from providing in any area electronic publishing or 480-6 another service; or 480-7 (2) an incumbent local exchange company or affiliate 480-8 from providing: 480-9 (A) a service other than electronic publishing 480-10 in any area; or 480-11 (B) electronic publishing that is not 480-12 disseminated by the basic telephone service of: 480-13 (i) the company; or 480-14 (ii) an affiliate of the company. 480-15 (V.A.C.S. Art. 1446c-0, Secs. 3.552(b), (c).) 480-16 Sec. 63.005. INVESTMENT OF DIVIDENDS. This chapter does not 480-17 prohibit an affiliate from investing a dividend derived from an 480-18 incumbent local exchange company in its separated affiliate. 480-19 (V.A.C.S. Art. 1446c-0, Sec. 3.557 (part).) 480-20 Sec. 63.006. JOINT VIOLATIONS. An incumbent local exchange 480-21 company, an affiliate, or a separated affiliate may not act jointly 480-22 with another entity to knowingly and wilfully violate or evade a 480-23 requirement of this chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.556.) 480-24 Sec. 63.007. PRIVATE COMPLAINT; APPLICATION FOR ORDER. 480-25 (a) A person may file with the commission a complaint that an act 481-1 or practice of an incumbent local exchange company, affiliate, or 481-2 separated affiliate violates this chapter. 481-3 (b) A person may apply to the commission for the commission 481-4 to order an incumbent local exchange company, affiliate, or 481-5 separated affiliate to cease and desist from an act or practice 481-6 that violates this chapter. (V.A.C.S. Art. 1446c-0, Secs. 3.563(a) 481-7 (part), (b) (part).) 481-8 Sec. 63.008. PRIVATE SUIT FOR INJUNCTION. A person may 481-9 bring suit in district court for an injunction to compel an 481-10 incumbent local exchange company, affiliate, or separated affiliate 481-11 to discontinue a violation of this chapter or to comply with a 481-12 requirement of this chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.563(b) 481-13 (part).) 481-14 Sec. 63.009. PRIVATE SUIT FOR DAMAGES. (a) A person may 481-15 bring suit to recover damages that result from a violation of this 481-16 chapter. 481-17 (b) An incumbent local exchange company, affiliate, or 481-18 separated affiliate is liable for damages if the incumbent local 481-19 exchange company violates this chapter or causes a violation of 481-20 this chapter. 481-21 (c) The incumbent local exchange company is liable to a 481-22 person injured by a violation of this chapter caused by the company 481-23 for: 481-24 (1) the amount of the damages that result from the 481-25 violation; and 482-1 (2) reasonable attorney's fees. 482-2 (d) The court shall determine and award attorney's fees in 482-3 each case in which damages are awarded. The attorney's fees shall 482-4 be taxed and collected as part of the costs of the suit. 482-5 (e) The court may not award damages for a violation: 482-6 (1) discovered by a compliance review under Section 482-7 63.034; and 482-8 (2) corrected before the 91st day after the date of 482-9 its discovery. (V.A.C.S. Art. 1446c-0, Sec. 3.563(a) (part).) 482-10 Sec. 63.010. APPLICABILITY OF ANTITRUST LAWS. This chapter 482-11 does not modify, impair, or supersede the applicability of 482-12 antitrust laws. (V.A.C.S. Art. 1446c-0, Sec. 3.564.) 482-13 Sec. 63.011. APPLICABILITY OF CHAPTER. This chapter does 482-14 not apply to conduct that occurs after June 30, 2001. (V.A.C.S. 482-15 Art. 1446c-0, Sec. 3.566.) 482-16 (Sections 63.012-63.030 reserved for expansion) 482-17 SUBCHAPTER B. ELECTRONIC PUBLISHING SAFEGUARDS 482-18 Sec. 63.031. PUBLICATION BY BASIC TELEPHONE SERVICE 482-19 PROHIBITED. An incumbent local exchange company or affiliate may 482-20 not provide electronic publishing disseminated by the basic 482-21 telephone service of: 482-22 (1) the incumbent local exchange company; or 482-23 (2) an affiliate of the incumbent local exchange 482-24 company. (V.A.C.S. Art. 1446c-0, Sec. 3.552(a).) 482-25 Sec. 63.032. SEPARATED AFFILIATE OR JOINT VENTURE 483-1 REQUIREMENTS. (a) A separated affiliate or electronic publishing 483-2 joint venture shall maintain books, records, and accounts that: 483-3 (1) are separate from the books, records, and accounts 483-4 of the incumbent local exchange company and any affiliate; and 483-5 (2) record, in accordance with generally accepted 483-6 accounting principles, all direct and indirect transactions with 483-7 the incumbent local exchange company. 483-8 (b) A separated affiliate or electronic publishing joint 483-9 venture shall prepare financial statements that are not 483-10 consolidated with the financial statements of the incumbent local 483-11 exchange company or an affiliate. Additional consolidated 483-12 statements may be prepared. 483-13 (c) A separated affiliate or electronic publishing joint 483-14 venture shall file annual reports with the commission. The reports 483-15 must be in a form substantially equivalent to the Form 10-K 483-16 required by federal Securities and Exchange Commission regulations. 483-17 (d) A separated affiliate or electronic publishing joint 483-18 venture may not hire: 483-19 (1) as a corporate officer, a sales or marketing 483-20 manager whose responsibilities at the separated affiliate or 483-21 electronic publishing joint venture include a geographic area in 483-22 which the incumbent local exchange company provides basic telephone 483-23 service; 483-24 (2) network operations personnel whose 483-25 responsibilities at the separated affiliate or electronic 484-1 publishing joint venture require dealing directly with the 484-2 incumbent local exchange company; or 484-3 (3) a person who was employed by the incumbent local 484-4 exchange company during the year preceding the date of hire. 484-5 (e) Subsection (d)(3) does not apply to a person who is 484-6 subject to a collective bargaining agreement under which the person 484-7 has a right to be employed by a separated affiliate or electronic 484-8 publishing joint venture of the local exchange company. 484-9 (f) A separated affiliate or electronic publishing joint 484-10 venture may not: 484-11 (1) incur debt in a manner that, on default, would 484-12 permit a creditor to have recourse against an asset of the 484-13 incumbent local exchange company; 484-14 (2) provide a wireline telephone exchange service in a 484-15 telephone exchange area in which an incumbent local exchange 484-16 company with which it is under common ownership or control provides 484-17 basic telephone exchange service, unless the service is provided by 484-18 resale; or 484-19 (3) use a name, trademark, or service mark of an 484-20 incumbent local exchange company unless the name, trademark, or 484-21 service mark is used in common with the entity that owns or 484-22 controls the incumbent local exchange company. (V.A.C.S. 484-23 Art. 1446c-0, Sec. 3.553 (part).) 484-24 Sec. 63.033. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS. 484-25 (a) This section applies only to an incumbent local exchange 485-1 company that is under common ownership or control with a separated 485-2 affiliate or electronic publishing joint venture. 485-3 (b) An incumbent local exchange company shall: 485-4 (1) carry out each transaction with a separated 485-5 affiliate in a manner: 485-6 (A) equivalent to the manner that unrelated 485-7 parties would carry out an independent transaction; and 485-8 (B) able to be audited in accordance with 485-9 generally accepted auditing standards; 485-10 (2) carry out a transaction with a separated affiliate 485-11 that involves the transfer of personnel, assets, or anything of 485-12 value, in accordance with a written contract or tariff that is 485-13 filed with the commission and made available to the public; 485-14 (3) value an asset the company transfers to a 485-15 separated affiliate at the greater of the asset's net book cost or 485-16 fair market value; 485-17 (4) value an asset the company's separated affiliate 485-18 transfers to the company at the lesser of the asset's net book cost 485-19 or fair market value; and 485-20 (5) comply fully with applicable accounting rules of 485-21 the Federal Communications Commission and the commission, including 485-22 rules on cost allocation. 485-23 (c) An incumbent local exchange company may not directly or 485-24 indirectly provide anything of monetary value to a separated 485-25 affiliate unless the item is provided in exchange for consideration 486-1 valued in an amount at least equal to the greater of the item's net 486-2 book cost or fair market value. This subsection does not apply to 486-3 an affiliate's investment of a dividend or profit derived from an 486-4 incumbent local exchange company. 486-5 (d) An incumbent local exchange company may not: 486-6 (1) provide a separated affiliate a facility, a 486-7 service, or basic telephone service information unless the company 486-8 makes the facility, service, or information available to 486-9 nonaffiliated entities on request and on the same terms; 486-10 (2) provide debt or equity financing directly or 486-11 indirectly to a separated affiliate, except in an instance in which 486-12 Federal Communications Commission regulations or commission rules 486-13 permit: 486-14 (A) in-arrears payment for a tariffed 486-15 telecommunications service; or 486-16 (B) an affiliate to invest a dividend or profit 486-17 derived from an incumbent local exchange company; 486-18 (3) discriminate in the presentation or provision of a 486-19 gateway for electronic publishing services or an electronic 486-20 directory of information services that is provided over the 486-21 company's basic telephone service; 486-22 (4) have a director, officer, or employee in common 486-23 with a separated affiliate; 486-24 (5) own property in common with a separated affiliate; 486-25 (6) hire or train personnel for a separated affiliate; 487-1 (7) purchase, install, or maintain equipment for a 487-2 separated affiliate, except for telephone service that the company 487-3 provides under tariff or contract subject to this chapter; or 487-4 (8) perform a research or development activity for a 487-5 separated affiliate. (V.A.C.S. Art. 1446c-0, Secs. 3.554(a) 487-6 (part), (g), (h).) 487-7 Sec. 63.034. COMPLIANCE REVIEW AND REPORT. (a) A separated 487-8 affiliate or an electronic publishing joint venture annually shall 487-9 have a compliance review performed to determine whether the 487-10 separated affiliate or joint venture, during the preceding calendar 487-11 year, complied with the requirements this chapter imposes on the 487-12 separated affiliate or joint venture. 487-13 (b) An incumbent local exchange company that is under common 487-14 ownership or control with a separated affiliate or electronic 487-15 publishing joint venture annually shall have a compliance review 487-16 performed to determine whether the company, during the preceding 487-17 calendar year, complied with the requirements this chapter imposes 487-18 on the company. 487-19 (c) An independent entity that is subject to professional, 487-20 legal, and ethical obligations must conduct the compliance review. 487-21 (d) The compliance review must be performed each year 487-22 before: 487-23 (1) March 31; or 487-24 (2) another date prescribed by the commission. 487-25 (e) An entity subject to a compliance review under 488-1 Subsection (a) or (b) shall maintain the results of the entity's 488-2 compliance review for five years subject to review by a lawful 488-3 authority. 488-4 (f) Before the 91st day after the date an entity subject to 488-5 a compliance review under Subsection (a) or (b) receives the 488-6 results of a compliance review under this section, the entity 488-7 shall: 488-8 (1) file with the commission a report of any 488-9 exceptions or corrective actions; and 488-10 (2) allow any person to inspect and copy the report. 488-11 (g) The right of a person to inspect and copy the report is 488-12 subject to reasonable safeguards to protect proprietary information 488-13 in the report from being used for a purpose other than to enforce 488-14 this chapter or to pursue a remedy under this chapter. (V.A.C.S. 488-15 Art. 1446c-0, Secs. 3.553 (part), 3.554(a) (part).) 488-16 Sec. 63.035. SERVICES TO ELECTRONIC PUBLISHER. (a) This 488-17 section applies only to an incumbent local exchange company that is 488-18 under common ownership and control with a separated affiliate or an 488-19 electronic publishing joint venture. 488-20 (b) If the incumbent local exchange company provides a 488-21 facility or service for telecommunication, transmission, billing 488-22 and collection, or expanded interconnection to an electronic 488-23 publisher, including a separated affiliate, for use in connection 488-24 with the provision of electronic publishing disseminated by the 488-25 basic telephone service of the incumbent local exchange company or 489-1 an affiliate of the incumbent local exchange company, the incumbent 489-2 local exchange company shall provide to any electronic publisher on 489-3 request the same type of facility or service. The facility or 489-4 service must be: 489-5 (1) provided on the same terms as provided to another 489-6 electronic publisher or as required by the Federal Communications 489-7 Commission or the commission; and 489-8 (2) unbundled and individually tariffed to the 489-9 smallest extent technically feasible and economically reasonable. 489-10 (c) The incumbent local exchange company shall provide 489-11 network access and interconnection for basic telephone service to 489-12 an electronic publisher: 489-13 (1) at any technically feasible and economically 489-14 reasonable point in the incumbent local exchange company's network; 489-15 and 489-16 (2) at a just and reasonable rate that: 489-17 (A) is tariffed if rates for the service are 489-18 subject to regulation; and 489-19 (B) is not higher on a per unit basis than the 489-20 rate charged for the service to another electronic publisher or a 489-21 separated affiliate engaged in electronic publishing. 489-22 (d) If the price for network access or interconnection for 489-23 basic telephone service is not subject to regulation, the incumbent 489-24 local exchange company shall provide the service to an electronic 489-25 publisher on the same terms under which a separated affiliate 490-1 receives the service. 490-2 (e) If a tariff is not required for a basic telephone 490-3 service used by an electronic publisher, the incumbent local 490-4 exchange company shall provide an electronic publisher with the 490-5 service on the same terms under which a separated affiliate 490-6 receives the service. (V.A.C.S. Art. 1446c-0, Secs. 3.554(b), (c), 490-7 (d), (e).) 490-8 Sec. 63.036. INFORMATION PROVIDED. (a) An incumbent local 490-9 exchange company under common ownership or control with a separated 490-10 affiliate or an electronic publishing joint venture shall give to 490-11 each affected electronic publisher reasonable advance notification 490-12 of information that: 490-13 (1) is necessary for an interconnected electronic 490-14 publisher to transmit or route information; 490-15 (2) is necessary to ensure the interoperability of an 490-16 electronic publisher's network with the exchange company's network; 490-17 or 490-18 (3) relates to a change in basic telephone service 490-19 network design or a technical standard that may affect the 490-20 provision of electronic publishing. 490-21 (b) The notification must be given to each electronic 490-22 publisher at the same time and on the same terms. (V.A.C.S. 490-23 Art. 1446c-0, Sec. 3.554(f).) 490-24 Sec. 63.037. CUSTOMER PROPRIETARY NETWORK INFORMATION. In 490-25 accordance with Subchapter B, Chapter 62, an incumbent local 491-1 exchange company or an affiliate may not provide an electronic 491-2 publisher, including a separated affiliate or electronic publishing 491-3 joint venture, with customer proprietary network information for 491-4 use with or in connection with providing electronic publishing 491-5 disseminated by the basic telephone service of the incumbent local 491-6 exchange company or an affiliate of the incumbent local exchange 491-7 company unless the exchange company or affiliate makes the 491-8 information available to all electronic publishers on the same 491-9 terms. (V.A.C.S. Art. 1446c-0, Sec. 3.555.) 491-10 Sec. 63.038. PROHIBITED JOINT ACTIVITIES. Except as 491-11 provided by Sections 63.039-63.041, an incumbent local exchange 491-12 company may not engage in any: 491-13 (1) promotion, marketing, sales, or advertising for or 491-14 with a separated affiliate; or 491-15 (2) promotion, marketing, sales, or advertising for or 491-16 with an affiliate if the activity is related to electronic 491-17 publishing. (V.A.C.S. Art. 1446c-0, Sec. 3.558.) 491-18 Sec. 63.039. PERMITTED JOINT MARKETING OR REFERRAL 491-19 ACTIVITIES. (a) An incumbent local exchange company may provide 491-20 an inbound telemarketing or referral service related to the 491-21 provision of electronic publishing for: 491-22 (1) a separated affiliate; 491-23 (2) an electronic publishing joint venture; 491-24 (3) an affiliate; or 491-25 (4) a nonaffiliated electronic publisher. 492-1 (b) To ensure that the company's method of providing the 492-2 service or the company's price structure does not competitively 492-3 disadvantage an electronic publisher, regardless of the publisher's 492-4 size or whether the publisher uses a telemarketing service of the 492-5 company, an incumbent local exchange company that provides an 492-6 inbound telemarketing or referral service to a separated affiliate, 492-7 electronic publishing joint venture, or affiliate shall make the 492-8 service available to all electronic publishers: 492-9 (1) on request; 492-10 (2) on nondiscriminatory terms; 492-11 (3) at compensatory prices; and 492-12 (4) subject to rules of the commission. (V.A.C.S. 492-13 Art. 1446c-0, Sec. 3.559(a).) 492-14 Sec. 63.040. ELECTRONIC PUBLISHING TEAMING OR BUSINESS 492-15 ARRANGEMENTS. (a) An incumbent local exchange company may engage 492-16 in a nondiscriminatory teaming or business arrangement to engage in 492-17 electronic publishing with a separated affiliate or with another 492-18 electronic publisher. 492-19 (b) An incumbent local exchange company engaged in a teaming 492-20 or business arrangement under Subsection (a) may not own the 492-21 teaming or business arrangement. 492-22 (c) An incumbent local exchange company engaged in a teaming 492-23 or business arrangement under Subsection (a) may provide only 492-24 facilities, services, and basic telephone service information 492-25 authorized by this chapter. (V.A.C.S. Art. 1446c-0, Sec. 493-1 3.559(b).) 493-2 Sec. 63.041. JOINT VENTURE PARTICIPATION. (a) Except as 493-3 provided by Subsection (b), an incumbent local exchange company or 493-4 affiliate may participate on a nonexclusive basis in an electronic 493-5 publishing joint venture to provide electronic publishing services 493-6 with an entity that is not: 493-7 (1) an incumbent local exchange company; 493-8 (2) an affiliate; or 493-9 (3) a separated affiliate. 493-10 (b) An incumbent local exchange company or affiliate may not 493-11 participate in an electronic publishing joint venture if the 493-12 company or affiliate has: 493-13 (1) a direct or indirect equity interest in the 493-14 venture, or the equivalent, of more than 50 percent; or 493-15 (2) the right to more than 50 percent of the gross 493-16 revenues of the venture under a revenue sharing or royalty 493-17 agreement. 493-18 (c) Officers and employees of an incumbent local exchange 493-19 company or affiliate that participates in an electronic publishing 493-20 joint venture may not have more than 50 percent of the voting 493-21 control over the venture. 493-22 (d) The commission for good cause shown may authorize an 493-23 incumbent local exchange company or affiliate to have a larger 493-24 percentage of equity interest, revenue share, or voting control 493-25 than that prescribed by Subsection (b) or (c) for a joint venture 494-1 between the company and a small, local, electronic publisher. The 494-2 larger percentage may not exceed 80 percent. 494-3 (e) An incumbent local exchange company that participates in 494-4 an electronic publishing joint venture may provide promotion, 494-5 marketing, sales, or advertising personnel or services to the joint 494-6 venture. (V.A.C.S. Art. 1446c-0, Sec. 3.559(c).) 494-7 Sec. 63.042. OTHER ELECTRONIC PUBLISHERS. (a) Except as 494-8 provided by Section 63.041: 494-9 (1) an incumbent local exchange company may not have 494-10 an officer, employee, property, or facility in common with an 494-11 entity whose principal business is publishing if the business 494-12 includes electronic publishing; and 494-13 (2) an officer or employee of an incumbent local 494-14 exchange company may not serve as a director of an entity whose 494-15 principal business is publishing if the business includes 494-16 electronic publishing. 494-17 (b) For the purposes of Subsection (a), an incumbent local 494-18 exchange company or affiliate that owns an electronic publishing 494-19 joint venture is not considered engaged in the electronic 494-20 publishing business solely because of that ownership. 494-21 (c) Except as provided by Section 63.041, an incumbent local 494-22 exchange company may not: 494-23 (1) market or sell for an entity that engages in 494-24 electronic publishing; 494-25 (2) provide a facility, service, or basic telephone 495-1 service information to an entity that engages in electronic 495-2 publishing, for use with or in connection with the provision of 495-3 electronic publishing that is disseminated by the basic telephone 495-4 service of the incumbent local exchange company or an affiliate of 495-5 the incumbent local exchange company, unless an equivalent 495-6 facility, service, or information is made available on equivalent 495-7 terms to all other entities; or 495-8 (3) hire personnel, purchase, or carry out production 495-9 for an entity that engages in electronic publishing. (V.A.C.S. 495-10 Art. 1446c-0, Sec. 3.562.) 495-11 (Sections 63.043-63.060 reserved for expansion) 495-12 SUBCHAPTER C. ELECTRONIC PUBLISHING TRANSACTIONS 495-13 Sec. 63.061. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN 495-14 INCUMBENT LOCAL EXCHANGE COMPANY AND AFFILIATE GENERALLY. (a) If 495-15 related to the provision of electronic publishing, the provision of 495-16 a facility, a service, or basic telephone service information by an 495-17 incumbent local exchange company to an affiliate or the transfer of 495-18 an asset, including personnel or something of commercial or 495-19 competitive value, from an incumbent local exchange company to an 495-20 affiliate shall be: 495-21 (1) recorded in the books and records of the incumbent 495-22 local exchange company and the affiliate; 495-23 (2) able to be audited in accordance with generally 495-24 accepted auditing standards; and 495-25 (3) done in accordance with a written contract or 496-1 tariff filed with the commission. 496-2 (b) A transfer of an asset directly related to the provision 496-3 of electronic publishing from an incumbent local exchange company 496-4 to an affiliate shall be valued at the greater of the asset's net 496-5 book cost or fair market value. 496-6 (c) A transfer of an asset related to the provision of 496-7 electronic publishing from an affiliate to the incumbent local 496-8 exchange company shall be valued at the lesser of the asset's net 496-9 book cost or fair market value. 496-10 (d) An incumbent local exchange company may not directly or 496-11 indirectly provide to a separated affiliate a facility, a service, 496-12 or basic telephone service information related to the provision of 496-13 electronic publishing unless the facility, service, or information 496-14 is made available to nonaffiliated companies on the same terms. 496-15 (V.A.C.S. Art. 1446c-0, Sec. 3.560.) 496-16 Sec. 63.062. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN 496-17 INCUMBENT LOCAL EXCHANGE COMPANY AND SEPARATED AFFILIATE. (a) If 496-18 an incumbent local exchange company provides to an affiliate a 496-19 facility, a service, or basic telephone service information subject 496-20 to Section 63.061(a) or transfers to an affiliate an asset subject 496-21 to that section and the affiliate provides the facility, service, 496-22 or information to a separated affiliate or transfers the asset to a 496-23 separated affiliate, the transaction shall be: 496-24 (1) recorded in the books and records of each entity; 496-25 (2) able to be audited in accordance with generally 497-1 accepted auditing standards; and 497-2 (3) done in accordance with a written contract or 497-3 tariff filed with the commission. 497-4 (b) A transfer of an asset directly related to the provision 497-5 of electronic publishing from an incumbent local exchange company 497-6 to an affiliate as described by Section 63.061 and then transferred 497-7 to a separated affiliate shall be valued at the greater of the 497-8 asset's net book cost or fair market value. 497-9 (c) A transfer of an asset related to the provision of 497-10 electronic publishing from a separated affiliate to an affiliate 497-11 and then transferred to the incumbent local exchange company as 497-12 described by Section 63.061 shall be valued at the lesser of the 497-13 asset's net book cost or fair market value. 497-14 (d) An affiliate may not provide directly or indirectly to a 497-15 separated affiliate a facility, a service, or basic telephone 497-16 service information related to the provision of electronic 497-17 publishing unless the facility, service, or information is made 497-18 available to nonaffiliated companies on the same terms. (V.A.C.S. 497-19 Art. 1446c-0, Sec. 3.561.) 497-20 Sec. 63.063. EXCEPTION. This subchapter does not apply to 497-21 an investment described by Section 63.005. (V.A.C.S. Art. 1446c-0, 497-22 Sec. 3.557 (part).) 497-23 (Chapters 64-100 reserved for expansion) 498-1 TITLE 3. GAS REGULATION 498-2 SUBTITLE A. GAS UTILITY REGULATORY ACT 498-3 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF 498-4 PUBLIC UTILITY COUNSEL 498-5 SUBCHAPTER A. GENERAL PROVISIONS 498-6 Sec. 101.001. SHORT TITLE 498-7 Sec. 101.002. PURPOSE AND FINDINGS 498-8 Sec. 101.003. DEFINITIONS 498-9 Sec. 101.004. PERSON DETERMINED TO BE AFFILIATE 498-10 Sec. 101.005. ADMINISTRATIVE PROCEDURE 498-11 Sec. 101.006. CUMULATIVE EFFECT; APPLICATION TO GAS 498-12 UTILITIES 498-13 Sec. 101.007. LIBERAL CONSTRUCTION 498-14 Sec. 101.008. CONSTRUCTION WITH FEDERAL AUTHORITY 498-15 (Sections 101.009-101.050 reserved for expansion) 498-16 SUBCHAPTER B. OFFICE OF PUBLIC UTILITY COUNSEL 498-17 Sec. 101.051. OFFICE OF PUBLIC UTILITY COUNSEL 498-18 Sec. 101.052. OFFICE POWERS AND DUTIES 498-19 Sec. 101.053. PROHIBITED ACTS 498-20 Sec. 101.054. PERSONNEL 498-21 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF 498-22 PUBLIC UTILITY COUNSEL 498-23 SUBCHAPTER A. GENERAL PROVISIONS 498-24 Sec. 101.001. SHORT TITLE. This subtitle may be cited as 498-25 the Gas Utility Regulatory Act. (V.A.C.S. Art. 1446e, Sec. 1.01.) 499-1 Sec. 101.002. PURPOSE AND FINDINGS. (a) This subtitle is 499-2 enacted to protect the public interest inherent in the rates and 499-3 services of gas utilities. The purpose of this subtitle is to 499-4 establish a comprehensive and adequate regulatory system for gas 499-5 utilities to assure rates, operations, and services that are just 499-6 and reasonable to the consumers and to the utilities. 499-7 (b) Gas utilities are by definition monopolies in the areas 499-8 they serve. As a result, the normal forces of competition that 499-9 regulate prices in a free enterprise society do not operate. Public 499-10 agencies regulate utility rates, operations, and services as a 499-11 substitute for competition. (V.A.C.S. Art. 1446e, Sec. 1.02.) 499-12 Sec. 101.003. DEFINITIONS. In this subtitle: 499-13 (1) "Affected person" means: 499-14 (A) a gas utility affected by an action of a 499-15 regulatory authority; 499-16 (B) a person whose utility service or rates are 499-17 affected by a proceeding before a regulatory authority; or 499-18 (C) a person who: 499-19 (i) is a competitor of a gas utility with 499-20 respect to a service performed by the utility; or 499-21 (ii) wants to enter into competition with 499-22 a gas utility. 499-23 (2) "Affiliate" means: 499-24 (A) a person who directly or indirectly owns or 499-25 holds at least five percent of the voting securities of a gas 500-1 utility; 500-2 (B) a person in a chain of successive ownership 500-3 of at least five percent of the voting securities of a gas utility; 500-4 (C) a corporation that has at least five percent 500-5 of its voting securities owned or controlled, directly or 500-6 indirectly, by a gas utility; 500-7 (D) a corporation that has at least five percent 500-8 of its voting securities owned or controlled, directly or 500-9 indirectly, by: 500-10 (i) a person who directly or indirectly 500-11 owns or controls at least five percent of the voting securities of 500-12 a gas utility; or 500-13 (ii) a person in a chain of successive 500-14 ownership of at least five percent of the voting securities of a 500-15 gas utility; 500-16 (E) a person who is an officer or director of a 500-17 gas utility or of a corporation in a chain of successive ownership 500-18 of at least five percent of the voting securities of a gas utility; 500-19 or 500-20 (F) a person determined to be an affiliate under 500-21 Section 101.004. 500-22 (3) "Allocation" means the division among 500-23 municipalities or among municipalities and unincorporated areas of 500-24 the plant, revenues, expenses, taxes, and reserves of a gas utility 500-25 used to provide gas utility service in a municipality or for a 501-1 municipality and unincorporated areas. 501-2 (4) "Corporation" means a domestic or foreign 501-3 corporation, joint-stock company, or association, and each lessee, 501-4 assignee, trustee, receiver, or other successor in interest of the 501-5 corporation, company, or association, that has any of the powers or 501-6 privileges of a corporation not possessed by an individual or 501-7 partnership. The term does not include a municipal corporation, 501-8 except as expressly provided by this subtitle. 501-9 (5) "Counsellor" means the chief executive of the 501-10 Office of Public Utility Counsel. 501-11 (6) "Facilities" means all of the plant and equipment 501-12 of a gas utility and includes the tangible and intangible property, 501-13 without limitation, owned, operated, leased, licensed, used, 501-14 controlled, or supplied for, by, or in connection with the business 501-15 of the gas utility. 501-16 (7) "Gas utility" includes a person or river authority 501-17 that owns or operates for compensation in this state equipment or 501-18 facilities to transmit or distribute combustible hydrocarbon 501-19 natural gas or synthetic natural gas for sale or resale in a manner 501-20 not subject to the jurisdiction of the Federal Energy Regulatory 501-21 Commission under the Natural Gas Act (15 U.S.C. Section 717 et 501-22 seq.). The term includes a lessee, trustee, or receiver of a gas 501-23 utility. The term does not include: 501-24 (A) a municipal corporation; 501-25 (B) a person or river authority to the extent 502-1 the person or river authority: 502-2 (i) produces, gathers, transports, or 502-3 sells natural gas or synthetic natural gas under Section 121.004 or 502-4 121.005; 502-5 (ii) distributes or sells liquefied 502-6 petroleum gas; or 502-7 (iii) transports, delivers, or sells 502-8 natural gas for fuel for irrigation wells or any other direct 502-9 agricultural use; 502-10 (C) a person to the extent the person: 502-11 (i) sells natural gas for use as vehicle 502-12 fuel; 502-13 (ii) sells natural gas to a person who 502-14 later sells the natural gas for use as vehicle fuel; or 502-15 (iii) owns or operates equipment or 502-16 facilities to sell or transport natural gas for ultimate use as 502-17 vehicle fuel; or 502-18 (D) a person not otherwise a gas utility who 502-19 furnishes gas or gas service only to itself, its employees, or its 502-20 tenants as an incident of employment or tenancy, if the gas or gas 502-21 service is not resold to or used by others. 502-22 (8) "Municipally owned utility" means a utility owned, 502-23 operated, and controlled by a municipality or by a nonprofit 502-24 corporation the directors of which are appointed by one or more 502-25 municipalities. 503-1 (9) "Order" means all or a part of a final disposition 503-2 by a regulatory authority in a matter other than rulemaking, 503-3 without regard to whether the disposition is affirmative or 503-4 negative or injunctive or declaratory. The term includes the 503-5 setting of a rate. 503-6 (10) "Person" includes an individual, a partnership of 503-7 two or more persons having a joint or common interest, a mutual or 503-8 cooperative association, and a corporation. 503-9 (11) "Proceeding" means a hearing, investigation, 503-10 inquiry, or other procedure for finding facts or making a decision 503-11 under this subtitle. The term includes a denial of relief or 503-12 dismissal of a complaint. 503-13 (12) "Rate" means: 503-14 (A) any compensation, tariff, charge, fare, 503-15 toll, rental, or classification that is directly or indirectly 503-16 demanded, observed, charged, or collected by a gas utility for a 503-17 service, product, or commodity described in the definition of gas 503-18 utility in this section; and 503-19 (B) a rule, regulation, practice, or contract 503-20 affecting the compensation, tariff, charge, fare, toll, rental, or 503-21 classification. 503-22 (13) "Regulatory authority" means either the railroad 503-23 commission or the governing body of a municipality, in accordance 503-24 with the context. 503-25 (14) "Service" has its broadest and most inclusive 504-1 meaning. The term includes any act performed, anything supplied, 504-2 and any facilities used or supplied by a gas utility in the 504-3 performance of the utility's duties under this subtitle to its 504-4 patrons, employees, other gas utilities, and the public. The term 504-5 also includes the interchange of facilities between two or more gas 504-6 utilities. 504-7 (15) "State agency" has the meaning assigned by 504-8 Section 572.002, Government Code, to the extent the state agency 504-9 must obtain the approval described by Section 31.401(a), Natural 504-10 Resources Code. 504-11 (16) "Test year" means the most recent 12 months, 504-12 beginning on the first day of a calendar or fiscal year quarter, 504-13 for which operating data for a gas utility are available. 504-14 (V.A.C.S. Art. 1446e, Secs. 1.03(1), (3), (4), (6), (7), (8) 504-15 (part), (9), (10), (11), (12), (13), (14), (15), (16), (17).) 504-16 Sec. 101.004. PERSON DETERMINED TO BE AFFILIATE. (a) The 504-17 railroad commission may determine that a person is an affiliate for 504-18 purposes of this subtitle if the railroad commission after notice 504-19 and hearing finds that the person: 504-20 (1) actually exercises substantial influence or 504-21 control over the policies and actions of a gas utility; 504-22 (2) is a person over which a gas utility exercises the 504-23 control described by Subdivision (1); 504-24 (3) is under common control with a gas utility; or 504-25 (4) actually exercises substantial influence over the 505-1 policies and actions of a gas utility in conjunction with one or 505-2 more persons with whom the person is related by ownership or blood 505-3 relationship, or by action in concert, that together they are 505-4 affiliated with the gas utility within the meaning of this section 505-5 even though neither person may qualify as an affiliate 505-6 individually. 505-7 (b) For purposes of Subsection (a)(3), "common control with 505-8 a gas utility" means the direct or indirect possession of the power 505-9 to direct or cause the direction of the management and policies of 505-10 another, without regard to whether that power is established 505-11 through ownership or voting of securities or by any other direct or 505-12 indirect means. (V.A.C.S. Art. 1446e, Sec. 1.03(8) (part).) 505-13 Sec. 101.005. ADMINISTRATIVE PROCEDURE. Chapter 2001, 505-14 Government Code, applies to a proceeding under this subtitle except 505-15 to the extent inconsistent with this subtitle. (V.A.C.S. 505-16 Art. 1446e, Sec. 1.04.) 505-17 Sec. 101.006. CUMULATIVE EFFECT; APPLICATION TO GAS 505-18 UTILITIES. (a) This subtitle is cumulative of laws existing on 505-19 September 1, 1983, relating to the jurisdiction, power, or 505-20 authority of the railroad commission over a gas utility, and, 505-21 except as specifically in conflict with this subtitle, that 505-22 jurisdiction, power, and authority are not limited by this 505-23 subtitle. 505-24 (b) This subtitle applies to all gas utilities, including a 505-25 gas utility that is under the jurisdiction, power, or authority of 506-1 the railroad commission in accordance with a law other than this 506-2 subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(c).) 506-3 Sec. 101.007. LIBERAL CONSTRUCTION. This subtitle shall be 506-4 construed liberally to promote the effectiveness and efficiency of 506-5 regulation of gas utilities to the extent that this construction 506-6 preserves the validity of this subtitle and its provisions. 506-7 (V.A.C.S. Art. 1446e, Sec. 10.04 (part).) 506-8 Sec. 101.008. CONSTRUCTION WITH FEDERAL AUTHORITY. This 506-9 subtitle shall be construed to apply so as not to conflict with any 506-10 authority of the United States. (V.A.C.S. Art. 1446e, Sec. 10.04 506-11 (part).) 506-12 (Sections 101.009-101.050 reserved for expansion) 506-13 SUBCHAPTER B. OFFICE OF PUBLIC UTILITY COUNSEL 506-14 Sec. 101.051. OFFICE OF PUBLIC UTILITY COUNSEL. The 506-15 independent office of public utility counsel represents the 506-16 interests of residential consumers. (V.A.C.S. Art. 1446e, Sec. 506-17 9.07(a).) 506-18 Sec. 101.052. OFFICE POWERS AND DUTIES. (a) The office: 506-19 (1) may appear or intervene as a party or otherwise 506-20 represent residential consumers, as a class, in appeals to the 506-21 railroad commission only at the written request of an affected 506-22 municipality's governing body; 506-23 (2) may initiate or intervene as a matter of right or 506-24 otherwise appear in a judicial proceeding that involves an action 506-25 taken by the railroad commission in a proceeding in which the 507-1 office was a party; 507-2 (3) is entitled to the same access as a party, other 507-3 than railroad commission staff, to records gathered by the railroad 507-4 commission under Section 102.203; 507-5 (4) is entitled to discovery of any nonprivileged 507-6 matter that is relevant to the subject matter of a proceeding or 507-7 petition before the railroad commission; 507-8 (5) may represent an individual residential consumer 507-9 with respect to the consumer's disputed complaint concerning 507-10 utility services that is unresolved before the railroad commission; 507-11 and 507-12 (6) may recommend legislation to the legislature that 507-13 the office determines would positively affect the interests of 507-14 residential consumers. 507-15 (b) The office may represent only as a class the residential 507-16 consumers of a municipality that makes a request under Subsection 507-17 (a)(1). 507-18 (c) This section does not limit the authority of the 507-19 railroad commission to represent residential consumers. 507-20 (d) The appearance of the counsellor in a proceeding does 507-21 not preclude the appearance of other parties on behalf of 507-22 residential consumers. The counsellor may not be grouped with any 507-23 other party. (V.A.C.S. Art. 1446e, Secs. 9.07(f), (g), (h).) 507-24 Sec. 101.053. PROHIBITED ACTS. (a) The counsellor may not: 507-25 (1) have a direct or indirect interest in a gas 508-1 utility company regulated under this subtitle; or 508-2 (2) provide legal services directly or indirectly to 508-3 or be employed in any capacity by a gas utility company regulated 508-4 under this subtitle, its parent, or its subsidiary companies, 508-5 corporations, or cooperatives. 508-6 (b) The prohibition under Subsection (a) applies during the 508-7 period of the counsellor's service and until the first anniversary 508-8 of the date the counsellor ceases to serve as counsellor. 508-9 (c) This section does not prohibit a person from otherwise 508-10 engaging in the private practice of law after the person ceases to 508-11 serve as counsellor. (V.A.C.S. Art. 1446e, Sec. 9.07(e).) 508-12 Sec. 101.054. PERSONNEL. (a) The counsellor may employ 508-13 lawyers, economists, engineers, consultants, statisticians, 508-14 accountants, clerical staff, and other employees as the counsellor 508-15 determines necessary to carry out this subchapter. 508-16 (b) An employee receives compensation as prescribed by the 508-17 legislature from the assessment imposed by Subchapter A, Chapter 508-18 16. (V.A.C.S. Art. 1446e, Sec. 9.07(c).) 508-19 CHAPTER 102. JURISDICTION AND POWERS OF 508-20 RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES 508-21 SUBCHAPTER A. GENERAL POWERS OF RAILROAD COMMISSION 508-22 Sec. 102.001. RAILROAD COMMISSION JURISDICTION 508-23 Sec. 102.002. LIMITATION ON RAILROAD COMMISSION 508-24 JURISDICTION 509-1 Sec. 102.003. RAILROAD COMMISSION POWERS RELATING 509-2 TO REPORTS 509-3 Sec. 102.004. REPORT OF SUBSTANTIAL INTEREST 509-4 Sec. 102.005. ASSISTANCE TO MUNICIPALITY 509-5 (Sections 102.006-102.050 reserved for expansion) 509-6 SUBCHAPTER B. RESTRICTIONS ON CERTAIN TRANSACTIONS 509-7 Sec. 102.051. REPORT OF CERTAIN TRANSACTIONS; 509-8 RAILROAD COMMISSION CONSIDERATION 509-9 Sec. 102.052. REPORT OF PURCHASE OF VOTING STOCK IN GAS 509-10 UTILITY 509-11 Sec. 102.053. REPORT OF LOAN TO STOCKHOLDERS 509-12 Sec. 102.054. APPROVAL OF CONVEYANCE OF GAS RESERVE RIGHTS 509-13 (Sections 102.055-102.100 reserved for expansion) 509-14 SUBCHAPTER C. RECORDS 509-15 Sec. 102.101. RECORDS OF GAS UTILITY 509-16 Sec. 102.102. MAINTENANCE OF OFFICE AND RECORDS IN THIS 509-17 STATE 509-18 Sec. 102.103. COMMUNICATIONS WITH REGULATORY AUTHORITY 509-19 Sec. 102.104. JURISDICTION OVER AFFILIATE 509-20 (Sections 102.105-102.150 reserved for expansion) 509-21 SUBCHAPTER D. REQUIRED REPORTS AND FILINGS 509-22 Sec. 102.151. SCHEDULE FILINGS 509-23 Sec. 102.152. DEPRECIATION ACCOUNT 509-24 Sec. 102.153. ACCOUNTS OF PROFITS AND LOSSES 509-25 Sec. 102.154. REPORT OF CERTAIN EXPENSES 510-1 (Sections 102.155-102.200 reserved for expansion) 510-2 SUBCHAPTER E. AUDITS AND INSPECTIONS 510-3 Sec. 102.201. INQUIRY INTO MANAGEMENT AND AFFAIRS 510-4 Sec. 102.202. AUDIT OF ACCOUNTS 510-5 Sec. 102.203. INSPECTION 510-6 Sec. 102.204. EXAMINATIONS UNDER OATH 510-7 Sec. 102.205. ENTERING PREMISES OF GAS UTILITY 510-8 Sec. 102.206. PRODUCTION OF OUT-OF-STATE RECORDS 510-9 (Sections 102.207-102.250 reserved for expansion) 510-10 SUBCHAPTER F. GENERAL PROVISIONS RELATING TO PROCEEDINGS 510-11 BEFORE REGULATORY AUTHORITY 510-12 Sec. 102.251. RECORD OF PROCEEDING 510-13 Sec. 102.252. RIGHT TO BE HEARD 510-14 CHAPTER 102. JURISDICTION AND POWERS OF 510-15 RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES 510-16 SUBCHAPTER A. GENERAL POWERS OF RAILROAD COMMISSION 510-17 Sec. 102.001. RAILROAD COMMISSION JURISDICTION. (a) The 510-18 railroad commission has exclusive original jurisdiction over the 510-19 rates and services of a gas utility distributing natural gas or 510-20 synthetic natural gas in areas outside a municipality. The 510-21 railroad commission also has exclusive original jurisdiction over 510-22 the rates and services of a gas utility that transmits, transports, 510-23 delivers, or sells natural gas or synthetic natural gas to a gas 510-24 utility that distributes the gas to the public. 510-25 (b) The railroad commission has exclusive appellate 511-1 jurisdiction to review an order or ordinance of a municipality as 511-2 provided by this subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(b).) 511-3 Sec. 102.002. LIMITATION ON RAILROAD COMMISSION 511-4 JURISDICTION. Except as otherwise provided by this subtitle, this 511-5 subtitle does not authorize the railroad commission to: 511-6 (1) regulate or supervise a rate or service of a 511-7 municipally owned utility; or 511-8 (2) affect the jurisdiction, power, or duty of a 511-9 municipality that has elected to regulate and supervise a gas 511-10 utility in the municipality. (V.A.C.S. Art. 1446e, Sec. 2.02.) 511-11 Sec. 102.003. RAILROAD COMMISSION POWERS RELATING TO 511-12 REPORTS. The railroad commission may: 511-13 (1) require a gas utility to report to the railroad 511-14 commission information relating to the gas utility and an affiliate 511-15 inside or outside this state as useful in administering this 511-16 subtitle; 511-17 (2) establish the form for a report; 511-18 (3) determine the time for a report and the frequency 511-19 with which the report is to be made; 511-20 (4) require that a report be made under oath; 511-21 (5) require the filing with the railroad commission of 511-22 a copy of: 511-23 (A) a contract or arrangement between a gas 511-24 utility and an affiliate; 511-25 (B) a report filed with a federal agency or a 512-1 governmental agency or body of another state; and 512-2 (C) an annual report that shows each payment of 512-3 compensation, other than salary or wages subject to federal income 512-4 tax withholding: 512-5 (i) to residents of this state; 512-6 (ii) with respect to legal, 512-7 administrative, or legislative matters in this state; or 512-8 (iii) for representation before the 512-9 legislature of this state or any governmental agency or body; and 512-10 (6) require that a contract or arrangement described 512-11 by Subdivision (5)(A) that is not in writing be reduced to writing 512-12 and filed with the railroad commission. (V.A.C.S. Art. 1446e, Sec. 512-13 4.02.) 512-14 Sec. 102.004. REPORT OF SUBSTANTIAL INTEREST. The railroad 512-15 commission may require disclosure of the identity and respective 512-16 interests of each owner of at least one percent of the voting 512-17 securities of a gas utility or its affiliate. (V.A.C.S. 512-18 Art. 1446e, Sec. 7.02.) 512-19 Sec. 102.005. ASSISTANCE TO MUNICIPALITY. On request of a 512-20 municipality, the railroad commission may advise and assist the 512-21 municipality with respect to a question or proceeding arising under 512-22 this subtitle. Assistance provided by the railroad commission may 512-23 include aid to a municipality on a matter pending before the 512-24 railroad commission, a court, or the municipality's governing body, 512-25 such as making a staff member available as a witness or otherwise 513-1 providing evidence. (V.A.C.S. Art. 1446e, Sec. 3.04.) 513-2 (Sections 102.006-102.050 reserved for expansion) 513-3 SUBCHAPTER B. RESTRICTIONS ON CERTAIN TRANSACTIONS 513-4 Sec. 102.051. REPORT OF CERTAIN TRANSACTIONS; RAILROAD 513-5 COMMISSION CONSIDERATION. (a) Unless a gas utility reports the 513-6 transaction to the railroad commission within a reasonable time, 513-7 the gas utility may not: 513-8 (1) sell, acquire, or lease a plant as an operating 513-9 unit or system in this state for a total consideration of more than 513-10 $100,000; or 513-11 (2) merge or consolidate with another gas utility 513-12 operating in this state. 513-13 (b) On the filing of a report with the railroad commission, 513-14 the railroad commission shall investigate the transaction described 513-15 by Subsection (a), with or without a public hearing, to determine 513-16 whether the action is consistent with the public interest. In 513-17 reaching its determination, the railroad commission shall consider 513-18 the reasonable value of the property, facilities, or securities to 513-19 be acquired, disposed of, merged, or consolidated. 513-20 (c) If the railroad commission finds that a transaction is 513-21 not in the public interest, the railroad commission shall take the 513-22 effect of the transaction into consideration in ratemaking 513-23 proceedings and disallow the effect of the transaction if the 513-24 transaction will unreasonably affect rates or service. 513-25 (d) This section does not apply to: 514-1 (1) the purchase of a unit of property for 514-2 replacement; or 514-3 (2) an addition to the facilities of a gas utility by 514-4 construction. (V.A.C.S. Art. 1446e, Sec. 6.01.) 514-5 Sec. 102.052. REPORT OF PURCHASE OF VOTING STOCK IN GAS 514-6 UTILITY. A gas utility may not purchase voting stock in another 514-7 gas utility doing business in this state unless the utility reports 514-8 the purchase to the railroad commission. (V.A.C.S. Art. 1446e, 514-9 Sec. 6.02.) 514-10 Sec. 102.053. REPORT OF LOAN TO STOCKHOLDERS. A gas utility 514-11 may not loan money, stocks, bonds, notes, or other evidence of 514-12 indebtedness to a person who directly or indirectly owns or holds 514-13 any stock of the gas utility unless the gas utility reports the 514-14 transaction to the railroad commission within a reasonable time. 514-15 (V.A.C.S. Art. 1446e, Sec. 6.03.) 514-16 Sec. 102.054. APPROVAL OF CONVEYANCE OF GAS RESERVE RIGHTS. 514-17 A gas utility may not sell, convey, bank, or assign rights to a gas 514-18 reserve to a utility or an interstate pipeline without the prior 514-19 approval of the railroad commission. (V.A.C.S. Art. 1446e, Sec. 514-20 6.04.) 514-21 (Sections 102.055-102.100 reserved for expansion) 514-22 SUBCHAPTER C. RECORDS 514-23 Sec. 102.101. RECORDS OF GAS UTILITY. (a) Each gas utility 514-24 shall keep and provide to the regulatory authority, in the manner 514-25 and form prescribed by the railroad commission, uniform accounts of 515-1 all business transacted by the gas utility. 515-2 (b) The railroad commission may prescribe the form of books, 515-3 accounts, records, and memoranda to be kept by a gas utility, 515-4 including: 515-5 (1) the books, accounts, records, and memoranda of: 515-6 (A) the provision of and capacity for service; 515-7 and 515-8 (B) the receipt and expenditure of money; and 515-9 (2) any other form, record, and memorandum that the 515-10 railroad commission considers necessary to carry out this subtitle. 515-11 (c) For a gas utility subject to regulation by a federal 515-12 regulatory agency, compliance with the system of accounts 515-13 prescribed for the particular class of utilities by the federal 515-14 agency may be considered sufficient compliance with the system 515-15 prescribed by the railroad commission. The railroad commission may 515-16 prescribe the form of books, accounts, records, and memoranda 515-17 covering information in addition to that required by the federal 515-18 agency. The system of accounts and the form of books, accounts, 515-19 records, and memoranda prescribed by the railroad commission for a 515-20 gas utility or class of utilities may not be inconsistent with the 515-21 systems and forms established by a federal agency for that gas 515-22 utility or class of utilities. 515-23 (d) Each gas utility shall: 515-24 (1) keep and provide its books, accounts, records, and 515-25 memoranda accurately and faithfully in the manner and form 516-1 prescribed by the railroad commission; and 516-2 (2) comply with the directions of the regulatory 516-3 authority relating to the books, accounts, records, and memoranda. 516-4 (e) In this section, "gas utility" includes a municipally 516-5 owned utility. (V.A.C.S. Art. 1446e, Secs. 4.01(a), (d) (part), 516-6 (f).) 516-7 Sec. 102.102. MAINTENANCE OF OFFICE AND RECORDS IN THIS 516-8 STATE. (a) Each gas utility shall maintain an office in this 516-9 state in a county in which some part of the utility's property is 516-10 located. The gas utility shall keep in this office all books, 516-11 accounts, records, and memoranda required by the railroad 516-12 commission to be kept in this state. 516-13 (b) A book, account, record, or memorandum required by the 516-14 regulatory authority to be kept in this state may not be removed 516-15 from this state except as prescribed by the railroad commission. 516-16 (V.A.C.S. Art. 1446e, Sec. 4.07.) 516-17 Sec. 102.103. COMMUNICATIONS WITH REGULATORY AUTHORITY. 516-18 (a) The regulatory authority shall adopt rules governing 516-19 communications with the regulatory authority or a member or 516-20 employee of the regulatory authority by: 516-21 (1) a gas utility; 516-22 (2) an affiliate; or 516-23 (3) a representative of a gas utility or affiliate. 516-24 (b) A record of a communication must contain: 516-25 (1) the name of the person contacting the regulatory 517-1 authority or member or employee of the regulatory authority; 517-2 (2) the name of the business entity represented; 517-3 (3) a brief description of the subject matter of the 517-4 communication; and 517-5 (4) the action, if any, requested by the gas utility, 517-6 affiliate, or representative. 517-7 (c) Records compiled under Subsection (b) shall be available 517-8 to the public monthly. (V.A.C.S. Art. 1446e, Sec. 4.08.) 517-9 Sec. 102.104. JURISDICTION OVER AFFILIATE. The railroad 517-10 commission has jurisdiction over an affiliate that has a 517-11 transaction with a gas utility under the railroad commission's 517-12 jurisdiction to the extent of access to an account or a record of 517-13 the affiliate relating to the transaction, including an account or 517-14 a record of joint or general expenses, any portion of which may be 517-15 applicable to the transaction. (V.A.C.S. Art. 1446e, Sec. 7.01.) 517-16 (Sections 102.105-102.150 reserved for expansion) 517-17 SUBCHAPTER D. REQUIRED REPORTS AND FILINGS 517-18 Sec. 102.151. SCHEDULE FILINGS. (a) A gas utility shall 517-19 file with each regulatory authority schedules showing all rates 517-20 that are: 517-21 (1) subject to the regulatory authority's original or 517-22 appellate jurisdiction; and 517-23 (2) in effect for a gas utility service, product, or 517-24 commodity offered by the gas utility. 517-25 (b) The gas utility shall file as a part of the schedules 518-1 required under Subsection (a) each rule or regulation that relates 518-2 to or affects: 518-3 (1) a rate of the gas utility; or 518-4 (2) a gas utility service, product, or commodity 518-5 furnished by the gas utility. (V.A.C.S. Art. 1446e, Sec. 4.06.) 518-6 Sec. 102.152. DEPRECIATION ACCOUNT. The railroad commission 518-7 shall require each gas utility or municipally owned utility to 518-8 carry a proper and adequate depreciation account in accordance 518-9 with: 518-10 (1) the rates and methods prescribed by the railroad 518-11 commission under Section 104.054; and 518-12 (2) any other rule the railroad commission adopts. 518-13 (V.A.C.S. Art. 1446e, Secs. 4.01(b) (part), (f).) 518-14 Sec. 102.153. ACCOUNTS OF PROFITS AND LOSSES. A gas utility 518-15 or municipally owned utility shall keep separate accounts showing 518-16 profits or losses from the sale or lease of merchandise, including 518-17 an appliance, a fixture, or equipment. (V.A.C.S. Art. 1446e, Secs. 518-18 4.01(c) (part), (f).) 518-19 Sec. 102.154. REPORT OF CERTAIN EXPENSES. A regulatory 518-20 authority may require a gas utility to annually report the 518-21 utility's expenditures for: 518-22 (1) business gifts and entertainment; and 518-23 (2) advertising or public relations, including 518-24 expenditures for institutional and consumption-inducing purposes. 518-25 (V.A.C.S. Art. 1446e, Sec. 4.04 (part).) 519-1 (Sections 102.155-102.200 reserved for expansion) 519-2 SUBCHAPTER E. AUDITS AND INSPECTIONS 519-3 Sec. 102.201. INQUIRY INTO MANAGEMENT AND AFFAIRS. A 519-4 regulatory authority may inquire into the management and affairs of 519-5 each gas utility and shall keep itself informed as to the manner 519-6 and method in which each gas utility is managed and its affairs are 519-7 conducted. (V.A.C.S. Art. 1446e, Sec. 4.03(c).) 519-8 Sec. 102.202. AUDIT OF ACCOUNTS. A regulatory authority may 519-9 require the examination and audit of the accounts of a gas or 519-10 municipally owned utility. (V.A.C.S. Art. 1446e, Secs. 4.01(d) 519-11 (part), (f).) 519-12 Sec. 102.203. INSPECTION. At a reasonable time for a 519-13 reasonable purpose, a regulatory authority and, to the extent 519-14 authorized by the regulatory authority, its counsel, agent, or 519-15 employee may: 519-16 (1) inspect and obtain copies of the papers, books, 519-17 accounts, documents, and other business records of a gas utility 519-18 within its jurisdiction; and 519-19 (2) inspect the plant, equipment, and other property 519-20 of a gas utility within its jurisdiction. (V.A.C.S. Art. 1446e, 519-21 Sec. 4.03(a) (part).) 519-22 Sec. 102.204. EXAMINATIONS UNDER OATH. In connection with 519-23 an investigation taken under Section 102.203, the regulatory 519-24 authority may: 519-25 (1) examine under oath an officer, agent, or employee 520-1 of a gas utility; or 520-2 (2) authorize the person conducting the action to make 520-3 the examination under oath. (V.A.C.S. Art. 1446e, Sec. 4.03(a) 520-4 (part).) 520-5 Sec. 102.205. ENTERING PREMISES OF GAS UTILITY. (a) A 520-6 member, agent, or employee of a regulatory authority may enter the 520-7 premises occupied by a gas utility to conduct an inspection, 520-8 examination, or test or to exercise any other authority provided by 520-9 this subtitle. 520-10 (b) A member, agent, or employee of the regulatory authority 520-11 may act under this section only during reasonable hours and after 520-12 reasonable notice to the gas utility. 520-13 (c) A gas utility is entitled to be represented when an 520-14 inspection, examination, or test is conducted on its premises. The 520-15 gas utility is entitled to a reasonable time to secure a 520-16 representative before the inspection, examination, or test begins. 520-17 (V.A.C.S. Art. 1446e, Secs. 4.03(b), 4.10(a) (part).) 520-18 Sec. 102.206. PRODUCTION OF OUT-OF-STATE RECORDS. (a) A 520-19 regulatory authority may require, by order or subpoena served on a 520-20 gas utility, the production, at the time and place in this state 520-21 that the regulatory authority designates, of any books, accounts, 520-22 papers, or records kept by that gas utility outside this state or, 520-23 if ordered by the railroad commission, verified copies of the 520-24 books, accounts, papers, or records. 520-25 (b) A gas utility that fails or refuses to comply with an 521-1 order or subpoena under this section violates this subtitle. 521-2 (V.A.C.S. Art. 1446e, Sec. 4.03(a) (part).) 521-3 (Sections 102.207-102.250 reserved for expansion) 521-4 SUBCHAPTER F. GENERAL PROVISIONS RELATING TO PROCEEDINGS 521-5 BEFORE REGULATORY AUTHORITY 521-6 Sec. 102.251. RECORD OF PROCEEDING. The regulatory 521-7 authority shall keep a record of each proceeding before the 521-8 authority. (V.A.C.S. Art. 1446e, Sec. 10.02 (part).) 521-9 Sec. 102.252. RIGHT TO BE HEARD. Each party to a proceeding 521-10 before a regulatory authority is entitled to be heard by attorney 521-11 or in person. (V.A.C.S. Art. 1446e, Sec. 10.02 (part).) 521-12 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 521-13 SUBCHAPTER A. GENERAL PROVISIONS 521-14 Sec. 103.001. MUNICIPAL JURISDICTION 521-15 Sec. 103.002. FRANCHISES 521-16 (Sections 103.003-103.020 reserved for expansion) 521-17 SUBCHAPTER B. RATE DETERMINATION 521-18 Sec. 103.021. MUNICIPAL PROCEEDINGS 521-19 Sec. 103.022. RATE ASSISTANCE AND COST REIMBURSEMENT 521-20 Sec. 103.023. MUNICIPAL STANDING 521-21 Sec. 103.024. JUDICIAL REVIEW 521-22 (Sections 103.025-103.050 reserved for expansion) 521-23 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 521-24 Sec. 103.051. APPEAL BY PARTY 521-25 Sec. 103.052. APPEAL BY RESIDENTS 522-1 Sec. 103.053. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY 522-2 Sec. 103.054. FILING OF APPEAL 522-3 Sec. 103.055. HEARING AND ORDER 522-4 Sec. 103.056. APPLICABILITY OF RATES 522-5 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 522-6 SUBCHAPTER A. GENERAL PROVISIONS 522-7 Sec. 103.001. MUNICIPAL JURISDICTION. To provide fair, 522-8 just, and reasonable rates and adequate and efficient services, the 522-9 governing body of a municipality has exclusive original 522-10 jurisdiction over the rates, operations, and services of a gas 522-11 utility within the municipality, subject to the limitations imposed 522-12 by this subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(a).) 522-13 Sec. 103.002. FRANCHISES. (a) This subtitle does not 522-14 restrict the rights and powers of a municipality to grant or refuse 522-15 a franchise to use the streets and alleys in the municipality or to 522-16 make a statutory charge for that use. 522-17 (b) A municipality that performs a regulatory function under 522-18 this subtitle may make each charge that is authorized by: 522-19 (1) this subtitle; or 522-20 (2) the applicable franchise agreement. 522-21 (c) A franchise agreement may not limit or interfere with a 522-22 power conferred on the railroad commission by this subtitle. 522-23 (V.A.C.S. Art. 1446e, Sec. 3.01.) 522-24 (Sections 103.003-103.020 reserved for expansion) 523-1 SUBCHAPTER B. RATE DETERMINATION 523-2 Sec. 103.021. MUNICIPAL PROCEEDINGS. (a) A municipality 523-3 regulating a gas utility under this subtitle shall require the 523-4 utility to submit information as necessary to make a reasonable 523-5 determination of rate base, expenses, investment, and rate of 523-6 return in the municipality. 523-7 (b) A municipality shall make a determination under 523-8 Subsection (a) using the procedures and requirements prescribed by 523-9 this subtitle. 523-10 (c) A municipality shall retain personnel necessary to make 523-11 the determination of reasonable rates. (V.A.C.S. Art. 1446e, Sec. 523-12 3.02.) 523-13 Sec. 103.022. RATE ASSISTANCE AND COST REIMBURSEMENT. 523-14 (a) The governing body of a municipality participating in or 523-15 conducting a ratemaking proceeding may engage rate consultants, 523-16 accountants, auditors, attorneys, and engineers to: 523-17 (1) conduct investigations, present evidence, and 523-18 advise and represent the governing body; and 523-19 (2) assist the governing body with litigation or a gas 523-20 utility ratemaking proceeding before a regulatory authority or 523-21 court. 523-22 (b) The gas utility in the ratemaking proceeding shall 523-23 reimburse the governing body of the municipality for the reasonable 523-24 cost of the services of a person engaged under Subsection (a) to 523-25 the extent the applicable regulatory authority determines 524-1 reasonable. (V.A.C.S. Art. 1446e, Sec. 3.03(a).) 524-2 Sec. 103.023. MUNICIPAL STANDING. (a) A municipality has 524-3 standing in each case before the railroad commission that relates 524-4 to a gas utility's rates and services in the municipality. 524-5 (b) A municipality's standing is subject to the right of the 524-6 railroad commission to consolidate that municipality with another 524-7 party on an issue of common interest. (V.A.C.S. Art. 1446e, Sec. 524-8 3.03(b) (part).) 524-9 Sec. 103.024. JUDICIAL REVIEW. A municipality is entitled 524-10 to judicial review of a railroad commission order relating to a gas 524-11 utility's rates and services in a municipality as provided by 524-12 Section 105.001. (V.A.C.S. Art. 1446e, Sec. 3.03(b) (part).) 524-13 (Sections 103.025-103.050 reserved for expansion) 524-14 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 524-15 Sec. 103.051. APPEAL BY PARTY. A party to a rate proceeding 524-16 before a municipality's governing body may appeal the governing 524-17 body's decision to the railroad commission. (V.A.C.S. Art. 1446e, 524-18 Sec. 3.05(a).) 524-19 Sec. 103.052. APPEAL BY RESIDENTS. The residents of a 524-20 municipality may appeal to the railroad commission the decision of 524-21 the municipality's governing body in a rate proceeding by filing 524-22 with the railroad commission a petition for review signed by a 524-23 number of qualified voters of the municipality equal to at least 524-24 the lesser of 20,000 or 10 percent of the qualified voters of the 524-25 municipality. (V.A.C.S. Art. 1446e, Sec. 3.05(b).) 525-1 Sec. 103.053. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY. 525-2 (a) The ratepayers of a municipally owned utility who are outside 525-3 the municipality may appeal to the railroad commission an action of 525-4 the municipality's governing body affecting the municipally owned 525-5 utility's rates by filing with the railroad commission a petition 525-6 for review signed by a number of ratepayers served by the utility 525-7 outside the municipality equal to at least the lesser of 10,000 or 525-8 five percent of those ratepayers. 525-9 (b) A petition for review is properly signed if signed by a 525-10 person or the spouse of a person in whose name residential utility 525-11 service is carried. 525-12 (c) For purposes of this section, each person who receives a 525-13 separate bill is a ratepayer. A person who receives more than one 525-14 bill may not be counted as more than one ratepayer. (V.A.C.S. 525-15 Art. 1446e, Sec. 3.05(c).) 525-16 Sec. 103.054. FILING OF APPEAL. (a) An appeal under this 525-17 subchapter is initiated by filing a petition for review with the 525-18 railroad commission and serving a copy of the petition on each 525-19 party to the original rate proceeding. 525-20 (b) The appeal must be initiated not later than the 30th day 525-21 after the date of the final decision by the governing body of the 525-22 municipality. (V.A.C.S. Art. 1446e, Sec. 3.05(d).) 525-23 Sec. 103.055. HEARING AND ORDER. (a) An appeal under this 525-24 subchapter is de novo and based on the test year presented to the 525-25 municipality adjusted for known changes and conditions that are 526-1 measurable with reasonable accuracy. 526-2 (b) The railroad commission shall enter a final order 526-3 establishing the rates the railroad commission determines the 526-4 municipality should have set in the ordinance to which the appeal 526-5 applies. 526-6 (c) If the railroad commission fails to enter a final order 526-7 within 185 days after the date the appeal is perfected, the rates 526-8 proposed by the gas utility are considered to be approved by the 526-9 railroad commission and take effect on the expiration of the 526-10 185-day period. (V.A.C.S. Art. 1446e, Sec. 3.05(e) (part).) 526-11 Sec. 103.056. APPLICABILITY OF RATES. Temporary or 526-12 permanent rates set by the railroad commission are prospective and 526-13 observed from the date of the applicable railroad commission order, 526-14 except an interim rate order necessary to provide a gas utility the 526-15 opportunity to avoid confiscation during the period beginning on 526-16 the date a petition for review is filed with the railroad 526-17 commission and ending on the date of a final order establishing 526-18 rates. (V.A.C.S. Art. 1446e, Sec. 3.05(e) (part).) 526-19 CHAPTER 104. RATES AND SERVICES 526-20 SUBCHAPTER A. GENERAL PROVISIONS 526-21 Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE 526-22 RATES 526-23 Sec. 104.002. COMPLIANCE WITH SUBTITLE 526-24 Sec. 104.003. JUST AND REASONABLE RATES 526-25 Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED 527-1 Sec. 104.005. EQUALITY OF RATES AND SERVICES 527-2 Sec. 104.006. RATES FOR AREA NOT IN MUNICIPALITY 527-3 Sec. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION 527-4 Sec. 104.008. BURDEN OF PROOF 527-5 (Sections 104.009-104.050 reserved for expansion) 527-6 SUBCHAPTER B. COMPUTATION OF RATES 527-7 Sec. 104.051. ESTABLISHING OVERALL REVENUES 527-8 Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN 527-9 Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED 527-10 CAPITAL 527-11 Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION 527-12 Sec. 104.055. NET INCOME; ALLOWABLE EXPENSES 527-13 Sec. 104.056. TREATMENT OF CERTAIN TAX BENEFITS 527-14 Sec. 104.057. CONSIDERATION OF CERTAIN EXPENSES 527-15 Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE 527-16 OR LEASE OF MERCHANDISE 527-17 (Sections 104.059-104.100 reserved for expansion) 527-18 SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY 527-19 Sec. 104.101. DEFINITION 527-20 Sec. 104.102. STATEMENT OF INTENT TO INCREASE RATES 527-21 Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES 527-22 Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE 527-23 Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 527-24 HEARING 527-25 Sec. 104.106. PREFERENCE TO HEARING 528-1 Sec. 104.107. RATE SUSPENSION; DEADLINE 528-2 Sec. 104.108. TEMPORARY RATES 528-3 Sec. 104.109. BONDED RATES 528-4 Sec. 104.110. ESTABLISHMENT OF FINAL RATES 528-5 Sec. 104.111. APPROVAL OF DECREASE IN RATES 528-6 (Sections 104.112-104.150 reserved for expansion) 528-7 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 528-8 Sec. 104.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 528-9 Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE 528-10 FROM ANOTHER SOURCE 528-11 (Sections 104.153-104.200 reserved for expansion) 528-12 SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES 528-13 Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR 528-14 MUNICIPALLY OWNED UTILITY AND STATE AGENCY 528-15 Sec. 104.202. EXCLUDED EXPENSES 528-16 Sec. 104.203. PAYMENT IN LIEU OF TAX 528-17 (Sections 104.204-104.250 reserved for expansion) 528-18 SUBCHAPTER F. SERVICES 528-19 Sec. 104.251. GENERAL STANDARD 528-20 Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 528-21 STANDARDS 528-22 Sec. 104.253. RULE OR STANDARD 528-23 Sec. 104.254. SERVICE 528-24 Sec. 104.255. BILLING 529-1 Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; 529-2 INSPECTION 529-3 Sec. 104.257. INSPECTION FOR CONSUMER 529-4 CHAPTER 104. RATES AND SERVICES 529-5 SUBCHAPTER A. GENERAL PROVISIONS 529-6 Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 529-7 (a) The railroad commission is vested with all the authority and 529-8 power of this state to ensure compliance with the obligations of 529-9 gas utilities in this subtitle. 529-10 (b) The regulatory authority may establish and regulate 529-11 rates of a gas utility and may adopt rules for determining: 529-12 (1) the classification of customers and services; and 529-13 (2) the applicability of rates. 529-14 (c) A rule or order of the regulatory authority may not 529-15 conflict with a ruling of a federal regulatory body. (V.A.C.S. 529-16 Art. 1446e, Sec. 5.01.) 529-17 Sec. 104.002. COMPLIANCE WITH SUBTITLE. A gas utility may 529-18 not: 529-19 (1) charge, collect, or receive a rate for utility 529-20 service except as provided by this subtitle; or 529-21 (2) impose a rule or regulation except as provided by 529-22 this subtitle. (V.A.C.S. Art. 1446e, Sec. 4.05.) 529-23 Sec. 104.003. JUST AND REASONABLE RATES. (a) The 529-24 regulatory authority shall ensure that each rate a gas utility or 529-25 two or more gas utilities jointly make, demand, or receive is just 530-1 and reasonable. A rate may not be unreasonably preferential, 530-2 prejudicial, or discriminatory but must be sufficient, equitable, 530-3 and consistent in application to each class of consumer. In 530-4 establishing a gas utility's rates, the railroad commission may 530-5 treat as a single class two or more municipalities that a gas 530-6 utility serves if the commission considers that treatment to be 530-7 appropriate. 530-8 (b) A rate for a pipeline-to-pipeline transaction or to a 530-9 transportation, industrial, or similar large volume contract 530-10 customer is considered to be just and reasonable and otherwise to 530-11 comply with this section and shall be approved by the regulatory 530-12 authority if: 530-13 (1) neither the gas utility nor the customer had an 530-14 unfair advantage during the negotiations; 530-15 (2) the rate is substantially the same as the rate 530-16 between the gas utility and at least two of those customers under 530-17 the same or similar conditions of service; or 530-18 (3) competition does or did exist with another gas 530-19 utility, another supplier of natural gas, or a supplier of an 530-20 alternative form of energy. 530-21 (c) Subsection (b) does not apply: 530-22 (1) if a complaint is filed with the railroad 530-23 commission by a transmission pipeline purchaser of gas sold or 530-24 transported under the pipeline-to-pipeline or transportation rate; 530-25 or 531-1 (2) to a direct sale for resale to a gas distribution 531-2 utility at a city gate. 531-3 (d) The reasonableness of gas purchase costs included in a 531-4 city gate rate proposed to be charged for a sale for resale to a 531-5 gas distribution utility at a city gate may be reviewed at a city 531-6 gate rate proceeding even though the costs have been previously 531-7 approved as a rate for other parties under Subsection (b). 531-8 (e) Subsection (b)(1) does not apply to a rate charged or 531-9 offered to be charged to an affiliated pipeline utility. (V.A.C.S. 531-10 Art. 1446e, Secs. 5.02(a), (b), (d), (f).) 531-11 Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE 531-12 PROHIBITED. A gas utility may not: 531-13 (1) grant an unreasonable preference or advantage 531-14 concerning rates or services to a person in a classification; 531-15 (2) subject a person in a classification to an 531-16 unreasonable prejudice or disadvantage concerning rates or 531-17 services; or 531-18 (3) establish or maintain an unreasonable difference 531-19 concerning rates of services between localities or between classes 531-20 of service. (V.A.C.S. Art. 1446e, Sec. 5.10.) 531-21 Sec. 104.005. EQUALITY OF RATES AND SERVICES. (a) A gas 531-22 utility may not directly or indirectly charge, demand, collect, or 531-23 receive from a person a greater or lesser compensation for a 531-24 service provided or to be provided by the utility than the 531-25 compensation prescribed by the applicable schedule of rates filed 532-1 under Section 102.151. 532-2 (b) A person may not knowingly receive or accept a service 532-3 from a gas utility for a compensation greater or less than the 532-4 compensation prescribed by the schedules. A rate charged and 532-5 collected by a gas utility on September 1, 1983, may be continued 532-6 until schedules are filed. 532-7 (c) After notice and hearing, the railroad commission may, 532-8 in the public interest, order a gas utility to refund with interest 532-9 compensation received in violation of this section. 532-10 (d) This subtitle does not prevent a cooperative corporation 532-11 from returning to its members net earnings resulting from its 532-12 operations in proportion to the members' purchases from or through 532-13 the corporation. (V.A.C.S. Art. 1446e, Sec. 5.11.) 532-14 Sec. 104.006. RATES FOR AREA NOT IN MUNICIPALITY. Without 532-15 the approval of the railroad commission, a gas utility's rates for 532-16 an area not in a municipality may not exceed 115 percent of the 532-17 average of all rates for similar services for all municipalities 532-18 served by the same utility in the same county as that area. 532-19 (V.A.C.S. Art. 1446e, Sec. 5.09.) 532-20 Sec. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION. 532-21 A gas utility may not: 532-22 (1) discriminate against a person who sells or leases 532-23 equipment or performs services in competition with the gas utility; 532-24 or 532-25 (2) engage in a practice that tends to restrict or 533-1 impair that competition. (V.A.C.S. Art. 1446e, Sec. 5.12.) 533-2 Sec. 104.008. BURDEN OF PROOF. In a proceeding involving a 533-3 proposed rate change, the gas utility has the burden of proving 533-4 that: 533-5 (1) the rate change is just and reasonable, if the 533-6 utility proposes the change; or 533-7 (2) an existing rate is just and reasonable, if the 533-8 proposal is to reduce the rate. (V.A.C.S. Art. 1446e, Sec. 533-9 5.04(b).) 533-10 (Sections 104.009-104.050 reserved for expansion) 533-11 SUBCHAPTER B. COMPUTATION OF RATES 533-12 Sec. 104.051. ESTABLISHING OVERALL REVENUES. In 533-13 establishing a gas utility's rates, the regulatory authority shall 533-14 establish the utility's overall revenues at an amount that will 533-15 permit the utility a reasonable opportunity to earn a reasonable 533-16 return on the utility's invested capital used and useful in 533-17 providing service to the public in excess of its reasonable and 533-18 necessary operating expenses. (V.A.C.S. Art. 1446e, Sec. 5.03 533-19 (part).) 533-20 Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN. The 533-21 regulatory authority may not establish a rate that yields more than 533-22 a fair return on the adjusted value of the invested capital used 533-23 and useful in providing service to the public. (V.A.C.S. 533-24 Art. 1446e, Sec. 5.04(a).) 533-25 Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED 534-1 CAPITAL. (a) Gas utility rates shall be based on the adjusted 534-2 value of invested capital used and useful to the utility in 534-3 providing service and that adjusted value shall be computed on the 534-4 basis of a reasonable balance between: 534-5 (1) original cost, less depreciation; and 534-6 (2) current cost, less an adjustment for present age 534-7 and condition. 534-8 (b) The regulatory authority may determine a reasonable 534-9 balance that reflects: 534-10 (1) not less than 60 percent nor more than 75 percent 534-11 of the original cost of the property at the time the property was 534-12 dedicated to public use, whether by the gas utility that is the 534-13 present owner or by a predecessor, less depreciation; and 534-14 (2) not less than 25 percent nor more than 40 percent 534-15 of the current cost less an adjustment for present age and 534-16 condition. 534-17 (c) In determining a reasonable balance, the regulatory 534-18 authority may consider inflation, deflation, quality of service 534-19 being provided, growth rate of the service area, and need for the 534-20 gas utility to attract new capital. 534-21 (d) Construction work in progress, at cost as recorded on 534-22 the gas utility's books, may be included as part of the adjusted 534-23 value of invested capital used by and useful to the utility in 534-24 providing service, as necessary to the financial integrity of the 534-25 utility. 535-1 (e) Costs of facilities, revenues, expenses, taxes, and 535-2 reserves shall be separated or allocated as prescribed by the 535-3 regulatory authority. 535-4 (f) In this section, "original cost" means the actual money 535-5 cost or the actual money value of consideration paid other than 535-6 money. (V.A.C.S. Art. 1446e, Sec. 5.05.) 535-7 Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION. 535-8 (a) The railroad commission shall establish proper and adequate 535-9 rates and methods of depreciation, amortization, or depletion for 535-10 each class of property of a gas utility or municipally owned 535-11 utility. 535-12 (b) The rates and methods established under this section and 535-13 the depreciation account required under Section 102.152 shall be 535-14 used uniformly and consistently throughout rate-setting and appeal 535-15 proceedings. (V.A.C.S. Art. 1446e, Secs. 4.01(b) (part), (f).) 535-16 Sec. 104.055. NET INCOME; ALLOWABLE EXPENSES. (a) Net 535-17 income shall be used to establish just and reasonable rates. For 535-18 that purpose, "net income" means the total revenues of the gas 535-19 utility from gas utility service less all reasonable and necessary 535-20 expenses related to that gas utility service. The regulatory 535-21 authority shall determine those revenues and expenses in a manner 535-22 consistent with this subchapter. 535-23 (b) In establishing a gas utility's rates, the regulatory 535-24 authority may not allow a gas utility's payment to an affiliate for 535-25 the cost of a service, property, right, or other item or for an 536-1 interest expense to be included as capital cost or as expense 536-2 related to gas utility service except to the extent that the 536-3 regulatory authority finds the payment is reasonable and necessary 536-4 for each item or class of items as determined by the regulatory 536-5 authority. That finding must include: 536-6 (1) a specific finding of the reasonableness and 536-7 necessity of each item or class of items allowed; and 536-8 (2) a finding that the price to the gas utility is not 536-9 higher than the prices charged by the supplying affiliate to its 536-10 other affiliates or divisions or to a nonaffiliated person for the 536-11 same item or class of items. 536-12 (c) If an expense is allowed to be included in utility 536-13 rates, or an investment is included in the utility rate base, the 536-14 related income tax deduction or benefit shall be included in the 536-15 computation of income tax expense to reduce the rates. If an 536-16 expense is disallowed or not included in utility rates, or an 536-17 investment is not included in the utility rate base, the related 536-18 income tax deduction or benefit may not be included in the 536-19 computation of income tax expense to reduce the rates. The income 536-20 tax expense shall be computed using the statutory income tax rates. 536-21 (d) The regulatory authority may adopt reasonable rules 536-22 complying with this section with respect to including and excluding 536-23 certain expenses in computing the rates to be established. 536-24 (e) This section is not intended to increase gas utility 536-25 rates to the customer not caused by utility service. Utility rates 537-1 may include only expenses caused by utility service. (V.A.C.S. 537-2 Art. 1446e, Sec. 5.06.) 537-3 Sec. 104.056. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 537-4 determining the allocation of tax savings derived from liberalized 537-5 depreciation and amortization, the investment tax credit, and the 537-6 application of similar methods, the regulatory authority shall: 537-7 (1) balance equitably the interests of present and 537-8 future customers; and 537-9 (2) apportion accordingly the benefits between 537-10 consumers and the gas utility or municipally owned utility. 537-11 (b) If a gas utility or municipally owned utility retains a 537-12 portion of the investment tax credit, that portion shall be 537-13 deducted from the original cost of the facilities or other addition 537-14 to the rate base to which the credit applied to the extent allowed 537-15 by the Internal Revenue Code. (V.A.C.S. Art. 1446e, Secs. 4.01(e), 537-16 (f).) 537-17 Sec. 104.057. CONSIDERATION OF CERTAIN EXPENSES. (a) In 537-18 establishing a gas utility's rates, the regulatory authority may 537-19 not allow as a cost or expense an expenditure: 537-20 (1) described by Section 102.154 that the regulatory 537-21 authority determines to be not in the public interest; or 537-22 (2) for legislative advocacy. 537-23 (b) The regulatory authority may allow as a cost or expense 537-24 reasonable charitable or civic contributions not to exceed the 537-25 amount approved by the regulatory authority. (V.A.C.S. Art. 1446e, 538-1 Sec. 4.04 (part).) 538-2 Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 538-3 LEASE OF MERCHANDISE. In establishing a gas utility's or 538-4 municipally owned utility's rates, the regulatory authority may not 538-5 consider a profit or loss that results from the sale or lease of 538-6 merchandise, including appliances, fixtures, or equipment, to the 538-7 extent that merchandise is not integral to providing utility 538-8 service. (V.A.C.S. Art. 1446e, Secs. 4.01(c) (part), (f).) 538-9 (Sections 104.059-104.100 reserved for expansion) 538-10 SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY 538-11 Sec. 104.101. DEFINITION. In this subchapter, "major 538-12 change" means an increase in rates that would increase the 538-13 aggregate revenues of the applicant more than the greater of 538-14 $100,000 or 2-1/2 percent. The term does not include an increase 538-15 in rates that the regulatory authority allows to go into effect or 538-16 the gas utility makes under an order of the regulatory authority 538-17 after hearings held with public notice. (V.A.C.S. Art. 1446e, Sec. 538-18 5.08(b) (part).) 538-19 Sec. 104.102. STATEMENT OF INTENT TO INCREASE RATES. (a) A 538-20 gas utility may not increase its rates unless the utility files a 538-21 statement of its intent with the regulatory authority that has 538-22 original jurisdiction over those rates at least 35 days before the 538-23 effective date of the proposed increase. 538-24 (b) The gas utility shall also mail or deliver a copy of the 538-25 statement of intent to the appropriate officer of each affected 539-1 municipality. 539-2 (c) The statement of intent must include: 539-3 (1) proposed revisions of tariffs and schedules; and 539-4 (2) a detailed statement of: 539-5 (A) each proposed increase; 539-6 (B) the effect the proposed increase is expected 539-7 to have on the revenues of the utility; 539-8 (C) each class and number of utility consumers 539-9 affected; and 539-10 (D) any other information required by the 539-11 regulatory authority's rules and regulations. (V.A.C.S. 539-12 Art. 1446e, Sec. 5.08(a) (part).) 539-13 Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES. (a) The 539-14 gas utility shall: 539-15 (1) publish, in conspicuous form, notice to the public 539-16 of the proposed increase once each week for four successive weeks 539-17 in a newspaper having general circulation in each county containing 539-18 territory affected by the proposed increase; and 539-19 (2) provide notice of the proposed increase to any 539-20 other affected person as required by the regulatory authority's 539-21 rules. 539-22 (b) Instead of publishing newspaper notice, a gas utility 539-23 may provide notice to the public in an area outside the affected 539-24 municipality or in a municipality with a population of less than 539-25 2,500 by: 540-1 (1) mailing the notice by United States mail, postage 540-2 prepaid, to the billing address of each directly affected customer; 540-3 or 540-4 (2) including the notice, in conspicuous form, in the 540-5 bill of each directly affected customer. (V.A.C.S. Art. 1446e, 540-6 Sec. 5.08(a) (part).) 540-7 Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE. 540-8 (a) For good cause shown, the regulatory authority may allow a 540-9 rate increase, other than a major change, to take effect: 540-10 (1) before the end of the 35-day period prescribed by 540-11 Section 104.102; and 540-12 (2) under conditions the regulatory authority 540-13 prescribes, subject to suspension as provided by this subchapter. 540-14 (b) The gas utility shall immediately revise its schedules 540-15 to include the increase. (V.A.C.S. Art. 1446e, Sec. 5.08(b) 540-16 (part).) 540-17 Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 540-18 HEARING. (a) If a schedule modifying or increasing rates is filed 540-19 with a regulatory authority, the regulatory authority shall, on 540-20 complaint by an affected person, or may, on its own motion, not 540-21 later than the 30th day after the effective date of the increase, 540-22 enter on a hearing to determine the propriety of the increase. 540-23 (b) The regulatory authority shall hold a hearing in every 540-24 case in which the increase constitutes a major change. The 540-25 regulatory authority may, however, use an informal proceeding if 541-1 the regulatory authority does not receive a complaint before the 541-2 expiration of 45 days after the date notice of the increase is 541-3 filed. 541-4 (c) The regulatory authority shall give reasonable notice of 541-5 the hearing, including notice to the governing body of each 541-6 affected municipality and county. The gas utility is not required 541-7 to provide a formal answer or file any other formal pleading in 541-8 response to the notice, and the absence of an answer does not 541-9 affect an order for a hearing. (V.A.C.S. Art. 1446e, Sec. 541-10 5.08(c).) 541-11 Sec. 104.106. PREFERENCE TO HEARING. The regulatory 541-12 authority shall: 541-13 (1) give preference to the hearing under this 541-14 subchapter and to deciding questions arising under this subchapter 541-15 over any other question pending before it; and 541-16 (2) decide the questions as quickly as possible. 541-17 (V.A.C.S. Art. 1446e, Sec. 5.08(d) (part).) 541-18 Sec. 104.107. RATE SUSPENSION; DEADLINE. (a) Pending the 541-19 hearing and a decision: 541-20 (1) the local regulatory authority, after delivering 541-21 to the gas utility a written statement of the regulatory 541-22 authority's reasons, may suspend the operation of the schedule for 541-23 not longer than 90 days after the date the schedule would otherwise 541-24 be effective; and 541-25 (2) the railroad commission may suspend the operation 542-1 of the schedule for not longer than 150 days after the date the 542-2 schedule would otherwise be effective. 542-3 (b) If the regulatory authority does not make a final 542-4 determination concerning a schedule of rates before expiration of 542-5 the applicable suspension period, the regulatory authority is 542-6 considered to have approved the schedule. This approval is subject 542-7 to the authority of the regulatory authority thereafter to continue 542-8 a hearing in progress. (V.A.C.S. Art. 1446e, Sec. 5.08(d) (part).) 542-9 Sec. 104.108. TEMPORARY RATES. (a) The regulatory 542-10 authority may establish temporary rates to be in effect during the 542-11 applicable suspension period under Section 104.107. 542-12 (b) If the regulatory authority does not establish temporary 542-13 rates, the rates in effect when the suspended schedule was filed 542-14 continue in effect during the suspension period. (V.A.C.S. 542-15 Art. 1446e, Sec. 5.08(d) (part).) 542-16 Sec. 104.109. BONDED RATES. (a) A gas utility may put a 542-17 changed rate into effect by filing a bond with the regulatory 542-18 authority if the regulatory authority fails to make a final 542-19 determination within 90 days from the date the proposed increase 542-20 would otherwise be effective. 542-21 (b) The bonded rate may not exceed the proposed rate. 542-22 (c) The bond must be: 542-23 (1) payable to the regulatory authority in an amount, 542-24 in a form, and with a surety approved by the regulatory authority; 542-25 and 543-1 (2) conditioned on refund. 543-2 (d) The gas utility shall refund or credit against future 543-3 bills: 543-4 (1) money collected under the bonded rates in excess 543-5 of the rate finally ordered; and 543-6 (2) interest on that money, at the current interest 543-7 rate as determined by the regulatory authority. (V.A.C.S. 543-8 Art. 1446e, Sec. 5.08(e).) 543-9 Sec. 104.110. ESTABLISHMENT OF FINAL RATES. (a) If, after 543-10 hearing, the regulatory authority finds the rates are unreasonable 543-11 or in violation of law, the regulatory authority shall: 543-12 (1) enter an order establishing the rates the gas 543-13 utility shall charge or apply for the service in question; and 543-14 (2) serve a copy of the order on the gas utility. 543-15 (b) The rates established in the order shall be observed 543-16 thereafter until changed as provided by this subtitle. (V.A.C.S. 543-17 Art. 1446e, Sec. 5.08(f).) 543-18 Sec. 104.111. APPROVAL OF DECREASE IN RATES. 543-19 Notwithstanding any other provision in this subtitle, the 543-20 regulatory authority may, without reference to the cost of service 543-21 standard prescribed by Section 104.051, administratively approve a 543-22 decrease in rates proposed by the applicant and agreed on by each 543-23 party directly affected unless the regulatory authority determines 543-24 that the proposed decrease is not in the public interest. 543-25 (V.A.C.S. Art. 1446e, Secs. 5.02(e), 5.03(b).) 544-1 (Sections 104.112-104.150 reserved for expansion) 544-2 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 544-3 Sec. 104.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. 544-4 (a) If the regulatory authority, on its own motion or on complaint 544-5 by an affected person, after reasonable notice and hearing, finds 544-6 that the existing rates of a gas utility for a service are 544-7 unreasonable or in violation of law, the regulatory authority 544-8 shall: 544-9 (1) enter an order establishing the just and 544-10 reasonable rates to be observed thereafter, including maximum or 544-11 minimum rates; and 544-12 (2) serve a copy of the order on the gas utility. 544-13 (b) The rates set under Subsection (a) constitute the legal 544-14 rates of the gas utility until changed as provided by this 544-15 subtitle. (V.A.C.S. Art. 1446e, Sec. 5.07(a).) 544-16 Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 544-17 ANOTHER SOURCE. If a gas utility does not produce the service that 544-18 it distributes, transmits, or furnishes to the public for 544-19 compensation but obtains the service from another source, the 544-20 regulatory authority may investigate the cost of that production in 544-21 an investigation of the reasonableness of the gas utility's rates. 544-22 (V.A.C.S. Art. 1446e, Sec. 5.07(b).) 544-23 (Sections 104.153-104.200 reserved for expansion) 544-24 SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES 544-25 Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR 545-1 MUNICIPALLY OWNED UTILITY AND STATE AGENCY. (a) Notwithstanding 545-2 Section 104.003(b), absent a contract for transportation service 545-3 between a state agency and a gas utility or municipally owned 545-4 utility, the railroad commission, not later than the 210th day 545-5 after the date either party files a request to set a transportation 545-6 rate, shall establish the transportation rate for the state agency. 545-7 The commission has exclusive original jurisdiction to establish a 545-8 transportation rate for a state agency under this section. 545-9 (b) The railroad commission shall base its determination of 545-10 the transportation rate under Subsection (a) on the cost of 545-11 providing the transportation service for both the distribution 545-12 system and the transmission system, as applicable, of the gas 545-13 utility or municipally owned utility. 545-14 (c) The railroad commission may order temporary rates under 545-15 Subsection (a) as provided for under the commission's appellate 545-16 jurisdiction. (V.A.C.S. Art. 1446e, Sec. 5.02(c).) 545-17 Sec. 104.202. EXCLUDED EXPENSES. (a) The rates that a gas 545-18 utility or municipally owned utility charges a state agency may not 545-19 include an amount representing a gross receipts assessment, 545-20 regulatory assessment, or similar expense of the utility. 545-21 (b) An expense under Subsection (a) that is reasonable and 545-22 is not recovered from a state agency under this section may be 545-23 recovered from other customers of the gas utility or municipally 545-24 owned utility. (V.A.C.S. Art. 1446e, Sec. 5.061.) 545-25 Sec. 104.203. PAYMENT IN LIEU OF TAX. (a) A payment made 546-1 in lieu of a tax by a municipally owned utility to the municipality 546-2 by which the utility is owned may not be considered an expense of 546-3 operation in establishing the utility's rate for providing utility 546-4 service to a school district or hospital district. 546-5 (b) A rate a municipally owned utility receives from a 546-6 school district or hospital district may not be used to make or to 546-7 cover the cost of making payments in lieu of taxes to the 546-8 municipality that owns the utility. (V.A.C.S. Art. 1446e, Sec. 546-9 5.13.) 546-10 (Sections 104.204-104.250 reserved for expansion) 546-11 SUBCHAPTER F. SERVICES 546-12 Sec. 104.251. GENERAL STANDARD. A gas utility shall furnish 546-13 service, instrumentalities, and facilities that are safe, adequate, 546-14 efficient, and reasonable. (V.A.C.S. Art. 1446e, Sec. 4.09(a).) 546-15 Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 546-16 STANDARDS. A regulatory authority, on its own motion or on 546-17 complaint and after reasonable notice and hearing, may: 546-18 (1) adopt just and reasonable standards, 546-19 classifications, regulations, or practices a gas utility must 546-20 follow in furnishing a service; 546-21 (2) adopt adequate and reasonable standards for 546-22 measuring a condition, including quantity, quality, and pressure 546-23 relating to the furnishing of a service; 546-24 (3) adopt reasonable regulations for examining, 546-25 testing, and measuring a service; and 547-1 (4) adopt or approve reasonable rules, regulations, 547-2 specifications, and standards to ensure the accuracy of equipment, 547-3 including meters and instruments, used to measure a service. 547-4 (V.A.C.S. Art. 1446e, Sec. 4.09(b).) 547-5 Sec. 104.253. RULE OR STANDARD. (a) A gas utility may file 547-6 with the regulatory authority a standard, classification, 547-7 regulation, or practice the utility follows. 547-8 (b) The standard, classification, regulation, or practice 547-9 continues in force until: 547-10 (1) amended by the utility; or 547-11 (2) changed by the regulatory authority as provided by 547-12 this subtitle. (V.A.C.S. Art. 1446e, Sec. 4.09(c).) 547-13 Sec. 104.254. SERVICE. A gas utility or municipally owned 547-14 utility may not refuse to provide service to a state agency if 547-15 pipeline capacity is available on an existing facility of the 547-16 utility. (V.A.C.S. Art. 1446e, Sec. 4.09(d).) 547-17 Sec. 104.255. BILLING. (a) A gas utility or municipally 547-18 owned utility may not bill or otherwise require the state or a 547-19 state agency or institution to pay for service before the service 547-20 is provided. 547-21 (b) The railroad commission shall adopt rules concerning 547-22 payment of bills by the state or a state agency to a gas utility or 547-23 municipally owned utility. The rules must be consistent with 547-24 Chapter 2251, Government Code. 547-25 (c) This subtitle does not prohibit a gas utility or 548-1 municipally owned utility from entering into an agreement with the 548-2 state or a state agency to establish a level or average monthly 548-3 service billing plan. An agreement under this subsection must 548-4 require reconciliation of the leveled or equalized bills quarterly. 548-5 (V.A.C.S. Art. 1446e, Secs. 10.05, 10.06.) 548-6 Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR 548-7 EQUIPMENT; INSPECTION. (a) A regulatory authority may: 548-8 (1) examine and test equipment, including meters and 548-9 instruments, used to measure service of a gas utility; and 548-10 (2) set up and use on the premises occupied by a gas 548-11 utility an apparatus or appliance necessary for the examination or 548-12 test. 548-13 (b) The gas utility is entitled to be represented at an 548-14 examination, test, or inspection made under this section. 548-15 (c) The gas utility and its officers and employees shall 548-16 facilitate the examination, test, or inspection by giving 548-17 reasonable aid to the regulatory authority and to any person 548-18 designated by the regulatory authority for the performance of those 548-19 duties. (V.A.C.S. Art. 1446e, Sec. 4.10(a) (part).) 548-20 Sec. 104.257. INSPECTION FOR CONSUMER. (a) A consumer may 548-21 have a meter or other measuring device tested by a gas utility: 548-22 (1) once without charge, after a reasonable period of 548-23 presumed accuracy that the regulatory authority establishes by 548-24 rule; and 548-25 (2) at a shorter interval on payment of a reasonable 549-1 fee established by the regulatory authority. 549-2 (b) The regulatory authority shall establish reasonable fees 549-3 to be paid for other examining or testing of a measuring device on 549-4 the request of a consumer. 549-5 (c) If the consumer requests the test under Subsection 549-6 (a)(2) and the measuring device is found unreasonably defective or 549-7 incorrect to the substantial disadvantage of the consumer, the fee 549-8 the consumer paid at the time of the request shall be refunded. 549-9 (V.A.C.S. Art. 1446e, Sec. 4.10(b).) 549-10 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 549-11 SUBCHAPTER A. JUDICIAL REVIEW 549-12 Sec. 105.001. RIGHT TO JUDICIAL REVIEW 549-13 Sec. 105.002. JUDICIAL STAY OR SUSPENSION 549-14 (Sections 105.003-105.020 reserved for expansion) 549-15 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 549-16 Sec. 105.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE 549-17 Sec. 105.022. CONTEMPT 549-18 Sec. 105.023. CIVIL PENALTY AGAINST GAS UTILITY OR AFFILIATE 549-19 Sec. 105.024. OFFENSE 549-20 Sec. 105.025. PLACE FOR SUIT 549-21 Sec. 105.026. PENALTIES CUMULATIVE 549-22 Sec. 105.027. DISPOSITION OF FINES AND PENALTIES 549-23 (Sections 105.028-105.050 reserved for expansion) 549-24 SUBCHAPTER C. COMPLAINTS 549-25 Sec. 105.051. COMPLAINT BY AFFECTED PERSON 550-1 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 550-2 SUBCHAPTER A. JUDICIAL REVIEW 550-3 Sec. 105.001. RIGHT TO JUDICIAL REVIEW. (a) Any party to a 550-4 proceeding before the railroad commission is entitled to judicial 550-5 review under the substantial evidence rule. 550-6 (b) The issue of confiscation is determined by a 550-7 preponderance of the evidence. (V.A.C.S. Art. 1446e, Sec. 8.01.) 550-8 Sec. 105.002. JUDICIAL STAY OR SUSPENSION. While an appeal 550-9 of an order, ruling, or decision of a regulatory authority is 550-10 pending, the district court, court of appeals, or supreme court, as 550-11 appropriate, may stay or suspend all or part of the operation of 550-12 the order, ruling, or decision. In granting or refusing a stay or 550-13 suspension, the court shall act in accordance with the practice of 550-14 a court exercising equity jurisdiction. (V.A.C.S. Art. 1446e, Sec. 550-15 10.03.) 550-16 (Sections 105.003-105.020 reserved for expansion) 550-17 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 550-18 Sec. 105.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. 550-19 (a) The attorney general, on the request of the railroad 550-20 commission, shall apply in the name of the commission for an order 550-21 under Subsection (b) if the commission determines that a gas 550-22 utility or other person is: 550-23 (1) engaging in or about to engage in an act that 550-24 violates this subtitle or an order or rule of the commission 550-25 entered or adopted under this subtitle; or 551-1 (2) failing to comply with the requirements of this 551-2 subtitle or a rule or order of the commission. 551-3 (b) A court, in an action under this section, may: 551-4 (1) prohibit the commencement or continuation of an 551-5 act that violates this subtitle or an order or rule of the 551-6 commission entered or adopted under this subtitle; or 551-7 (2) require compliance with a provision of this 551-8 subtitle or an order or rule of the commission. 551-9 (c) The remedy under this section is in addition to any 551-10 other remedy provided under this subtitle. (V.A.C.S. Art. 1446e, 551-11 Sec. 9.01.) 551-12 Sec. 105.022. CONTEMPT. The railroad commission may file an 551-13 action for contempt against a person who: 551-14 (1) fails to comply with a lawful order of the 551-15 commission; 551-16 (2) fails to comply with a subpoena or subpoena duces 551-17 tecum; or 551-18 (3) refuses to testify about a matter on which the 551-19 person may be lawfully interrogated. (V.A.C.S. Art. 1446e, Sec. 551-20 9.04.) 551-21 Sec. 105.023. CIVIL PENALTY AGAINST GAS UTILITY OR 551-22 AFFILIATE. (a) A gas utility or affiliate is subject to a civil 551-23 penalty if the gas utility or affiliate knowingly violates this 551-24 subtitle, fails to perform a duty imposed on it, or fails, 551-25 neglects, or refuses to obey an order, rule, direction, or 552-1 requirement of the railroad commission or a decree or judgment of a 552-2 court. 552-3 (b) A civil penalty under this section shall be in an amount 552-4 of not less than $1,000 and not more than $5,000 for each 552-5 violation. 552-6 (c) A gas utility or affiliate commits a separate violation 552-7 each day it continues to violate Subsection (a). 552-8 (d) The attorney general shall file in the name of the 552-9 railroad commission a suit on the attorney general's own initiative 552-10 or at the request of the commission to recover the civil penalty 552-11 under this section. (V.A.C.S. Art. 1446e, Sec. 9.02.) 552-12 Sec. 105.024. OFFENSE. (a) A person commits an offense if 552-13 the person knowingly violates this subtitle. 552-14 (b) An offense under this section is a felony of the third 552-15 degree. (V.A.C.S. Art. 1446e, Sec. 9.03(a).) 552-16 Sec. 105.025. PLACE FOR SUIT. A suit for an injunction or a 552-17 penalty under this subtitle may be brought in: 552-18 (1) Travis County; 552-19 (2) a county in which the violation is alleged to have 552-20 occurred; or 552-21 (3) a county in which a defendant resides. (V.A.C.S. 552-22 Art. 1446e, Sec. 9.06.) 552-23 Sec. 105.026. PENALTIES CUMULATIVE. (a) A penalty that 552-24 accrues under this subtitle is cumulative of any other penalty. 552-25 (b) A suit for the recovery of a penalty does not bar or 553-1 affect the recovery of any other penalty or bar a criminal 553-2 prosecution against any person, including a gas utility or officer, 553-3 director, agent, or employee of a gas utility. (V.A.C.S. 553-4 Art. 1446e, Sec. 9.03(b).) 553-5 Sec. 105.027. DISPOSITION OF FINES AND PENALTIES. A fine or 553-6 penalty collected under this subtitle, other than a fine or penalty 553-7 collected in a criminal proceeding, shall be paid to the railroad 553-8 commission. (V.A.C.S. Art. 1446e, Sec. 9.05.) 553-9 (Sections 105.028-105.050 reserved for expansion) 553-10 SUBCHAPTER C. COMPLAINTS 553-11 Sec. 105.051. COMPLAINT BY AFFECTED PERSON. An affected 553-12 person may complain to the regulatory authority in writing setting 553-13 forth an act or omission by a gas utility in violation or claimed 553-14 violation of a law that the regulatory authority has jurisdiction 553-15 to administer or of an order, ordinance, or rule of the regulatory 553-16 authority. (V.A.C.S. Art. 1446e, Sec. 10.01.) 553-17 (Chapters 106-120 reserved for expansion) 553-18 SUBTITLE B. REGULATION OF TRANSPORTATION AND USE 553-19 CHAPTER 121. GAS PIPELINES 553-20 SUBCHAPTER A. GAS UTILITY DEFINED 553-21 Sec. 121.001. DEFINITION OF GAS UTILITY 553-22 Sec. 121.002. AFFILIATE OF GAS UTILITY EXCLUDED 553-23 Sec. 121.003. AGRICULTURAL SERVICE EXCLUDED 553-24 Sec. 121.004. TRANSPORTATION OF GAS SOLELY FOR INTERSTATE 553-25 COMMERCE EXCLUDED 554-1 Sec. 121.005. TRANSPORTATION OF GAS IN VICINITY OF PLACE 554-2 OF PRODUCTION EXCLUDED 554-3 Sec. 121.006. VEHICLE FUEL EXCLUDED 554-4 (Sections 121.007-121.050 reserved for expansion) 554-5 SUBCHAPTER B. PUBLIC POLICY 554-6 Sec. 121.051. GAS UTILITY: PUBLIC INTEREST AND JURISDICTION 554-7 OF RAILROAD COMMISSION 554-8 Sec. 121.052. PIPELINES: MONOPOLIES SUBJECT TO RAILROAD 554-9 COMMISSION 554-10 (Sections 121.053-121.100 reserved for expansion) 554-11 SUBCHAPTER C. DUTIES OF GAS UTILITIES AND PIPELINES 554-12 Sec. 121.101. MAINTENANCE OF OFFICE AND RECORDS IN THIS 554-13 STATE 554-14 Sec. 121.102. OPERATOR'S REPORT 554-15 Sec. 121.103. DUTY TO SERVE CERTAIN USERS EXTINGUISHED 554-16 Sec. 121.104. DISCRIMINATION IN SERVICE AND CHARGES 554-17 PROHIBITED 554-18 (Sections 121.105-121.150 reserved for expansion) 554-19 SUBCHAPTER D. REGULATION BY RAILROAD COMMISSION 554-20 Sec. 121.151. RAILROAD COMMISSION REGULATION OF GAS 554-21 PIPELINES 554-22 Sec. 121.152. INITIATION OF REGULATORY PROCEEDING 554-23 Sec. 121.153. RAILROAD COMMISSION REVIEW OF GAS 554-24 PIPELINE ORDERS AND AGREEMENTS 554-25 Sec. 121.154. REFUND OF EXCESS CHARGES 555-1 Sec. 121.155. RATE REDUCTION OR DETERMINATION BY MUNICIPALITY 555-2 AND APPEAL 555-3 Sec. 121.156. RAILROAD COMMISSION REPORT 555-4 Sec. 121.157. RAILROAD COMMISSION EMPLOYEES 555-5 Sec. 121.158. PAYMENT FROM THE GENERAL REVENUE FUND 555-6 (Sections 121.159-121.200 reserved for expansion) 555-7 SUBCHAPTER E. PIPELINE SAFETY 555-8 Sec. 121.201. SAFETY RULES: RAILROAD COMMISSION POWER 555-9 Sec. 121.202. MUNICIPAL AND COUNTY AUTHORITY 555-10 Sec. 121.203. ENFORCEMENT: INJUNCTION 555-11 Sec. 121.204. CIVIL PENALTY 555-12 Sec. 121.205. SETTLEMENT BY ATTORNEY GENERAL 555-13 Sec. 121.206. ADMINISTRATIVE PENALTY FOR VIOLATION OF 555-14 PIPELINE SAFETY STANDARD OR RULE 555-15 Sec. 121.207. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 555-16 ASSESSMENT PROCEDURE 555-17 Sec. 121.208. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 555-18 PAYMENT OF PENALTY 555-19 Sec. 121.209. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 555-20 REFUND OF PAYMENT OR RELEASE OF BOND 555-21 Sec. 121.210. RECOVERY BY ATTORNEY GENERAL 555-22 (Sections 121.211-121.250 reserved for expansion) 555-23 SUBCHAPTER F. GAS SAFETY 555-24 Sec. 121.251. RAILROAD COMMISSION TO INVESTIGATE USE OF 555-25 GAS MALODORANTS 556-1 Sec. 121.252. REGULATION OF USE OF MALODORANTS 556-2 Sec. 121.253. INTERSTATE TRANSPORTATION OF GAS EXCLUDED 556-3 (Sections 121.254-121.300 reserved for expansion) 556-4 SUBCHAPTER G. ENFORCEMENT REMEDIES 556-5 Sec. 121.301. RECEIVERSHIP 556-6 Sec. 121.302. CIVIL PENALTY 556-7 Sec. 121.303. PENALTY RECOVERABLE BY VICTIM OF 556-8 DISCRIMINATION 556-9 Sec. 121.304. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-10 PENALTY 556-11 Sec. 121.305. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-12 PENALTY: ASSESSMENT PROCEDURE 556-13 Sec. 121.306. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-14 PENALTY: PAYMENT OF PENALTY 556-15 Sec. 121.307. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-16 PENALTY: APPEALS 556-17 Sec. 121.308. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-18 PENALTY: REFUND OF PAYMENT OR RELEASE OF 556-19 BOND 556-20 Sec. 121.309. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 556-21 PENALTY: RECOVERY 556-22 Sec. 121.310. CRIMINAL PENALTY 556-23 (Sections 121.311-121.400 reserved for expansion) 556-24 SUBCHAPTER H. APPEALS 556-25 Sec. 121.401. APPEAL TO COURT 557-1 Sec. 121.402. APPEAL: BURDEN AND STANDARD OF PROOF 557-2 Sec. 121.403. APPEAL FROM TRIAL COURT 557-3 CHAPTER 121. GAS PIPELINES 557-4 SUBCHAPTER A. GAS UTILITY DEFINED 557-5 Sec. 121.001. DEFINITION OF GAS UTILITY. (a) In this 557-6 chapter, "gas utility" means a person who owns, manages, operates, 557-7 leases, or controls in this state property or equipment or a 557-8 pipeline, plant, facility, franchise, license, or permit for a 557-9 business that: 557-10 (1) transports, conveys, distributes, or delivers 557-11 natural gas: 557-12 (A) for public use or service for compensation; 557-13 (B) for sale to municipalities or persons 557-14 engaged in distributing or selling natural gas to the public, in a 557-15 situation described by Subdivision (3); 557-16 (C) for sale or delivery to a person operating 557-17 under a franchise or contract with a political subdivision of this 557-18 state; or 557-19 (D) for sale or delivery to the public for 557-20 domestic or other use; 557-21 (2) owns, operates, or manages a pipeline: 557-22 (A) that is for transporting or carrying natural 557-23 gas, whether for public hire or not; and 557-24 (B) for which the right-of-way has been or is 557-25 hereafter acquired by exercising the right of eminent domain; or 558-1 (3) produces or purchases natural gas and transports 558-2 or causes the transportation of natural gas by a pipeline to or 558-3 near the limits of a municipality in which the gas is received and 558-4 distributed or sold to the public by another gas utility or by the 558-5 municipality in a situation in which the business is the only or 558-6 practically the only agency of supply of natural gas to the gas 558-7 utility or municipality. 558-8 (b) In this subchapter, "person" means an individual, 558-9 company, or private corporation and includes a lessee, trustee, or 558-10 receiver of an individual, company, or private corporation. 558-11 (V.A.C.S. Art. 6050, Secs. 1 (part), (a), (b), (c) (part).) 558-12 Sec. 121.002. AFFILIATE OF GAS UTILITY EXCLUDED. A person 558-13 is not a gas utility solely because the person is an affiliate of a 558-14 gas utility. (V.A.C.S. Art. 6050, Sec. 1(d).) 558-15 Sec. 121.003. AGRICULTURAL SERVICE EXCLUDED. (a) The act 558-16 or acts of transporting, delivering, selling, or otherwise making 558-17 available natural gas for fuel, either directly or indirectly, to 558-18 an owner of an irrigation well, or the sale, transportation, or 558-19 delivery of natural gas for any other direct use in an agricultural 558-20 activity, does not make a person a gas utility or make the person 558-21 subject to the jurisdiction, control, and regulation of the 558-22 railroad commission as a gas utility. 558-23 (b) In order for a person furnishing natural gas to qualify 558-24 for the exemption under Subsection (a), the person to whom the gas 558-25 was furnished under Subsection (a) shall use the gas exclusively to 559-1 pump water for farm and other agricultural purposes. (V.A.C.S. 559-2 Art. 6050, Secs. 2, 3 (part).) 559-3 Sec. 121.004. TRANSPORTATION OF GAS SOLELY FOR INTERSTATE 559-4 COMMERCE EXCLUDED. Except as provided by Section 121.001(a)(2), a 559-5 person is not a gas utility if the person certifies to the railroad 559-6 commission that the person transports natural or synthetic gas, for 559-7 sale, for hire, or otherwise, solely in, or in the vicinity of, the 559-8 field or fields where the gas is produced, to another person for 559-9 transportation or sale in interstate commerce. (V.A.C.S. 559-10 Art. 6050, Sec. 4(a) (part).) 559-11 Sec. 121.005. TRANSPORTATION OF GAS IN VICINITY OF PLACE OF 559-12 PRODUCTION EXCLUDED. (a) Except as provided by Section 559-13 121.001(a)(2), a person is not a gas utility if the person 559-14 certifies to the railroad commission that the person transports 559-15 natural or synthetic gas, for sale, for hire, or otherwise, solely: 559-16 (1) in, or in the vicinity of, the field or fields 559-17 where the gas is produced to a gas processing plant or treating 559-18 facility; 559-19 (2) from the outlet of a gas processing plant or 559-20 treating facility described by Subdivision (1) to a person: 559-21 (A) at, or in the vicinity of, the plant or 559-22 treating facility; or 559-23 (B) described by Subdivision (3) or Section 559-24 121.004; or 559-25 (3) to another person in, or in the vicinity of, the 560-1 field or fields where the gas is produced for transportation or 560-2 sale in intrastate commerce. 560-3 (b) A person is not a gas utility because the person 560-4 delivers or sells gas: 560-5 (1) for lease use, compressor fuel, processing plant 560-6 fuel, or a similar use; 560-7 (2) under a lease or right-of-way agreement; 560-8 (3) in, or in the vicinity of, the field where the gas 560-9 is produced; or 560-10 (4) at a processing plant outlet. 560-11 (c) Subsection (b) does not exclude as a gas utility a 560-12 pipeline that: 560-13 (1) transmits or distributes to end users of gas, 560-14 other than: 560-15 (A) those described by Subsection (b); or 560-16 (B) a person who qualifies for the exemption 560-17 provided by Section 121.003; or 560-18 (2) makes city-gate deliveries for local distribution. 560-19 (V.A.C.S. Art. 6050, Secs. 4(a) (part), (b).) 560-20 Sec. 121.006. VEHICLE FUEL EXCLUDED. A person is not a gas 560-21 utility to the extent that the person: 560-22 (1) sells natural gas for use as vehicle fuel; 560-23 (2) sells natural gas to a person who later sells the 560-24 natural gas for use as vehicle fuel; or 560-25 (3) owns or operates equipment or facilities to sell 561-1 or transport the natural gas for ultimate use as vehicle fuel. 561-2 (V.A.C.S. Art. 6050, Sec. 5.) 561-3 (Sections 121.007-121.050 reserved for expansion) 561-4 SUBCHAPTER B. PUBLIC POLICY 561-5 Sec. 121.051. GAS UTILITY: PUBLIC INTEREST AND JURISDICTION 561-6 OF RAILROAD COMMISSION. (a) A gas utility, including a business 561-7 described by Section 121.001(a)(3), is affected with a public 561-8 interest. 561-9 (b) A business described by Section 121.001(a)(3) is a 561-10 virtual monopoly. 561-11 (c) A business described by Section 121.001(a)(3) and the 561-12 property of the business used in this state is subject to the 561-13 jurisdiction, control, and regulation of the railroad commission as 561-14 provided by this chapter. (V.A.C.S. Art. 6050, Secs. 1(c) (part), 561-15 (e).) 561-16 Sec. 121.052. PIPELINES: MONOPOLIES SUBJECT TO RAILROAD 561-17 COMMISSION. (a) The operation of a pipeline for buying, selling, 561-18 transporting, producing, or otherwise dealing in natural gas is a 561-19 business which in its nature and according to the established 561-20 method of conducting the business is a monopoly. 561-21 (b) A business described by this section may not be 561-22 conducted unless the gas pipeline used in connection with the 561-23 business is subject to the jurisdiction conferred by this chapter 561-24 on the railroad commission. 561-25 (c) The attorney general shall enforce this section by 562-1 injunction or other remedy. (V.A.C.S. Art. 6051.) 562-2 (Sections 121.053-121.100 reserved for expansion) 562-3 SUBCHAPTER C. DUTIES OF GAS UTILITIES AND PIPELINES 562-4 Sec. 121.101. MAINTENANCE OF OFFICE AND RECORDS IN THIS 562-5 STATE. (a) A gas utility shall maintain an office in this state 562-6 in a county in which some part of the gas utility's property is 562-7 located. The gas utility shall keep in this office all books, 562-8 accounts, papers, records, vouchers, and receipts that the railroad 562-9 commission requires. 562-10 (b) A book, account, paper, record, receipt, voucher, or 562-11 other item of information required by the railroad commission to be 562-12 kept in this state may not be removed from this state except as 562-13 prescribed by the railroad commission. (V.A.C.S. Art. 6052.) 562-14 Sec. 121.102. OPERATOR'S REPORT. The railroad commission 562-15 may require a person or corporation that owns, controls, or 562-16 operates a pipeline subject to this chapter to make to the 562-17 commission a sworn report of any matter relating to the business of 562-18 the person or corporation that the commission determines to be 562-19 pertinent, including: 562-20 (1) the total quantity of gas distributed by the 562-21 pipelines; 562-22 (2) the total quantity of gas held in storage; 562-23 (3) the source of supply of gas; 562-24 (4) the number of wells from which the person or 562-25 corporation draws its supply; 563-1 (5) the amount of pipeline pressure maintained; and 563-2 (6) the amount and character and description of the 563-3 equipment used. (V.A.C.S. Art. 6056.) 563-4 Sec. 121.103. DUTY TO SERVE CERTAIN USERS EXTINGUISHED. 563-5 (a) A gas utility that provides gas to a customer does not have an 563-6 obligation to serve the customer or to maintain the gas supply or 563-7 physical capacity to serve the customer if the customer: 563-8 (1) is a transportation, industrial, or other similar 563-9 large-volume contract customer; 563-10 (2) is an end-use customer of the gas utility; 563-11 (3) reduces or ceases the purchase of natural gas or 563-12 natural gas service from the gas utility; and 563-13 (4) purchases natural gas or natural gas service from 563-14 another supplier or purchases an alternate form of energy. 563-15 (b) Subsection (a) does not apply to the extent that: 563-16 (1) the customer continues to purchase natural gas or 563-17 natural gas service of any class from the gas utility; or 563-18 (2) the gas utility has a written contract to provide 563-19 natural gas or natural gas service of any class to the customer. 563-20 (c) This section does not prevent the railroad commission 563-21 from requiring a gas utility to comply with an order of the 563-22 railroad commission in apportioning gas under a curtailment plan 563-23 and order. (V.A.C.S. Art. 6053, Sec. 1(c).) 563-24 Sec. 121.104. DISCRIMINATION IN SERVICE AND CHARGES 563-25 PROHIBITED. (a) A pipeline gas utility may not: 564-1 (1) discriminate in favor of or against any person or 564-2 place in: 564-3 (A) apportioning the supply of natural gas; or 564-4 (B) charging for natural gas; or 564-5 (2) directly or indirectly charge, demand, collect, or 564-6 receive from anyone a greater or lesser compensation for a service 564-7 provided than the compensation charged, demanded, or received from 564-8 another for a similar and contemporaneous service. 564-9 (b) This section does not limit the right of the railroad 564-10 commission to prescribe: 564-11 (1) different rates and rules for the use of natural 564-12 gas for manufacturing and similar purposes; or 564-13 (2) rates and rules for service from or to other or 564-14 different places. (V.A.C.S. Arts. 6057, 6057a.) 564-15 (Sections 121.105-121.150 reserved for expansion) 564-16 SUBCHAPTER D. REGULATION BY RAILROAD COMMISSION 564-17 Sec. 121.151. RAILROAD COMMISSION REGULATION OF GAS 564-18 PIPELINES. The railroad commission shall: 564-19 (1) establish and enforce the adequate and reasonable 564-20 price of gas and fair and reasonable rates of charges and rules for 564-21 transporting, producing, distributing, buying, selling, and 564-22 delivering gas by pipelines subject to this chapter in this state; 564-23 (2) establish fair and equitable rules for the full 564-24 control and supervision of the pipelines subject to this chapter 564-25 and all their holdings pertaining to the gas business in all their 565-1 relations to the public, as the railroad commission determines to 565-2 be proper; 565-3 (3) establish a fair and equitable division of the 565-4 proceeds of the sale of gas between the companies transporting or 565-5 producing the gas and the companies distributing or selling it; 565-6 (4) prescribe and enforce rules for the government and 565-7 control of pipelines subject to this chapter in respect to their 565-8 pipelines and producing, receiving, transporting, and distributing 565-9 facilities; 565-10 (5) regulate and apportion the supply of gas between 565-11 municipalities and between municipalities and corporations; and 565-12 (6) prescribe fair and reasonable rules requiring 565-13 pipelines subject to this chapter to augment their supply of gas, 565-14 when: 565-15 (A) the supply of gas controlled by any gas 565-16 pipeline is inadequate; and 565-17 (B) the railroad commission determines that 565-18 augmentation is practicable. (V.A.C.S. Art. 6053, Sec. 1(a) 565-19 (part).) 565-20 Sec. 121.152. INITIATION OF REGULATORY PROCEEDING. The 565-21 railroad commission shall exercise power under Section 121.151: 565-22 (1) on: 565-23 (A) its own motion; 565-24 (B) the petition of a person or county 565-25 commissioner's precinct showing a substantial interest in the 566-1 subject; 566-2 (C) the petition of the attorney general; or 566-3 (D) the petition of a district or county 566-4 attorney of a county in which any portion of a business subject to 566-5 this chapter is conducted; and 566-6 (2) after notice has been given. (V.A.C.S. Art. 6053, 566-7 Sec. 1(a) (part).) 566-8 Sec. 121.153. RAILROAD COMMISSION REVIEW OF GAS PIPELINE 566-9 ORDERS AND AGREEMENTS. The railroad commission, after notice to a 566-10 person or corporation owning, controlling, or operating a pipeline 566-11 subject to this chapter and after a hearing, may review, revise, 566-12 and regulate an order or agreement that is made by the person or 566-13 corporation and establishes a price, rate, rule, regulation, or 566-14 condition of service. (V.A.C.S. Art. 6054.) 566-15 Sec. 121.154. REFUND OF EXCESS CHARGES. (a) On a complaint 566-16 against a person or corporation owning or operating a pipeline 566-17 business subject to this chapter filed by any person authorized by 566-18 Section 121.152 to file a petition and complaint and sustained in 566-19 whole or in part by the railroad commission, each customer of the 566-20 pipeline is entitled to reparation for or reimbursement of a rate 566-21 or charge made or adopted by the pipeline for a purpose relating to 566-22 the operation of that business, including a rate or charge for gas, 566-23 service, or meter rental, or in the event of an inadequate supply 566-24 of gas or inadequate service in any respect. 566-25 (b) The amount recoverable under Subsection (a) is the 567-1 amount paid after the filing of the complaint in excess of the 567-2 proper rate or charge of the pipeline as finally determined by the 567-3 railroad commission. (V.A.C.S. Art. 6055.) 567-4 Sec. 121.155. RATE REDUCTION OR DETERMINATION BY 567-5 MUNICIPALITY AND APPEAL. A gas utility the rates of which have 567-6 been reduced by a municipality may appeal the municipal order, 567-7 decision, regulation, or ordinance to the railroad commission. The 567-8 appeal is initiated by filing with the railroad commission in the 567-9 manner and on the conditions that the railroad commission may 567-10 direct a petition for review and a bond. The appeal is de novo. 567-11 The railroad commission shall set a hearing and may make any order 567-12 or decision in relation to the matter appealed that the commission 567-13 considers just and reasonable. To change a rate, rental, or 567-14 charge, a gas utility that is a local distributing company or 567-15 concern and the rates of which have been established by a 567-16 municipality must submit an application to the municipality in 567-17 which the utility is located. The municipality shall make a 567-18 determination on an application not later than the 60th day after 567-19 the date the application is filed. If the municipality rejects the 567-20 application or fails or refuses to act on the application on or 567-21 before the deadline prescribed by this section, the gas utility may 567-22 appeal to the railroad commission as provided by this section. The 567-23 railroad commission shall make a determination on the appeal not 567-24 later than the 60th day after the date the appeal is filed unless 567-25 the gas utility agrees in writing to a longer period. The rates 568-1 established by the municipality remain in effect until changed by 568-2 the railroad commission. (V.A.C.S. Art. 6058.) 568-3 Sec. 121.156. RAILROAD COMMISSION REPORT. (a) On December 568-4 1 of each year, the railroad commission shall report to the 568-5 governor, fully and in detail, on: 568-6 (1) the proceedings of the railroad commission with 568-7 respect to gas utilities; 568-8 (2) the receipts and sources of gross income taxes; 568-9 and 568-10 (3) the amount and nature of expenditures made under 568-11 and in accordance with this chapter, including the names, titles, 568-12 nature of employment, and salaries of and payments made to each 568-13 person employed under the terms of this chapter with a statement of 568-14 the travel and other expenses incurred by each of those persons and 568-15 approved by the railroad commission. 568-16 (b) The governor shall send the report to the legislature at 568-17 the first legislative session after the governor receives the 568-18 report. (V.A.C.S. Art. 6061.) 568-19 Sec. 121.157. RAILROAD COMMISSION EMPLOYEES. (a) The 568-20 railroad commission may employ or appoint persons as necessary to: 568-21 (1) inspect and audit records or receipts, 568-22 disbursements, vouchers, prices, payrolls, time cards, and books; 568-23 (2) inspect the property and records of a gas utility 568-24 subject to this chapter; and 568-25 (3) perform other services as directed by, or under 569-1 the authority of, the railroad commission. 569-2 (b) The railroad commission shall set the amount of 569-3 compensation for persons employed by the railroad commission. 569-4 (c) The chief supervisor of the oil and gas division of the 569-5 railroad commission shall assist the railroad commission in the 569-6 performance of the railroad commission's duties under this chapter, 569-7 as directed by, and under the rules of, the railroad commission. 569-8 (V.A.C.S. Arts. 6064, 6065.) 569-9 Sec. 121.158. PAYMENT FROM THE GENERAL REVENUE FUND. All 569-10 expenses, including witness fees and mileage, employee wages and 569-11 fees, and the salary and expenses of the chief supervisor of the 569-12 oil and gas division of the railroad commission incurred by or 569-13 under authority of the railroad commission or a railroad 569-14 commissioner in administering and enforcing, or exercising a power 569-15 under, this chapter shall be paid from the general revenue fund. 569-16 (V.A.C.S. Art. 6066 (part).) 569-17 (Sections 121.159-121.200 reserved for expansion) 569-18 SUBCHAPTER E. PIPELINE SAFETY 569-19 Sec. 121.201. SAFETY RULES: RAILROAD COMMISSION POWER. 569-20 (a) The railroad commission by rule may: 569-21 (1) adopt safety standards for the transportation of 569-22 gas and for gas pipeline facilities; 569-23 (2) require record maintenance and reports; 569-24 (3) inspect records and facilities to determine 569-25 compliance with adopted safety standards; and 570-1 (4) make certifications and reports and take any other 570-2 requisite action in accordance with Chapter 601, Title 49, United 570-3 States Code (49 U.S.C. Section 60101 et seq.), or a succeeding law. 570-4 (b) The power granted by Subsection (a) does not apply to 570-5 the transportation of gas or to gas facilities subject to the 570-6 exclusive control of the United States but applies to the 570-7 transportation of gas and gas pipeline facilities in this state to 570-8 the maximum degree permissible under Chapter 601, Title 49, United 570-9 States Code (49 U.S.C. Section 60101 et seq.), or a succeeding law. 570-10 (c) A term that is used in this section and defined by 570-11 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 570-12 et seq.), or a succeeding law has the meaning assigned by that 570-13 chapter or the succeeding law. (V.A.C.S. Art. 6053-1, Subsecs. 570-14 (A), (B).) 570-15 Sec. 121.202. MUNICIPAL AND COUNTY AUTHORITY. (a) A 570-16 municipality or a county may not adopt or enforce an ordinance that 570-17 establishes a safety standard or practice applicable to a facility 570-18 that is regulated under this subchapter, another state law, or a 570-19 federal law. 570-20 (b) Except as provided by Subsection (a), this subchapter 570-21 does not reduce, limit, or impair: 570-22 (1) a power vested by law in: 570-23 (A) a county in relation to a county road; or 570-24 (B) a municipality; or 570-25 (2) the ability of a municipality to: 571-1 (A) adopt an ordinance that establishes 571-2 conditions for mapping, inventorying, installing, or relocating 571-3 pipelines over, under, along, or across a public street or alley or 571-4 private residential area in the boundaries of the municipality; or 571-5 (B) establish conditions for mapping or taking 571-6 an inventory in an area in a municipality's extraterritorial 571-7 jurisdiction. (V.A.C.S. Art. 6053-1, Subsec. (D).) 571-8 Sec. 121.203. ENFORCEMENT: INJUNCTION. The attorney 571-9 general, on behalf of the railroad commission, is entitled to 571-10 injunctive relief to restrain a violation of a safety standard 571-11 adopted under this subchapter, including an injunction that 571-12 restrains the transportation of gas or the operation of a pipeline 571-13 facility. (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 571-14 Sec. 121.204. CIVIL PENALTY. Each day of each violation of 571-15 a safety standard adopted under this subchapter is subject to a 571-16 civil penalty of not more than $25,000, except that the maximum 571-17 penalty that may be assessed for any related series of violations 571-18 may not exceed $500,000. The penalty is payable to the state. 571-19 (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 571-20 Sec. 121.205. SETTLEMENT BY ATTORNEY GENERAL. A civil 571-21 penalty under Section 121.204 may be compromised by the attorney 571-22 general who in determining a compromise shall consider: 571-23 (1) the appropriateness of the penalty in relation to 571-24 the size of the business of the person charged; 571-25 (2) the gravity of the violation; and 572-1 (3) the good faith of the person charged in attempting 572-2 to achieve compliance after notification of the violation. 572-3 (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 572-4 Sec. 121.206. ADMINISTRATIVE PENALTY FOR VIOLATION OF 572-5 PIPELINE SAFETY STANDARD OR RULE. (a) The railroad commission may 572-6 assess an administrative penalty against a person who violates 572-7 Section 121.201 or a safety standard or rule relating to the 572-8 transportation of gas and gas pipeline facilities adopted under 572-9 that section. 572-10 (b) The penalty for each violation may not exceed $10,000. 572-11 Each day a violation continues may be considered a separate 572-12 violation for the purpose of penalty assessment. 572-13 (c) In determining the amount of the penalty, the railroad 572-14 commission shall consider: 572-15 (1) the person's history of previous violations of 572-16 Section 121.201 or a safety standard or rule relating to the 572-17 transportation of gas and gas pipeline facilities adopted under 572-18 that section; 572-19 (2) the seriousness of the violation; and 572-20 (3) any hazard to the health or safety of the public. 572-21 (V.A.C.S. Art. 6053-2, Secs. (a), (b), (c).) 572-22 Sec. 121.207. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 572-23 ASSESSMENT PROCEDURE. (a) An administrative penalty may be 572-24 assessed only after a person charged under Section 121.206 has been 572-25 given an opportunity for a public hearing. 573-1 (b) If a public hearing is held, the railroad commission 573-2 shall make findings of fact and shall issue a written decision as 573-3 to the occurrence of the violation and the penalty amount warranted 573-4 by the violation, incorporating, if appropriate, an order requiring 573-5 that the penalty be paid. 573-6 (c) If appropriate, the railroad commission shall 573-7 consolidate the hearings with other proceedings under Section 573-8 121.206. 573-9 (d) If a person charged under Section 121.206 fails to take 573-10 advantage of the opportunity for a public hearing, an 573-11 administrative penalty may be assessed by the railroad commission 573-12 after it has determined: 573-13 (1) that a violation occurred; and 573-14 (2) the penalty amount warranted by the violation. 573-15 (e) After assessing an administrative penalty, the railroad 573-16 commission shall issue an order requiring the penalty to be paid. 573-17 (f) Not later than the 30th day after the date an order is 573-18 issued finding that a violation described under Section 121.206 573-19 occurred, the railroad commission shall inform the person found in 573-20 violation of the amount of the penalty. (V.A.C.S. Art. 6053-2, 573-21 Secs. (d), (e), (f), (g), (h), (i).) 573-22 Sec. 121.208. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 573-23 PAYMENT OF PENALTY. Not later than the 30th day after the date the 573-24 railroad commission's decision or order imposing an administrative 573-25 penalty becomes final as provided by Section 2001.144, Government 574-1 Code, the person charged with the violation shall: 574-2 (1) pay the penalty in full; or 574-3 (2) if the person seeks judicial review of either the 574-4 amount of the penalty or the fact of the violation, or both: 574-5 (A) pay the penalty to the railroad commission 574-6 for placement in an escrow account; or 574-7 (B) give to the railroad commission a 574-8 supersedeas bond in a form approved by the railroad commission for 574-9 the amount of the penalty that is effective until all judicial 574-10 review of the order or decision is final. (V.A.C.S. Art. 6053-2, 574-11 Sec. (j).) 574-12 Sec. 121.209. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 574-13 REFUND OF PAYMENT OR RELEASE OF BOND. If through judicial review 574-14 of a decision or order regarding an administrative penalty it is 574-15 determined that a violation did not occur or that the amount of the 574-16 penalty should be reduced or not assessed, the railroad commission 574-17 shall, not later than the 30th day after the date of that 574-18 determination: 574-19 (1) remit the appropriate amount to the person, with 574-20 accrued interest if the utility paid the penalty to the railroad 574-21 commission; or 574-22 (2) execute a release of the bond if the utility 574-23 posted a supersedeas bond. (V.A.C.S. Art. 6053-2, Sec. (k).) 574-24 Sec. 121.210. RECOVERY BY ATTORNEY GENERAL. An 574-25 administrative penalty owed under Sections 121.206-121.208 may be 575-1 recovered in a civil action brought by the attorney general at the 575-2 request of the railroad commission. (V.A.C.S. Art. 6053-2, Sec. 575-3 (m).) 575-4 (Sections 121.211-121.250 reserved for expansion) 575-5 SUBCHAPTER F. GAS SAFETY 575-6 Sec. 121.251. RAILROAD COMMISSION TO INVESTIGATE USE OF GAS 575-7 MALODORANTS. The railroad commission shall investigate the use of 575-8 malodorants by a person, firm, or corporation in the business of: 575-9 (1) handling, storing, selling, or distributing 575-10 natural or liquefied petroleum gases, including butane and other 575-11 odorless gases, for private or commercial uses; or 575-12 (2) supplying these products to a public building or 575-13 the general public. (V.A.C.S. Art. 6053, Sec. 2 (part).) 575-14 Sec. 121.252. REGULATION OF USE OF MALODORANTS. (a) The 575-15 railroad commission, by rule as necessary to carry out the purposes 575-16 of this section, may: 575-17 (1) require a person, firm, or corporation subject to 575-18 Section 121.251 to odorize the gas by using a malodorant agent that 575-19 indicates the presence of gas by a distinctive odor; 575-20 (2) regulate the method of the use of malodorants; and 575-21 (3) direct and approve the use of containers and 575-22 other equipment used in connection with malodorants. 575-23 (b) A required malodorant agent must be: 575-24 (1) nontoxic and noncorrosive; and 575-25 (2) not harmful to leather diaphragms in gas 576-1 equipment. (V.A.C.S. Art. 6053, Sec. 2 (part).) 576-2 Sec. 121.253. INTERSTATE TRANSPORTATION OF GAS EXCLUDED. 576-3 This subchapter does not apply to gas transported out of this 576-4 state. (V.A.C.S. Art. 6053, Sec. 2 (part).) 576-5 (Sections 121.254-121.300 reserved for expansion) 576-6 SUBCHAPTER G. ENFORCEMENT REMEDIES 576-7 Sec. 121.301. RECEIVERSHIP. (a) On application of the 576-8 railroad commission, a court having jurisdiction to appoint a 576-9 receiver may appoint a receiver to control and manage, under the 576-10 direction of the court, the property of a pipeline subject to this 576-11 chapter if the person or corporation owning, operating, or 576-12 controlling the pipeline violates this chapter or a rule of the 576-13 railroad commission. 576-14 (b) The railroad commission may apply for a receivership 576-15 only if the railroad commission determines that the public interest 576-16 requires a receivership. 576-17 (c) The grounds for the appointment of a receiver under this 576-18 section are in addition to any other ground provided by law. 576-19 (V.A.C.S. Art. 6063.) 576-20 Sec. 121.302. CIVIL PENALTY. (a) A gas utility is subject 576-21 to a civil penalty if the gas utility: 576-22 (1) violates this chapter; 576-23 (2) fails to perform a duty imposed by this chapter; 576-24 or 576-25 (3) fails to comply with an order of the railroad 577-1 commission if the order is not stayed or suspended by a court 577-2 order. A penalty under this section is payable to the state and 577-3 shall be not less than $100 and not more than $1,000 for each 577-4 violation or failure. 577-5 (b) Each violation and each day that the failure continues 577-6 is subject to a separate penalty. (V.A.C.S. Art. 6062 (part).) 577-7 Sec. 121.303. PENALTY RECOVERABLE BY VICTIM OF 577-8 DISCRIMINATION. (a) A penalty of not less than $100 and not more 577-9 than $1,000 for each violation is recoverable by any person against 577-10 whom discrimination prohibited by Section 121.104 is committed. 577-11 (b) A suit to collect a penalty under this section must be 577-12 brought in the name of and for the benefit of the person aggrieved. 577-13 (c) A person who recovers a penalty under this section is 577-14 also entitled to reasonable attorney's fees. 577-15 (d) The penalty under this section is in addition to a 577-16 penalty under Section 121.302. (V.A.C.S. Art. 6062 (part).) 577-17 Sec. 121.304. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 577-18 PENALTY. (a) The railroad commission may assess an administrative 577-19 penalty against a gas utility that violates this chapter, fails to 577-20 perform a duty imposed by this chapter, or fails to comply with an 577-21 order of the railroad commission issued under this chapter and 577-22 applicable to the gas utility if the violation: 577-23 (1) results in pollution of the air or water of this 577-24 state; or 577-25 (2) poses a threat to the public safety. 578-1 (b) The penalty for each violation or failure may not exceed 578-2 $10,000 a day. Each day a violation continues may be considered a 578-3 separate violation for purposes of penalty assessment. 578-4 (c) In determining the amount of the penalty, the railroad 578-5 commission shall consider: 578-6 (1) the gas utility's history of previous violations 578-7 of this chapter; 578-8 (2) the seriousness of the violation; and 578-9 (3) any hazard to the health or safety of the public. 578-10 (V.A.C.S. Art. 6062A, Secs. (a), (b), (c).) 578-11 Sec. 121.305. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 578-12 PENALTY: ASSESSMENT PROCEDURE. (a) An administrative penalty may 578-13 be assessed under Section 121.304 only after a gas utility charged 578-14 under Section 121.304 has been given an opportunity for a public 578-15 hearing. 578-16 (b) If a public hearing is held, the railroad commission 578-17 shall make findings of fact and shall issue a written decision as 578-18 to the occurrence of the violation and the penalty amount warranted 578-19 by the violation, incorporating, if appropriate, an order requiring 578-20 that the penalty be paid. 578-21 (c) If appropriate, the railroad commission shall 578-22 consolidate the hearings with other proceedings under Section 578-23 121.304. 578-24 (d) If a gas utility charged under Section 121.304 fails to 578-25 take advantage of the opportunity for a public hearing, an 579-1 administrative penalty may be assessed by the railroad commission 579-2 after it has determined: 579-3 (1) that a violation occurred; and 579-4 (2) the penalty amount warranted by the violation. 579-5 (e) After assessing an administrative penalty, the railroad 579-6 commission shall issue an order requiring the penalty to be paid. 579-7 (f) Not later than the 30th day after the date an order is 579-8 issued finding that a violation described under Section 121.304 579-9 occurred, the railroad commission shall inform the gas utility 579-10 found in violation of the amount of the penalty. (V.A.C.S. 579-11 Art. 6062A, Secs. (d), (e), (f), (g), (h), (i).) 579-12 Sec. 121.306. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 579-13 PENALTY: PAYMENT OF PENALTY. (a) Not later than the 30th day 579-14 after the date the railroad commission's decision or order imposing 579-15 an administrative penalty becomes final as provided by Section 579-16 2001.144, Government Code, the gas utility charged with the 579-17 violation shall: 579-18 (1) pay the penalty in full; or 579-19 (2) if the gas utility seeks judicial review of either 579-20 the amount of the penalty or the fact of the violation, or both: 579-21 (A) pay the penalty to the railroad commission 579-22 for placement in an escrow account; or 579-23 (B) except as provided by Subsection (b), give 579-24 to the railroad commission a supersedeas bond, in the amount of the 579-25 penalty and in the form approved by the railroad commission, to 580-1 stay the collection of the penalty until all judicial review of the 580-2 order or decision is final. 580-3 (b) If the gas utility is appealing a second or subsequent 580-4 decision or order assessing an administrative penalty against the 580-5 gas utility, regardless of the finality of judicial review of any 580-6 previous decision or order, the railroad commission may, but is not 580-7 required to, accept a supersedeas bond. (V.A.C.S. Art. 6062A, Sec. 580-8 (j).) 580-9 Sec. 121.307. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 580-10 PENALTY: APPEALS. (a) The district courts of Travis County have 580-11 exclusive jurisdiction of the appeal of an order or decision of the 580-12 railroad commission assessing an administrative penalty under 580-13 Section 121.304. 580-14 (b) Subchapter G, Chapter 2001, Government Code, and the 580-15 substantial evidence rule apply to an appeal under this section. 580-16 (V.A.C.S. Art. 6062A, Sec. (n).) 580-17 Sec. 121.308. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 580-18 PENALTY: REFUND OF PAYMENT OR RELEASE OF BOND. If through 580-19 judicial review of a decision or order regarding an administrative 580-20 penalty it is determined that a violation did not occur or that the 580-21 amount of the penalty should be reduced or not assessed, the 580-22 railroad commission shall, not later than the 30th day after the 580-23 date of that determination: 580-24 (1) remit the appropriate amount to the gas utility 580-25 with accrued interest if the utility paid the penalty to the 581-1 railroad commission; or 581-2 (2) execute a release of the bond if the utility 581-3 posted a supersedeas bond. (V.A.C.S. Art. 6062A, Sec. (k).) 581-4 Sec. 121.309. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 581-5 PENALTY: RECOVERY. An administrative penalty owed under Sections 581-6 121.304-121.308 may be recovered in a civil action brought by the 581-7 attorney general at the request of the railroad commission. 581-8 (V.A.C.S. Art. 6062A, Sec. (m).) 581-9 Sec. 121.310. CRIMINAL PENALTY. (a) A person commits an 581-10 offense if: 581-11 (1) the person is an owner, officer, director, agent, 581-12 or employee of a person or corporation owning, operating, or 581-13 controlling a pipeline of a gas utility; and 581-14 (2) the person wilfully violates this chapter or 581-15 Chapter 122. 581-16 (b) An offense under this section is punishable by a fine of 581-17 not less than $50 and not more than $1,000. In addition to the 581-18 fine, the offense may be punishable by confinement in jail for not 581-19 less than 10 days nor more than six months. (V.A.C.S. Art. 6057b.) 581-20 (Sections 121.311-121.400 reserved for expansion) 581-21 SUBCHAPTER H. APPEALS 581-22 Sec. 121.401. APPEAL TO COURT. (a) A gas utility or other 581-23 party at interest may appeal to a court a decision of any rate, 581-24 classification, rule, charge, order, or act adopted by the railroad 581-25 commission by filing a petition against the railroad commission as 582-1 defendant and specifying each particular reason for objection. 582-2 (b) An action under this section is tried and determined as 582-3 are other civil causes in the court except as provided by Section 582-4 121.402. (V.A.C.S. Art. 6059 (part).) 582-5 Sec. 121.402. APPEAL: BURDEN AND STANDARD OF PROOF. In a 582-6 trial under this subchapter, the burden of proof is on the 582-7 plaintiff, who must show by clear and satisfactory evidence that 582-8 the rate, rule, order, classification, act, or charge that is the 582-9 subject of the complaint is unreasonable and unjust to the 582-10 plaintiff. (V.A.C.S. Art. 6059 (part).) 582-11 Sec. 121.403. APPEAL FROM TRIAL COURT. An appeal from an 582-12 action under Section 121.402: 582-13 (1) is at once returnable to the appellate court; and 582-14 (2) has precedence in the appellate court over each 582-15 other pending cause of a different character. (V.A.C.S. Art. 6059 582-16 (part).) 582-17 CHAPTER 122. GAS UTILITY PIPELINE TAX 582-18 SUBCHAPTER A. DEFINITIONS 582-19 Sec. 122.001. DEFINITIONS 582-20 (Sections 122.002-122.050 reserved for expansion) 582-21 SUBCHAPTER B. TAX IMPOSED 582-22 Sec. 122.051. TAX IMPOSED; RATE 582-23 Sec. 122.052. DEDUCTION OF CERTAIN COSTS 582-24 (Sections 122.053-122.100 reserved for expansion) 583-1 SUBCHAPTER C. PAYMENTS, REPORTS, AND RECORDS 583-2 Sec. 122.101. TAX PAYMENT 583-3 Sec. 122.102. REPORT 583-4 Sec. 122.103. PAYMENT AND REPORT DEADLINE 583-5 Sec. 122.104. RECORDS 583-6 (Sections 122.105-122.150 reserved for expansion) 583-7 SUBCHAPTER D. ADMINISTRATION 583-8 Sec. 122.151. ADMINISTRATION BY RAILROAD COMMISSION 583-9 Sec. 122.152. EXAMINATION OF RECORDS AND PERSON DOING 583-10 BUSINESS IN THIS STATE 583-11 (Sections 122.153-122.200 reserved for expansion) 583-12 SUBCHAPTER E. PENALTIES AND INTEREST 583-13 Sec. 122.201. PENALTY FOR FAILURE TO REPORT TAX 583-14 Sec. 122.202. PENALTY FOR FAILURE TO PAY TAX 583-15 Sec. 122.203. PENALTY FOR FAILURE TO REPORT AND PAY TAX 583-16 Sec. 122.204. MINIMUM PENALTY 583-17 Sec. 122.205. INTEREST 583-18 CHAPTER 122. GAS UTILITY PIPELINE TAX 583-19 SUBCHAPTER A. DEFINITIONS 583-20 Sec. 122.001. DEFINITIONS. In this chapter: 583-21 (1) "Gas utility" has the meaning assigned by Section 583-22 121.001(a)(2) and includes a person without regard to whether the 583-23 person acquired a part of the right-of-way for the pipeline by 583-24 eminent domain. 583-25 (2) "Gross income" includes all gross receipts the gas 584-1 utility received from activities described by Section 121.001(a)(2) 584-2 that are performed in this state, other than an activity excluded 584-3 by Chapter 121 from the activities that make a person a gas utility 584-4 for purposes of that chapter, and excludes the amount of the 584-5 deduction allowed by Section 122.052. (V.A.C.S. Art. 6060, Secs. 584-6 (1)(a) (part), (c) (part).) 584-7 (Sections 122.002-122.050 reserved for expansion) 584-8 SUBCHAPTER B. TAX IMPOSED 584-9 Sec. 122.051. TAX IMPOSED; RATE. (a) A tax is imposed on 584-10 each gas utility. 584-11 (b) The gas utility tax is imposed at the rate of one-half 584-12 of one percent of the gross income of the gas utility. (V.A.C.S. 584-13 Art. 6060, Secs. 1(a) (part), (b).) 584-14 Sec. 122.052. DEDUCTION OF CERTAIN COSTS. A gas utility is 584-15 entitled to deduct from the utility's gross receipts the amount of 584-16 the cost paid to another person by the utility for purchasing, 584-17 treating, or storing natural gas or for gathering or transporting 584-18 natural gas to the utility's facilities. (V.A.C.S. Art. 6060, Sec. 584-19 1(c) (part).) 584-20 (Sections 122.053-122.100 reserved for expansion) 584-21 SUBCHAPTER C. PAYMENTS, REPORTS, AND RECORDS 584-22 Sec. 122.101. TAX PAYMENT. (a) A gas utility on whom a tax 584-23 is imposed by this chapter during a calendar quarter shall pay the 584-24 tax to the railroad commission. 584-25 (b) A gas utility shall make the tax payment payable to the 585-1 comptroller. (V.A.C.S. Art. 6060, Sec. 2(a) (part).) 585-2 Sec. 122.102. REPORT. (a) A gas utility on whom a tax is 585-3 imposed by this chapter during a calendar quarter shall include 585-4 with the tax payment a report to the railroad commission that 585-5 includes a statement of: 585-6 (1) all activity subject to the tax during the period 585-7 covered by the report; and 585-8 (2) the gross income from that activity. 585-9 (b) The president, secretary, or general manager of a gas 585-10 utility that is a corporation or an owner of a gas utility that is 585-11 not a corporation must verify the truth and accuracy of the report. 585-12 (V.A.C.S. Art. 6060, Secs. 2(a) (part), (b).) 585-13 Sec. 122.103. PAYMENT AND REPORT DEADLINE. A tax payment 585-14 and report under this chapter for a calendar quarter are due on or 585-15 before the 20th day of the second month of the succeeding quarter. 585-16 (V.A.C.S. Art. 6060, Sec. 2(a) (part).) 585-17 Sec. 122.104. RECORDS. A person on whom a tax is imposed by 585-18 this chapter shall maintain until the fourth anniversary of the 585-19 date the tax report and payment for a calendar quarter are due 585-20 records sufficient to: 585-21 (1) document the person's tax report; and 585-22 (2) establish the amount of the tax imposed. 585-23 (V.A.C.S. Art. 6060, Sec. 3(b).) 585-24 (Sections 122.105-122.150 reserved for expansion) 586-1 SUBCHAPTER D. ADMINISTRATION 586-2 Sec. 122.151. ADMINISTRATION BY RAILROAD COMMISSION. The 586-3 railroad commission: 586-4 (1) shall administer and collect the taxes imposed by 586-5 this chapter; and 586-6 (2) may adopt rules necessary to administer this 586-7 chapter and to collect and enforce the taxes. (V.A.C.S. Art. 6060, 586-8 Sec. 3(a).) 586-9 Sec. 122.152. EXAMINATION OF RECORDS AND PERSON DOING 586-10 BUSINESS IN THIS STATE. To enforce this chapter, the railroad 586-11 commission may examine: 586-12 (1) a book, record, or paper of a person permitted to 586-13 do business in this state, including an agent of the person, at an 586-14 office of the person or agent in the United States; and 586-15 (2) an officer or employee of a person described by 586-16 Subdivision (1) under oath. (V.A.C.S. Art. 6060, Sec. 3(c).) 586-17 (Sections 122.153-122.200 reserved for expansion) 586-18 SUBCHAPTER E. PENALTIES AND INTEREST 586-19 Sec. 122.201. PENALTY FOR FAILURE TO REPORT TAX. A person 586-20 who is required to report a tax imposed by this chapter and fails 586-21 to report as required by Sections 122.102 and 122.103 shall pay: 586-22 (1) a penalty of five percent of the amount of the tax 586-23 due with the report; and 586-24 (2) if the report is not made before the 31st day 586-25 after the date the report is initially required to be made, an 587-1 additional penalty of five percent of the amount of the tax due 587-2 with the report. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 587-3 Sec. 122.202. PENALTY FOR FAILURE TO PAY TAX. A person who 587-4 is required to pay a tax imposed by this chapter and fails to pay 587-5 the tax as required by Sections 122.101 and 122.103 shall pay: 587-6 (1) a penalty of five percent of the amount of the tax 587-7 due and unpaid; and 587-8 (2) if the tax is not paid before the 31st day after 587-9 the date the tax payment is initially required to be made, an 587-10 additional penalty of five percent of the amount of the tax due and 587-11 unpaid. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 587-12 Sec. 122.203. PENALTY FOR FAILURE TO REPORT AND PAY TAX. If 587-13 a person fails to make the report and to pay the tax for a 587-14 reporting period, only the penalty and additional penalty under 587-15 Section 122.201, as applicable, for failure to make the report is 587-16 imposed. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 587-17 Sec. 122.204. MINIMUM PENALTY. If the amount of a penalty 587-18 or additional penalty computed as provided by this subchapter is 587-19 less than $5, the amount of the penalty or additional penalty is 587-20 $5. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 587-21 Sec. 122.205. INTEREST. A tax imposed by this chapter that 587-22 becomes delinquent draws interest at the rate of 12 percent a year 587-23 beginning on the 60th day after the date the tax becomes delinquent 587-24 and continues to draw interest until the date the tax is paid. 587-25 (V.A.C.S. Art. 6060, Sec. 4(b).) 588-1 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 588-2 SUBCHAPTER A. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 588-3 Sec. 123.001. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 588-4 Sec. 123.002. EXCEPTION 588-5 (Sections 123.003-123.020 reserved for expansion) 588-6 SUBCHAPTER B. AGRICULTURE GAS USERS ACT 588-7 Sec. 123.021. SHORT TITLE 588-8 Sec. 123.022. DEFINITIONS 588-9 Sec. 123.023. CONTRACT FOR NATURAL GAS 588-10 Sec. 123.024. EXCEPTION 588-11 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 588-12 SUBCHAPTER A. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 588-13 Sec. 123.001. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES. 588-14 A person, firm, corporation, partnership, association, or 588-15 cooperative who sells natural gas for irrigation may not reduce the 588-16 supply of natural gas for an agricultural purpose, including 588-17 irrigation pumping or crop drying, if that person or entity: 588-18 (1) sells and distributes natural gas in a 588-19 municipality; or 588-20 (2) delivers gas to the boundary of a municipality for 588-21 resale in the municipality. (V.A.C.S. Art. 6066f (part).) 588-22 Sec. 123.002. EXCEPTION. This subchapter does not apply to 588-23 the extent that the supply of natural gas is required to maintain 588-24 natural gas service for: 588-25 (1) use by residential users or hospitals; or 589-1 (2) an analogous use that is vital to public health 589-2 and safety. (V.A.C.S. Art. 6066f (part).) 589-3 (Sections 123.003-123.020 reserved for expansion) 589-4 SUBCHAPTER B. AGRICULTURE GAS USERS ACT 589-5 Sec. 123.021. SHORT TITLE. This subchapter may be cited as 589-6 the Agriculture Gas Users Act. (V.A.C.S. Art. 6066g, Sec. 1.) 589-7 Sec. 123.022. DEFINITIONS. In this subchapter: 589-8 (1) "Agriculture energy user" means a person who 589-9 purchases or uses natural gas for fuel for an irrigation well. 589-10 (2) "Corporation" means a domestic or foreign 589-11 corporation or association, and each lessee, assignee, trustee, 589-12 receiver, or other successor in interest of the corporation or 589-13 association, that has any of the powers or privileges of a 589-14 corporation not possessed by an individual or partnership. 589-15 (3) "Person" includes an individual, a partnership of 589-16 two or more persons having a joint or common interest, a mutual or 589-17 cooperative association, and a corporation. 589-18 (4) "Supplier" means a person who furnishes natural 589-19 gas to an agriculture energy user. (V.A.C.S. Art. 6066g, Sec. 2.) 589-20 Sec. 123.023. CONTRACT FOR NATURAL GAS. (a) A supplier and 589-21 an agriculture energy user may by contract establish a price and 589-22 other terms of service for the furnishing of natural gas. 589-23 (b) A contract under this section must be negotiated in good 589-24 faith and the result of arm's-length bargaining between the 589-25 parties. 590-1 (c) Each party shall provide information and maintain 590-2 records as reasonably necessary for the contract. 590-3 (d) A price charged to an agriculture energy user under the 590-4 contract may not exceed the price charged to a majority of the 590-5 supplier's commercial users or other similar large-volume users. 590-6 (V.A.C.S. Art. 6066g, Sec. 3.) 590-7 Sec. 123.024. EXCEPTION. This subchapter does not apply to 590-8 a transaction between an agriculture energy user and a supplier who 590-9 does not deliver gas to a municipality unless: 590-10 (1) the parties agree the subchapter applies to the 590-11 transaction; and 590-12 (2) the contract states the subchapter applies to the 590-13 transaction. (V.A.C.S. Art. 6066g, Sec. 4.) 590-14 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS 590-15 AND APARTMENT HOUSES 590-16 Sec. 124.001. DEFINITIONS 590-17 Sec. 124.002. SUBMETERING 590-18 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS 590-19 AND APARTMENT HOUSES 590-20 Sec. 124.001. DEFINITIONS. In this chapter: 590-21 (1) "Apartment house" means one or more buildings 590-22 containing more than five dwelling units each of which is rented 590-23 primarily for nontransient use with rent paid at intervals of one 590-24 week or longer. The term includes a rented or owner-occupied 590-25 residential condominium. 591-1 (2) "Dwelling unit" means: 591-2 (A) one or more rooms that are suitable for 591-3 occupancy as a residence and that contain kitchen and bathroom 591-4 facilities; or 591-5 (B) a mobile home in a mobile home park. 591-6 (V.A.C.S. Art. 6053, Sec. 1a(a).) 591-7 Sec. 124.002. SUBMETERING. (a) The railroad commission 591-8 shall adopt rules under which an owner, operator, or manager of a 591-9 mobile home park or apartment house may purchase natural gas 591-10 through a master meter for delivery to a dwelling unit in the 591-11 mobile home park or apartment house using individual submeters to 591-12 allocate fairly the cost of the gas consumption of each dwelling 591-13 unit. 591-14 (b) In addition to other appropriate safeguards for a 591-15 resident of a mobile home park or apartment house, the rules must 591-16 provide that the owner, operator, or manager of the mobile home 591-17 park or apartment house: 591-18 (1) may not deliver natural gas for sale or resale for 591-19 profit; and 591-20 (2) shall maintain adequate records relating to that 591-21 submetering and make those records available for inspection by the 591-22 resident during reasonable business hours. (V.A.C.S. Art. 6053, 591-23 Sec. 1a(b).) 591-24 (Chapters 125-160 reserved for expansion) 592-1 TITLE 4. DELIVERY OF UTILITY SERVICES 592-2 SUBTITLE A. UTILITY CORPORATIONS AND OTHER PROVIDERS 592-3 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 592-4 SUBCHAPTER A. GENERAL PROVISIONS 592-5 Sec. 161.001. SHORT TITLE 592-6 Sec. 161.002. DEFINITIONS 592-7 Sec. 161.003. CONSTRUCTION OF CHAPTER 592-8 Sec. 161.004. CERTAIN CORPORATE NAMES PROHIBITED 592-9 Sec. 161.005. CHAPTER COMPLETE AND CONTROLLING 592-10 (Sections 161.006-161.050 reserved for expansion) 592-11 SUBCHAPTER B. CREATION AND OPERATION OF ELECTRIC COOPERATIVES 592-12 Sec. 161.051. INCORPORATORS 592-13 Sec. 161.052. DURATION OF CORPORATION 592-14 Sec. 161.053. NAME OF ELECTRIC COOPERATIVE 592-15 Sec. 161.054. ARTICLES OF INCORPORATION 592-16 Sec. 161.055. FILING AND RECORDING OF ARTICLES OF 592-17 INCORPORATION 592-18 Sec. 161.056. REVIVAL OF ARTICLES OF INCORPORATION 592-19 Sec. 161.057. ORGANIZATIONAL MEETING 592-20 Sec. 161.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATION 592-21 Sec. 161.059. NONPROFIT OPERATION 592-22 Sec. 161.060. MEMBERS NOT LIABLE FOR DEBTS OF ELECTRIC 592-23 COOPERATIVE 592-24 Sec. 161.061. LICENSE FEE 592-25 Sec. 161.062. EXEMPTION FROM EXCISE TAXES 593-1 Sec. 161.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT 593-2 Sec. 161.064. BYLAWS 593-3 Sec. 161.065. MEMBERSHIP 593-4 Sec. 161.066. CERTIFICATE OF MEMBERSHIP 593-5 Sec. 161.067. MEETINGS OF MEMBERS 593-6 Sec. 161.068. NOTICE OF MEMBERS' MEETING 593-7 Sec. 161.069. QUORUM OF MEMBERS 593-8 Sec. 161.070. VOTING BY MEMBERS 593-9 Sec. 161.071. BOARD OF DIRECTORS 593-10 Sec. 161.072. ELECTION OF DIRECTORS; VACANCIES 593-11 Sec. 161.073. COMPENSATION OF DIRECTORS 593-12 Sec. 161.074. QUORUM OF DIRECTORS 593-13 Sec. 161.075. BOARD MEETINGS 593-14 Sec. 161.076. OFFICERS, AGENTS, AND EMPLOYEES 593-15 Sec. 161.077. EXECUTIVE COMMITTEE 593-16 Sec. 161.078. INDEMNIFICATION 593-17 Sec. 161.079. APPLICABILITY OF CHAPTER TO CORPORATIONS 593-18 ORGANIZED UNDER OTHER LAW 593-19 (Sections 161.080-161.120 reserved for expansion) 593-20 SUBCHAPTER C. POWERS OF ELECTRIC COOPERATIVE 593-21 Sec. 161.121. GENERAL POWERS 593-22 Sec. 161.122. PROVISION OF RURAL ELECTRIFICATION 593-23 Sec. 161.123. POWERS RELATING TO PROVISION OF ELECTRIC 593-24 ENERGY 594-1 Sec. 161.124. PROVISION OF ELECTRIC ENERGY TO CERTAIN 594-2 NONMEMBER ENTITIES 594-3 Sec. 161.125. EMINENT DOMAIN 594-4 (Sections 161.126-161.150 reserved for expansion) 594-5 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 594-6 Sec. 161.151. AMENDMENT OF ARTICLES OF INCORPORATION 594-7 Sec. 161.152. ARTICLES OF AMENDMENT 594-8 (Sections 161.153-161.200 reserved for expansion) 594-9 SUBCHAPTER E. CONSOLIDATION OF ELECTRIC COOPERATIVES 594-10 Sec. 161.201. CONSOLIDATION 594-11 Sec. 161.202. ARTICLES OF CONSOLIDATION 594-12 (Sections 161.203-161.250 reserved for expansion) 594-13 SUBCHAPTER F. DISSOLUTION 594-14 Sec. 161.251. DISSOLUTION 594-15 Sec. 161.252. EXISTENCE FOLLOWING DISSOLUTION 594-16 Sec. 161.253. DISTRIBUTION OF NET ASSETS ON DISSOLUTION 594-17 Sec. 161.254. DISSOLUTION OF DEFECTIVELY INCORPORATED 594-18 ELECTRIC COOPERATIVE 594-19 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 594-20 SUBCHAPTER A. GENERAL PROVISIONS 594-21 Sec. 161.001. SHORT TITLE. This chapter may be cited as the 594-22 Electric Cooperative Corporation Act. (V.A.C.S. Art. 1528b, Sec. 594-23 1.) 594-24 Sec. 161.002. DEFINITIONS. In this chapter: 594-25 (1) "Acquire" means and includes construct, acquire by 595-1 purchase, lease, devise, or gift, or other mode of acquisition. 595-2 (2) "Board" means the board of directors of an 595-3 electric cooperative. 595-4 (3) "Central station service" means electric service 595-5 provided by a municipally owned electric system or by an electric 595-6 corporation described by Subchapter A, Chapter 181. 595-7 (4) "Electric cooperative" means a corporation that is 595-8 organized under this chapter or that becomes subject to this 595-9 chapter as provided by this chapter. 595-10 (5) "Member" means: 595-11 (A) an incorporator of an electric cooperative; 595-12 or 595-13 (B) a person admitted to membership in the 595-14 electric cooperative as provided by Section 161.065. 595-15 (6) "Obligation" includes a bond, note, debenture, 595-16 interim certificate or receipt, or other evidence of indebtedness 595-17 issued by an electric cooperative. 595-18 (7) "Rural area" means an area, including both farm 595-19 and nonfarm population of the area, that is not located in: 595-20 (A) a municipality having a population greater 595-21 than 1,500; or 595-22 (B) an unincorporated city, town, village, or 595-23 borough having a population greater than 1,500. (V.A.C.S. 595-24 Art. 1528b, Secs. 2(1), (2), (3), (6), (7), (8), 3 (part).) 595-25 Sec. 161.003. CONSTRUCTION OF CHAPTER. This chapter shall 596-1 be liberally construed. The enumeration of a purpose, power, 596-2 method, or thing does not exclude similar purposes, powers, 596-3 methods, or things. (V.A.C.S. Art. 1528b, Sec. 34.) 596-4 Sec. 161.004. CERTAIN CORPORATE NAMES PROHIBITED. A 596-5 corporation organized under the laws of this state or authorized to 596-6 do business in this state may not use the words "electric 596-7 cooperative" in the corporation's name unless the corporation is 596-8 organized under this chapter. (V.A.C.S. Art. 1528b, Sec. 7.) 596-9 Sec. 161.005. CHAPTER COMPLETE AND CONTROLLING. This 596-10 chapter is complete in itself and is controlling. (V.A.C.S. 596-11 Art. 1528b, Sec. 36 (part).) 596-12 (Sections 161.005-161.050 reserved for expansion) 596-13 SUBCHAPTER B. CREATION AND OPERATION OF ELECTRIC COOPERATIVES 596-14 Sec. 161.051. INCORPORATORS. (a) Three or more individuals 596-15 may act as incorporators of an electric cooperative by executing 596-16 articles of incorporation as provided by this chapter. 596-17 (b) An incorporator must: 596-18 (1) be at least 21 years of age; and 596-19 (2) reside in this state. (V.A.C.S. Art. 1528b, Sec. 596-20 5.) 596-21 Sec. 161.052. DURATION OF CORPORATION. An electric 596-22 cooperative may be created as a perpetual corporation. (V.A.C.S. 596-23 Art. 1528b, Secs. 4 (part), 6(a) (part).) 596-24 Sec. 161.053. NAME OF ELECTRIC COOPERATIVE. The name of an 596-25 electric cooperative must: 597-1 (1) include the words "Electric Cooperative"; 597-2 (2) include the term "Corporation," "Incorporated," 597-3 "Inc.," "Association," or "Company"; and 597-4 (3) be distinct from the name of any other corporation 597-5 organized under the laws of this state. (V.A.C.S. Art. 1528b, Sec. 597-6 6(a) (part).) 597-7 Sec. 161.054. ARTICLES OF INCORPORATION. (a) The articles 597-8 of incorporation of an electric cooperative must state: 597-9 (1) the name of the cooperative; 597-10 (2) the purpose for which the cooperative is formed; 597-11 (3) the name and address of each incorporator; 597-12 (4) the number of directors; 597-13 (5) the address of the cooperative's principal office 597-14 and the name and address of its agent on whom process may be 597-15 served; 597-16 (6) the duration of the cooperative; 597-17 (7) the terms under which a person is admitted to 597-18 membership and retains membership in the cooperative, unless the 597-19 articles expressly state that the determination of membership 597-20 matters is reserved to the directors by the bylaws; and 597-21 (8) any provisions that the incorporators include for 597-22 the regulation of the business and the conduct of the affairs of 597-23 the cooperative. 597-24 (b) The articles of incorporation do not need to state any 597-25 of the corporate powers enumerated in this chapter. (V.A.C.S. 598-1 Art. 1528b, Secs. 6(a) (part), (b).) 598-2 Sec. 161.055. FILING AND RECORDING OF ARTICLES OF 598-3 INCORPORATION. (a) The secretary of state shall receive articles 598-4 of incorporation of an electric cooperative if the incorporators of 598-5 the cooperative: 598-6 (1) apply for filing the articles; 598-7 (2) furnish satisfactory evidence of compliance with 598-8 this chapter to the secretary of state; and 598-9 (3) pay a fee of $10. 598-10 (b) The secretary of state shall: 598-11 (1) file the articles of incorporation in the 598-12 secretary's office; 598-13 (2) record the articles at length in a book to be kept 598-14 for that purpose; 598-15 (3) retain the original articles of incorporation on 598-16 file in the secretary's office; and 598-17 (4) issue a certificate showing the recording of the 598-18 articles of incorporation and the electric cooperative's authority 598-19 to do business under the articles. 598-20 (c) A copy of the articles of incorporation or of the record 598-21 of the articles, certified under the state seal, is evidence of the 598-22 creation of the electric cooperative. 598-23 (d) The existence of the electric cooperative dates from the 598-24 filing of the articles in the office of the secretary of state. 598-25 The certificate of the secretary of state is evidence of that 599-1 filing. (V.A.C.S. Art. 1528b, Secs. 8, 29 (part).) 599-2 Sec. 161.056. REVIVAL OF ARTICLES OF INCORPORATION. (a) If 599-3 the articles of incorporation of an electric cooperative expire by 599-4 limitation, the cooperative, with the consent of a majority of its 599-5 members, may revive the articles by filing: 599-6 (1) new articles of incorporation under this chapter; 599-7 and 599-8 (2) a certified copy of the expired original articles. 599-9 (b) An electric cooperative that revives its articles of 599-10 incorporation has all the privileges, immunities, and rights of 599-11 property exercised and held by the cooperative at the time the 599-12 original articles expired. 599-13 (c) New articles of incorporation filed under this section 599-14 must recite the privileges, immunities, and rights of property 599-15 exercised and held by the cooperative at the time the original 599-16 articles expired. (V.A.C.S. Art. 1528b, Sec. 9.) 599-17 Sec. 161.057. ORGANIZATIONAL MEETING. (a) After the 599-18 certificate of incorporation is issued, the incorporators of an 599-19 electric cooperative shall meet to adopt bylaws, elect officers, 599-20 and transact other business that properly comes before the meeting. 599-21 (b) A majority of the incorporators shall call the 599-22 organizational meeting. 599-23 (c) The incorporators calling the organizational meeting 599-24 shall give at least three days' notice of the meeting by mail to 599-25 each incorporator. The notice must state the time and place of the 600-1 meeting. The notice may be waived in writing. (V.A.C.S. 600-2 Art. 1528b, Sec. 10.) 600-3 Sec. 161.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATION. 600-4 (a) An electric cooperative that files defective articles of 600-5 incorporation or fails to take an action necessary to perfect its 600-6 corporate organization may: 600-7 (1) file corrected articles of incorporation or amend 600-8 the original articles; and 600-9 (2) take any action necessary to correct the defect. 600-10 (b) An action taken under this section is valid and binding 600-11 on any person concerned. (V.A.C.S. Art. 1528b, Sec. 32.) 600-12 Sec. 161.059. NONPROFIT OPERATION. (a) An electric 600-13 cooperative shall operate without profit to its members. 600-14 (b) The rates, fees, rents, and other charges for electric 600-15 energy and other facilities, supplies, equipment, or services 600-16 furnished by the cooperative must be sufficient at all times to: 600-17 (1) pay all operating and maintenance expenses 600-18 necessary or desirable for the prudent conduct of its business; 600-19 (2) pay the principal of and interest on the 600-20 obligations issued or assumed by the cooperative in performing the 600-21 purpose for which the cooperative was organized; and 600-22 (3) create reserves. 600-23 (c) The cooperative shall devote its revenues: 600-24 (1) first to the payment of operating and maintenance 600-25 expenses and the principal and interest on outstanding obligations; 601-1 and 601-2 (2) then to the reserves prescribed by the board for 601-3 improvement, new construction, depreciation, and contingencies. 601-4 (d) The cooperative shall periodically return revenues not 601-5 required for the purposes prescribed by Subsection (c) to the 601-6 members in proportion to the amount of business done with each 601-7 member during the applicable period. The cooperative may return 601-8 revenues: 601-9 (1) in cash, by abatement of current charges for 601-10 electric energy, or in another manner determined by the board; or 601-11 (2) through a general rate reduction to members. 601-12 (V.A.C.S. Art. 1528b, Sec. 25.) 601-13 Sec. 161.060. MEMBERS NOT LIABLE FOR DEBTS OF ELECTRIC 601-14 COOPERATIVE. A member is not liable for a debt of an electric 601-15 cooperative except for: 601-16 (1) a debt contracted between the member and the 601-17 cooperative; or 601-18 (2) an amount not to exceed the unpaid amount of the 601-19 member's membership fee. (V.A.C.S. Art. 1528b, Sec. 16 (part).) 601-20 Sec. 161.061. LICENSE FEE. Not later than May 1 of each 601-21 year, each electric cooperative shall pay to the secretary of state 601-22 a license fee of $10. (V.A.C.S. Art. 1528b, Sec. 30 (part).) 601-23 Sec. 161.062. EXEMPTION FROM EXCISE TAXES. An electric 601-24 cooperative is exempt from all excise taxes but is exempt from the 601-25 franchise tax imposed by Chapter 171, Tax Code, only if the 602-1 cooperative is exempted by that chapter. (V.A.C.S. Art. 1528b, 602-2 Sec. 30 (part).) 602-3 Sec. 161.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT. 602-4 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 602-5 Statutes) does not apply to: 602-6 (1) an obligation issued to secure a debt of an 602-7 electric cooperative to the United States; or 602-8 (2) the issuance of a membership certificate by an 602-9 electric cooperative. (V.A.C.S. Art. 1528b, Sec. 31.) 602-10 Sec. 161.064. BYLAWS. (a) The board may adopt, amend, or 602-11 repeal the bylaws of the cooperative. 602-12 (b) The bylaws may contain any provision for the regulation 602-13 and management of the affairs of the electric cooperative that is 602-14 consistent with the articles of incorporation. (V.A.C.S. 602-15 Art. 1528b, Secs. 4 (part), 11.) 602-16 Sec. 161.065. MEMBERSHIP. (a) A person is eligible to 602-17 become a member of an electric cooperative if the person has a 602-18 dwelling, structure, apparatus, or point of delivery at which the 602-19 person does not receive central station service from another source 602-20 and that is located in an area in which the cooperative is 602-21 authorized to provide electric energy, and the person: 602-22 (1) uses or agrees to use electric energy or the 602-23 facilities, supplies, equipment, or services furnished by the 602-24 cooperative at the dwelling, structure, apparatus, or point of 602-25 delivery; or 603-1 (2) is an incorporator of the cooperative. 603-2 (b) An electric cooperative may become a member of another 603-3 electric cooperative and may fully use the facilities and services 603-4 of that cooperative. 603-5 (c) Membership in an electric cooperative is not 603-6 transferable. (V.A.C.S. Art. 1528b, Secs. 12, 16 (part).) 603-7 Sec. 161.066. CERTIFICATE OF MEMBERSHIP. (a) An electric 603-8 cooperative shall issue a certificate of membership to a member who 603-9 pays the member's membership fee in full. 603-10 (b) A certificate of membership is not transferable. 603-11 (c) A certificate of membership shall be surrendered to the 603-12 cooperative on the resignation, expulsion, or death of the member. 603-13 (V.A.C.S. Art. 1528b, Sec. 16 (part).) 603-14 Sec. 161.067. MEETINGS OF MEMBERS. (a) An electric 603-15 cooperative may hold a meeting of its members at a place provided 603-16 in the bylaws. If the bylaws do not provide for a place for a 603-17 meeting, the cooperative shall hold the meeting in the principal 603-18 office of the cooperative in this state. 603-19 (b) An electric cooperative shall hold an annual meeting of 603-20 its members at the time provided in the bylaws. Failure to hold 603-21 the annual meeting at the designated time does not result in 603-22 forfeiture or dissolution of the cooperative. 603-23 (c) A special meeting of the members may be called by: 603-24 (1) the president; 603-25 (2) the board; 604-1 (3) a majority of the directors; 604-2 (4) the members by a petition signed by at least 10 604-3 percent of the members; or 604-4 (5) an officer or other person as provided by the 604-5 articles of incorporation or bylaws. (V.A.C.S. Art. 1528b, Sec. 604-6 13.) 604-7 Sec. 161.068. NOTICE OF MEMBERS' MEETING. (a) Written 604-8 notice of each meeting of the members shall be delivered to each 604-9 member of record, either personally or by mail, not earlier than 604-10 the 30th day or later than the 10th day before the date of the 604-11 meeting. The notice must be delivered by or at the direction of 604-12 the president, the secretary, or the officers or other persons 604-13 calling the meeting. 604-14 (b) The notice must state the time and place of the meeting 604-15 and, in the case of a special meeting, each purpose for which the 604-16 meeting is called. 604-17 (c) A member may waive notice of meetings in writing. 604-18 (d) A notice that is mailed is considered to be delivered 604-19 when the notice is deposited in the United States mail in a sealed 604-20 envelope with postage prepaid addressed to the member at the 604-21 member's address as it appears on the records of the electric 604-22 cooperative. (V.A.C.S. Art. 1528b, Sec. 14.) 604-23 Sec. 161.069. QUORUM OF MEMBERS. Unless otherwise provided 604-24 by the articles of incorporation, a quorum for the transaction of 604-25 business at a meeting of the members of an electric cooperative is 605-1 a majority of the members present in person or represented by 605-2 proxy. If voting by mail is provided for in the bylaws, members 605-3 voting by mail are counted as present for purposes of determining 605-4 whether a quorum is present. (V.A.C.S. Art. 1528b, Sec. 17.) 605-5 Sec. 161.070. VOTING BY MEMBERS. Each member present at a 605-6 meeting of the members is entitled to one vote on each matter 605-7 submitted to a vote at the meeting. The bylaws may provide for 605-8 voting by proxy or by mail. (V.A.C.S. Art. 1528b, Sec. 15.) 605-9 Sec. 161.071. BOARD OF DIRECTORS. (a) The business and 605-10 affairs of an electric cooperative shall be managed by a board of 605-11 directors. The board consists of at least three directors. Each 605-12 director must be a member of the cooperative. The bylaws may 605-13 prescribe additional qualifications for directors. 605-14 (b) The board may exercise any power of an electric 605-15 cooperative not conferred on the members by this chapter or by the 605-16 cooperative's articles of incorporation or bylaws. (V.A.C.S. 605-17 Art. 1528b, Secs. 6(a) (part), 18, 19 (part).) 605-18 Sec. 161.072. ELECTION OF DIRECTORS; VACANCIES. (a) The 605-19 incorporators of an electric cooperative named in the articles of 605-20 incorporation shall serve as directors until the first annual 605-21 meeting of the members, and until their successors are elected and 605-22 qualify. Subsequently, the directors shall be elected by the 605-23 members at each annual meeting or as otherwise provided by the 605-24 bylaws. 605-25 (b) A vacancy on the board shall be filled as provided by 606-1 the bylaws. A person selected to fill a vacancy serves until the 606-2 next regular election of directors. (V.A.C.S. Art. 1528b, Secs. 606-3 6(a) (part), 19 (part), 20.) 606-4 Sec. 161.073. COMPENSATION OF DIRECTORS. A director of an 606-5 electric cooperative is entitled to the compensation and 606-6 reimbursement for expenses actually and necessarily incurred by the 606-7 director as provided by the bylaws. (V.A.C.S. Art. 1528b, Sec. 19 606-8 (part).) 606-9 Sec. 161.074. QUORUM OF DIRECTORS. (a) A majority of the 606-10 directors is a quorum unless the articles of incorporation or the 606-11 bylaws provide that a greater number of the directors is a quorum. 606-12 (b) A majority of the directors present at a meeting at 606-13 which a quorum is present may exercise the board's authority unless 606-14 the articles of incorporation or the bylaws require a greater 606-15 number of directors to exercise the board's authority. (V.A.C.S. 606-16 Art. 1528b, Sec. 21.) 606-17 Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a 606-18 regular or special board meeting at the place and on the notice 606-19 prescribed by the bylaws. 606-20 (b) The attendance of a director at a board meeting 606-21 constitutes a waiver of notice of the meeting unless the director 606-22 attends the meeting for the express purpose of objecting to the 606-23 transaction of business at the meeting because the meeting is not 606-24 lawfully called or convened. 606-25 (c) A notice or waiver of notice of a board meeting is not 607-1 required to specify the business to be transacted at the meeting or 607-2 the purpose of the meeting. (V.A.C.S. Art. 1528b, Sec. 22.) 607-3 Sec. 161.076. OFFICERS, AGENTS, AND EMPLOYEES. (a) The 607-4 board shall elect from the board's membership a president, a vice 607-5 president, a secretary, and a treasurer. The terms of office, 607-6 powers, duties, and compensation of the officers elected under this 607-7 subsection shall be provided for by the bylaws. 607-8 (b) The same person may hold the offices of secretary and of 607-9 treasurer. 607-10 (c) The board may appoint other officers, agents, and 607-11 employees as the board considers necessary and shall prescribe the 607-12 powers, duties, and compensation of those persons. 607-13 (d) The board may remove an officer, agent, or employee 607-14 elected or appointed by the board if the board determines that the 607-15 removal will serve the best interests of the cooperative. 607-16 (V.A.C.S. Art. 1528b, Secs. 4 (part), 23.) 607-17 Sec. 161.077. EXECUTIVE COMMITTEE. (a) The bylaws of an 607-18 electric cooperative may authorize the board to elect an executive 607-19 committee from the board's membership. 607-20 (b) The board may delegate to the executive committee the 607-21 management of the current and ordinary business of the cooperative 607-22 and other duties as prescribed by the bylaws. 607-23 (c) The designation of an executive committee and the 607-24 delegation of authority to the committee does not relieve the board 607-25 or any director of a responsibility imposed on the board or the 608-1 director by this chapter. (V.A.C.S. Art. 1528b, Sec. 24.) 608-2 Sec. 161.078. INDEMNIFICATION. An electric cooperative may 608-3 indemnify and provide indemnity insurance in the same manner and to 608-4 the same extent as a nonprofit corporation under Article 2.22A, 608-5 Texas Non-Profit Corporation Act (Article 1396-2.22A, Vernon's 608-6 Texas Civil Statutes). (V.A.C.S. Art. 1528b, Sec. 19A.) 608-7 Sec. 161.079. APPLICABILITY OF CHAPTER TO CORPORATIONS 608-8 ORGANIZED UNDER OTHER LAW. A cooperative or nonprofit corporation 608-9 or association organized under any other law of this state for the 608-10 purpose of engaging in rural electrification may, by a majority 608-11 vote of the members present in person or represented by proxy at a 608-12 meeting called for that purpose, amend its articles of 608-13 incorporation to comply with this chapter. (V.A.C.S. Art. 1528b, 608-14 Sec. 33.) 608-15 (Sections 161.080-161.120 reserved for expansion) 608-16 SUBCHAPTER C. POWERS OF ELECTRIC COOPERATIVE 608-17 Sec. 161.121. GENERAL POWERS. An electric cooperative may: 608-18 (1) sue and be sued in its corporate name; 608-19 (2) adopt and alter a corporate seal and use the seal 608-20 or a facsimile of the seal as required by law; 608-21 (3) acquire, own, hold, maintain, exchange, or use 608-22 property or an interest in property, including plants, buildings, 608-23 works, machinery, supplies, equipment, apparatus, and transmission 608-24 and distribution lines or systems that are necessary, convenient, 608-25 or useful; 609-1 (4) dispose of, mortgage, or lease as lessor any of 609-2 its property or assets; 609-3 (5) borrow money and otherwise contract indebtedness, 609-4 issue obligations for its indebtedness, and secure the payment of 609-5 indebtedness by mortgage, pledge, or deed of trust on any or all of 609-6 its property or revenue; 609-7 (6) accept gifts or grants of money, services, or 609-8 property; 609-9 (7) make any contracts necessary or convenient for the 609-10 exercise of the powers granted by this chapter; 609-11 (8) conduct its business and have offices inside or 609-12 outside this state; 609-13 (9) adopt and amend bylaws not inconsistent with the 609-14 articles of incorporation for the administration and regulation of 609-15 the affairs of the cooperative; and 609-16 (10) perform any other acts for the cooperative or its 609-17 members or for another electric cooperative or its members, and 609-18 exercise any other power, that may be necessary, convenient, or 609-19 appropriate to accomplish the purpose for which the cooperative is 609-20 organized. (V.A.C.S. Art. 1528b, Sec. 4 (part).) 609-21 Sec. 161.122. PROVISION OF RURAL ELECTRIFICATION. An 609-22 electric cooperative may engage in rural electrification by: 609-23 (1) furnishing electric energy to any person for 609-24 delivery to a dwelling, structure, apparatus, or point of delivery 609-25 that is: 610-1 (A) located in a rural area; and 610-2 (B) not receiving central station service, even 610-3 if the person is receiving central station service at other points 610-4 of delivery; 610-5 (2) furnishing electric energy to a person desiring 610-6 that service in a municipality or unincorporated city or town, 610-7 rural or nonrural, served by the cooperative and in which central 610-8 station service was not available at the time the cooperative began 610-9 furnishing electric energy to the residents of the municipality or 610-10 unincorporated city or town; 610-11 (3) assisting in the wiring of the premises of persons 610-12 in rural areas or the acquisition, supply, or installation of 610-13 electrical or plumbing equipment in those premises; or 610-14 (4) furnishing electric energy, wiring facilities, or 610-15 electrical or plumbing equipment or service to another electric 610-16 cooperative or to the members of another electric cooperative. 610-17 (V.A.C.S. Art. 1528b, Sec. 3 (part).) 610-18 Sec. 161.123. POWERS RELATING TO PROVISION OF ELECTRIC 610-19 ENERGY. An electric cooperative may: 610-20 (1) generate, acquire, and accumulate electric energy 610-21 and transmit, distribute, sell, furnish, and dispose of that 610-22 electric energy to its members only; 610-23 (2) assist its members only to wire their premises and 610-24 install in those premises electrical and plumbing fixtures, 610-25 machinery, supplies, apparatus, and equipment of any kind, and in 611-1 connection with those activities: 611-2 (A) acquire, lease, sell, distribute, install, 611-3 and repair electrical and plumbing fixtures, machinery, supplies, 611-4 apparatus, and equipment of any kind; and 611-5 (B) receive, acquire, endorse, pledge, and 611-6 dispose of notes, bonds, and other evidences of indebtedness; 611-7 (3) furnish to other electric cooperatives or their 611-8 members electric energy, wiring facilities, electrical and plumbing 611-9 equipment, and services that are convenient or useful; and 611-10 (4) establish, regulate, and collect rates, fees, 611-11 rents, or other charges for electric energy or other facilities, 611-12 supplies, equipment, or services furnished by the electric 611-13 cooperative. (V.A.C.S. Art. 1528b, Sec. 4 (part).) 611-14 Sec. 161.124. PROVISION OF ELECTRIC ENERGY TO CERTAIN 611-15 NONMEMBER ENTITIES. An electric cooperative may generate, acquire, 611-16 and accumulate electric energy and transmit, distribute, sell, 611-17 furnish, and dispose of that electric energy to any of the 611-18 following that is engaged in the generation, transmission, or 611-19 distribution of electricity: 611-20 (1) a corporation, association, or firm; 611-21 (2) the United States; 611-22 (3) this state or a political subdivision of this 611-23 state; or 611-24 (4) a municipal power agency or political subdivision 611-25 of this state that is a co-owner with the electric cooperative of 612-1 an electric generation facility. (V.A.C.S. Art. 1528b, Sec. 4A 612-2 (part).) 612-3 Sec. 161.125. EMINENT DOMAIN. An electric cooperative may 612-4 exercise the power of eminent domain in the manner provided by 612-5 state law for acquiring private property for public use. The power 612-6 does not apply to state property or property of a political 612-7 subdivision in this state. (V.A.C.S. Art. 1528b, Sec. 4 (part).) 612-8 (Sections 161.126-161.150 reserved for expansion) 612-9 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 612-10 Sec. 161.151. AMENDMENT OF ARTICLES OF INCORPORATION. 612-11 (a) An electric cooperative may amend its articles of 612-12 incorporation by a majority vote of the members of the cooperative 612-13 present in person or represented by proxy at a regular meeting or 612-14 at a special meeting of its members called for that purpose as 612-15 provided by the bylaws. 612-16 (b) Notice of the meeting to members must state the general 612-17 nature of each proposed amendment to be presented and voted on at 612-18 the meeting. Valid action may not be taken at the meeting unless 612-19 at least five percent of the members of the electric cooperative 612-20 either attend the meeting in person or are represented at the 612-21 meeting by proxy. 612-22 (c) The power to amend the articles of incorporation 612-23 includes the power to accomplish any desired change in the articles 612-24 of incorporation and to include any purpose, power, or provision 612-25 that is permitted to be included in original articles of 613-1 incorporation executed at the time the amendment is made. 613-2 (V.A.C.S. Art. 1528b, Sec. 26 (part).) 613-3 Sec. 161.152. ARTICLES OF AMENDMENT. (a) Articles of 613-4 amendment of an electric cooperative must be: 613-5 (1) signed by the president or vice president and 613-6 attested by the secretary, certifying to the amendment and its 613-7 lawful adoption; and 613-8 (2) executed, acknowledged, filed, and recorded in the 613-9 same manner as the original articles of incorporation. 613-10 (b) An amendment takes effect when the secretary of state 613-11 accepts the articles of amendment for filing and recording and 613-12 issues a certificate of amendment. The certificate of amendment is 613-13 evidence of the filing of the amendment. 613-14 (c) The secretary of state shall charge and collect a fee of 613-15 $2.50 for filing articles of amendment and issuing a certificate of 613-16 amendment. (V.A.C.S. Art. 1528b, Secs. 26 (part), 29 (part).) 613-17 (Sections 161.153-161.200 reserved for expansion) 613-18 SUBCHAPTER E. CONSOLIDATION OF ELECTRIC COOPERATIVES 613-19 Sec. 161.201. CONSOLIDATION. (a) Two or more electric 613-20 cooperatives may enter into an agreement to consolidate the 613-21 cooperatives. The agreement must state: 613-22 (1) the terms of the consolidation; 613-23 (2) the name of the proposed consolidated cooperative; 613-24 (3) the number of directors of the proposed 613-25 consolidated cooperative; 614-1 (4) the time of the annual meeting and election; and 614-2 (5) the names of at least three persons to be 614-3 directors until the first annual meeting. 614-4 (b) A consolidation agreement may be approved only on the 614-5 votes of a majority of the members of each electric cooperative 614-6 present in person or represented by proxy at a regular meeting or 614-7 at a special meeting of its members called for that purpose. 614-8 (V.A.C.S. Art. 1528b, Sec. 27(a) (part).) 614-9 Sec. 161.202. ARTICLES OF CONSOLIDATION. (a) The articles 614-10 of consolidation must: 614-11 (1) conform substantially to original articles of 614-12 incorporation of an electric cooperative; and 614-13 (2) be executed, acknowledged, filed, and recorded in 614-14 the same manner as original articles of incorporation. 614-15 (b) The directors named in the consolidation agreement shall 614-16 as incorporators sign and acknowledge the articles of 614-17 consolidation. 614-18 (c) The secretary of state shall charge and collect a fee of 614-19 $10 for filing articles of consolidation and issuing a certificate 614-20 of consolidation. 614-21 (d) When the secretary of state accepts the articles of 614-22 consolidation for filing and recording and issues a certificate of 614-23 consolidation, the proposed consolidated electric cooperative 614-24 described in the articles under its designated name exists as a 614-25 body corporate, with all the powers of an electric cooperative 615-1 originally organized under this chapter. (V.A.C.S. Art. 1528b, 615-2 Secs. 27(a) (part), (b), 29 (part).) 615-3 (Sections 161.203-161.250 reserved for expansion) 615-4 SUBCHAPTER F. DISSOLUTION 615-5 Sec. 161.251. DISSOLUTION. (a) An electric cooperative may 615-6 be dissolved by a majority vote of its members present in person or 615-7 represented by proxy at a regular meeting or at a special meeting 615-8 of its members called for that purpose. 615-9 (b) A certificate of dissolution must be: 615-10 (1) signed by the president or vice president and 615-11 attested by the secretary, certifying to the dissolution and 615-12 stating that the officers have been authorized by a vote of the 615-13 members under Subsection (a) to execute and file the certificate; 615-14 and 615-15 (2) executed, acknowledged, filed, and recorded in the 615-16 same manner as original articles of incorporation of an electric 615-17 cooperative. 615-18 (c) The cooperative is dissolved when the secretary of state 615-19 accepts the certificate of dissolution for filing and recording and 615-20 issues a certificate of dissolution. 615-21 (d) The secretary of state shall charge and collect a fee of 615-22 $2.50 for filing articles of dissolution. (V.A.C.S. Art. 1528b, 615-23 Secs. 28(a), 29 (part).) 615-24 Sec. 161.252. EXISTENCE FOLLOWING DISSOLUTION. (a) A 615-25 dissolved electric cooperative continues to exist to: 616-1 (1) satisfy existing liabilities or obligations; 616-2 (2) collect or liquidate its assets; and 616-3 (3) take any other action required to adjust and wind 616-4 up its business and affairs. 616-5 (b) A dissolved electric cooperative may sue and be sued in 616-6 its corporate name. (V.A.C.S. Art. 1528b, Sec. 28(b) (part).) 616-7 Sec. 161.253. DISTRIBUTION OF NET ASSETS ON DISSOLUTION. 616-8 Assets of a dissolved electric cooperative that remain after all 616-9 liabilities or obligations of the cooperative have been satisfied 616-10 shall be distributed pro rata to the members of the cooperative who 616-11 were members when the certificate of dissolution was filed. 616-12 (V.A.C.S. Art. 1528b, Sec. 28(b) (part).) 616-13 Sec. 161.254. DISSOLUTION OF DEFECTIVELY INCORPORATED 616-14 ELECTRIC COOPERATIVE. (a) An electric cooperative that purports 616-15 to have been incorporated or reincorporated under this chapter but 616-16 that has not complied with a requirement for legal corporate 616-17 existence may file a certificate of dissolution in the same manner 616-18 as a validly incorporated electric cooperative. 616-19 (b) The certificate of dissolution may be authorized by a 616-20 majority of the incorporators or directors at a meeting called by 616-21 an incorporator and held at the principal office of the cooperative 616-22 named in the articles of incorporation. 616-23 (c) The incorporator calling the meeting must give at least 616-24 10 days' notice of the meeting by mail to the last known post 616-25 office address of each incorporator or director. (V.A.C.S. 617-1 Art. 1528b, Sec. 28(c).) 617-2 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 617-3 SUBCHAPTER A. GENERAL PROVISIONS 617-4 Sec. 162.001. SHORT TITLE 617-5 Sec. 162.002. PURPOSE 617-6 Sec. 162.003. DEFINITIONS 617-7 Sec. 162.004. CERTAIN CORPORATE NAMES PROHIBITED 617-8 Sec. 162.005. EFFECT OF RECORDING CERTAIN MORTGAGES 617-9 EXECUTED BY TELEPHONE COOPERATIVES 617-10 Sec. 162.006. CONSTRUCTION STANDARDS 617-11 (Sections 162.007-162.050 reserved for expansion) 617-12 SUBCHAPTER B. CREATION AND OPERATION OF TELEPHONE 617-13 COOPERATIVES 617-14 Sec. 162.051. INCORPORATORS 617-15 Sec. 162.052. DURATION OF CORPORATION 617-16 Sec. 162.053. NAME OF TELEPHONE COOPERATIVE 617-17 Sec. 162.054. ARTICLES OF INCORPORATION 617-18 Sec. 162.055. FILING AND RECORDING OF ARTICLES OF 617-19 INCORPORATION 617-20 Sec. 162.056. REVIVAL OF ARTICLES OF INCORPORATION 617-21 Sec. 162.057. ORGANIZATIONAL MEETING 617-22 Sec. 162.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATIONS 617-23 Sec. 162.059. NONPROFIT OPERATION 617-24 Sec. 162.060. MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE 617-25 COOPERATIVE 618-1 Sec. 162.061. LICENSE FEE 618-2 Sec. 162.062. EXEMPTION FROM EXCISE TAXES 618-3 Sec. 162.063. EXEMPTION FROM APPLICATION OF SECURITIES 618-4 ACT 618-5 Sec. 162.064. BYLAWS 618-6 Sec. 162.065. MEMBERSHIP 618-7 Sec. 162.066. PATRONS 618-8 Sec. 162.067. MEETINGS OF MEMBERS 618-9 Sec. 162.068. NOTICE OF MEMBERS' MEETING 618-10 Sec. 162.069. WAIVER OF NOTICE 618-11 Sec. 162.070. MEMBERS' MEETING: QUORUM AND VOTING 618-12 Sec. 162.071. BOARD OF DIRECTORS 618-13 Sec. 162.072. ELECTION OF DIRECTORS; TERMS 618-14 Sec. 162.073. COMPENSATION OF DIRECTORS 618-15 Sec. 162.074. INSURANCE FOR DIRECTORS 618-16 Sec. 162.075. BOARD MEETINGS; QUORUM 618-17 Sec. 162.076. DISTRICTS 618-18 Sec. 162.077. OFFICERS, AGENTS, AND EMPLOYEES 618-19 Sec. 162.078. EXECUTIVE COMMITTEE 618-20 Sec. 162.079. INDEMNIFICATION 618-21 Sec. 162.080. CHANGE OF LOCATION OF PRINCIPAL OFFICE 618-22 Sec. 162.081. DIRECTOR, OFFICER, OR MEMBER ACTING AS 618-23 NOTARY 618-24 Sec. 162.082. APPLICABILITY TO CORPORATIONS ORGANIZED 618-25 UNDER OTHER LAW 619-1 (Sections 162.083-162.120 reserved for expansion) 619-2 SUBCHAPTER C. POWERS OF TELEPHONE COOPERATIVE 619-3 Sec. 162.121. GENERAL POWERS 619-4 Sec. 162.122. POWERS RELATING TO PROVISION OF 619-5 COMMUNICATION SERVICE 619-6 Sec. 162.123. CONNECTION AND INTERCONNECTION OF FACILITIES 619-7 Sec. 162.124. EMINENT DOMAIN 619-8 Sec. 162.125. ENCUMBRANCE AND DISPOSITION OF PROPERTY 619-9 WITHOUT MEMBERS' AUTHORIZATION 619-10 Sec. 162.126. ENCUMBRANCE, LEASE, AND DISPOSITION OF 619-11 PROPERTY WITH MEMBERS' AUTHORIZATION 619-12 (Sections 162.127-162.150 reserved for expansion) 619-13 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 619-14 Sec. 162.151. AMENDMENT OF ARTICLES OF INCORPORATION 619-15 Sec. 162.152. PRESENTATION AND APPROVAL OF PROPOSED 619-16 AMENDMENT 619-17 Sec. 162.153. ARTICLES OF AMENDMENT 619-18 Sec. 162.154. FILING OF ARTICLES OF AMENDMENT 619-19 (Sections 162.155-162.200 reserved for expansion) 619-20 SUBCHAPTER E. CONSOLIDATION OR MERGER OF TELEPHONE 619-21 COOPERATIVES 619-22 Sec. 162.201. CONSOLIDATION 619-23 Sec. 162.202. ARTICLES OF CONSOLIDATION 619-24 Sec. 162.203. MERGER 619-25 Sec. 162.204. ARTICLES OF MERGER 620-1 Sec. 162.205. EFFECT OF CONSOLIDATION OR MERGER 620-2 (Sections 162.206-162.250 reserved for expansion) 620-3 SUBCHAPTER F. CONVERSION OF CORPORATION INTO TELEPHONE 620-4 COOPERATIVE 620-5 Sec. 162.251. CONVERSION OF CORPORATION INTO TELEPHONE 620-6 COOPERATIVE 620-7 Sec. 162.252. ARTICLES OF CONVERSION 620-8 Sec. 162.253. CONSOLIDATION AND CONVERSION OF 620-9 CORPORATIONS INTO TELEPHONE COOPERATIVE 620-10 Sec. 162.254. ARTICLES OF CONSOLIDATION AND CONVERSION 620-11 (Sections 162.255-162.300 reserved for expansion) 620-12 SUBCHAPTER G. DISSOLUTION 620-13 Sec. 162.301. DISSOLUTION 620-14 Sec. 162.302. EXISTENCE FOLLOWING DISSOLUTION 620-15 Sec. 162.303. DISTRIBUTION OF NET ASSETS ON DISSOLUTION 620-16 Sec. 162.304. DISSOLUTION OF DEFECTIVELY INCORPORATED TELEPHONE 620-17 COOPERATIVE 620-18 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 620-19 SUBCHAPTER A. GENERAL PROVISIONS 620-20 Sec. 162.001. SHORT TITLE. This chapter may be cited as the 620-21 Telephone Cooperative Act. (V.A.C.S. Art. 1528c, Sec. 1.) 620-22 Sec. 162.002. PURPOSE. A cooperative, nonprofit corporation 620-23 may be organized under this chapter to furnish communication 620-24 service to the widest practicable number of users of that service. 620-25 (V.A.C.S. Art. 1528c, Sec. 3.) 621-1 Sec. 162.003. DEFINITIONS. In this chapter: 621-2 (1) "Board" means the board of directors of a 621-3 telephone cooperative. 621-4 (2) "Communication service" means: 621-5 (A) the transmission or reception of 621-6 information, signals, or messages by any means, including by wire, 621-7 radio, cellular radio, microwave, or fiber optics; and 621-8 (B) the provision of lines, facilities, and 621-9 systems used in the transmission or reception described by 621-10 Paragraph (A). 621-11 (3) "Member" means: 621-12 (A) an incorporator of a telephone cooperative; 621-13 or 621-14 (B) a person admitted to membership in a 621-15 telephone cooperative as provided by Section 162.065. 621-16 (4) "Patron" means a member who is eligible to receive 621-17 patronage dividends or to earn capital credits as a result of 621-18 purchasing certain services from a telephone cooperative as 621-19 provided by Section 162.066. 621-20 (5) "Telephone cooperative" means a corporation that 621-21 is organized under this chapter or that becomes subject to this 621-22 chapter as provided by this chapter. (V.A.C.S. Art. 1528c, Secs. 621-23 2(1), (2), (3), (6), (8).) 621-24 Sec. 162.004. CERTAIN CORPORATE NAMES PROHIBITED. A 621-25 corporation organized under the laws of this state or authorized to 622-1 do business in this state may not use the words "telephone 622-2 cooperative" in the corporation's name unless the corporation is 622-3 organized under this chapter. (V.A.C.S. Art. 1528c, Sec. 6(a) 622-4 (part).) 622-5 Sec. 162.005. EFFECT OF RECORDING CERTAIN MORTGAGES EXECUTED 622-6 BY TELEPHONE COOPERATIVES. (a) An instrument executed by a 622-7 telephone cooperative or a foreign corporation doing business in 622-8 this state under this chapter that affects real and personal 622-9 property and that is recorded in the real property records of any 622-10 county in which the property is located or is to be located has the 622-11 same effect as if the instrument were also recorded as provided by 622-12 law in the proper office in that county as a mortgage of personal 622-13 property. 622-14 (b) All after-acquired property of a telephone cooperative 622-15 or foreign corporation doing business in this state under this 622-16 chapter described by or referred to as being pledged in an 622-17 instrument to which Subsection (a) applies becomes subject to the 622-18 lien described by the instrument immediately when the cooperative 622-19 or corporation acquires the property, without regard to whether the 622-20 property existed at the time the instrument was executed. The 622-21 execution of the instrument constitutes notice and otherwise has 622-22 the same effect with respect to after-acquired property to which 622-23 this subsection applies as it has under the laws relating to 622-24 recordation with respect to property that is owned by the 622-25 cooperative or foreign corporation at the time the instrument is 623-1 executed and that is described in the instrument as being pledged 623-2 by the instrument. 623-3 (c) After a lien on personal property under an instrument to 623-4 which Subsection (a) applies is recorded, the lien continues in 623-5 existence and of record for the period specified in the instrument 623-6 without: 623-7 (1) the refiling of the instrument; or 623-8 (2) the filing of any renewal certificate, affidavit, 623-9 or other supplemental information required by a law relating to the 623-10 renewal, maintenance, or extension of a lien on personal property. 623-11 (V.A.C.S. Art. 1528c, Sec. 25.) 623-12 Sec. 162.006. CONSTRUCTION STANDARDS. A telephone 623-13 cooperative that constructs communication lines or facilities must 623-14 at a minimum comply with the standards of the National Electrical 623-15 Safety Code in effect at the time of construction. (V.A.C.S. 623-16 Art. 1528c, Sec. 26.) 623-17 (Sections 162.007-162.050 reserved for expansion) 623-18 SUBCHAPTER B. CREATION AND OPERATION OF TELEPHONE COOPERATIVES 623-19 Sec. 162.051. INCORPORATORS. (a) Three or more individuals 623-20 may act as incorporators of a telephone cooperative by executing 623-21 articles of incorporation as provided by this chapter. 623-22 (b) An incorporator must: 623-23 (1) be at least 21 years of age; and 623-24 (2) reside in this state. (V.A.C.S. Art. 1528c, Sec. 623-25 5.) 624-1 Sec. 162.052. DURATION OF CORPORATION. A telephone 624-2 cooperative may be created as a perpetual corporation. (V.A.C.S. 624-3 Art. 1528c, Secs. 4 (part), 6(a) (part).) 624-4 Sec. 162.053. NAME OF TELEPHONE COOPERATIVE. The name of a 624-5 telephone cooperative must: 624-6 (1) include the words "telephone" and "cooperative" 624-7 and the abbreviation "Inc."; and 624-8 (2) be distinct from the name of any other corporation 624-9 organized under the laws of or authorized to do business in this 624-10 state. (V.A.C.S. Art. 1528c, Sec. 6(a) (part).) 624-11 Sec. 162.054. ARTICLES OF INCORPORATION. (a) The articles 624-12 of incorporation of a telephone cooperative must: 624-13 (1) state that the articles are executed under this 624-14 chapter; 624-15 (2) be signed by each incorporator and acknowledged by 624-16 at least two incorporators; and 624-17 (3) state: 624-18 (A) the name of the cooperative; 624-19 (B) the purpose for which the cooperative is 624-20 formed; 624-21 (C) the name and address of each incorporator; 624-22 (D) the number of directors; 624-23 (E) the address of the cooperative's principal 624-24 office and the name and address of its agent on whom process may be 624-25 served; 625-1 (F) the duration of the cooperative; 625-2 (G) the terms under which a person is admitted 625-3 to membership and retains membership in the cooperative, unless the 625-4 articles expressly state that the determination of membership 625-5 matters is reserved to the directors by the bylaws; and 625-6 (H) any provisions that the incorporators 625-7 include for the regulation of the business and the conduct of the 625-8 affairs of the cooperative. 625-9 (b) The articles of incorporation do not need to state any 625-10 of the corporate powers enumerated in this chapter. (V.A.C.S. 625-11 Art. 1528c, Secs. 6(a) (part), (b).) 625-12 Sec. 162.055. FILING AND RECORDING OF ARTICLES OF 625-13 INCORPORATION. (a) The secretary of state shall receive articles 625-14 of incorporation of a telephone cooperative if the incorporators of 625-15 the cooperative: 625-16 (1) apply for filing the articles; 625-17 (2) furnish satisfactory evidence of compliance with 625-18 this chapter to the secretary of state; and 625-19 (3) pay a fee of $25. 625-20 (b) The secretary of state shall: 625-21 (1) file the articles of incorporation in the 625-22 secretary's office; 625-23 (2) record the articles at length in a book to be kept 625-24 for that purpose; 625-25 (3) retain the original articles of incorporation on 626-1 file in the secretary's office; and 626-2 (4) issue a certificate showing the recording of the 626-3 articles of incorporation and the telephone cooperative's authority 626-4 to do business under the articles. 626-5 (c) A copy of the articles of incorporation or of the record 626-6 of the articles, certified under the state seal, is evidence of the 626-7 creation of the telephone cooperative. 626-8 (d) The existence of the telephone cooperative dates from 626-9 the filing of the articles in the office of the secretary of state. 626-10 The certificate of the secretary of state is evidence of that 626-11 filing. (V.A.C.S. Art. 1528c, Secs. 7, 28 (part).) 626-12 Sec. 162.056. REVIVAL OF ARTICLES OF INCORPORATION. (a) If 626-13 the articles of incorporation of a telephone cooperative expire by 626-14 limitation, the cooperative, with the consent of a majority of its 626-15 members, may revive the articles by filing: 626-16 (1) new articles of incorporation under this chapter; 626-17 and 626-18 (2) a certified copy of the expired original articles. 626-19 (b) A telephone cooperative that revives its articles of 626-20 incorporation has all the privileges, immunities, and rights of 626-21 property exercised and held by the cooperative at the time the 626-22 original articles expired. 626-23 (c) New articles of incorporation filed under this section 626-24 must recite the privileges, immunities, and rights of property 626-25 exercised and held by the cooperative at the time the original 627-1 articles expired. (V.A.C.S. Art. 1528c, Sec. 8.) 627-2 Sec. 162.057. ORGANIZATIONAL MEETING. (a) After the 627-3 certificate of incorporation is issued, the incorporators of a 627-4 telephone cooperative shall meet to adopt bylaws, elect officers, 627-5 and transact other business that properly comes before the meeting. 627-6 (b) A majority of the incorporators shall call the 627-7 organizational meeting. 627-8 (c) The incorporators calling the organizational meeting 627-9 shall give at least three days' notice of the meeting by mail to 627-10 each incorporator. The notice must state the time and place of the 627-11 meeting. The notice may be waived in writing. (V.A.C.S. 627-12 Art. 1528c, Sec. 9.) 627-13 Sec. 162.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATIONS. 627-14 (a) A telephone cooperative that files defective articles of 627-15 incorporation or fails to take an action necessary to perfect its 627-16 corporate organization may: 627-17 (1) file corrected articles of incorporation or amend 627-18 the original articles; and 627-19 (2) take any action necessary to correct the defect. 627-20 (b) An action taken under this section is valid and binding 627-21 on any person concerned. (V.A.C.S. Art. 1528c, Sec. 32.) 627-22 Sec. 162.059. NONPROFIT OPERATION. (a) A telephone 627-23 cooperative shall be operated on a nonprofit basis for the mutual 627-24 benefit of its members and patrons. 627-25 (b) A cooperative's bylaws and its contracts with members 628-1 and patrons must contain appropriate provisions relating to the 628-2 disposition of revenues and receipts to establish and maintain the 628-3 cooperative's nonprofit and cooperative character. (V.A.C.S. 628-4 Art. 1528c, Sec. 22.) 628-5 Sec. 162.060. MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE 628-6 COOPERATIVE. A member is not liable for a debt of a telephone 628-7 cooperative, and the member's property is not subject to execution 628-8 for that debt. (V.A.C.S. Art. 1528c, Sec. 24.) 628-9 Sec. 162.061. LICENSE FEE. Not later than July 1 of each 628-10 year, each telephone cooperative doing business in this state shall 628-11 pay to the secretary of state a fee of $10. (V.A.C.S. Art. 1528c, 628-12 Sec. 29 (part).) 628-13 Sec. 162.062. EXEMPTION FROM EXCISE TAXES. A telephone 628-14 cooperative doing business in this state is exempt from all excise 628-15 taxes but is exempt from the franchise tax imposed by Chapter 171, 628-16 Tax Code, only if the cooperative is exempted by that chapter. 628-17 (V.A.C.S. Art. 1528c, Sec. 29 (part).) 628-18 Sec. 162.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT. 628-19 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 628-20 Statutes) does not apply to: 628-21 (1) a note, bond, or other evidence of indebtedness 628-22 issued by a telephone cooperative doing business in this state to 628-23 the United States; 628-24 (2) an instrument executed to secure a debt of a 628-25 telephone cooperative to the United States; or 629-1 (3) the issuance of a membership certificate by a 629-2 telephone cooperative or a foreign corporation doing business in 629-3 this state under this chapter. (V.A.C.S. Art. 1528c, Sec. 31.) 629-4 Sec. 162.064. BYLAWS. (a) The board shall adopt the 629-5 initial bylaws of a telephone cooperative to be adopted following: 629-6 (1) an incorporation; 629-7 (2) a consolidation; or 629-8 (3) an amendment by an existing cooperative, 629-9 corporation, or association of its articles of incorporation as 629-10 provided by Section 162.082. 629-11 (b) After the initial bylaws are adopted, the members may 629-12 adopt, amend, or repeal the bylaws by the affirmative vote of a 629-13 majority of those members voting on the question at a meeting of 629-14 the members. 629-15 (c) The bylaws may contain any provision for the regulation 629-16 and management of the affairs of the telephone cooperative that is 629-17 consistent with the articles of incorporation. (V.A.C.S. 629-18 Art. 1528c, Sec. 10.) 629-19 Sec. 162.065. MEMBERSHIP. (a) Each incorporator of a 629-20 telephone cooperative is a member of the cooperative. A person 629-21 other than an incorporator may become a member of a telephone 629-22 cooperative only if the person agrees to use communication service 629-23 furnished by the cooperative when that service is made available 629-24 through the cooperative's facilities. The bylaws may prescribe 629-25 additional qualifications and limitations with respect to 630-1 membership. 630-2 (b) Membership in a telephone cooperative is evidenced by a 630-3 certificate of membership. A membership certificate must contain 630-4 the provisions, consistent with this chapter and the articles of 630-5 incorporation, that are prescribed by the cooperative's bylaws. A 630-6 certificate may be transferred only as provided by the bylaws. 630-7 (c) A telephone cooperative may become a member of another 630-8 telephone cooperative and may fully use the facilities and services 630-9 of that cooperative. (V.A.C.S. Art. 1528c, Sec. 11(a).) 630-10 Sec. 162.066. PATRONS. (a) A member is a patron of a 630-11 telephone cooperative if the member purchases local 630-12 telecommunications service or toll telecommunications service or 630-13 pays end user access charges in the ordinary course of business of 630-14 the cooperative. 630-15 (b) The use of interexchange access, payment of 630-16 interexchange access fees or settlements, or purchase of equipment 630-17 does not qualify a member or other person as a patron. (V.A.C.S. 630-18 Art. 1528c, Sec. 11(b).) 630-19 Sec. 162.067. MEETINGS OF MEMBERS. (a) A telephone 630-20 cooperative shall hold an annual meeting of members at the time and 630-21 place provided by the bylaws. Failure to hold the annual meeting 630-22 at the designated time does not result in forfeiture or dissolution 630-23 of the cooperative. 630-24 (b) A special meeting of the members may be called by: 630-25 (1) the president; 631-1 (2) the board; 631-2 (3) any three directors; or 631-3 (4) the lesser of: 631-4 (A) 200 members; or 631-5 (B) 10 percent of all the members. (V.A.C.S. 631-6 Art. 1528c, Secs. 12(a), (b).) 631-7 Sec. 162.068. NOTICE OF MEMBERS' MEETING. (a) Except as 631-8 otherwise provided by this chapter, written notice of each meeting 631-9 of the members shall be given to each member, either personally or 631-10 by mail, not earlier than the 25th day or later than the 10th day 631-11 before the date of the meeting. 631-12 (b) The notice must state the time and place of the meeting 631-13 and, in the case of a special meeting, each purpose for which the 631-14 meeting is called. 631-15 (c) A notice that is mailed is considered to have been given 631-16 when the notice is deposited in the United States mail with postage 631-17 prepaid addressed to the member at the member's address as it 631-18 appears on the records of the telephone cooperative. (V.A.C.S. 631-19 Art. 1528c, Sec. 12(c).) 631-20 Sec. 162.069. WAIVER OF NOTICE. A person entitled to notice 631-21 of a meeting may waive notice in writing either before or after the 631-22 meeting. If a person entitled to notice of a meeting attends the 631-23 meeting, the person's attendance constitutes a waiver of notice of 631-24 the meeting, unless the person participates in the meeting solely 631-25 to object to the transaction of business because the meeting is not 632-1 legally called or convened. (V.A.C.S. Art. 1528c, Sec. 13.) 632-2 Sec. 162.070. MEMBERS' MEETING: QUORUM AND VOTING. 632-3 (a) Unless the bylaws prescribe a greater percentage or number of 632-4 members for a quorum, a quorum at a meeting of the members of a 632-5 telephone cooperative is the personal presence of: 632-6 (1) 10 percent of all members, if the cooperative has 632-7 500 or fewer members; or 632-8 (2) the greater of 50 members or two percent of all 632-9 members, if the cooperative has more than 500 members. 632-10 (b) If fewer than a quorum are present at a meeting, a 632-11 majority of the members present in person may adjourn the meeting 632-12 from time to time without further notice. 632-13 (c) Each member present at a meeting of the members is 632-14 entitled to one vote on each matter submitted to a vote at the 632-15 meeting. Voting must be in person unless the bylaws provide for 632-16 voting by mail. (V.A.C.S. Art. 1528c, Secs. 12(d), (e).) 632-17 Sec. 162.071. BOARD OF DIRECTORS. (a) A board of at least 632-18 five directors shall manage the business of a telephone 632-19 cooperative. Each director must be a member of the cooperative. 632-20 The bylaws must prescribe the number of directors and their 632-21 qualifications other than those prescribed by this chapter. 632-22 (b) The board may exercise any power of a telephone 632-23 cooperative not conferred on the members by this chapter or by the 632-24 cooperative's articles of incorporation or bylaws. (V.A.C.S. 632-25 Art. 1528c, Secs. 6(a) (part), 14(a) (part), (e).) 633-1 Sec. 162.072. ELECTION OF DIRECTORS; TERMS. (a) The 633-2 incorporators of a telephone cooperative named in the articles of 633-3 incorporation shall serve as directors and hold office until the 633-4 first annual meeting of the members and until their successors are 633-5 elected and qualify. 633-6 (b) At each annual meeting or, in the case of failure to 633-7 hold the annual meeting as specified in the bylaws, at a special 633-8 meeting called for that purpose, the members shall elect directors 633-9 to hold office until the next annual members' meeting, except as 633-10 otherwise provided by this chapter. Except as provided by 633-11 Subsection (e), each director holds office for the term for which 633-12 the person is elected and until the person's successor is elected 633-13 and qualifies. 633-14 (c) Instead of electing all the directors annually, the 633-15 bylaws may provide that the directors, other than those named in 633-16 the articles of incorporation to serve until the first annual 633-17 meeting of the members, are elected by the members for a term of 633-18 two years or three years. The terms must be set so that: 633-19 (1) one-half of the directors, as nearly as possible, 633-20 are elected annually, if a two-year term is provided; or 633-21 (2) one-third of the directors, as nearly as possible, 633-22 are elected annually, if a three-year term is provided. 633-23 (d) After the implementation of two-year or three-year terms 633-24 for directors, as directors' terms expire, the members shall elect 633-25 their successors to serve until the second or third succeeding 634-1 annual meeting after their election, as appropriate. 634-2 (e) The bylaws must prescribe the manner of electing a 634-3 successor to a director who resigns, dies, or otherwise becomes 634-4 incapable of acting. The bylaws may provide for the removal of a 634-5 director from office and for the election of the director's 634-6 successor. (V.A.C.S. Art. 1528c, Secs. 6(a) (part), 14(a) (part), 634-7 (b), (c).) 634-8 Sec. 162.073. COMPENSATION OF DIRECTORS. (a) A director 634-9 may not receive a salary for services as a director. Except in an 634-10 emergency, a director may not receive a salary for services in a 634-11 capacity other than director without the approval of the members. 634-12 (b) The bylaws may: 634-13 (1) prescribe a fixed fee for attendance at each board 634-14 meeting, committee meeting, industry-related conference approved by 634-15 the board, or training program; and 634-16 (2) provide for reimbursement of actual expenses of 634-17 attendance or a reasonable per diem. (V.A.C.S. Art. 1528c, Sec. 634-18 14(a) (part).) 634-19 Sec. 162.074. INSURANCE FOR DIRECTORS. A telephone 634-20 cooperative may provide liability, accident, life, and health 634-21 insurance coverage for a director who chooses to have that 634-22 coverage. (V.A.C.S. Art. 1528c, Sec. 14(a) (part).) 634-23 Sec. 162.075. BOARD MEETINGS; QUORUM. (a) The bylaws shall 634-24 prescribe the manner of holding board meetings. 634-25 (b) A majority of the directors is a quorum. (V.A.C.S. 635-1 Art. 1528c, Secs. 14(a) (part), (d).) 635-2 Sec. 162.076. DISTRICTS. (a) The bylaws may provide for 635-3 the territory served or to be served by a telephone cooperative to 635-4 be divided into two or more districts for any purpose, including 635-5 the nomination and election of directors and the election and 635-6 functioning of district delegates. 635-7 (b) The bylaws must prescribe: 635-8 (1) the boundaries of each district or the manner of 635-9 establishing a district's boundaries; 635-10 (2) the manner of changing a district's boundaries; 635-11 and 635-12 (3) the manner in which each district functions. 635-13 (c) District delegates may nominate and elect directors. A 635-14 district delegate must be a member. 635-15 (d) A member may not vote by proxy or by mail at a district 635-16 meeting. 635-17 (e) A district delegate may not vote by proxy or by mail at 635-18 any meeting. (V.A.C.S. Art. 1528c, Sec. 15.) 635-19 Sec. 162.077. OFFICERS, AGENTS, AND EMPLOYEES. (a) The 635-20 board of a telephone cooperative shall annually elect from the 635-21 board's membership a president, a vice president, a secretary, and 635-22 a treasurer. 635-23 (b) An officer who ceases to be a director ceases to hold 635-24 office. 635-25 (c) The same person may hold the offices of secretary and of 636-1 treasurer. 636-2 (d) The board may also elect or appoint other officers, 636-3 agents, or employees as the board considers appropriate and shall 636-4 prescribe the powers and duties of those persons. 636-5 (e) An officer may be removed from office and a successor 636-6 elected in the manner prescribed by the bylaws. (V.A.C.S. 636-7 Art. 1528c, Sec. 16.) 636-8 Sec. 162.078. EXECUTIVE COMMITTEE. (a) The bylaws of a 636-9 telephone cooperative may authorize the board to elect an executive 636-10 committee from the board's membership. 636-11 (b) The board may delegate to the executive committee the 636-12 management of the current and ordinary business of the cooperative 636-13 and other duties as prescribed by the bylaws. 636-14 (c) The designation of an executive committee and the 636-15 delegation of authority to the committee does not relieve the board 636-16 or any director of a responsibility imposed on the board or the 636-17 director by this chapter. (V.A.C.S. Art. 1528c, Sec. 17.) 636-18 Sec. 162.079. INDEMNIFICATION. Article 2.22A, Texas 636-19 Non-Profit Corporation Act (Article 1396-2.22A, Vernon's Texas 636-20 Civil Statutes), applies to a telephone cooperative in the same 636-21 manner as if the cooperative were formed under the Texas Non-Profit 636-22 Corporation Act. (V.A.C.S. Art. 1528c, Sec. 4A.) 636-23 Sec. 162.080. CHANGE OF LOCATION OF PRINCIPAL OFFICE. 636-24 (a) A telephone cooperative may, with the authorization of the 636-25 board or the members, change the location of its principal office 637-1 by filing a certificate reciting the change of principal office 637-2 with the secretary of state. 637-3 (b) The cooperative's president or vice president must 637-4 execute and acknowledge the certificate under the cooperative's 637-5 seal as attested by the secretary. 637-6 (c) The secretary of state shall charge and collect a fee of 637-7 $5 for filing a certificate of change of principal office. 637-8 (V.A.C.S. Art. 1528c, Secs. 19, 28 (part).) 637-9 Sec. 162.081. DIRECTOR, OFFICER, OR MEMBER ACTING AS NOTARY. 637-10 A person who is an officer, director, or member of a telephone 637-11 cooperative and who is authorized to take acknowledgments under 637-12 state law is not disqualified because of the person's association 637-13 with the cooperative from taking an acknowledgment of an instrument 637-14 executed in favor of the cooperative or to which the cooperative is 637-15 a party. (V.A.C.S. Art. 1528c, Sec. 27.) 637-16 Sec. 162.082. APPLICABILITY TO CORPORATIONS ORGANIZED UNDER 637-17 OTHER LAW. A cooperative or nonprofit corporation or association 637-18 organized under any other law of this state for the purpose of 637-19 furnishing communication service may, by a majority vote of the 637-20 members present in person at a meeting called for that purpose, 637-21 amend its articles of incorporation to comply with this chapter. 637-22 (V.A.C.S. Art. 1528c, Sec. 33.) 637-23 (Sections 162.083-162.120 reserved for expansion) 637-24 SUBCHAPTER C. POWERS OF TELEPHONE COOPERATIVE 637-25 Sec. 162.121. GENERAL POWERS. A telephone cooperative may: 638-1 (1) sue and be sued in its corporate name; 638-2 (2) adopt and alter a corporate seal and use the seal 638-3 or a facsimile of the seal as required by law; 638-4 (3) construct, acquire, lease, improve, install, 638-5 equip, maintain, and operate, and, subject to Sections 162.125 and 638-6 162.126, dispose of, lease, or encumber, communication lines, 638-7 facilities or systems, lands, structures, plants and equipment, 638-8 exchanges, and other property, considered appropriate to accomplish 638-9 the purpose for which the cooperative is organized; 638-10 (4) issue membership certificates as provided by this 638-11 chapter; 638-12 (5) borrow money and otherwise contract indebtedness, 638-13 issue or guarantee notes, bonds, and other evidences of 638-14 indebtedness, and secure the payment of indebtedness by pledge or 638-15 other encumbrance on any or all of its property or revenue; 638-16 (6) conduct its business and exercise its powers 638-17 inside or outside this state; 638-18 (7) adopt, amend, and repeal bylaws; 638-19 (8) make any contracts appropriate for the full 638-20 exercise of the powers granted by this chapter; and 638-21 (9) perform any other acts and exercise any other 638-22 power that may be appropriate to accomplish the purpose for which 638-23 the cooperative is organized. (V.A.C.S. Art. 1528c, Sec. 4 638-24 (part).) 638-25 Sec. 162.122. POWERS RELATING TO PROVISION OF COMMUNICATION 639-1 SERVICE. (a) A telephone cooperative may: 639-2 (1) furnish and improve communication service to its 639-3 members, to governmental agencies and political subdivisions, to 639-4 any number of subscribers of other communication systems through 639-5 interconnection of facilities, and to any number of users through 639-6 pay stations; 639-7 (2) connect and interconnect its communication lines, 639-8 facilities, or systems with other communication lines, facilities, 639-9 or systems; 639-10 (3) make its facilities available to persons 639-11 furnishing communication service inside or outside this state; and 639-12 (4) construct, maintain, and operate a communication 639-13 line along, on, under, or across publicly owned land or a public 639-14 thoroughfare, subject to the same restrictions and obligations that 639-15 apply to an electric transmission cooperative under Subchapter C, 639-16 Chapter 181. 639-17 (b) A telephone cooperative that acquires communication 639-18 facilities may continue to furnish service to a person who is 639-19 already receiving service from those facilities without requiring 639-20 the person to become a member, but the person may become a member 639-21 on the terms prescribed by the bylaws. (V.A.C.S. Art. 1528c, Sec. 639-22 4 (part).) 639-23 Sec. 162.123. CONNECTION AND INTERCONNECTION OF FACILITIES. 639-24 A telephone cooperative doing business in this state may require a 639-25 person furnishing communication service to the public in this state 640-1 to interconnect that person's lines, facilities, or systems with, 640-2 or otherwise make available those lines, facilities, or systems to, 640-3 the cooperative's communication lines, facilities, or systems to 640-4 provide a continuous line of communication for the cooperative's 640-5 subscribers. (V.A.C.S. Art. 1528c, Sec. 30 (part).) 640-6 Sec. 162.124. EMINENT DOMAIN. A telephone cooperative may 640-7 exercise the power of eminent domain in the manner provided by 640-8 state law for the exercise of that power by other corporations 640-9 constructing or operating communication lines, facilities, or 640-10 systems. (V.A.C.S. Art. 1528c, Sec. 4 (part).) 640-11 Sec. 162.125. ENCUMBRANCE AND DISPOSITION OF PROPERTY 640-12 WITHOUT MEMBERS' AUTHORIZATION. (a) The board of a telephone 640-13 cooperative may, without authorization of the members, authorize 640-14 the execution and delivery of a mortgage or deed of trust of or the 640-15 encumbering of any property of the cooperative, including property 640-16 to be acquired and the revenues from property of the cooperative, 640-17 to secure any indebtedness of the cooperative to the United States 640-18 or any lending institution licensed by the United States or a 640-19 state. 640-20 (b) A mortgage or deed of trust described by Subsection (a) 640-21 is exempt from a tax for recording the instrument. (V.A.C.S. 640-22 Art. 1528c, Sec. 23(a).) 640-23 Sec. 162.126. ENCUMBRANCE, LEASE, AND DISPOSITION OF 640-24 PROPERTY WITH MEMBERS' AUTHORIZATION. (a) Except as provided by 640-25 Section 162.125, a telephone cooperative may not dispose of, lease, 641-1 or encumber all or a major portion of its property unless the 641-2 disposition, lease, or encumbrance is authorized by the affirmative 641-3 vote of at least two-thirds of all the members of the cooperative. 641-4 (b) The board may, on the authorization of two-thirds of all 641-5 the members of the cooperative at a members' meeting, dispose of or 641-6 lease all or a major portion of its property to: 641-7 (1) another telephone cooperative; 641-8 (2) a foreign corporation doing business in this state 641-9 under this chapter; or 641-10 (3) the holder of a note, bond, or other evidence of 641-11 indebtedness issued to the United States or to a lending 641-12 institution licensed by the United States or a state. 641-13 (c) The notice of a meeting at which a disposition or lease 641-14 under Subsection (b) is to be considered must state the proposed 641-15 action. (V.A.C.S. Art. 1528c, Sec. 23(b).) 641-16 (Sections 162.127-162.150 reserved for expansion) 641-17 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 641-18 Sec. 162.151. AMENDMENT OF ARTICLES OF INCORPORATION. A 641-19 telephone cooperative may amend its articles of incorporation in 641-20 accordance with this subchapter. (V.A.C.S. Art. 1528c, Sec. 18 641-21 (part).) 641-22 Sec. 162.152. PRESENTATION AND APPROVAL OF PROPOSED 641-23 AMENDMENT. (a) A proposed amendment to the articles of 641-24 incorporation must be presented to a meeting of the members. The 641-25 notice of the meeting must state the proposed amendment or must 642-1 have the proposed amendment attached to it. 642-2 (b) A proposed amendment, with any changes, may be approved 642-3 only on the affirmative vote of at least two-thirds of the members 642-4 voting on the question at the meeting. (V.A.C.S. Art. 1528c, Sec. 642-5 18 (part).) 642-6 Sec. 162.153. ARTICLES OF AMENDMENT. (a) The president or 642-7 vice president, on behalf of the telephone cooperative, shall 642-8 execute and acknowledge the approved articles of amendment. The 642-9 cooperative's seal must be affixed to the articles of amendment and 642-10 attested by its secretary. 642-11 (b) The articles of amendment must state: 642-12 (1) that the articles of amendment are executed under 642-13 this chapter; 642-14 (2) the name of the telephone cooperative; 642-15 (3) the address of the cooperative's principal office; 642-16 and 642-17 (4) the amendment to the articles of incorporation. 642-18 (c) The president or vice president executing the articles 642-19 of amendment shall make and attach to the articles an affidavit 642-20 stating that the cooperative complied with this subchapter with 642-21 respect to the amendment set forth in the articles. (V.A.C.S. 642-22 Art. 1528c, Sec. 18 (part).) 642-23 Sec. 162.154. FILING OF ARTICLES OF AMENDMENT. 642-24 (a) Articles of amendment shall be filed with the secretary of 642-25 state in the same manner as the original articles of incorporation. 643-1 (b) The secretary of state shall charge and collect a fee of 643-2 $25 for filing articles of amendment. (V.A.C.S. Art. 1528c, Secs. 643-3 18 (part), 28 (part).) 643-4 (Sections 162.155-162.200 reserved for expansion) 643-5 SUBCHAPTER E. CONSOLIDATION OR MERGER OF TELEPHONE 643-6 COOPERATIVES 643-7 Sec. 162.201. CONSOLIDATION. (a) Two or more telephone 643-8 cooperatives may enter into an agreement to consolidate the 643-9 cooperatives. The agreement must state: 643-10 (1) the terms of the consolidation; 643-11 (2) the name of the proposed consolidated cooperative; 643-12 (3) the number of directors of the proposed 643-13 consolidated cooperative; 643-14 (4) the time of the annual meeting and election; and 643-15 (5) the names of at least five persons to be directors 643-16 until the first annual meeting. 643-17 (b) A consolidation agreement may be approved only on the 643-18 votes of a majority of the members of each telephone cooperative at 643-19 a regular meeting or at a special meeting of its members called for 643-20 that purpose. 643-21 (c) Telephone cooperatives may not consolidate for the 643-22 purpose of duplicating the facilities of another communication 643-23 company where the other communication company is giving or is 643-24 willing to give reasonably adequate communication service. 643-25 (V.A.C.S. Art. 1528c, Secs. 20(a) (part), (b) (part).) 644-1 Sec. 162.202. ARTICLES OF CONSOLIDATION. (a) The articles 644-2 of consolidation must: 644-3 (1) conform substantially to original articles of 644-4 incorporation of a telephone cooperative; and 644-5 (2) be executed, acknowledged, filed, and recorded in 644-6 the same manner as original articles of incorporation. 644-7 (b) The directors named in the consolidation agreement shall 644-8 as incorporators sign and acknowledge the articles of 644-9 consolidation. 644-10 (c) The secretary of state shall charge and collect a fee of 644-11 $50 for filing articles of consolidation. 644-12 (d) When the secretary of state accepts the articles of 644-13 consolidation for filing and recording and issues a certificate of 644-14 consolidation, the proposed consolidated telephone cooperative 644-15 described in the articles under its designated name exists as a 644-16 body corporate, with all the powers of a telephone cooperative 644-17 originally organized under this chapter. (V.A.C.S. Art. 1528c, 644-18 Secs. 20(a) (part), (b) (part), 28 (part).) 644-19 Sec. 162.203. MERGER. (a) One or more telephone 644-20 cooperatives may merge into another cooperative as provided by this 644-21 section and Section 162.204. 644-22 (b) The proposition for the merger and proposed articles of 644-23 merger must be submitted at a meeting of the members of each 644-24 merging cooperative and the surviving cooperative. A copy of the 644-25 proposed articles of merger must be attached to the notice of each 645-1 meeting. 645-2 (c) A proposed merger and proposed articles of merger, with 645-3 any amendments, may be approved only on the affirmative vote of at 645-4 least two-thirds of the members of each cooperative voting on the 645-5 proposed merger and articles. (V.A.C.S. Art. 1528c, Secs. 20A(a), 645-6 (b), (c) (part).) 645-7 Sec. 162.204. ARTICLES OF MERGER. (a) The president or 645-8 vice president of each telephone cooperative, on behalf of the 645-9 telephone cooperative, shall execute and acknowledge the approved 645-10 articles of merger. The cooperative's seal must be affixed to the 645-11 articles of merger and attested by its secretary. 645-12 (b) The articles of merger must state: 645-13 (1) that they are executed under this chapter; 645-14 (2) the name of each merging cooperative and the 645-15 address of its principal office; 645-16 (3) the name of the surviving cooperative and the 645-17 address of its principal office; 645-18 (4) that each merging cooperative and the surviving 645-19 cooperative agree to the merger; 645-20 (5) the name and address of each director of the 645-21 surviving cooperative; 645-22 (6) the terms of the merger and the manner in which 645-23 the merger will be carried out, including the manner in which 645-24 members of the merging cooperatives become or may become members of 645-25 the surviving cooperative; 646-1 (7) the duration of the surviving cooperative; and 646-2 (8) the purpose for which the surviving cooperative is 646-3 formed. 646-4 (c) The articles of merger may contain any provision 646-5 consistent with this chapter considered appropriate for the conduct 646-6 of the business of the surviving cooperative. The president or 646-7 vice president of each cooperative executing the articles of merger 646-8 shall make and attach to the articles an affidavit stating that the 646-9 cooperative complied with this subchapter with respect to the 646-10 articles. 646-11 (d) The original and a copy of the articles of merger shall 646-12 be delivered to the secretary of state. If the secretary of state 646-13 finds that the articles conform to law, the secretary of state, on 646-14 payment of a fee of $50, shall: 646-15 (1) file and record the articles of merger; 646-16 (2) issue a certificate of merger; and 646-17 (3) attach to the certificate of merger the copy of 646-18 the articles of merger and deliver the certificate and attached 646-19 copy to the surviving cooperative or its representative. (V.A.C.S. 646-20 Art. 1528c, Secs. 20A(c) (part), (d), (e), (f), 28 (part).) 646-21 Sec. 162.205. EFFECT OF CONSOLIDATION OR MERGER. (a) In a 646-22 consolidation the existence of each telephone cooperative ceases 646-23 and the articles of consolidation are considered to be the articles 646-24 of incorporation of the new cooperative. In a merger the separate 646-25 existence of each merging telephone cooperative ceases and the 647-1 articles of incorporation of the surviving cooperative are 647-2 considered to be amended to the extent, if any, that amendment is 647-3 provided for in the articles of merger. 647-4 (b) All the rights, privileges, immunities, property, and 647-5 applications for membership of each of the consolidating or merging 647-6 cooperatives are transferred to and vested in the new or surviving 647-7 cooperative, except that this chapter does not relieve a 647-8 cooperative of the obligation to comply with the applicable 647-9 provisions of Title 2. 647-10 (c) The new or surviving cooperative is liable for all the 647-11 liabilities and obligations of the consolidating or merging 647-12 cooperatives. A claim existing or action or proceeding pending by 647-13 or against a consolidating or merging cooperative may be prosecuted 647-14 as if the consolidation or merger had not taken place, and the new 647-15 or surviving cooperative may be substituted in the place of the 647-16 consolidating or merging cooperative. The consolidation or merger 647-17 does not impair the rights of creditors of or liens on the property 647-18 of a consolidating or merging cooperative. (V.A.C.S. Art. 1528c, 647-19 Sec. 20B.) 647-20 (Sections 162.206-162.250 reserved for expansion) 647-21 SUBCHAPTER F. CONVERSION OF CORPORATION INTO TELEPHONE 647-22 COOPERATIVE 647-23 Sec. 162.251. CONVERSION OF CORPORATION INTO TELEPHONE 647-24 COOPERATIVE. (a) A corporation organized under the laws of this 647-25 state that furnishes or is authorized to furnish communication 648-1 service may be converted into a telephone cooperative in accordance 648-2 with this subchapter. On conversion, the corporation is subject to 648-3 this chapter as if it had been originally organized under this 648-4 chapter. 648-5 (b) The proposition for the conversion and proposed articles 648-6 of conversion must be submitted at a meeting of the members or 648-7 stockholders of the corporation or, in the case of a corporation 648-8 that does not have members or stockholders, at a meeting of the 648-9 incorporators of the corporation. A copy of the proposed articles 648-10 of conversion must be attached to the notice of the meeting. 648-11 (c) A proposed conversion and proposed articles of 648-12 conversion, with any amendments, may be approved only on the 648-13 affirmative vote of: 648-14 (1) at least two-thirds of the members of the 648-15 corporation voting on the proposed conversion and articles; 648-16 (2) the holders of at least two-thirds of the shares 648-17 of the capital stock of the corporation represented at the meeting 648-18 and voting on the proposition and articles, if the corporation is a 648-19 stock corporation; or 648-20 (3) at least two-thirds of the corporation's 648-21 incorporators, if the corporation does not have members or 648-22 outstanding shares of capital stock. (V.A.C.S. Art. 1528c, Secs. 648-23 20C(a), (b), (c) (part).) 648-24 Sec. 162.252. ARTICLES OF CONVERSION. (a) The president or 648-25 vice president, on behalf of the corporation, shall execute and 649-1 acknowledge the approved articles of conversion. The corporation's 649-2 seal must be affixed to the articles and attested by its secretary. 649-3 (b) The articles of conversion must state: 649-4 (1) that they are executed under this chapter; 649-5 (2) the name of the corporation and the address of its 649-6 principal office before its conversion into a telephone 649-7 cooperative; 649-8 (3) the law under which the corporation was organized; 649-9 (4) that the corporation elects to become a 649-10 cooperative, nonprofit corporation subject to this chapter; 649-11 (5) the corporation's name as a cooperative; 649-12 (6) the address of the principal office of the 649-13 cooperative; 649-14 (7) the name and address of each director of the 649-15 cooperative; 649-16 (8) the manner in which a member, stockholder, or 649-17 incorporator of the corporation becomes or may become a member of 649-18 the cooperative; 649-19 (9) the duration of the cooperative; and 649-20 (10) the purpose for which the cooperative is formed. 649-21 (c) The articles of conversion may contain any provision 649-22 consistent with this chapter considered appropriate for the conduct 649-23 of the business of the cooperative. The president or vice 649-24 president executing the articles of conversion shall make and 649-25 attach to the articles an affidavit stating that the corporation 650-1 complied with this section with respect to the articles. The 650-2 articles of conversion are considered to be the articles of 650-3 incorporation of the cooperative. 650-4 (d) The original and a copy of the articles of conversion 650-5 shall be delivered to the secretary of state. If the secretary of 650-6 state finds that the articles conform to law, the secretary of 650-7 state, on payment of a fee of $50, shall: 650-8 (1) file and record the articles of conversion; 650-9 (2) issue a certificate of conversion; and 650-10 (3) attach to the certificate of conversion the copy 650-11 of the articles of conversion and deliver the certificate and 650-12 attached copy to the cooperative or its representative. (V.A.C.S. 650-13 Art. 1528c, Secs. 20C(c) (part), (d), (e), (f), 28 (part).) 650-14 Sec. 162.253. CONSOLIDATION AND CONVERSION OF CORPORATIONS 650-15 INTO TELEPHONE COOPERATIVE. (a) Two or more corporations 650-16 organized under the laws of this state that furnish or are 650-17 authorized to furnish communication service may, if otherwise 650-18 permitted to consolidate under state law, consolidate and convert 650-19 into a telephone cooperative in accordance with this subchapter. 650-20 On consolidation and conversion, the new cooperative is subject to 650-21 this chapter as if it had been originally organized under this 650-22 chapter. 650-23 (b) The proposition for the consolidation and conversion and 650-24 the proposed articles of consolidation and conversion, with any 650-25 amendments, must be approved by each corporation in accordance 651-1 with: 651-2 (1) the law under which it was organized; and 651-3 (2) Sections 162.251 and 162.252. (V.A.C.S. 651-4 Art. 1528c, Secs. 20D(a), (b).) 651-5 Sec. 162.254. ARTICLES OF CONSOLIDATION AND CONVERSION. 651-6 (a) The approved articles of consolidation and conversion: 651-7 (1) shall be executed, acknowledged, and sealed as 651-8 prescribed by Section 162.252 and by the law under which the 651-9 consolidating and converting corporations were organized; 651-10 (2) must: 651-11 (A) state that they are executed under this 651-12 chapter and the law under which the corporations were organized and 651-13 that each consolidating corporation elects that the new corporation 651-14 be a cooperative; and 651-15 (B) contain all other information required by 651-16 the law under which the corporations were organized; and 651-17 (3) may contain any provision consistent with this 651-18 chapter considered appropriate for the conduct of the business of 651-19 the cooperative. 651-20 (b) The president or vice president executing the articles 651-21 of consolidation and conversion shall make and attach to the 651-22 articles an affidavit stating that the corporations complied with 651-23 this section and Section 162.253 and with the applicable provisions 651-24 of the law under which the consolidating corporations were 651-25 organized with respect to the articles. The articles of 652-1 consolidation and conversion are considered to be the articles of 652-2 incorporation of the cooperative and shall be filed in accordance 652-3 with the provisions both of this chapter and of the law under which 652-4 the consolidating corporations were organized. 652-5 (c) The original and a copy of the articles of consolidation 652-6 and conversion shall be delivered to the secretary of state. If 652-7 the secretary of state finds that the articles conform to law, the 652-8 secretary of state, on payment of a fee of $50, shall: 652-9 (1) file and record the articles of consolidation and 652-10 conversion; 652-11 (2) issue a certificate of consolidation and 652-12 conversion; and 652-13 (3) attach to the certificate the copy of the articles 652-14 and deliver the certificate and attached copy to the cooperative or 652-15 its representative. (V.A.C.S. Art. 1528c, Secs. 20D(c), (d), 28 652-16 (part).) 652-17 (Sections 162.255-162.300 reserved for expansion) 652-18 SUBCHAPTER G. DISSOLUTION 652-19 Sec. 162.301. DISSOLUTION. (a) A telephone cooperative may 652-20 be dissolved by a two-thirds vote of all the members of the 652-21 cooperative. The vote must be taken at a regular meeting or at a 652-22 special meeting of its members called for that purpose. Votes must 652-23 be cast in person. 652-24 (b) A certificate of dissolution must be: 652-25 (1) signed by the president or vice president and 653-1 attested by the secretary, certifying to the dissolution and 653-2 stating that the officers have been authorized by a vote of the 653-3 members under Subsection (a) to execute and file the certificate; 653-4 and 653-5 (2) executed, acknowledged, filed, and recorded in the 653-6 same manner as original articles of incorporation of a telephone 653-7 cooperative. 653-8 (c) The cooperative is dissolved when the secretary of state 653-9 accepts the certificate of dissolution for filing and recording and 653-10 issues a certificate of dissolution. 653-11 (d) The secretary of state shall charge and collect: 653-12 (1) a fee of $5 for filing a certificate of election 653-13 to dissolve; and 653-14 (2) a fee of $5 for filing articles of dissolution. 653-15 (V.A.C.S. Art. 1528c, Secs. 21(a), 28 (part).) 653-16 Sec. 162.302. EXISTENCE FOLLOWING DISSOLUTION. (a) A 653-17 dissolved telephone cooperative continues to exist to: 653-18 (1) satisfy existing liabilities or obligations; 653-19 (2) collect or liquidate its assets; and 653-20 (3) take any other action required to adjust and wind 653-21 up its business and affairs. 653-22 (b) A dissolved telephone cooperative may sue and be sued in 653-23 its corporate name. (V.A.C.S. Art. 1528c, Sec. 21(b) (part).) 653-24 Sec. 162.303. DISTRIBUTION OF NET ASSETS ON DISSOLUTION. 653-25 Assets of a dissolved telephone cooperative that remain after all 654-1 liabilities or obligations of the cooperative have been satisfied 654-2 shall be distributed as follows: 654-3 (1) first, to patrons for the pro rata return of 654-4 amounts standing to their credit because of their patronage; and 654-5 (2) second, to members for the pro rata repayment of 654-6 membership fees. (V.A.C.S. Art. 1528c, Sec. 21(b) (part).) 654-7 Sec. 162.304. DISSOLUTION OF DEFECTIVELY INCORPORATED 654-8 TELEPHONE COOPERATIVE. (a) A telephone cooperative that purports 654-9 to have been incorporated or reincorporated under this chapter but 654-10 that has not complied with a requirement for legal corporate 654-11 existence may file a certificate of dissolution in the same manner 654-12 as a validly incorporated telephone cooperative. 654-13 (b) The certificate of dissolution may be authorized by a 654-14 majority of the incorporators or directors at a meeting called by 654-15 an incorporator and held at the principal office of the cooperative 654-16 named in the articles of incorporation. 654-17 (c) The incorporator calling the meeting must give at least 654-18 ten days' notice of the meeting by mail to the last known post 654-19 office address of each incorporator or director. (V.A.C.S. 654-20 Art. 1528c, Sec. 21(c).) 654-21 CHAPTER 163. JOINT POWERS AGENCIES 654-22 SUBCHAPTER A. GENERAL PROVISIONS 654-23 Sec. 163.001. DEFINITIONS 654-24 (Sections 163.002-163.010 reserved for expansion) 655-1 SUBCHAPTER B. COOPERATION BY PUBLIC AND PRIVATE ENTITIES 655-2 Sec. 163.011. EFFECT OF SUBCHAPTER 655-3 Sec. 163.012. AUTHORITY TO MAKE AGREEMENTS 655-4 Sec. 163.013. GENERAL RIGHTS, POWERS, AND DUTIES OF ENTITIES 655-5 Sec. 163.014. USE OF EMINENT DOMAIN 655-6 Sec. 163.015. TAXATION 655-7 Sec. 163.016. INSURANCE 655-8 (Sections 163.017-163.050 reserved for expansion) 655-9 SUBCHAPTER C. MUNICIPAL POWER AGENCIES 655-10 Sec. 163.051. DEFINITIONS 655-11 Sec. 163.052. CONSTRUCTION 655-12 Sec. 163.053. CONFLICTS WITH OTHER LAW 655-13 Sec. 163.054. CREATION OF AGENCY 655-14 Sec. 163.055. RE-CREATION OF AGENCY 655-15 Sec. 163.056. NOTICE 655-16 Sec. 163.057. CONTENTS OF CONCURRENT ORDINANCE 655-17 Sec. 163.058. ELECTION 655-18 Sec. 163.059. BOARD OF DIRECTORS 655-19 Sec. 163.060. POWERS 655-20 Sec. 163.061. CONSTRUCTION CONTRACTS 655-21 Sec. 163.062. SALE OR EXCHANGE OF ELECTRIC ENERGY 655-22 Sec. 163.063. RATES AND CHARGES 655-23 Sec. 163.064. REVENUE BONDS 655-24 Sec. 163.065. REFUNDING BONDS 655-25 Sec. 163.066. ISSUANCE, FORM, AND PROVISIONS OF BONDS 656-1 Sec. 163.067. NONNEGOTIABLE PURCHASE MONEY NOTES 656-2 Sec. 163.068. BOND ANTICIPATION NOTES 656-3 (Sections 163.069-163.100 reserved for expansion) 656-4 SUBCHAPTER D. AGENCY RECEIVING POWER THROUGH 656-5 INTERSTATE SYSTEM 656-6 Sec. 163.101. CREATION 656-7 Sec. 163.102. POWERS 656-8 (Sections 163.103-163.120 reserved for expansion) 656-9 SUBCHAPTER E. ELECTRIC COOPERATIVE CORPORATIONS 656-10 Sec. 163.121. CREATION 656-11 Sec. 163.122. APPLICATION OF OPEN MEETINGS LAW 656-12 Sec. 163.123. AUTHORITY OF PUBLIC UTILITY COMMISSION 656-13 Sec. 163.124. POWER TO ISSUE CERTAIN BONDS OR SECURITIES 656-14 CHAPTER 163. JOINT POWERS AGENCIES 656-15 SUBCHAPTER A. GENERAL PROVISIONS 656-16 Sec. 163.001. DEFINITIONS. In this chapter: 656-17 (1) "Electric facility" means a facility necessary or 656-18 incidental to generating or transmitting electric power and energy, 656-19 including: 656-20 (A) a generating unit or plant or a plant site; 656-21 (B) transmission lines; 656-22 (C) a right-of-way or other right relating to a 656-23 facility; and 656-24 (D) property and equipment. 656-25 (2) "Entity" means a person who engages in the 657-1 authorized generation, transmission, or distribution of electric 657-2 energy for sale to the public. 657-3 (3) "Private entity" means an entity that is not a 657-4 public entity. 657-5 (4) "Public entity" means an entity that is an agency 657-6 or political subdivision of this state. (V.A.C.S. Art. 1435a, Sec. 657-7 2.) 657-8 (Sections 163.002-163.010 reserved for expansion) 657-9 SUBCHAPTER B. COOPERATION BY PUBLIC AND PRIVATE ENTITIES 657-10 Sec. 163.011. EFFECT OF SUBCHAPTER. This subchapter does 657-11 not affect: 657-12 (1) the statutory purposes prescribed by state law 657-13 relating to creating, establishing, or operating an entity that 657-14 co-owns a facility; 657-15 (2) an entity's rights or powers in effect on August 657-16 27, 1973, relating to the generation, transmission, distribution, 657-17 or sale of electric power and energy; or 657-18 (3) a contract in effect on August 27, 1973. 657-19 (V.A.C.S. Art. 1435a, Secs. 1 (part), 5.) 657-20 Sec. 163.012. AUTHORITY TO MAKE AGREEMENTS. Public and 657-21 private entities may by agreement jointly plan, finance, acquire, 657-22 construct, own, operate, and maintain electric facilities to: 657-23 (1) achieve economies of scale in providing electric 657-24 energy to the public; 657-25 (2) promote the economic development of this state and 658-1 its natural resources; and 658-2 (3) meet the state's future power needs. (V.A.C.S. 658-3 Art. 1435a, Secs. 1 (part), 3 (part).) 658-4 Sec. 163.013. GENERAL RIGHTS, POWERS, AND DUTIES OF 658-5 ENTITIES. (a) A participating entity may: 658-6 (1) use its means and assets to plan, acquire, 658-7 construct, own, operate, and maintain its interest in an electric 658-8 facility; 658-9 (2) issue bonds and other securities to raise money 658-10 for a purpose described by Subdivision (1) in the same manner and 658-11 to the same extent and subject to the same conditions as would be 658-12 applicable if the entity had sole ownership of the electric 658-13 facility; 658-14 (3) acquire, for the use and benefit of each 658-15 participating entity, land, easements, and property for an electric 658-16 facility by purchase or by exercising the power of eminent domain; 658-17 and 658-18 (4) transfer or otherwise convey the acquired land, 658-19 property, or property interest or otherwise cause the land, 658-20 property, or interest to become vested in other participating 658-21 entities to the extent to which and in the manner in which the 658-22 participating entities agree. 658-23 (b) Each participating entity is a cotenant or co-owner of 658-24 the electric facility and in relation to the entity's undivided 658-25 interest in the facility has each right, privilege, exemption, 659-1 power, duty, and liability the entity would have had if the entity 659-2 had sole ownership. (V.A.C.S. Art. 1435a, Secs. 1 (part), 3 659-3 (part), 4(1), 4(2) (part).) 659-4 Sec. 163.014. USE OF EMINENT DOMAIN. (a) A participating 659-5 entity has the power of eminent domain to be exercised as provided 659-6 by this section. 659-7 (b) The use of eminent domain authority by a participating 659-8 entity is governed by the law relating to an eminent domain 659-9 proceeding involving a municipality in this state. 659-10 (c) A participating entity may acquire a fee title to the 659-11 condemned real property. 659-12 (d) A participating entity may not use eminent domain 659-13 authority to acquire: 659-14 (1) an interest in an electric facility that belongs 659-15 to another entity; or 659-16 (2) an interest in real property to drill, mine, or 659-17 produce from that property oil, gas, geothermal resources, 659-18 geothermal/geopressured resources, or lignite, coal, sulphur, 659-19 uranium, plutonium, or other minerals that belong to another person 659-20 regardless of whether the material is in place or is in the process 659-21 of being drilled, mined, or produced. 659-22 (e) Subsection (d) does not affect the authority of a 659-23 participating entity to acquire full title to real property for a 659-24 plant site and any related surface installation or equipment, 659-25 including a cooling reservoir. (V.A.C.S. Art. 1435a, Sec. 4(2) 660-1 (part).) 660-2 Sec. 163.015. TAXATION. (a) A participating private entity 660-3 shall render for ad valorem taxation its undivided fractional 660-4 interest in a jointly owned electric facility. An ad valorem or 660-5 similar tax shall be imposed separately against the undivided 660-6 interest of the participating private entity. 660-7 (b) A tax or assessment, including an excise tax or sales 660-8 and use tax, attributable to a property or service bought, sold, 660-9 leased, or used to construct, maintain, repair, or operate a 660-10 jointly owned electric facility shall be imposed separately against 660-11 each participating entity in proportion to the entity's respective 660-12 undivided interest in the facility. 660-13 (c) A participating entity is not liable for a tax or 660-14 assessment attributable to another participating entity under 660-15 Subsection (a) or (b). 660-16 (d) A participating entity is entitled to each 660-17 constitutional or statutory ad valorem or other tax exemption 660-18 attributable to the jointly owned electric facility or to a 660-19 property or service bought, sold, leased, or used to construct, 660-20 maintain, repair, or operate the facility to the extent the entity 660-21 would have been exempt from the tax if the entity's undivided 660-22 interest were an entire interest in the facility or in the property 660-23 or service. The entity is entitled to any applicable exemption 660-24 certificate or statement provided by law to claim or prove the 660-25 exemption. (V.A.C.S. Art. 1435a, Sec. 4(3).) 661-1 Sec. 163.016. INSURANCE. A participating entity may: 661-2 (1) contract for insurance, including specialized 661-3 insurance for property and risks relating to the ownership, 661-4 operation, and maintenance of electric facilities; 661-5 (2) contract for insurance for the use and benefit of 661-6 each of the other participating entities as though the insurance 661-7 was for the sole benefit of the contracting entity; and 661-8 (3) cause the rights of the other participating 661-9 entities to be protected under the contract in accordance with each 661-10 entity's undivided interest or entitlement under any applicable 661-11 agreement between the entities. (V.A.C.S. Art. 1435a, Sec. 4(4).) 661-12 (Sections 163.017-163.050 reserved for expansion) 661-13 SUBCHAPTER C. MUNICIPAL POWER AGENCIES 661-14 Sec. 163.051. DEFINITIONS. In this subchapter: 661-15 (1) "Agency" means a municipal power agency created 661-16 under this subchapter. 661-17 (2) "Bond" includes a note, but does not include a 661-18 nonnegotiable purchase money note issued under Section 163.067. 661-19 (3) "Concurrent ordinance" means an ordinance or order 661-20 adopted under this subchapter by two or more public entities that 661-21 relates to the creation or re-creation of a municipal power agency. 661-22 (4) "Obligations" means revenue bonds or notes. 661-23 (V.A.C.S. Art. 1435a, Secs. 4a(c) (part), (j) (part); New.) 661-24 Sec. 163.052. CONSTRUCTION. This subchapter shall be 661-25 liberally construed to carry out its purpose. (V.A.C.S. 662-1 Art. 1435a, Sec. 4a(s) (part).) 662-2 Sec. 163.053. CONFLICTS WITH OTHER LAW. This subchapter 662-3 prevails to the extent of a conflict between this subchapter and 662-4 any other law, including: 662-5 (1) a law regulating the affairs of a municipal 662-6 corporation; or 662-7 (2) a home-rule charter provision. (V.A.C.S. 662-8 Art. 1435a, Sec. 4a(s) (part).) 662-9 Sec. 163.054. CREATION OF AGENCY. (a) Public entities may 662-10 create an agency by concurrent ordinances subject to voter 662-11 approval. 662-12 (b) A public entity may join in the creation of an agency 662-13 under this subchapter only if on May 8, 1975, and at the time the 662-14 concurrent ordinance is adopted, the entity was engaged in the 662-15 authorized generation of electric energy for sale to the public. 662-16 This subsection does not prohibit a public entity from disposing of 662-17 its electric generating capabilities after creation of the agency. 662-18 (c) An agency is a: 662-19 (1) separate municipal corporation; 662-20 (2) political subdivision of this state; and 662-21 (3) political entity and corporate body. 662-22 (d) An agency may not impose a tax but has all the other 662-23 powers relating to municipally owned utilities and provided by law 662-24 to a municipality that owns a public utility. (V.A.C.S. 662-25 Art. 1435a, Secs. 4a(a) (part); (b) (part).) 663-1 Sec. 163.055. RE-CREATION OF AGENCY. (a) The public 663-2 entities that create an agency may by concurrent ordinances 663-3 re-create the agency by adding or deleting, or both, a public 663-4 entity. 663-5 (b) The public entities may not re-create an agency if the 663-6 re-creation will impair an agency obligation. 663-7 (c) Re-creation by adding a public entity is subject to 663-8 voter approval in accordance with Section 163.058. (V.A.C.S. 663-9 Art. 1435a, Sec. 4a(b) (part).) 663-10 Sec. 163.056. NOTICE. (a) The governing body of each 663-11 public entity shall publish notice of its intention to create an 663-12 agency once a week for two consecutive weeks. 663-13 (b) The first publication must appear before the 14th day 663-14 before the date set for passage of the concurrent ordinance. 663-15 (c) The notice must state: 663-16 (1) the date, time, and location at which the 663-17 governing body proposes to enact the concurrent ordinance; and 663-18 (2) that an agency will be created on the date on 663-19 which the concurrent ordinances take effect. (V.A.C.S. Art. 1435a, 663-20 Sec. 4a(a) (part).) 663-21 Sec. 163.057. CONTENTS OF CONCURRENT ORDINANCE. A 663-22 concurrent ordinance creating an agency under Section 163.054 or 663-23 re-creating an agency under Section 163.055 must, as adopted by 663-24 each public entity: 663-25 (1) contain identical provisions; 664-1 (2) define the boundaries of the agency to include the 664-2 territory within the boundaries of each participating public 664-3 entity; 664-4 (3) designate the name of the agency; and 664-5 (4) designate the number, place, initial term, and 664-6 manner of appointment of directors in accordance with Section 664-7 163.059. (V.A.C.S. Art. 1435a, Secs. 4a(c) (part), (d) (part), (e) 664-8 (part).) 664-9 Sec. 163.058. ELECTION. (a) An agency may not be created 664-10 unless the creation is approved by a majority of the qualified 664-11 voters of each public entity creating the agency at an election 664-12 called and held for that purpose. 664-13 (b) An agency may not be re-created by addition of a public 664-14 entity unless the re-creation is approved by a majority of the 664-15 qualified voters of the additional public entity at an election 664-16 called and held for that purpose. 664-17 (c) Notice of an election under this section shall be given 664-18 in accordance with Article 704, Revised Statutes. The election 664-19 shall be called and held in accordance with: 664-20 (1) the Election Code; 664-21 (2) Chapter 1, Title 22, Revised Statutes; and 664-22 (3) this subchapter. (V.A.C.S. Art. 1435a, Secs. 664-23 4a(a) (part), (b) (part).) 664-24 Sec. 163.059. BOARD OF DIRECTORS. (a) The agency shall be 664-25 governed by a board of directors. The board is responsible for the 665-1 management, operation, and control of the property belonging to the 665-2 agency. 665-3 (b) The board must include at least four directors. Each 665-4 director must be appointed by place by the governing bodies of the 665-5 participating public entities. Each participating public entity is 665-6 entitled to appoint at least one director. 665-7 (c) Directors must serve staggered terms. Successor 665-8 directors are appointed in the same manner as the original 665-9 appointees. 665-10 (d) To qualify to serve as a director, a person must be a 665-11 qualified voter and reside in the boundaries of the appointing 665-12 public entity when the person takes the constitutional oath of 665-13 office. 665-14 (e) An employee, officer, or member of the governing body of 665-15 a public entity may serve as a director but may not have a personal 665-16 interest in a contract executed by the agency other than as an 665-17 employee, officer, or member of the governing body of the public 665-18 entity. 665-19 (f) Directors serve without compensation. (V.A.C.S. 665-20 Art. 1435a, Secs. 4a(d) (part), (e) (part), (f) (part).) 665-21 Sec. 163.060. POWERS. (a) An agency may not engage in any 665-22 utility business other than the generation, transmission, and sale 665-23 or exchange of electric energy to: 665-24 (1) a participating public entity; or 665-25 (2) a private entity that owns jointly with the agency 666-1 an electric generating facility in this state. 666-2 (b) The agency may: 666-3 (1) perform any act necessary to the full exercise of 666-4 the agency's powers; 666-5 (2) enter into a contract, lease, or agreement with or 666-6 accept a grant or loan from a: 666-7 (A) department or agency of the United States; 666-8 (B) department, agency, or political subdivision 666-9 of this state; or 666-10 (C) public or private person; 666-11 (3) sell, lease, convey, or otherwise dispose of any 666-12 right, interest, or property the agency considers to be unnecessary 666-13 for the efficient maintenance or operation of its electric 666-14 facilities; 666-15 (4) use the uniform system of accounts prescribed for 666-16 utilities and licenses by the Federal Energy Regulatory Commission; 666-17 and 666-18 (5) adopt rules to govern the operation of the agency 666-19 and its employees, facilities, and service. (V.A.C.S. Art. 1435a, 666-20 Secs. 4a(a) (part), (f) (part), (o) (part), (p).) 666-21 Sec. 163.061. CONSTRUCTION CONTRACTS. (a) Except as 666-22 provided by Subsection (c), an agency may award a contract for 666-23 construction of an improvement that involves the expenditure of 666-24 more than $20,000 only on the basis of competitive bids. 666-25 (b) The agency shall publish notice of intent to receive 667-1 bids once a week for two consecutive weeks in a newspaper of 667-2 general circulation in this state. The first publication must 667-3 appear before the 14th day before the date bids are to be received. 667-4 (c) An entity that has joint ownership of the improvement to 667-5 be constructed or that is an agent of a joint owner shall award a 667-6 contract using the entity's contracting procedures. (V.A.C.S. 667-7 Art. 1435a, Sec. 4a(o) (part).) 667-8 Sec. 163.062. SALE OR EXCHANGE OF ELECTRIC ENERGY. (a) An 667-9 agency may participate through appropriate contracts in power 667-10 pooling and power exchange agreements with other entities through 667-11 direct or indirect system interconnections. 667-12 (b) An entity that participates with an agency under this 667-13 section may: 667-14 (1) purchase electric energy from the agency; 667-15 (2) sell or dispose of electric energy to the agency; 667-16 or 667-17 (3) exchange electric energy with the agency. 667-18 (c) An entity payment for electric energy purchased from the 667-19 agency is an operating expense of the entity's electric system. 667-20 (d) An agency contract to sell or exchange electric energy 667-21 may require the purchaser to pay for the electric energy regardless 667-22 of whether the electric energy is produced or delivered. (V.A.C.S. 667-23 Art. 1435a, Secs. 4a(f) (part), (g) (part), (o) (part).) 667-24 Sec. 163.063. RATES AND CHARGES. (a) An agency may 667-25 establish and maintain rates and charges for electric power and 668-1 energy the agency delivers, transmits, or exchanges. The rates and 668-2 charges must: 668-3 (1) be reasonable and in accordance with prudent 668-4 utility practices; 668-5 (2) be based on periodic cost of service studies and 668-6 subject to modification, unless such a basis for rates and charges 668-7 is waived by the purchaser by contract; and 668-8 (3) be developed to recover the agency's cost of 668-9 producing and transmitting the electric power and energy, as 668-10 applicable, which cost must include the amortization of capital 668-11 investment. 668-12 (b) Notwithstanding Subsection (a), this state reserves its 668-13 power to regulate an agency's rates and charges for electric energy 668-14 supplied by the agency's facilities. 668-15 (c) Until obligations issued under this subchapter have been 668-16 paid and discharged, with all interest on the obligations, interest 668-17 on unpaid interest installments on the obligations, and other 668-18 connected and incurred costs or expenses, this state pledges to and 668-19 agrees with the purchasers and successive holders of the 668-20 obligations that it will not: 668-21 (1) limit or alter the power of an agency to establish 668-22 and collect rates and charges under this section sufficient to pay: 668-23 (A) necessary operational and maintenance 668-24 expenses; 668-25 (B) interest and principal on obligations issued 669-1 by the agency; 669-2 (C) sinking funds and reserve fund payments; and 669-3 (D) other charges necessary to fulfill the terms 669-4 of any agreement; or 669-5 (2) take any action that will impair the rights or 669-6 remedies of the holders of the obligations. (V.A.C.S. Art. 1435a, 669-7 Secs. 4a(g) (part), (h).) 669-8 Sec. 163.064. REVENUE BONDS. (a) The agency may issue 669-9 revenue bonds to accomplish the purposes of the agency. 669-10 (b) The agency may pledge to the payment of the obligations 669-11 the revenues of all or part of its electric facilities, including 669-12 facilities acquired after the obligations are issued. However, 669-13 operating and maintenance expenses, including salaries and labor, 669-14 materials, and repairs of electric facilities necessary to render 669-15 efficient service constitute a first lien on and charge against the 669-16 pledged revenue. 669-17 (c) The agency may set aside from the proceeds from the sale 669-18 of the obligations amounts for payment into the interest and 669-19 sinking fund and reserve fund, and for interest and operating 669-20 expenses during construction and development, as specified in the 669-21 proceedings authorizing the obligations. 669-22 (d) Obligation proceeds may be invested, pending their use, 669-23 in securities, interest-bearing certificates, or time deposits as 669-24 specified in the authorizing proceedings. 669-25 (e) Agency obligations are authorized investments for: 670-1 (1) a bank; 670-2 (2) a savings bank; 670-3 (3) a trust company; 670-4 (4) a savings and loan association; and 670-5 (5) an insurance company. 670-6 (f) The obligations, when accompanied by all appurtenant, 670-7 unmatured coupons and to the extent of the lesser of their face 670-8 value or market value, are eligible to secure the deposit of public 670-9 funds of this state, a political subdivision of this state, and any 670-10 other political corporation of this state. (V.A.C.S. Art. 1435a, 670-11 Secs. 4a(i), (j) (part), (k), (n).) 670-12 Sec. 163.065. REFUNDING BONDS. The agency may issue 670-13 refunding bonds. (V.A.C.S. Art. 1435a, Sec. 4a(m) (part).) 670-14 Sec. 163.066. ISSUANCE, FORM, AND PROVISIONS OF BONDS. 670-15 (a) Agency bonds that are payable from agency revenues or 670-16 anticipated bond proceeds and the records relating to their 670-17 issuance must be submitted to the attorney general for examination 670-18 before delivery. 670-19 (b) The bonds: 670-20 (1) must mature serially or otherwise not more than 50 670-21 years after the date of issuance; 670-22 (2) may be made redeemable before maturity at the time 670-23 and at the price or prices set by the agency; and 670-24 (3) may be sold at public or private sale under the 670-25 terms and for the price the agency determines to be in the best 671-1 interest of the agency. 671-2 (c) The bonds must be signed by the presiding officer or 671-3 assistant presiding officer of the agency, be attested by the 671-4 secretary, and bear the seal of the agency. The signatures may be 671-5 printed on the bonds if authorized by the agency, and the seal may 671-6 be impressed or printed on the bonds. The agency may adopt or use 671-7 for any purpose the signature of an individual who has been an 671-8 officer of the agency, regardless of whether the individual has 671-9 ceased to be an officer at the time the bonds are delivered to the 671-10 purchaser. (V.A.C.S. Art. 1435a, Secs. 4a(l) (part), (q) (part), 671-11 (r) (part).) 671-12 Sec. 163.067. NONNEGOTIABLE PURCHASE MONEY NOTES. (a) The 671-13 agency may issue nonnegotiable purchase money notes to acquire land 671-14 or fuel resources. 671-15 (b) Nonnegotiable purchase money notes are: 671-16 (1) payable in installments; 671-17 (2) secured by the property acquired with the notes or 671-18 other collateral the agency substitutes; and 671-19 (3) not a security or agency obligation. 671-20 (c) Nonnegotiable purchase money notes may be further 671-21 secured by a promise to issue bonds or bond anticipation notes to 671-22 pay the purchase money notes. (V.A.C.S. Art. 1435a, Sec. 4a(r) 671-23 (part).) 671-24 Sec. 163.068. BOND ANTICIPATION NOTES. (a) The agency may 671-25 issue bond anticipation notes: 672-1 (1) for any purpose for which the agency may issue 672-2 bonds; or 672-3 (2) to refund previously issued bond anticipation 672-4 notes or nonnegotiable purchase money notes. 672-5 (b) Bond anticipation notes are subject to the limitations 672-6 and conditions prescribed by this subchapter for bonds. 672-7 (c) The agency may contract with purchasers of bond 672-8 anticipation notes that the proceeds of one or more series of bonds 672-9 will be used to pay or refund the notes. (V.A.C.S. Art. 1435a, 672-10 Sec. 4a(r) (part).) 672-11 (Sections 163.069-163.100 reserved for expansion) 672-12 SUBCHAPTER D. AGENCY RECEIVING POWER THROUGH 672-13 INTERSTATE SYSTEM 672-14 Sec. 163.101. CREATION. (a) Notwithstanding Section 672-15 163.054, two or more public entities may create a municipal power 672-16 agency governed by Subchapter C if the entities: 672-17 (1) are municipalities; 672-18 (2) are engaged in the distribution and sale of 672-19 electric energy to the public; and 672-20 (3) receive a major portion of their power through or 672-21 from an interstate electric system. 672-22 (b) The entities must comply with the provisions of 672-23 Subchapter C relating to the creation of a municipal power agency, 672-24 including the concurrent ordinance and election provisions. 672-25 (V.A.C.S. Art. 1435a, Sec. 4b (part).) 673-1 Sec. 163.102. POWERS. (a) An agency created under this 673-2 subchapter may: 673-3 (1) generate and transmit electric power and energy 673-4 inside and outside this state; 673-5 (2) sell, purchase, or exchange electric power and 673-6 energy with entities inside or outside this state; and 673-7 (3) construct or acquire new steam electric generating 673-8 facilities, but only if the facilities are owned jointly by the 673-9 agency and one or more private entities. 673-10 (b) This section does not authorize an agency created under 673-11 this subchapter to engage in the distribution and retail sale of 673-12 electric power and energy. (V.A.C.S. Art. 1435a, Sec. 4b (part).) 673-13 (Sections 163.103-163.120 reserved for expansion) 673-14 SUBCHAPTER E. ELECTRIC COOPERATIVE CORPORATIONS 673-15 Sec. 163.121. CREATION. An electric cooperative corporation 673-16 may join one or more public entities to create a joint powers 673-17 agency as if the corporation were also a public entity. (V.A.C.S. 673-18 Art. 1435a, Sec. 4c(a).) 673-19 Sec. 163.122. APPLICATION OF OPEN MEETINGS LAW. A joint 673-20 powers agency created under this subchapter is a governmental body 673-21 subject to Chapter 551, Government Code. (V.A.C.S. Art. 1435a, 673-22 Sec. 4c(c).) 673-23 Sec. 163.123. AUTHORITY OF PUBLIC UTILITY COMMISSION. A 673-24 joint powers agency created under this subchapter is: 673-25 (1) subject to all applicable provisions of Title 2; 674-1 and 674-2 (2) under the jurisdiction of the Public Utility 674-3 Commission of Texas as provided by Title 2. (V.A.C.S. Art. 1435a, 674-4 Sec. 4c(b).) 674-5 Sec. 163.124. POWER TO ISSUE CERTAIN BONDS OR SECURITIES. 674-6 This subchapter does not authorize an electric cooperative 674-7 corporation to issue bonds or other securities that are tax exempt 674-8 under federal law. (V.A.C.S. Art. 1435a, Sec. 4c(d).) 674-9 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES 674-10 BY PUBLIC ENTITIES 674-11 Sec. 164.001. JOINT OWNERSHIP OF ELECTRIC UTILITY FACILITIES 674-12 AUTHORIZED 674-13 Sec. 164.002. PUBLIC PURPOSE 674-14 Sec. 164.003. APPROVAL OF AGREEMENT BY ATTORNEY 674-15 GENERAL 674-16 Sec. 164.004. INCREASE IN OWNERSHIP SHARES 674-17 Sec. 164.005. CONTRACTUAL OBLIGATIONS AS LIEN ON 674-18 SYSTEM REVENUE 674-19 Sec. 164.006. CONSTRUCTION WITH OTHER LAWS 674-20 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES 674-21 BY PUBLIC ENTITIES 674-22 Sec. 164.001. JOINT OWNERSHIP OF ELECTRIC UTILITY FACILITIES 674-23 AUTHORIZED. (a) Political subdivisions may join together to 674-24 finance, construct, complete, acquire, or operate electric utility 674-25 facilities so that the facilities or an undivided interest in the 675-1 facilities is jointly owned by the political subdivisions as 675-2 cotenants or co-owners. 675-3 (b) The ownership shares in the facilities are those 675-4 approved by the governing bodies of the political subdivisions, as 675-5 set forth in an agreement authorized by the governing bodies. 675-6 (V.A.C.S. Art. 1435b, Sec. 1 (part).) 675-7 Sec. 164.002. PUBLIC PURPOSE. The exercise by a political 675-8 subdivision of the authority granted by this chapter, including the 675-9 exercise of the power to issue bonds, notes, or other obligations 675-10 to accomplish the purposes of this chapter, and the performance of 675-11 an agreement entered into under this chapter are considered to be 675-12 additional public purposes of the political subdivision, without 675-13 regard to any express or implied limitation on the authority or 675-14 purposes of the political subdivision under any other general or 675-15 special law or charter provision. (V.A.C.S. Art. 1435b, Sec. 3 675-16 (part).) 675-17 Sec. 164.003. APPROVAL OF AGREEMENT BY ATTORNEY GENERAL. 675-18 (a) An agreement between political subdivisions establishing an 675-19 interest in electric utility facilities that is executed under this 675-20 chapter shall be submitted to the attorney general in connection 675-21 with any proceeding to finance the contractual obligation by the 675-22 issuance of bonds. 675-23 (b) An agreement submitted under Subsection (a) is 675-24 incontestable on approval as to legality by the attorney general. 675-25 (V.A.C.S. Art. 1435b, Sec. 1 (part).) 676-1 Sec. 164.004. INCREASE IN OWNERSHIP SHARES. (a) An 676-2 agreement under this chapter may provide for a political 676-3 subdivision to increase its present or future ownership share of 676-4 the electric utility facilities by installment purchase payments 676-5 and for another political subdivision that is a party to the 676-6 agreement to transfer, in consideration of those payments, any 676-7 portion of its present or future ownership share of the facilities 676-8 to the purchasing political subdivision. 676-9 (b) A payment made by a political subdivision to acquire an 676-10 ownership interest is not treated as a maintenance and operating 676-11 expense but is treated as a capital cost as if the political 676-12 subdivision had issued bonds to construct or acquire the ownership 676-13 interest, unless otherwise specified in the agreement. (V.A.C.S. 676-14 Art. 1435b, Sec. 1 (part).) 676-15 Sec. 164.005. CONTRACTUAL OBLIGATIONS AS LIEN ON SYSTEM 676-16 REVENUE. (a) If the electric utility facilities financed, 676-17 acquired, constructed, or completed are a part of a utility system 676-18 of a political subdivision, the obligation to make the contract 676-19 payments to acquire an ownership interest is a lien on the revenue 676-20 of the system on a parity with the outstanding bonds of the system 676-21 to the extent permitted in the ordinance or resolution authorizing 676-22 or the deed of trust or indenture securing the payment of the 676-23 outstanding bonds. 676-24 (b) If the ordinance or resolution authorizing or the deed 676-25 of trust or trust indenture securing the revenue bonds of a utility 677-1 system provides for the subsequent issuance of additional bonds or 677-2 the creation of a contractual obligation described by Section 677-3 164.004 and provides that the payments to be made for the security 677-4 or payment of the subsequent bonds or contractual obligation are to 677-5 be on a parity with the previously issued bonds or bonds then to be 677-6 issued, the political subdivision may, subject to any conditions 677-7 contained in that ordinance, resolution, deed of trust, or trust 677-8 indenture, authorize, issue, and sell additional bonds or incur the 677-9 contractual obligation in a different series payable from the 677-10 entire revenue of the utility system on a parity with the 677-11 previously issued bonds or bonds then to be issued and secured by a 677-12 lien on the revenue of the system on a parity with the lien 677-13 securing the previously issued bonds or bonds then to be issued. 677-14 This subsection applies without regard to whether the previously 677-15 issued bonds: 677-16 (1) were issued before August 29, 1977; or 677-17 (2) are an original issue or a refunding issue. 677-18 (c) A political subdivision may pledge the revenue of a 677-19 utility system to pay contract payments to acquire an ownership 677-20 interest in an electric utility facility under this chapter. 677-21 (d) In this section, "utility system" includes a combined 677-22 utility system. (V.A.C.S. Art. 1435b, Sec. 2.) 677-23 Sec. 164.006. CONSTRUCTION WITH OTHER LAWS. To provide full 677-24 authority for the execution of an agreement under this chapter, 677-25 this chapter applies to a municipality as if this chapter were 678-1 originally contained in Chapter 10, Title 28, Revised Statutes. 678-2 This chapter prevails over any charter provision or general or 678-3 special law. (V.A.C.S. Art. 1435b, Sec. 3 (part).) 678-4 (Chapters 165-180 reserved for expansion) 678-5 SUBTITLE B. PROVISIONS REGULATING DELIVERY OF SERVICES 678-6 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 678-7 SUBCHAPTER A. POWERS AND DUTIES OF GAS AND ELECTRIC CORPORATIONS 678-8 Sec. 181.001. DEFINITIONS 678-9 Sec. 181.002. CORPORATE POWERS 678-10 Sec. 181.003. AUTHORITY TO BORROW MONEY, ISSUE STOCK, OR MORTGAGE 678-11 PROPERTY 678-12 Sec. 181.004. CONDEMNATION OF PROPERTY 678-13 Sec. 181.005. AUTHORITY TO LAY AND MAINTAIN LINES 678-14 Sec. 181.006. CONSENT REQUIRED IN MUNICIPALITY 678-15 Sec. 181.007. AUTHORITY TO HOLD LAND OR OTHER 678-16 PROPERTY 678-17 Sec. 181.008. AUTHORITY RELATING TO TRANSPORT OR SALE 678-18 Sec. 181.009. DISCRIMINATION PROHIBITED 678-19 (Sections 181.010-181.020 reserved for expansion) 678-20 SUBCHAPTER B. PROVISIONS APPLYING TO GAS UTILITIES 678-21 Sec. 181.021. DEFINITIONS 678-22 Sec. 181.022. AUTHORITY TO LAY AND MAINTAIN GAS FACILITY 678-23 Sec. 181.023. CONSENT REQUIRED IN MUNICIPALITY 678-24 Sec. 181.024. NOTICE TO STATE OR COUNTY 679-1 Sec. 181.025. RELOCATION OF GAS FACILITY TO ALLOW CHANGE TO 679-2 TRAFFIC LANE 679-3 Sec. 181.026. EFFECT OF MUNICIPAL INCORPORATION ON GAS 679-4 FACILITY PREVIOUSLY LAID 679-5 (Sections 181.027-181.040 reserved for expansion) 679-6 SUBCHAPTER C. PROVISIONS APPLYING TO ELECTRIC UTILITIES 679-7 Sec. 181.041. DEFINITIONS 679-8 Sec. 181.042. AUTHORITY TO CONSTRUCT, MAINTAIN, AND OPERATE 679-9 LINES 679-10 Sec. 181.043. CONSENT REQUIRED IN MUNICIPALITY 679-11 Sec. 181.044. NOTICE TO STATE OR COUNTY 679-12 Sec. 181.045. STANDARDS FOR CONSTRUCTION, OPERATION, AND 679-13 MAINTENANCE OF LINES 679-14 Sec. 181.046. RELOCATION OF LINE TO ALLOW ROAD OR DITCH 679-15 IMPROVEMENT 679-16 Sec. 181.047. EFFECT OF MUNICIPAL INCORPORATION ON LINE 679-17 PREVIOUSLY CONSTRUCTED 679-18 (Sections 181.048-181.060 reserved for expansion) 679-19 SUBCHAPTER D. PROVISIONS APPLYING TO TELEGRAPH COMPANIES 679-20 Sec. 181.061. DEFINITION 679-21 Sec. 181.062. TELEGRAPH CONNECTIONS 679-22 Sec. 181.063. EXCEPTIONS 679-23 Sec. 181.064. HEARING AND DETERMINATION 679-24 Sec. 181.065. PENALTY 679-25 Sec. 181.066. APPEAL 680-1 (Sections 181.067-181.080 reserved for expansion) 680-2 SUBCHAPTER E. PROVISIONS APPLYING TO TELEPHONE AND 680-3 TELEGRAPH CORPORATIONS 680-4 Sec. 181.081. DEFINITIONS 680-5 Sec. 181.082. AUTHORITY TO INSTALL FACILITY IN 680-6 RELATION TO PUBLIC PROPERTY 680-7 Sec. 181.083. AUTHORITY TO CONSTRUCT LINE ON 680-8 PRIVATE PROPERTY 680-9 Sec. 181.084. APPROPRIATION OR CONDEMNATION OF LAND 680-10 Sec. 181.085. PROHIBITION ON LAND CONTRACT EXCLUDING ANOTHER 680-11 TELEGRAPH UTILITY 680-12 Sec. 181.086. LINES IN OR OUTSIDE STATE 680-13 Sec. 181.087. USE OF ANOTHER'S TELEGRAPH LINE 680-14 Sec. 181.088. CONSOLIDATION OF UTILITIES 680-15 Sec. 181.089. MUNICIPAL REGULATION 680-16 (Sections 181.090-181.100 reserved for expansion) 680-17 SUBCHAPTER F. PROVISIONS APPLYING TO COMMUNITY ANTENNA AND 680-18 CABLE TELEVISION UTILITIES 680-19 Sec. 181.101. DEFINITIONS 680-20 Sec. 181.102. AUTHORITY TO INSTALL AND MAINTAIN EQUIPMENT 680-21 Sec. 181.103. NOTICE TO STATE OR COUNTY 680-22 Sec. 181.104. RELOCATION OF EQUIPMENT TO ALLOW CHANGE TO 680-23 TRAFFIC LANE 680-24 (Sections 181.105-181.900 reserved for expansion) 681-1 SUBCHAPTER Z. MISCELLANEOUS PROVISIONS 681-2 Sec. 181.901. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 681-3 PROTECT UTILITY 681-4 Sec. 181.902. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 681-5 PREVENT USE OR WASTE OF UTILITY 681-6 COMMODITY OR SERVICE 681-7 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 681-8 SUBCHAPTER A. POWERS AND DUTIES OF GAS AND ELECTRIC CORPORATIONS 681-9 Sec. 181.001. DEFINITIONS. In this chapter: 681-10 (1) "Corporation" includes partnerships and other 681-11 combinations composed exclusively of corporations or in which a 681-12 corporation is a general partner. 681-13 (2) "Electric corporation" means an electric current 681-14 and power corporation. (V.A.C.S. Art. 1435 (part); (New).) 681-15 Sec. 181.002. CORPORATE POWERS. A gas or electric 681-16 corporation has the powers and rights of a corporation organized 681-17 for profit in this state whenever those powers and duties may be 681-18 applicable. (V.A.C.S. Art. 1437 (part).) 681-19 Sec. 181.003. AUTHORITY TO BORROW MONEY, ISSUE STOCK, OR 681-20 MORTGAGE PROPERTY. A gas or electric corporation has the right to: 681-21 (1) borrow money; 681-22 (2) issue stock, including preferred stock; or 681-23 (3) mortgage a franchise or other property of the 681-24 corporation to secure a debt contracted for any purpose of the 681-25 corporation. (V.A.C.S. Art. 1437 (part).) 682-1 Sec. 181.004. CONDEMNATION OF PROPERTY. A gas or electric 682-2 corporation has the right and power to enter on, condemn, and 682-3 appropriate the land, right-of-way, easement, or other property of 682-4 any person or corporation. (V.A.C.S. Art. 1436 (part).) 682-5 Sec. 181.005. AUTHORITY TO LAY AND MAINTAIN LINES. A gas 682-6 corporation has the right to lay and maintain lines over and across 682-7 a public road, a railroad, railroad right-of-way, an interurban 682-8 railroad, a street railroad, a canal or stream, or a municipal 682-9 street or alley. (V.A.C.S. Art. 1436 (part).) 682-10 Sec. 181.006. CONSENT REQUIRED IN MUNICIPALITY. A gas 682-11 corporation may exercise authority under Section 181.005 in 682-12 relation to a municipal street or alley with the consent of and 682-13 subject to the direction of the governing body of the municipality. 682-14 (V.A.C.S. Art. 1436 (part).) 682-15 Sec. 181.007. AUTHORITY TO HOLD LAND OR OTHER PROPERTY. A 682-16 gas or electric corporation has the power to own, hold, or use 682-17 land, a right-of-way, an easement, a franchise, or a building or 682-18 other structure as necessary for the purpose of the corporation. 682-19 (V.A.C.S. Art. 1435 (part).) 682-20 Sec. 181.008. AUTHORITY RELATING TO TRANSPORT OR SALE. 682-21 (a) A gas or electric corporation has the power to generate, make, 682-22 manufacture, transport, and sell gas, electric current, and power 682-23 to an individual, the public, or a municipality for any purpose. 682-24 (b) A gas or electric corporation may: 682-25 (1) impose reasonable charges for an action taken 683-1 under Subsection (a); and 683-2 (2) construct, maintain, and operate power plants and 683-3 substations and any machinery, apparatus, pipe, pole, wire, device, 683-4 or arrangements as necessary to operate its lines in this state. 683-5 (V.A.C.S. Art. 1435 (part).) 683-6 Sec. 181.009. DISCRIMINATION PROHIBITED. A gas or electric 683-7 corporation may not discriminate against a person, corporation, 683-8 firm, association, or location in: 683-9 (1) charging for gas, electric current, or power; or 683-10 (2) providing service under similar circumstances. 683-11 (V.A.C.S. Arts. 1435 (part), 1438.) 683-12 (Sections 181.010-181.020 reserved for expansion) 683-13 SUBCHAPTER B. PROVISIONS APPLYING TO GAS UTILITIES 683-14 Sec. 181.021. DEFINITIONS. In this subchapter: 683-15 (1) "Gas facility" means a pipe, main, conductor, or 683-16 other facility or fixture used to carry gas. 683-17 (2) "Gas utility" means a person, firm, corporation, 683-18 or municipality engaged in the business of transporting or 683-19 distributing gas for public consumption. (V.A.C.S. Art. 1436b, 683-20 Secs. 1 (part), 2 (part).) 683-21 Sec. 181.022. AUTHORITY TO LAY AND MAINTAIN GAS FACILITY. A 683-22 gas utility has the right to lay and maintain a gas facility 683-23 through, under, along, across, or over a public highway, a public 683-24 road, a public street or alley, or public water. (V.A.C.S. Art. 683-25 1436b, Sec. 1 (part).) 684-1 Sec. 181.023. CONSENT REQUIRED IN MUNICIPALITY. A gas 684-2 utility may exercise authority under Section 181.022 in a 684-3 municipality with the consent of and subject to the direction of 684-4 the governing body of the municipality. (V.A.C.S. Art. 1436b, Sec. 684-5 1 (part).) 684-6 Sec. 181.024. NOTICE TO STATE OR COUNTY. (a) A gas utility 684-7 proposing under this subchapter to locate a gas facility in the 684-8 right-of-way of a state highway or a county road not in a 684-9 municipality shall give notice of the proposal to: 684-10 (1) the Texas Transportation Commission if the 684-11 proposal relates to a state highway; or 684-12 (2) the commissioners court of the county if the 684-13 proposal relates to a county road. 684-14 (b) On receipt of the notice, the Texas Transportation 684-15 Commission or the commissioners court may designate the location in 684-16 the right-of-way where the gas utility may place the gas facility. 684-17 (V.A.C.S. Art. 1436b, Sec. 1 (part).) 684-18 Sec. 181.025. RELOCATION OF GAS FACILITY TO ALLOW CHANGE TO 684-19 TRAFFIC LANE. (a) The authority of the Texas Transportation 684-20 Commission under this section is limited to a gas facility on a 684-21 state highway not in a municipality. The authority of the 684-22 commissioners court under this section is limited to a gas facility 684-23 on a county road not in a municipality. 684-24 (b) The Texas Transportation Commission or the commissioners 684-25 court of a county may require a gas utility to relocate the 685-1 utility's gas facility, at the utility's own expense, to allow the 685-2 widening or other changing of a traffic lane. 685-3 (c) To impose a requirement under this section, the Texas 685-4 Transportation Commission or the commissioners court, as 685-5 appropriate, must give to the gas utility 30 days' written notice 685-6 of the requirement. The notice must identify the gas facility to 685-7 be relocated and indicate the location on the new right-of-way 685-8 where the gas utility may place the facility. 685-9 (d) The gas utility shall replace the grade and surface of 685-10 the highway or road at the utility's own expense. (V.A.C.S. 685-11 Art. 1436b, Sec. 1 (part).) 685-12 Sec. 181.026. EFFECT OF MUNICIPAL INCORPORATION ON GAS 685-13 FACILITY PREVIOUSLY LAID. A gas utility having a gas facility 685-14 located in an area that becomes incorporated after the facility is 685-15 in place may continue to exercise in that area the authority 685-16 granted by this subchapter until the 10th anniversary of the date 685-17 of the incorporation without the consent of but subject to the 685-18 direction of the governing body of the municipality. (V.A.C.S. 685-19 Art. 1436b, Sec. 2.) 685-20 (Sections 181.027-181.040 reserved for expansion) 685-21 SUBCHAPTER C. PROVISIONS APPLYING TO ELECTRIC UTILITIES 685-22 Sec. 181.041. DEFINITIONS. In this subchapter: 685-23 (1) "Electric utility" means: 685-24 (A) an electric cooperative organized under 685-25 Chapter 161; 686-1 (B) a corporation or river authority, if the 686-2 river authority is created by a statute of this state: 686-3 (i) that generates, transmits, or 686-4 distributes electric energy in this state; and 686-5 (ii) whose operations are subject to the 686-6 judicial and legislative processes of this state; or 686-7 (C) a municipal electric utility. 686-8 (2) "Municipal electric utility" means a municipality 686-9 in this state that owns and operates an electric generating plant 686-10 or that operates electric transmission lines or an electric 686-11 distribution system. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a 686-12 (part).) 686-13 Sec. 181.042. AUTHORITY TO CONSTRUCT, MAINTAIN, AND OPERATE 686-14 LINES. An electric utility has the right to construct, maintain, 686-15 and operate lines over, under, across, on, or along a state 686-16 highway, a county road, a municipal street or alley, or other 686-17 public property in a municipality. (V.A.C.S. Art. 1436a, Secs. 1 686-18 (part), 1a (part).) 686-19 Sec. 181.043. CONSENT REQUIRED IN MUNICIPALITY. (a) An 686-20 electric utility may exercise authority under Section 181.042 in a 686-21 municipality with the consent of and subject to the direction of 686-22 the governing body of the municipality. 686-23 (b) Subsection (a) does not apply to a municipal electric 686-24 utility exercising authority under Section 181.042 in its municipal 686-25 territory. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 687-1 Sec. 181.044. NOTICE TO STATE OR COUNTY. (a) An electric 687-2 utility proposing under this subchapter to construct a line along 687-3 the right-of-way of a state highway or a county road not in a 687-4 municipality shall give notice of the proposal to: 687-5 (1) the Texas Transportation Commission if the 687-6 proposal relates to a state highway; or 687-7 (2) the commissioners court of the county if the 687-8 proposal relates to a county road. 687-9 (b) On receipt of the notice, the Texas Transportation 687-10 Commission or the commissioners court may designate the location 687-11 along the right-of-way where the electric utility may construct the 687-12 line. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 687-13 Sec. 181.045. STANDARDS FOR CONSTRUCTION, OPERATION, AND 687-14 MAINTENANCE OF LINES. (a) A municipal electric utility shall 687-15 construct, operate, and maintain its lines for the transmission and 687-16 distribution of electric energy along highways and at other places 687-17 in accordance with the national electrical safety code. With 687-18 regard to clearances, an electric utility that is not a municipal 687-19 electric utility shall construct, operate, and maintain its lines 687-20 for the transmission and distribution of electric energy along 687-21 highways and at other places in accordance with the national 687-22 electrical safety code. 687-23 (b) Regardless of Subsection (a), an electric utility shall: 687-24 (1) use single pole construction for a line along a 687-25 highway or county road; 688-1 (2) construct a transmission line that crosses a 688-2 highway or road so that the line is at least 22 feet above the 688-3 surface of the traffic lane; and 688-4 (3) construct a line that is above a railroad track or 688-5 railroad siding so that the line is at least 22 feet above the 688-6 surface of the track or siding. 688-7 (c) Subsection (a) does not apply to a line in a 688-8 municipality to the extent an ordinance or regulation applying in 688-9 the municipality provides differently than the national electrical 688-10 safety code. 688-11 (d) In this section, "national electrical safety code" means 688-12 the National Electrical Safety Code, as published in March 1948 by 688-13 the National Bureau of Standards, Handbook 30, as revised by 688-14 Handbook 81, published by the National Bureau of Standards in 688-15 November 1961. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 688-16 Sec. 181.046. RELOCATION OF LINE TO ALLOW ROAD OR DITCH 688-17 IMPROVEMENT. (a) The authority of the Texas Transportation 688-18 Commission under this section is limited to a line on a state 688-19 highway not in a municipality. The authority of the commissioners 688-20 court under this section is limited to a line on a county road not 688-21 in a municipality. 688-22 (b) The Texas Transportation Commission or the commissioners 688-23 court of a county may require an electric utility to relocate a 688-24 line of the utility, at the utility's own expense, to allow the: 688-25 (1) widening of a right-of-way; 689-1 (2) changing of a traffic lane; 689-2 (3) improving of a road bed; or 689-3 (4) improving of a drainage ditch located on a 689-4 right-of-way. 689-5 (c) To impose a requirement under this section, the Texas 689-6 Transportation Commission or the commissioners court, as 689-7 appropriate, must give to the electric utility 30 days' written 689-8 notice of the requirement. The notice must identify the line to be 689-9 relocated and indicate the location on the new right-of-way where 689-10 the electric utility may place the line. (V.A.C.S. Art. 1436a, 689-11 Secs. 1 (part), 1a (part).) 689-12 Sec. 181.047. EFFECT OF MUNICIPAL INCORPORATION ON LINE 689-13 PREVIOUSLY CONSTRUCTED. (a) An electric utility that owns a line 689-14 on a state highway or county road in a city or town that, at the 689-15 time of the construction of the line, is unincorporated but that 689-16 later incorporates as a municipality may continue to exercise in 689-17 the municipality the authority granted by Section 181.042 until the 689-18 10th anniversary of the date of the incorporation. 689-19 (b) After that period, to continue to exercise the authority 689-20 in the municipality the electric utility must have the consent of 689-21 the governing body of the municipality. 689-22 (c) The governing body of the municipality may require the 689-23 electric utility to relocate a pole or line, at the utility's own 689-24 expense, to allow the widening or straightening of a street. To 689-25 impose a requirement under this subsection, the governing body of 690-1 the municipality must give to the electric utility 30 days' notice. 690-2 The notice must indicate the new location for the pole or line 690-3 along the right-of-way of the street. 690-4 (d) This section does not prohibit a municipality from 690-5 imposing a tax or special charge for the use of a street as 690-6 authorized by Subchapter B, Chapter 182, Tax Code. (V.A.C.S. 690-7 Art. 1436a, Secs. 1 (part), 1a (part).) 690-8 (Sections 181.048-181.060 reserved for expansion) 690-9 SUBCHAPTER D. PROVISIONS APPLYING TO TELEGRAPH COMPANIES 690-10 Sec. 181.061. DEFINITION. In this subchapter, "telegraph 690-11 company" includes a person, firm, corporation, or association 690-12 engaged in the business of accepting and transmitting messages to 690-13 and from different locations in this state through use of a 690-14 telegraph. (V.A.C.S. Art. 1428 (part).) 690-15 Sec. 181.062. TELEGRAPH CONNECTIONS. A telegraph company 690-16 engaged in business at the same location or in the same 690-17 municipality as another telegraph company shall provide: 690-18 (1) means through which a message may be transferred 690-19 to the lines of the other telegraph company at common locations and 690-20 transmitted to the message's final destination; and 690-21 (2) facilities to assure the transfer of a message in 690-22 compliance with this section. (V.A.C.S. Art. 1428 (part).) 690-23 Sec. 181.063. EXCEPTIONS. (a) A telegraph company is not 690-24 required to transfer a message to another line if: 690-25 (1) the message originated on the company's line; and 691-1 (2) the company can deliver the message directly to 691-2 its intended recipient on the company's lines. 691-3 (b) A telegraph company is not required to receive a message 691-4 from another's line and transmit the message to its final 691-5 destination if the message originated at a location on the 691-6 company's lines. (V.A.C.S. Art. 1429.) 691-7 Sec. 181.064. HEARING AND DETERMINATION. (a) The governing 691-8 body of a municipality or, for an unincorporated area, the 691-9 commissioners court of the county, shall on its own motion or on 691-10 application of at least 100 residents: 691-11 (1) hear evidence as the governing body or 691-12 commissioners court considers necessary; and 691-13 (2) determine whether a connection between different 691-14 lines or other arrangements for transfer of messages is: 691-15 (A) necessary for public convenience; and 691-16 (B) just to the telegraph companies. 691-17 (b) After conducting a hearing and making the determinations 691-18 required by Subsection (a), the governing body or commissioners 691-19 court shall issue an order that: 691-20 (1) includes the findings of the governing body or 691-21 commissioners court; 691-22 (2) specifies the conditions under which the 691-23 arrangements for transfer of messages will be made; and 691-24 (3) specifies the proportion of expense to be paid by 691-25 the owner or operator of each line. (V.A.C.S. Art. 1430.) 692-1 Sec. 181.065. PENALTY. (a) A telegraph company shall 692-2 comply with an order of a municipality's governing body or a 692-3 commissioners court requiring the company to arrange for transfer 692-4 of messages. 692-5 (b) A telegraph company that fails to comply with an order 692-6 is subject to a penalty of $10 for each day of noncompliance, 692-7 payable to the state. The county or district attorney may bring 692-8 suit to recover the penalty. 692-9 (c) A penalty may not be imposed against a telegraph company 692-10 for noncompliance with an order if: 692-11 (1) the company is prevented from making a connection 692-12 through the fault or omission of another company; and 692-13 (2) the fault or omission causes the company's failure 692-14 to connect. (V.A.C.S. Art. 1431.) 692-15 Sec. 181.066. APPEAL. (a) A telegraph company ordered to 692-16 transfer messages under this subchapter has the right to appeal to 692-17 the court having jurisdiction over the matter. 692-18 (b) If the court finds that the telegraph company had 692-19 reasonable grounds for bringing the appeal, the court shall suspend 692-20 any penalty imposed under this subchapter until the appeal is 692-21 finally determined. (V.A.C.S. Art. 1432.) 692-22 (Sections 181.067-181.080 reserved for expansion) 692-23 SUBCHAPTER E. PROVISIONS APPLYING TO TELEPHONE AND 692-24 TELEGRAPH CORPORATIONS 692-25 Sec. 181.081. DEFINITIONS. In this subchapter: 693-1 (1) "Facility" means a pole, pier, abutment, wire, or 693-2 other fixture related to a telephone or magnetic telegraph line. 693-3 (2) "Telegraph corporation" means a corporation 693-4 created to construct and maintain magnetic telegraph lines. 693-5 (3) "Telephone corporation" means a corporation 693-6 created to construct and maintain telephone lines. (V.A.C.S. Arts. 693-7 1416 (part), 1417 (part), 1422 (part).) 693-8 Sec. 181.082. AUTHORITY TO INSTALL FACILITY IN RELATION TO 693-9 PUBLIC PROPERTY. A telephone or telegraph corporation may install 693-10 a facility of the corporation along, on, or across a public road, a 693-11 public street, or public water in a manner that does not 693-12 inconvenience the public in the use of the road, street, or water. 693-13 (V.A.C.S. Art. 1416 (part).) 693-14 Sec. 181.083. AUTHORITY TO CONSTRUCT LINE ON PRIVATE 693-15 PROPERTY. A telephone or telegraph corporation may enter land in 693-16 which a private person or a corporation owns a fee or lesser estate 693-17 to: 693-18 (1) make a preliminary survey or examination to 693-19 prepare for the construction of a telephone or telegraph line; 693-20 (2) change the location of a part of a telephone or 693-21 telegraph line as necessary; or 693-22 (3) construct or repair a telephone or telegraph line. 693-23 (V.A.C.S. Art. 1417 (part).) 693-24 Sec. 181.084. APPROPRIATION OR CONDEMNATION OF LAND. A 693-25 telephone or telegraph corporation has the right to: 694-1 (1) appropriate as much land owned by a private person 694-2 or a corporation as is necessary to construct a facility; or 694-3 (2) condemn land to acquire a right-of-way or other 694-4 interest in the land for the use of the telephone or telegraph 694-5 corporation. (V.A.C.S. Art. 1417 (part).) 694-6 Sec. 181.085. PROHIBITION ON LAND CONTRACT EXCLUDING ANOTHER 694-7 TELEGRAPH UTILITY. A telegraph corporation may not contract with 694-8 an owner of land for the right to construct and maintain a 694-9 telegraph line over the land to the exclusion of the line of 694-10 another telegraph corporation. (V.A.C.S. Art. 1418.) 694-11 Sec. 181.086. LINES IN OR OUTSIDE STATE. A telegraph 694-12 corporation may construct, own, use, or maintain a telegraph line 694-13 in or outside this state. (V.A.C.S. Art. 1419.) 694-14 Sec. 181.087. USE OF ANOTHER'S TELEGRAPH LINE. (a) A 694-15 telegraph corporation may: 694-16 (1) lease the telegraph line of another telegraph 694-17 corporation; 694-18 (2) as the result of a lease or purchase, attach to 694-19 its telegraph line the telegraph line of another telegraph 694-20 corporation; or 694-21 (3) join with any other corporation or association 694-22 to construct, lease, own, use, or maintain a telegraph 694-23 line. 694-24 (b) An action under Subsection (a)(3) must be taken in 694-25 accordance with an agreement made by the directors or managers of 695-1 the telegraph corporations. (V.A.C.S. Art. 1420.) 695-2 Sec. 181.088. CONSOLIDATION OF UTILITIES. (a) A telephone 695-3 or telegraph corporation organized under the law of this state may 695-4 consolidate or otherwise unite with one or more other companies 695-5 organized under the law of a state or the United States if the 695-6 union or consolidation: 695-7 (1) is approved, at a regular meeting of the 695-8 corporation's stockholders, by a vote of persons holding a majority 695-9 of the shares of stock of the corporation; and 695-10 (2) is done with the consent of each other company. 695-11 (b) The company resulting from the consolidation or other 695-12 union may hold, use, and enjoy the rights and privileges given by 695-13 the law of this state to, and has the same liabilities of, a 695-14 company separately organized under the law of this state relating 695-15 to corporations. (V.A.C.S. Art. 1421.) 695-16 Sec. 181.089. MUNICIPAL REGULATION. (a) The appropriate 695-17 authorities of a municipality through which a line of a telephone 695-18 or telegraph corporation is to pass may adopt, by ordinance or 695-19 another method, regulations governing the corporation that specify 695-20 the: 695-21 (1) location of the facilities of the corporation; 695-22 (2) kind of posts that must be used by the 695-23 corporation; or 695-24 (3) height at which the wires of the corporation must 695-25 be placed. 696-1 (b) After the construction of the telephone or telegraph 696-2 line, the appropriate authorities of the municipality, after giving 696-3 the corporation or its agents an opportunity to be heard, may 696-4 direct any change in: 696-5 (1) the construction or location of the facilities; or 696-6 (2) the height at which the corporation must locate 696-7 the wires. (V.A.C.S. Art. 1422 (part).) 696-8 (Sections 181.090-181.100 reserved for expansion) 696-9 SUBCHAPTER F. PROVISIONS APPLYING TO COMMUNITY ANTENNA AND 696-10 CABLE TELEVISION UTILITIES 696-11 Sec. 181.101. DEFINITIONS. In this subchapter: 696-12 (1) "Equipment" means a line, wire, cable, pipe, 696-13 conduit, conductor, pole, or other facility for the transmission of 696-14 community antenna or cable television service. 696-15 (2) "Person" means an individual, firm, or 696-16 corporation. (V.A.C.S. Art. 9021, Sec. 1.) 696-17 Sec. 181.102. AUTHORITY TO INSTALL AND MAINTAIN EQUIPMENT. 696-18 (a) In an unincorporated area, a person in the business of 696-19 providing community antenna or cable television service to the 696-20 public may install and maintain equipment through, under, along, 696-21 across, or over a utility easement, a public road, an alley, or a 696-22 body of public water in accordance with this subchapter. 696-23 (b) The installation and maintenance of the equipment must 696-24 be done in a way that does not unduly inconvenience the public 696-25 using the affected property. (V.A.C.S. Art. 9021, Secs. 2, 3.) 697-1 Sec. 181.103. NOTICE TO STATE OR COUNTY. (a) A person 697-2 proposing to install equipment under Section 181.102 in the 697-3 right-of-way of a state highway or a county road shall give notice 697-4 of the proposal to: 697-5 (1) the Texas Department of Transportation if the 697-6 proposal relates to a state highway; or 697-7 (2) the commissioners court of the county if the 697-8 proposal relates to a county road. 697-9 (b) On receipt of the notice, the Texas Department of 697-10 Transportation or commissioners court may designate the location in 697-11 the right-of-way where the person may install the equipment, if the 697-12 equipment is not to be installed on an existing facility. 697-13 (V.A.C.S. Art. 9021, Secs. 4(a), (b).) 697-14 Sec. 181.104. RELOCATION OF EQUIPMENT TO ALLOW CHANGE TO 697-15 TRAFFIC LANE. (a) The authority of the Texas Department of 697-16 Transportation under this section is limited to equipment installed 697-17 in connection with a state highway. The authority of the 697-18 commissioners court under this section is limited to equipment 697-19 installed in connection with a county road. 697-20 (b) The Texas Department of Transportation or the 697-21 commissioners court of a county may require a person who has 697-22 installed equipment in the right-of-way of a state highway or 697-23 county road to relocate the person's equipment to allow the 697-24 widening or other changing of a traffic lane. 697-25 (c) To impose a requirement under this section, the Texas 698-1 Department of Transportation or the commissioners court, as 698-2 appropriate, must give to the person written notice of the 698-3 requirement not later than the 45th day before the date the 698-4 relocation is to be made. The notice must identify the equipment 698-5 to be relocated and indicate the location in the right-of-way where 698-6 the person may reinstall the equipment. 698-7 (d) The person shall pay the cost of repairing a state 698-8 highway or county road damaged by the relocation. (V.A.C.S. 698-9 Art. 9021, Sec. 4(c).) 698-10 (Sections 181.105-181.900 reserved for expansion) 698-11 SUBCHAPTER Z. MISCELLANEOUS PROVISIONS 698-12 Sec. 181.901. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 698-13 PROTECT UTILITY. (a) The governing body of a general-law 698-14 municipality may adopt an ordinance that applies to a utility using 698-15 the streets and public grounds of the municipality and that 698-16 protects the utility: 698-17 (1) in the free enjoyment of the utility's rights and 698-18 privileges; and 698-19 (2) from interference with the utility's property and 698-20 franchises. 698-21 (b) In this section, "utility" means a person, company, or 698-22 corporation engaged in furnishing water, gas, telephone, light, 698-23 power, or sewage service to the public. (V.A.C.S. Art. 1120 698-24 (part); New.) 698-25 Sec. 181.902. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 699-1 PREVENT USE OR WASTE OF UTILITY COMMODITY OR SERVICE. (a) The 699-2 governing body of a general-law municipality may adopt an ordinance 699-3 that prevents the free or unauthorized use or the waste of a 699-4 commodity or service furnished by a utility that uses the streets 699-5 and public grounds of the municipality. 699-6 (b) In this section, "utility" has the meaning assigned to 699-7 the term by Section 181.901. (V.A.C.S. Art. 1120 (part); New.) 699-8 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 699-9 SUBCHAPTER A. PAYMENT DATE OF UTILITY BILL 699-10 FOR ELDERLY INDIVIDUAL 699-11 Sec. 182.001. DEFINITIONS 699-12 Sec. 182.002. DELAY OF BILL PAYMENT DATE FOR ELDERLY 699-13 INDIVIDUAL 699-14 Sec. 182.003. REQUEST FOR DELAY 699-15 Sec. 182.004. PROOF OF AGE 699-16 Sec. 182.005. CERTAIN UTILITIES NOT AFFECTED 699-17 (Sections 182.006-182.050 reserved for expansion) 699-18 SUBCHAPTER B. CONFIDENTIALITY OF CUSTOMER INFORMATION 699-19 Sec. 182.051. DEFINITIONS 699-20 Sec. 182.052. CONFIDENTIALITY OF PERSONAL INFORMATION 699-21 Sec. 182.053. FEE 699-22 Sec. 182.054. EXCEPTIONS 699-23 Sec. 182.055. NO CIVIL LIABILITY FROM VIOLATION 699-24 (Sections 182.056-182.100 reserved for expansion) 700-1 SUBCHAPTER C. TESTING OF METERS 700-2 Sec. 182.101. DEFINITIONS 700-3 Sec. 182.102. TESTING OF METER 700-4 Sec. 182.103. UTILITY REPRESENTATIVE; NOTICE 700-5 Sec. 182.104. OFFENSE 700-6 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 700-7 SUBCHAPTER A. PAYMENT DATE OF UTILITY BILL 700-8 FOR ELDERLY INDIVIDUAL 700-9 Sec. 182.001. DEFINITIONS. In this subchapter: 700-10 (1) "Elderly individual" means an individual who is 60 700-11 years of age or older. 700-12 (2) "Utility" means an electric, gas, water, or 700-13 telephone utility operated by a public or private entity. 700-14 (V.A.C.S. Art. 1446c-2, Sec. 1.) 700-15 Sec. 182.002. DELAY OF BILL PAYMENT DATE FOR ELDERLY 700-16 INDIVIDUAL. (a) On request by an elderly individual, a utility 700-17 shall delay without penalty the payment date of a bill for 700-18 providing utility service to that individual until the 25th day 700-19 after the date the bill is issued. 700-20 (b) This subchapter applies only to an elderly individual 700-21 who: 700-22 (1) is a residential customer; and 700-23 (2) occupies the entire premises for which a delay is 700-24 requested. (V.A.C.S. Art. 1446c-2, Secs. 2(a), (d).) 700-25 Sec. 182.003. REQUEST FOR DELAY. An elderly individual may 701-1 request that the utility implement the delay under Section 182.002 701-2 for: 701-3 (1) the most recent utility bill; or 701-4 (2) the most recent utility bill and each subsequent 701-5 utility bill. (V.A.C.S. Art. 1446c-2, Sec. 2(b).) 701-6 Sec. 182.004. PROOF OF AGE. A utility may require an 701-7 individual requesting a delay under this subchapter to present 701-8 reasonable proof that the individual is 60 years of age or older. 701-9 (V.A.C.S. Art. 1446c-2, Sec. 2(c).) 701-10 Sec. 182.005. CERTAIN UTILITIES NOT AFFECTED. This 701-11 subchapter does not apply to a utility that: 701-12 (1) does not assess a late payment charge on a 701-13 residential customer; 701-14 (2) does not suspend service before the 26th day after 701-15 the date of the bill for which collection action is taken; and 701-16 (3) is regulated under Title 2. (V.A.C.S. 701-17 Art. 1446c-2, Sec. 2(e).) 701-18 (Sections 182.006-182.050 reserved for expansion) 701-19 SUBCHAPTER B. CONFIDENTIALITY OF CUSTOMER INFORMATION 701-20 Sec. 182.051. DEFINITIONS. In this subchapter: 701-21 (1) "Consumer reporting agency" means a person who, 701-22 for a monetary fee or payment of dues, or on a cooperative 701-23 nonprofit basis, regularly engages in the practice of assembling or 701-24 evaluating consumer credit information or other information 701-25 relating to consumers in order to furnish a consumer report to a 702-1 third party. 702-2 (2) "Governmental body" has the meaning assigned by 702-3 Section 552.003, Government Code. 702-4 (3) "Government-operated utility" means a governmental 702-5 body or an entity governed by a governmental body that, for 702-6 compensation, provides water, wastewater, sewer, gas, garbage, 702-7 electricity, or drainage service. 702-8 (4) "Personal information" means an individual's 702-9 address, telephone number, or social security number. (V.A.C.S. 702-10 Art. 1446h, Sec. 1.) 702-11 Sec. 182.052. CONFIDENTIALITY OF PERSONAL INFORMATION. 702-12 (a) Except as provided by Section 182.054, a government-operated 702-13 utility may not disclose personal information in a customer's 702-14 account record if the customer requests that the 702-15 government-operated utility keep the information confidential. 702-16 (b) A customer may request confidentiality by delivering to 702-17 the government-operated utility an appropriately marked form 702-18 provided under Subsection (c)(3) or any other written request for 702-19 confidentiality. 702-20 (c) A government-operated utility shall include with a bill 702-21 sent to each customer: 702-22 (1) a notice of the customer's right to request 702-23 confidentiality under this subchapter; 702-24 (2) a statement of the amount of any fee applicable to 702-25 the request; and 703-1 (3) a form by which the customer may request 703-2 confidentiality by marking an appropriate box on the form and 703-3 returning it to the government-operated utility. 703-4 (d) A customer may rescind a request for confidentiality by 703-5 providing the government-operated utility written permission to 703-6 disclose personal information. (V.A.C.S. Art. 1446h, Secs. 2, 4.) 703-7 Sec. 182.053. FEE. A government-operated utility may charge 703-8 each customer who requests confidentiality under this subchapter a 703-9 fee not to exceed the administrative cost of complying with the 703-10 request of confidentiality. (V.A.C.S. Art. 1446h, Sec. 3.) 703-11 Sec. 182.054. EXCEPTIONS. This subchapter does not prohibit 703-12 a government-operated utility from disclosing personal information 703-13 in a customer's account record to: 703-14 (1) an official or employee of the state, a political 703-15 subdivision of the state, or the United States acting in an 703-16 official capacity; 703-17 (2) an employee of a utility acting in connection with 703-18 the employee's duties; 703-19 (3) a consumer reporting agency; 703-20 (4) a contractor or subcontractor approved by and 703-21 providing services to the utility, the state, a political 703-22 subdivision of the state, or the United States; 703-23 (5) a person for whom the customer has contractually 703-24 waived confidentiality for personal information; or 703-25 (6) another entity that provides water, wastewater, 704-1 sewer, gas, garbage, electricity, or drainage service for 704-2 compensation. (V.A.C.S. Art. 1446h, Sec. 5.) 704-3 Sec. 182.055. NO CIVIL LIABILITY FROM VIOLATION. A 704-4 government-operated utility or an officer or employee of a 704-5 government-operated utility is immune from civil liability for a 704-6 violation of this subchapter. (V.A.C.S. Art. 1446h, Sec. 6.) 704-7 (Sections 182.056-182.100 reserved for expansion) 704-8 SUBCHAPTER C. TESTING OF METERS 704-9 Sec. 182.101. DEFINITIONS. In this subchapter: 704-10 (1) "Consumer" means a person who obtains electricity 704-11 or gas from a utility. 704-12 (2) "Gas" includes natural gas and artificial gas. 704-13 (3) "Meter" means an instrument or machine used to 704-14 measure and record the use of electricity or gas. 704-15 (4) "Test" includes, in reference to the testing of a 704-16 meter and as necessary to the reading and examination of a meter, 704-17 the authority to break the seal. 704-18 (5) "Utility" means a person, other than a 704-19 governmental entity, who provides for compensation electricity or 704-20 gas for consumption in a municipality. (V.A.C.S. Art. 1124a, Secs. 704-21 1 (part), 2, 3; New.) 704-22 Sec. 182.102. TESTING OF METER. (a) On complaint by a 704-23 consumer to the governing body of a municipality, an agent or 704-24 employee of the municipality shall examine, read, and test a meter 704-25 that is installed by the utility furnishing the electricity or gas. 705-1 (b) On demand by a consumer to the governing body of a 705-2 municipality, the governing body shall provide the consumer with a 705-3 detailed report stating the results of the examination, reading, 705-4 and test, including: 705-5 (1) whether the meter is in good condition; 705-6 (2) whether the meter functions properly; and 705-7 (3) the amount of electricity or gas used during a 705-8 period designated by the consumer in the demand, not to exceed one 705-9 year. (V.A.C.S. Art. 1124a, Secs. 1 (part), 4.) 705-10 Sec. 182.103. UTILITY REPRESENTATIVE; NOTICE. A utility 705-11 representative may be present during a meter test. The 705-12 municipality shall provide notice to a utility regarding the 705-13 testing of a meter not later than the third day before the date the 705-14 meter test is conducted. (V.A.C.S. Art. 1124a, Sec. 1 (part).) 705-15 Sec. 182.104. OFFENSE. (a) A utility or other person 705-16 commits an offense if the utility or other person fails or refuses 705-17 to allow an agent or employee of a municipality to examine a meter. 705-18 (b) An offense under this section is a misdemeanor 705-19 punishable by a fine not to exceed $200. 705-20 (c) Each day a utility or other person refuses to allow an 705-21 agent or employee of a municipality to examine a meter is a 705-22 separate offense. (V.A.C.S. Art. 1124a, Sec. 5.) 705-23 CHAPTER 183. UTILITY DEPOSITS 705-24 Sec. 183.001. DEFINITIONS 705-25 Sec. 183.002. INTEREST ON DEPOSIT 706-1 Sec. 183.003. RATE OF INTEREST 706-2 Sec. 183.004. INTEREST PAYMENT TO DEPOSITOR 706-3 Sec. 183.005. RETURN OF DEPOSIT 706-4 Sec. 183.006. CRIMINAL PENALTY 706-5 CHAPTER 183. UTILITY DEPOSITS 706-6 Sec. 183.001. DEFINITIONS. In this chapter: 706-7 (1) "Commission" means the Public Utility Commission 706-8 of Texas. 706-9 (2) "Utility" means a person, firm, company, 706-10 corporation, receiver, or trustee who furnishes water, electric, 706-11 gas, or telephone service. (V.A.C.S. Arts. 1440 (part), 1440a 706-12 (part); New.) 706-13 Sec. 183.002. INTEREST ON DEPOSIT. A utility that requires 706-14 the user of a service to pay a money deposit as a condition to 706-15 furnishing the service shall pay interest on the deposit from the 706-16 time the deposit is made. (V.A.C.S. Arts. 1440 (part), 1440a 706-17 (part).) 706-18 Sec. 183.003. RATE OF INTEREST. (a) The commission each 706-19 December 1, or the next regular workday if December 1 is a 706-20 Saturday, Sunday, or legal holiday, shall set the annual interest 706-21 rate for the next calendar year on deposits governed by this 706-22 chapter. 706-23 (b) The commission may not set the rate at an amount that 706-24 exceeds the lesser of: 706-25 (1) 85 percent of the average rate paid over the 707-1 previous 12-month period on United States treasury bills with a 707-2 12-month maturity date; or 707-3 (2) 12 percent. 707-4 (c) The commission may not set the rate at an amount that is 707-5 less than six percent. (V.A.C.S. Arts. 1440 (part), 1440a (part).) 707-6 Sec. 183.004. INTEREST PAYMENT TO DEPOSITOR. A utility 707-7 shall pay interest on the deposit to the depositor or the 707-8 depositor's heirs or assigns annually on demand or sooner if the 707-9 service is discontinued. (V.A.C.S. Arts. 1440 (part), 1440a 707-10 (part).) 707-11 Sec. 183.005. RETURN OF DEPOSIT. (a) When the service is 707-12 discontinued, the utility shall return the deposit and any unpaid 707-13 interest on the deposit to the depositor or the depositor's heirs 707-14 or legal representatives. 707-15 (b) The utility company may deduct from the amount returned 707-16 under Subsection (a) any payments due for the services. (V.A.C.S. 707-17 Arts. 1440 (part), 1440a (part).) 707-18 Sec. 183.006. CRIMINAL PENALTY. (a) A person commits an 707-19 offense if the person violates this chapter. 707-20 (b) An offense under this section is punishable by: 707-21 (1) a fine of not less than $25 and not more than 707-22 $200; 707-23 (2) confinement in jail for not less than six months 707-24 and not more than one year; or 707-25 (3) both the fine and confinement. (V.A.C.S. 708-1 Art. 1440a (part).) 708-2 CHAPTER 184. ELECTRIC AND WATER METERING 708-3 SUBCHAPTER A. GENERAL PROVISIONS 708-4 Sec. 184.001. DEFINITION 708-5 (Sections 184.002-184.010 reserved for expansion) 708-6 SUBCHAPTER B. METERING IN APARTMENTS, CONDOMINIUMS, 708-7 AND MOBILE HOME PARKS 708-8 Sec. 184.011. DEFINITIONS 708-9 Sec. 184.012. NEW CONSTRUCTION OR CONVERSION 708-10 Sec. 184.013. SUBMETERING 708-11 Sec. 184.014. RULES 708-12 (Sections 184.015-184.030 reserved for expansion) 708-13 SUBCHAPTER C. METERING IN RECREATIONAL VEHICLE PARKS 708-14 Sec. 184.031. DEFINITIONS 708-15 Sec. 184.032. METERED SALE UNDER COMMISSION RULES 708-16 Sec. 184.033. METERED SALE UNDER THIS CHAPTER 708-17 Sec. 184.034. COMPUTATION OF CHARGES 708-18 Sec. 184.035. REFUND OF SURCHARGES 708-19 (Sections 184.036-184.050 reserved for expansion) 708-20 SUBCHAPTER D. CENTRAL SYSTEM UTILITIES 708-21 Sec. 184.051. DEFINITIONS 708-22 Sec. 184.052. RULES 708-23 (Sections 184.053-184.070 reserved for expansion) 708-24 SUBCHAPTER E. LIABILITY FOR RULE VIOLATION 708-25 Sec. 184.071. LIABILITY 709-1 CHAPTER 184. ELECTRIC AND WATER METERING 709-2 SUBCHAPTER A. GENERAL PROVISIONS 709-3 Sec. 184.001. DEFINITION. In this chapter, "commission" 709-4 means the Public Utility Commission of Texas. (New.) 709-5 (Sections 184.002-184.010 reserved for expansion) 709-6 SUBCHAPTER B. METERING IN APARTMENTS, CONDOMINIUMS, 709-7 AND MOBILE HOME PARKS 709-8 Sec. 184.011. DEFINITIONS. In this subchapter: 709-9 (1) "Apartment house" means one or more buildings 709-10 containing more than five dwelling units each of which is rented 709-11 primarily for nontransient use with rent paid at intervals of one 709-12 week or longer. The term includes a rented or owner-occupied 709-13 residential condominium. 709-14 (2) "Dwelling unit" means: 709-15 (A) one or more rooms that are suitable for 709-16 occupancy as a residence and that contain kitchen and bathroom 709-17 facilities; or 709-18 (B) a mobile home in a mobile home park. 709-19 (V.A.C.S. Art. 1446d, Sec. 1.) 709-20 Sec. 184.012. NEW CONSTRUCTION OR CONVERSION. (a) A 709-21 political subdivision may not authorize the construction or 709-22 occupancy of a new apartment house, including the conversion of 709-23 property to a condominium, unless the construction plan provides 709-24 for the measurement of the quantity of electricity consumed by the 709-25 occupants of each dwelling unit of the apartment house, either by 710-1 individual metering by the utility company or by submetering by the 710-2 owner. 710-3 (b) This section does not prohibit a political subdivision 710-4 from issuing a permit to a nonprofit organization for construction 710-5 of a new apartment house for occupancy by low-income elderly 710-6 tenants if the nonprofit organization establishes, by submitting 710-7 engineering and cost data and a sworn statement, that all cost 710-8 savings will be passed on to the low-income elderly tenants. 710-9 (V.A.C.S. Art. 1446d, Secs. 2(a), (b).) 710-10 Sec. 184.013. SUBMETERING. (a) The owner of an apartment 710-11 house or mobile home park may submeter each dwelling unit in the 710-12 apartment house or mobile home park to measure the quantity of 710-13 electricity consumed by the occupants of the dwelling unit. 710-14 (b) Electric submetering equipment is subject to: 710-15 (1) the same rules adopted by the commission for 710-16 accuracy, testing, and recordkeeping of meters installed by 710-17 electric utilities; and 710-18 (2) the meter testing requirements of Subchapter C, 710-19 Chapter 38. 710-20 (c) If not more than 90 days before the date an owner, 710-21 operator, or manager of an apartment house installs individual 710-22 meters or submeters in the apartment house the owner, operator, or 710-23 manager increases rental rates and the increase in rental rates is 710-24 attributable to the increased cost of utilities, the owner, 710-25 operator, or manager, on installation of the meters or submeters, 711-1 shall: 711-2 (1) immediately reduce the rental rate by the amount 711-3 of the increase attributable to the increased cost of utilities; 711-4 and 711-5 (2) refund the amount of the increased rent: 711-6 (A) collected in the 90-day period preceding the 711-7 installation of the meters or submeters; and 711-8 (B) attributable to the cost of increased 711-9 utilities. (V.A.C.S. Art. 1446d, Secs. 2(c), 3 (part), 4.) 711-10 Sec. 184.014. RULES. (a) The commission shall adopt rules 711-11 under which an owner, operator, or manager of an apartment house or 711-12 mobile home park for which electricity is not individually metered 711-13 may install submetering equipment to allocate fairly the cost of 711-14 the electrical consumption of each dwelling unit in the apartment 711-15 house or mobile home park. 711-16 (b) In addition to other appropriate safeguards for a tenant 711-17 of an apartment house or mobile home park, a rule adopted under 711-18 Subsection (a) must provide that: 711-19 (1) the apartment house owner or a mobile home park 711-20 owner may not charge a tenant more than the cost per kilowatt hour 711-21 charged by the utility to the owner; and 711-22 (2) the apartment house owner shall maintain adequate 711-23 records relating to submetering and make those records available 711-24 for inspection by the tenant during reasonable business hours. 711-25 (c) A rule adopted under this section has the same effect as 712-1 a rule adopted under Title 2, and a utility company and the owner, 712-2 operator, or manager of an apartment house subject to this 712-3 subchapter is subject to enforcement under Sections 15.021, 15.022, 712-4 15.028, 15.029, 15.030, 15.031, 15.032, and 15.033. (V.A.C.S. 712-5 Art. 1446d, Sec. 3 (part).) 712-6 (Sections 184.015-184.030 reserved for expansion) 712-7 SUBCHAPTER C. METERING IN RECREATIONAL VEHICLE PARKS 712-8 Sec. 184.031. DEFINITIONS. In this subchapter: 712-9 (1) "Recreational vehicle" has the meaning assigned by 712-10 Section 522.004(b), Transportation Code. 712-11 (2) "Supplying utility" means the electric utility 712-12 from which a recreational vehicle park owner purchases electricity 712-13 consumed at the recreational vehicle park. (V.A.C.S. Art. 1446d-2, 712-14 Sec. 1.) 712-15 Sec. 184.032. METERED SALE UNDER COMMISSION RULES. The 712-16 metered sale of electricity by a recreational vehicle park owner in 712-17 compliance with submetering rules adopted by the commission under 712-18 Title 2 does not constitute the provision of electric service for 712-19 compensation. (V.A.C.S. Art. 1446d-2, Sec. 2 (part).) 712-20 Sec. 184.033. METERED SALE UNDER THIS CHAPTER. 712-21 Notwithstanding any provision of Title 2, the metered sale of 712-22 electricity by a recreational vehicle park owner does not 712-23 constitute the provision of electric service for compensation if: 712-24 (1) the electricity is consumed in a recreational 712-25 vehicle that is located in a recreational vehicle park; 713-1 (2) the owner can show that the owner does not 713-2 annually recover from recreational vehicle occupants through 713-3 metered charges more than the supplying utility charges the owner 713-4 for electricity that is submetered, taking into account fuel 713-5 refunds; 713-6 (3) the owner establishes a fiscal year for the 713-7 purposes of this subchapter and maintains for at least three years 713-8 records of: 713-9 (A) bills received from the supplying utility; 713-10 (B) charges made to recreational vehicle 713-11 occupants; and 713-12 (C) consumption records for each fiscal year; 713-13 (4) the owner charges for electricity using a fixed 713-14 rate per kilowatt hour for each fiscal year computed at the 713-15 beginning of the fiscal year in the manner provided by Section 713-16 184.034; and 713-17 (5) the owner complies with the refund requirements of 713-18 Section 184.035. (V.A.C.S. Art. 1446d-2, Sec. 2 (part).) 713-19 Sec. 184.034. COMPUTATION OF CHARGES. (a) For the purposes 713-20 of computing the charge for electricity under Section 184.033(4), 713-21 the recreational vehicle park owner shall divide the amount charged 713-22 the owner by the supplying utility for the preceding fiscal year by 713-23 the total number of kilowatt hours consumed by occupants visiting 713-24 the park in the preceding fiscal year and round the quotient to the 713-25 nearest cent. 714-1 (b) If since or during the preceding fiscal year the 714-2 supplying utility increases its rates, the owner may recompute the 714-3 preceding fiscal year's charges by the utility using the current 714-4 rates charged by the utility. 714-5 (c) If since or during the preceding fiscal year the 714-6 supplying utility decreases its rates, the owner shall recompute 714-7 the preceding fiscal year's charges by the utility using the 714-8 current rates charged by the utility. 714-9 (d) An owner may not: 714-10 (1) include a charge by the supplying utility for 714-11 electricity used in a common area or office of the recreational 714-12 vehicle park in computing the amounts under Subsection (b) or (c); 714-13 or 714-14 (2) recover that charge through a metered charge to a 714-15 recreational vehicle occupant. (V.A.C.S. Art. 1446d-2, Sec. 2 714-16 (part).) 714-17 Sec. 184.035. REFUND OF SURCHARGES. A recreational vehicle 714-18 park owner who determines at the end of a fiscal year that the 714-19 owner has collected more than the amount charged by the supplying 714-20 utility shall refund the excess amount to occupants visiting the 714-21 park in the succeeding fiscal year. (V.A.C.S. Art. 1446d-2, Sec. 2 714-22 (part).) 714-23 (Sections 184.036-184.050 reserved for expansion) 714-24 SUBCHAPTER D. CENTRAL SYSTEM UTILITIES 714-25 Sec. 184.051. DEFINITIONS. In this subchapter: 715-1 (1) "Apartment house" means one or more buildings 715-2 containing two or more dwelling units rented primarily for 715-3 nontransient use with rent paid at intervals of one week or longer. 715-4 (2) "Apartment house owner" means the legal 715-5 titleholder of an apartment house or an individual, firm, or 715-6 corporation purporting to be the landlord of tenants in the 715-7 apartment house. 715-8 (3) "Central system utilities" means electricity and 715-9 water consumed by and wastewater services related to a central air 715-10 conditioning system, central heating system, central hot water 715-11 system, or central chilled water system in an apartment house. The 715-12 term does not include utilities directly consumed in a dwelling 715-13 unit. 715-14 (4) "Customer" means an individual, firm, or 715-15 corporation in whose name a master meter is connected by a utility. 715-16 (5) "Dwelling unit" means one or more rooms that are 715-17 suitable for occupancy as a residence and that contain kitchen and 715-18 bathroom facilities. 715-19 (6) "Nonsubmetered master metered utility service" 715-20 means an electric utility service that is master metered for an 715-21 apartment house but is not submetered. 715-22 (7) "Tenant" means a person who is entitled to occupy 715-23 a dwelling unit in an apartment house to the exclusion of others 715-24 and who is obligated to pay for the occupancy under a written or 715-25 oral rental agreement. 716-1 (8) "Utility" means a public, private, or member-owned 716-2 utility that provides electricity, water, or wastewater service to 716-3 an apartment house served by a master meter. (V.A.C.S. Art. 1446f, 716-4 Sec. 1.) 716-5 Sec. 184.052. RULES. (a) The commission shall adopt rules 716-6 governing billing systems or methods used by an apartment house 716-7 owner to prorate or allocate among tenants central system utility 716-8 costs or nonsubmetered master metered utility service costs. 716-9 (b) In addition to other appropriate safeguards for a tenant 716-10 of an apartment house, a rule adopted under this section must 716-11 require that: 716-12 (1) a rental agreement contain: 716-13 (A) a clear written description of the method of 716-14 computing the allocation of central system utilities or 716-15 nonsubmetered master metered utilities for the apartment house; and 716-16 (B) a statement of the average apartment unit 716-17 monthly bill for all apartment units for any allocation of central 716-18 system utilities' costs or nonsubmetered master metered utility 716-19 service costs for the previous calendar year; and 716-20 (2) the apartment house owner: 716-21 (A) not impose a charge on a tenant in excess of 716-22 the actual charge imposed on the owner for utility consumption by 716-23 the apartment house; and 716-24 (B) maintain adequate records, including utility 716-25 bills and records concerning the central system utility or 717-1 nonsubmetered master metered utility service consumption of the 717-2 apartment house, the charges assessed by the utility, and the 717-3 allocation of central system utilities' costs or nonsubmetered 717-4 master metered utility service costs to the tenants and make the 717-5 records available for inspection by the tenants during normal 717-6 business hours. 717-7 (c) A rule adopted under this section has the same effect as 717-8 a rule adopted under Title 2, and an owner, operator, or manager of 717-9 an apartment house subject to this subchapter is subject to 717-10 enforcement under Sections 15.021, 15.022, 15.028, 15.029, 15.030, 717-11 15.031, 15.032, and 15.033. (V.A.C.S. Art. 1446f, Sec. 2.) 717-12 (Sections 184.053-184.070 reserved for expansion) 717-13 SUBCHAPTER E. LIABILITY FOR RULE VIOLATION 717-14 Sec. 184.071. LIABILITY. (a) A landlord who violates a 717-15 commission rule relating to submetering of electric utilities 717-16 consumed exclusively in a tenant's dwelling unit or a rule relating 717-17 to the allocation of central system utility costs or nonsubmetered 717-18 master metered electric utility costs is liable to the tenant for: 717-19 (1) three times the amount of any overcharge; 717-20 (2) a civil penalty equal to one month's rent; 717-21 (3) reasonable attorney's fees; and 717-22 (4) court costs. 717-23 (b) A landlord is not liable for the civil penalty provided 717-24 by Subsection (a)(2) if the landlord proves that the landlord's 717-25 violation of the rule was an unintentional mistake made in good 718-1 faith. (V.A.C.S. Art. 1446g.) 718-2 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 718-3 Sec. 185.001. DEFINITIONS 718-4 Sec. 185.002. COMPLIANCE 718-5 Sec. 185.003. ADOPTION OF STANDARDS 718-6 Sec. 185.004. USE OF NATIONAL STANDARDS 718-7 Sec. 185.005. REVIEW OF STANDARDS 718-8 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 718-9 Sec. 185.001. DEFINITIONS. In this chapter: 718-10 (1) "Commission" means the Public Utility Commission 718-11 of Texas. 718-12 (2) "Solar energy device" means a solar energy 718-13 collector or solar energy system that provides for the collection 718-14 of solar energy or the subsequent use of that energy as thermal, 718-15 mechanical, or electrical energy. (V.A.C.S. Art. 1446c-1, Sec. 1.) 718-16 Sec. 185.002. COMPLIANCE. A person who rates, labels, or 718-17 certifies the performance of a solar energy device in this state 718-18 shall comply with the standards adopted by the commission under 718-19 this chapter. (V.A.C.S. Art. 1446c-1, Sec. 5.) 718-20 Sec. 185.003. ADOPTION OF STANDARDS. (a) The commission 718-21 shall study and adopt standards for rating solar energy devices. 718-22 The standards shall be used in performance labeling and 718-23 certification of solar energy devices in this state. 718-24 (b) The commission shall examine rating standards and 718-25 certification programs used by other states and by industry in 719-1 adopting standards under this section. 719-2 (c) The commission shall adopt the standards that the 719-3 commission finds are the most widely used unless the commission 719-4 finds that those standards are not suitable for use in this state. 719-5 If the commission finds that a widely used standard is not 719-6 suitable, the commission may amend the standard or adopt a standard 719-7 that the commission finds suitable. (V.A.C.S. Art. 1446c-1, Sec. 719-8 2.) 719-9 Sec. 185.004. USE OF NATIONAL STANDARDS. If national 719-10 standards for rating and certifying solar energy devices are 719-11 developed by a federal agency in conjunction with the states and 719-12 industry, the commission shall adopt those national standards as 719-13 the standards for use in this state. (V.A.C.S. Art. 1446c-1, Sec. 719-14 4.) 719-15 Sec. 185.005. REVIEW OF STANDARDS. The commission shall 719-16 periodically review the standards adopted under this chapter and 719-17 shall amend those standards as necessary to ensure that the 719-18 standards are: 719-19 (1) appropriate in view of current technology; and 719-20 (2) the same as or similar to the standards widely 719-21 used by other states and by industry. (V.A.C.S. Art. 1446c-1, Sec. 719-22 3.) 720-1 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY 720-2 AND INTEGRITY OF UTILITY SERVICE 720-3 SUBCHAPTER A. CONTINUITY OF UTILITY SERVICE 720-4 Sec. 186.001. DEFINITION 720-5 Sec. 186.002. POLICY 720-6 Sec. 186.003. ENFORCEMENT BY EXECUTIVE DEPARTMENT 720-7 Sec. 186.004. UNLAWFUL PICKETING, THREATS, OR 720-8 INTIMIDATION 720-9 Sec. 186.005. RESTRAINING ORDER 720-10 Sec. 186.006. EMPLOYEE RIGHTS 720-11 (Sections 186.007-186.020 reserved for expansion) 720-12 SUBCHAPTER B. MANIPULATION OF SERVICE FOR CERTAIN LAW 720-13 ENFORCEMENT PURPOSES 720-14 Sec. 186.021. EMERGENCY INVOLVING HOSTAGE OR ARMED SUSPECT 720-15 (Sections 186.022-186.030 reserved for expansion) 720-16 SUBCHAPTER C. FRAUDULENT OBTAINING OF SERVICE 720-17 Sec. 186.031. DEFINITIONS 720-18 Sec. 186.032. FRAUDULENTLY OBTAINING TELECOMMUNICATIONS 720-19 SERVICES 720-20 Sec. 186.033. DISPOSITION OF CERTAIN EQUIPMENT 720-21 (Sections 186.034-186.040 reserved for expansion) 720-22 SUBCHAPTER D. AVAILABILITY OF EMERGENCY TELEPHONE SERVICE 720-23 Sec. 186.041. DEFINITIONS 720-24 Sec. 186.042. OBSTRUCTION OF EMERGENCY TELEPHONE CALL; 720-25 PENALTY 721-1 Sec. 186.043. FALSIFICATION OF EMERGENCY TELEPHONE CALL; 721-2 PENALTY 721-3 Sec. 186.044. NOTICE OF CERTAIN OFFENSES REQUIRED 721-4 Sec. 186.045. FAILURE TO PROVIDE NOTICE; PENALTY 721-5 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY 721-6 AND INTEGRITY OF UTILITY SERVICE 721-7 SUBCHAPTER A. CONTINUITY OF UTILITY SERVICE 721-8 Sec. 186.001. DEFINITION. In this subchapter, "public 721-9 utility" means and includes a private corporation that does 721-10 business in this state and has the right of eminent domain, a 721-11 municipality, or a state agency, authority, or subdivision engaged 721-12 in the business of: 721-13 (1) generating, transmitting, or distributing electric 721-14 energy to the public; 721-15 (2) producing, transmitting, or distributing natural 721-16 or artificial gas to the public; or 721-17 (3) furnishing water to the public. (V.A.C.S. 721-18 Art. 1446a, Sec. 2.) 721-19 Sec. 186.002. POLICY. (a) Continuous service by a public 721-20 utility is essential to the life, health, and safety of the public. 721-21 A person's wilful interruption of that service is a public calamity 721-22 that cannot be endured. 721-23 (b) A public utility is dedicated to public service. The 721-24 primary duty of a public utility, including its management and 721-25 employees, is to maintain continuous and adequate service at all 722-1 times to protect the safety and health of the public against the 722-2 danger inherent in the interruption of service. 722-3 (c) Each court and administrative agency of this state 722-4 shall: 722-5 (1) recognize the policy stated in this section; and 722-6 (2) interpret and apply this subchapter in accordance 722-7 with that policy. (V.A.C.S. Art. 1446a, Sec. 1.) 722-8 Sec. 186.003. ENFORCEMENT BY EXECUTIVE DEPARTMENT. In 722-9 accordance with Section 186.002, the governor, and the department 722-10 of the executive branch of government under the governor's 722-11 direction, shall exercise all power available under the 722-12 constitution and laws of this state to protect the public from 722-13 dangers incident to an interruption in water, electric, or gas 722-14 utility service in this state that occurs because of a violation of 722-15 this subchapter. (V.A.C.S. Art. 1446a, Sec. 6.) 722-16 Sec. 186.004. UNLAWFUL PICKETING, THREATS, OR INTIMIDATION. 722-17 (a) A person may not: 722-18 (1) picket the plant, premises, or other property of a 722-19 public utility with intent to disrupt the service of that utility 722-20 or to prevent the maintenance of that service; or 722-21 (2) engage in picketing that has the effect of 722-22 disrupting the service of a public utility or preventing the 722-23 maintenance of that service. 722-24 (b) A person may not: 722-25 (1) intimidate, threaten, or harass an employee of a 723-1 public utility with intent to disrupt the service of the utility or 723-2 prevent the maintenance of that service; or 723-3 (2) intimidate, threaten, or harass an employee of a 723-4 public utility if that conduct has the effect of disrupting the 723-5 service of the utility or preventing the maintenance of that 723-6 service. (V.A.C.S. Art. 1446a, Sec. 3.) 723-7 Sec. 186.005. RESTRAINING ORDER. (a) A district court 723-8 shall immediately inquire into the matter if a public utility 723-9 presents a verified petition to the court: 723-10 (1) alleging that in the judicial district of the 723-11 court a person is violating or threatening to violate Section 723-12 186.004 and that the violation or threatened violation will 723-13 interfere with the maintenance of adequate water, electric, or gas 723-14 service; and 723-15 (2) describing the acts committed in violation of 723-16 Section 186.004, or the threatened acts that, if committed, will 723-17 violate Section 186.004. 723-18 (b) If it appears that there is a violation or threatened 723-19 violation of Section 186.004, the court shall immediately issue an 723-20 order restraining the person, the person's agent, and any other 723-21 person acting with them from committing an act prohibited by that 723-22 section. 723-23 (c) A restraining order issued under this section is 723-24 effective when the petitioner files with the clerk of the court a 723-25 good and sufficient bond in an amount set by the court to cover 724-1 court costs that may reasonably accrue in connection with the case. 724-2 A judgment rendered in the case may not be superseded pending 724-3 appeal. 724-4 (d) Venue for a suit under this section is in any judicial 724-5 district in which the violation or threat to violate occurs. 724-6 (V.A.C.S. Art. 1446a, Sec. 4.) 724-7 Sec. 186.006. EMPLOYEE RIGHTS. This subchapter does not 724-8 limit the right of an employee of a public utility to: 724-9 (1) quit work and leave the employer's premises at any 724-10 time the employee chooses; or 724-11 (2) refuse to report for work when the employee does 724-12 not want to report. (V.A.C.S. Art. 1446a, Sec. 7.) 724-13 (Sections 186.007-186.020 reserved for expansion) 724-14 SUBCHAPTER B. MANIPULATION OF SERVICE FOR CERTAIN LAW 724-15 ENFORCEMENT PURPOSES 724-16 Sec. 186.021. EMERGENCY INVOLVING HOSTAGE OR ARMED SUSPECT. 724-17 (a) In an emergency in which the supervising law enforcement 724-18 official having jurisdiction in the geographical area has probable 724-19 cause to believe that an armed and barricaded suspect or a person 724-20 holding a hostage is committing a crime, the supervising law 724-21 enforcement official may order a designated telephone company 724-22 security official to cut or otherwise control telephone lines to 724-23 prevent telephone communication by the armed suspect or the hostage 724-24 holder with a person other than a peace officer or person 724-25 authorized by a peace officer. 725-1 (b) The serving telephone company in the geographical area 725-2 of a law enforcement unit shall designate a telephone company 725-3 security official and an alternate to provide all required 725-4 assistance to law enforcement officials to carry out this section. 725-5 (c) Good faith reliance on an order given by a supervising 725-6 law enforcement official under this section is a complete defense 725-7 to a civil or criminal action brought against a telephone company 725-8 or the company's director, officer, agent, or employee as a result 725-9 of compliance with the order. (V.A.C.S. Art. 1432b.) 725-10 (Sections 186.022-186.030 reserved for expansion) 725-11 SUBCHAPTER C. FRAUDULENT OBTAINING OF SERVICE 725-12 Sec. 186.031. DEFINITIONS. In this subchapter: 725-13 (1) "Publish" means to communicate information to 725-14 another by any means. 725-15 (2) "Telecommunications service" means the 725-16 transmission of a message or other information by a public utility, 725-17 including a telephone or telegraph company. (V.A.C.S. Art. 1446b, 725-18 Sec. 1.) 725-19 Sec. 186.032. FRAUDULENTLY OBTAINING TELECOMMUNICATIONS 725-20 SERVICES. (a) A person commits an offense if: 725-21 (1) knowing that another will use the published 725-22 information to avoid payment of a charge for telecommunications 725-23 service, the person publishes: 725-24 (A) an existing, cancelled, revoked, or 725-25 nonexistent telephone number; 726-1 (B) a credit number or other credit device; or 726-2 (C) a method of numbering or coding that is used 726-3 in issuing telephone numbers or credit devices, including credit 726-4 numbers; or 726-5 (2) the person makes or possesses equipment 726-6 specifically designed to be used fraudulently to avoid charges for 726-7 telecommunications service. 726-8 (b) An offense under this section is a misdemeanor 726-9 punishable by a fine of not more than $500, by confinement in jail 726-10 for not more than 60 days, or by both, unless the person has been 726-11 previously convicted of an offense under this section. A second or 726-12 subsequent offense is a felony punishable by a fine of not more 726-13 than $5,000, by imprisonment in the penitentiary for not less than 726-14 two years and not more than five years, or by both. 726-15 (c) This section does not apply to an employee of a public 726-16 utility who provides telecommunications service while acting in the 726-17 course of employment. (V.A.C.S. Art. 1446b, Secs. 2, 4.) 726-18 Sec. 186.033. DISPOSITION OF CERTAIN EQUIPMENT. (a) A 726-19 peace officer may seize equipment described by Section 726-20 186.032(a)(2) under a warrant or incident to a lawful arrest. 726-21 (b) If the person who possessed equipment seized under 726-22 Subsection (a) is convicted under Section 186.032, the court 726-23 entering the judgment of conviction shall order the sheriff to 726-24 destroy the equipment. (V.A.C.S. Art. 1446b, Sec. 3.) 726-25 (Sections 186.034-186.040 reserved for expansion) 727-1 SUBCHAPTER D. AVAILABILITY OF EMERGENCY TELEPHONE SERVICE 727-2 Sec. 186.041. DEFINITIONS. In this subchapter: 727-3 (1) "Emergency" means a situation in which property or 727-4 human life is in jeopardy and the prompt summoning of aid is 727-5 essential. 727-6 (2) "Party line" means a subscriber's telephone 727-7 circuit, consisting of two or more main telephone stations 727-8 connected with the circuit, each station with a distinctive ring or 727-9 telephone number. (V.A.C.S. Art. 1432a, Sec. 3.) 727-10 Sec. 186.042. OBSTRUCTION OF EMERGENCY TELEPHONE CALL; 727-11 PENALTY. (a) A person commits an offense if: 727-12 (1) the person wilfully refuses to relinquish a party 727-13 line immediately on being informed that the line is needed for an 727-14 emergency call described by Subdivision (2); and 727-15 (2) the party line is needed for an emergency call: 727-16 (A) to a fire or police department; or 727-17 (B) for medical aid or an ambulance service. 727-18 (b) An offense under this section is a misdemeanor 727-19 punishable by: 727-20 (1) a fine of not less than $25 and not more than 727-21 $500; 727-22 (2) confinement in the county jail for not more than 727-23 one month; or 727-24 (3) both fine and confinement. (V.A.C.S. Art. 1432a, 727-25 Sec. 1.) 728-1 Sec. 186.043. FALSIFICATION OF EMERGENCY TELEPHONE CALL; 728-2 PENALTY. (a) A person commits an offense if the person secures 728-3 the use of a party line by falsely stating that the line is needed 728-4 for an emergency call: 728-5 (1) to a fire or police department; or 728-6 (2) for medical aid or an ambulance service. 728-7 (b) An offense under this section is a misdemeanor 728-8 punishable by: 728-9 (1) a fine of not less than $25 and not more than 728-10 $500; 728-11 (2) confinement in the county jail for not more than 728-12 one month; or 728-13 (3) both fine and confinement. (V.A.C.S. Art. 1432a, 728-14 Sec. 2.) 728-15 Sec. 186.044. NOTICE OF CERTAIN OFFENSES REQUIRED. (a) A 728-16 telephone directory distributed to the public in this state that 728-17 lists the telephone numbers of an exchange located in this state 728-18 must contain a notice explaining the offenses under Sections 728-19 186.042 and 186.043. The notice must be: 728-20 (1) printed in type not smaller than the smallest type 728-21 on the same page; and 728-22 (2) preceded by the word "warning" printed in type at 728-23 least as large as the largest type on the same page. 728-24 (b) At least once each year, a person providing telephone 728-25 service shall enclose in the telephone bill mailed to each person 729-1 who uses a party line telephone a notice of Sections 186.042 and 729-2 186.043. 729-3 (c) This section does not apply to a directory, commonly 729-4 known as a classified directory, that is distributed solely for 729-5 business advertising purposes. (V.A.C.S. Art. 1432a, Sec. 4 729-6 (part).) 729-7 Sec. 186.045. FAILURE TO PROVIDE NOTICE; PENALTY. (a) A 729-8 person providing telephone service commits an offense if the 729-9 person: 729-10 (1) distributes copies of a telephone directory 729-11 subject to Section 186.044(a) from which the notice required by 729-12 that section is wilfully omitted; or 729-13 (2) wilfully fails to enclose in telephone bills the 729-14 notice required by Section 186.044(b). 729-15 (b) An offense under this section is a misdemeanor 729-16 punishable by a fine of not less than $25 and not more than $500. 729-17 (V.A.C.S. Art. 1432a, Sec. 4 (part).) 729-18 SECTION 2. CONFORMING AMENDMENT. Title 4, Water Code, is 729-19 amended by adding Chapter 67 to read as follows: 729-20 CHAPTER 67. NONPROFIT WATER SUPPLY OR SEWER SERVICE CORPORATIONS 729-21 Sec. 67.001. DEFINITIONS. In this chapter: 729-22 (1) "Board" means the board of directors of a 729-23 corporation. 729-24 (2) "Corporation" means a water supply or sewer 729-25 service corporation operating under this chapter. 730-1 (3) "Director" means a member of the board of 730-2 directors. (New.) 730-3 Sec. 67.002. PURPOSE OF CORPORATION. A corporation may be 730-4 organized under this chapter to provide: 730-5 (1) water supply, sewer service, or both for a 730-6 municipality, a private corporation, an individual, or a military 730-7 camp or base; and 730-8 (2) flood control and a drainage system for a 730-9 political subdivision, private corporation, or another person. 730-10 (V.A.C.S. Art. 1434a, Sec. 1 (part).) 730-11 Sec. 67.003. CREATION OF CORPORATION. (a) Three or more 730-12 individuals who are citizens of this state may form a corporation 730-13 by making an application to the secretary of state in the same 730-14 manner as provided by law for an application for a private 730-15 corporation. 730-16 (b) The application for charter must include the number of 730-17 directors and the name of each director. 730-18 (c) The name designated for the corporation must include the 730-19 words "Water Supply Corporation." (V.A.C.S. Art. 1434a, Secs. 1 730-20 (part), 3(a) (part).) 730-21 Sec. 67.004. APPLICATION OF TEXAS NON-PROFIT CORPORATION 730-22 ACT. To the extent it does not conflict with this chapter, the 730-23 Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 730-24 Vernon's Texas Civil Statutes) applies to a corporation created 730-25 under: 731-1 (1) this chapter; or 731-2 (2) Chapter 76, Acts of the 43rd Legislature, 1st 731-3 Called Session, 1933 (Article 1434a, Vernon's Texas Civil 731-4 Statutes). (V.A.C.S. Art. 1434a, Sec. 2(d).) 731-5 Sec. 67.005. DIRECTORS. (a) A corporation may not have 731-6 more than 21 directors. 731-7 (b) The corporation may increase the number of directors by 731-8 amendment to the bylaws but may not exceed the limit imposed by 731-9 Subsection (a). 731-10 (c) The bylaws of the corporation may provide that directors 731-11 serve staggered terms of approximately two or three years. 731-12 (d) At the first annual meeting of the shareholders, the 731-13 directors shall be divided into two or three classes according to 731-14 the length of the terms the directors serve. The classification of 731-15 directors may not take effect before that meeting. 731-16 (e) The division of the directors and the corresponding 731-17 terms must be set so that: 731-18 (1) one-half of the directors, as nearly as possible, 731-19 are elected annually, if a two-year term is provided; or 731-20 (2) one-third of the directors, as nearly as possible, 731-21 are elected annually, if a three-year term is provided. 731-22 (f) After the implementation of two-year or three-year terms 731-23 for directors, as directors' terms expire, the members shall elect 731-24 their successors to serve until the second or third succeeding 731-25 annual meeting after their election, as appropriate. (V.A.C.S. 732-1 Art. 1434a, Secs. 3(a) (part), (b).) 732-2 Sec. 67.006. OFFICERS. (a) The board shall elect a 732-3 president, a vice president, and a secretary-treasurer following 732-4 the issuance of a charter and after each annual meeting of the 732-5 membership or shareholders. 732-6 (b) The board may require a bond of an officer for faithful 732-7 performance of the officer's duties. 732-8 (c) The salary of an officer of the corporation other than 732-9 secretary-treasurer or a manager employed under Section 67.012 may 732-10 not exceed $5,000 a year. The board shall set the 732-11 secretary-treasurer's salary at an amount commensurate with the 732-12 secretary-treasurer's duties. (V.A.C.S. Art. 1434a, Sec. 5 732-13 (part).) 732-14 Sec. 67.007. ANNUAL MEETING. The annual meeting of the 732-15 members or shareholders of the corporation must be held between 732-16 January 1 and May 1 at a time specified by the bylaws or the board. 732-17 (V.A.C.S. Art. 1434a, Sec. 5 (part).) 732-18 Sec. 67.008. DISTRIBUTION OF PROFITS. (a) The 732-19 incorporators may provide in the charter of the corporation that a 732-20 dividend will not be paid on the stock and that all profits of the 732-21 corporation will be paid annually to political subdivisions, 732-22 private corporations, or other persons that have transacted 732-23 business with the corporation during the previous year. 732-24 (b) The corporation shall distribute any profits under 732-25 Subsection (a) in direct proportion to the amount of business the 733-1 corporation transacts with each entity during that year. 733-2 (c) The corporation may not make a distribution under 733-3 Subsection (a) if the corporation has unpaid indebtedness. 733-4 (d) A corporation may allocate to a sinking fund an amount 733-5 of the annual profits as determined necessary by the board for 733-6 maintenance, operation, and replacements. (V.A.C.S. Art. 1434a, 733-7 Sec. 1 (part).) 733-8 Sec. 67.009. FACILITIES. A corporation may construct, 733-9 acquire, lease, improve, extend, or maintain a facility, plant, 733-10 equipment, or appliance helpful or necessary to provide more 733-11 adequate sewer service, flood control, or drainage for a political 733-12 subdivision. (V.A.C.S. Art. 1434a, Sec. 2(c).) 733-13 Sec. 67.010. POWER TO CONTRACT WITH OTHER ENTITIES. (a) A 733-14 corporation may enter into a contract with any political 733-15 subdivision, federal agency, or other entity for the acquisition, 733-16 construction, or maintenance of a project or improvement for an 733-17 authorized purpose. 733-18 (b) A corporation may obtain money from any political 733-19 subdivision of this state, federal agency, or other entity to 733-20 finance the acquisition or construction of a project or improvement 733-21 for an authorized purpose. 733-22 (c) A corporation may encumber the project or improvement 733-23 and may encumber any income, fees, rents, and other charges derived 733-24 from the operation of the project or improvement. The corporation 733-25 may issue bonds, notes, or warrants to secure payment of funds 734-1 received. Indebtedness authorized by this subsection is a charge 734-2 only on specifically encumbered property and revenues and is not a 734-3 general obligation of indebtedness of the corporation. 734-4 (d) A political subdivision may contract with a corporation 734-5 under Section 402.014, Local Government Code, to carry out this 734-6 chapter. (V.A.C.S. Art. 1434a, Secs. 2(a), (b).) 734-7 Sec. 67.011. POWERS OF CORPORATION IN CERTAIN COUNTIES. In 734-8 a county with a population of less than two million, a corporation 734-9 may: 734-10 (1) own, hold, lease, or otherwise acquire water 734-11 wells, springs, or other sources of water supply; 734-12 (2) build, operate, and maintain pipelines to 734-13 transport water or wastewater; 734-14 (3) build and operate plants and equipment necessary 734-15 to distribute water or to treat and dispose of wastewater; and 734-16 (4) sell water or provide wastewater services to a 734-17 political subdivision, a private corporation, or an individual. 734-18 (V.A.C.S. Art. 1434a, Sec. 4 (part).) 734-19 Sec. 67.012. USE OF MANAGER. The board may employ a manager 734-20 to handle the business of the corporation under the direction of 734-21 the board. The board shall set the salary for the manager. 734-22 (V.A.C.S. Art. 1434a, Sec. 6.) 734-23 Sec. 67.013. USE OF COUNSEL. The board may employ and 734-24 compensate counsel to represent the corporation as the board 734-25 determines is necessary. (V.A.C.S. Art. 1434a, Sec. 7.) 735-1 Sec. 67.014. DEPOSITORY OF FUNDS. (a) The board shall 735-2 select as depository for the funds of the corporation a bank in 735-3 this state that is insured by the Federal Deposit Insurance 735-4 Corporation and require from the depository a bond in an amount the 735-5 board finds necessary to protect the corporation. 735-6 (b) Funds allocated by the board to a sinking fund for 735-7 replacement, amortization of debts, and the payment of interest 735-8 that are not required to be spent in the year in which deposited 735-9 shall be: 735-10 (1) invested in bonds or other evidence of 735-11 indebtedness of the United States; 735-12 (2) placed with the depository in an interest-bearing 735-13 savings account; or 735-14 (3) invested in shares or share accounts in a savings 735-15 and loan association insured by the Federal Deposit Insurance 735-16 Corporation. (V.A.C.S. Art. 1434a, Sec. 8, as amended Acts 57th 735-17 Leg., R.S., Ch. 81; Acts 57th Leg., 1st C.S., Ch. 54.) 735-18 Sec. 67.015. EXEMPTION FROM SECURITIES ACT. The Securities 735-19 Act (Article 581-1 et seq., Vernon's Texas Civil Statutes) does not 735-20 apply to: 735-21 (1) a note, bond, or other evidence of indebtedness 735-22 issued by a corporation doing business in this state to the United 735-23 States; 735-24 (2) an instrument executed to secure a debt of a 735-25 corporation to the United States; or 736-1 (3) the issuance of a membership certificate or stock 736-2 certificate of a corporation. (V.A.C.S. Art. 1434a, Sec. 9.) 736-3 Sec. 67.016. TRANSFER OR CANCELLATION OF STOCK, MEMBERSHIP, 736-4 OR OTHER RIGHT OF PARTICIPATION. (a) A person or entity that owns 736-5 any stock of, is a member of, or has some other right of 736-6 participation in a corporation may not sell or transfer that stock, 736-7 membership, or other right of participation to another person or 736-8 entity except: 736-9 (1) by will to a person who is related to the testator 736-10 within the second degree by consanguinity; 736-11 (2) by transfer without compensation to a person who 736-12 is related to the owner of the stock or other interest within the 736-13 second degree by consanguinity; or 736-14 (3) by transfer without compensation or by sale to the 736-15 corporation. 736-16 (b) Subsection (a) does not apply to a person or entity that 736-17 transfers the membership or other right of participation to another 736-18 person or entity as part of the conveyance of real estate from 736-19 which the membership or other right of participation arose. 736-20 (c) The transfer of stock, a membership, or another right of 736-21 participation under this section does not entitle the transferee to 736-22 water or sewer service unless each condition for water or sewer 736-23 service is met as provided in the corporation's published rates, 736-24 charges, and conditions of service. A transfer and service 736-25 application must be completed on the corporation's standardized 737-1 forms and filed with the corporation's office in a timely manner. 737-2 The conditions of service may not require a personal appearance in 737-3 the office of the corporation if the transferee agrees in writing 737-4 to accept the rates, charges, and conditions of service. 737-5 (d) The corporation may make water or sewer service provided 737-6 as a result of stock, a membership, or another right of 737-7 participation in the corporation conditional on ownership of the 737-8 real estate designated to receive service and from which the 737-9 membership or other right of participation arises. 737-10 (e) The corporation may cancel a person's or other entity's 737-11 stock, membership, or other right of participation if the person or 737-12 entity fails to: 737-13 (1) meet the conditions for water or sewer service 737-14 prescribed by the corporation's published rates, charges, and 737-15 conditions of service; or 737-16 (2) comply with any other condition placed on the 737-17 receipt of water or sewer service under the stock, membership, or 737-18 other right of participation. 737-19 (f) Consistent with Subsection (a), the corporation may 737-20 reassign canceled stock or a canceled membership or other right of 737-21 participation to a person or entity that has legal title to the 737-22 real estate from which the canceled membership or other right of 737-23 participation arose and for which water or sewer service is 737-24 requested. 737-25 (g) Notwithstanding Subsection (a), the corporation shall 738-1 reassign canceled stock or a canceled membership or other right of 738-2 participation to a person or entity that acquires the real estate 738-3 from which the membership or other right of participation arose 738-4 through judicial or nonjudicial foreclosure. The corporation may 738-5 require proof of ownership resulting from the foreclosure. 738-6 (h) Service provided following a transfer under Subsection 738-7 (f) or (g) is made subject to compliance with the conditions for 738-8 water or sewer service prescribed by the corporation's published 738-9 rates, charges, and conditions of service. (V.A.C.S. Art. 1434a, 738-10 Sec. 9A.) 738-11 Sec. 67.017. VOLUNTARY CONTRIBUTIONS ON BEHALF OF EMERGENCY 738-12 SERVICES. (a) A corporation may as part of its billing process 738-13 collect from its customers a voluntary contribution, including a 738-14 voluntary membership or subscription fee, on behalf of a volunteer 738-15 fire department or an emergency medical service. 738-16 (b) A corporation that collects contributions under this 738-17 section shall provide each customer at the time that the customer 738-18 first subscribes to the water or sewer service, and at least 738-19 annually thereafter, a written statement: 738-20 (1) describing the procedure by which the customer may 738-21 make a contribution with the customer's bill payment; 738-22 (2) designating the volunteer fire department or 738-23 emergency medical service to which the corporation will deliver the 738-24 contribution; 738-25 (3) informing the customer that a contribution is 739-1 voluntary; and 739-2 (4) describing the deductibility status of the 739-3 contribution under federal income tax law. 739-4 (c) A billing by the corporation that includes a voluntary 739-5 contribution under this section must clearly state that the 739-6 contribution is voluntary and that it may be deducted from the 739-7 billed amount. 739-8 (d) The corporation shall promptly deliver contributions 739-9 that it collects under this section to the designated volunteer 739-10 fire department or emergency medical service, except that the 739-11 corporation may keep from the contributions an amount equal to the 739-12 lesser of: 739-13 (1) the corporation's expenses in administering the 739-14 contribution program; or 739-15 (2) five percent of the amount collected as 739-16 contributions. (V.A.C.S. Art. 1434a, Sec. 4A.) 739-17 SECTION 3. CONFORMING AMENDMENT. Chapter 402, Local 739-18 Government Code, is amended by adding Subchapter F to read as 739-19 follows: 739-20 SUBCHAPTER F. MUNICIPAL WATER CORPORATIONS 739-21 AND MUNICIPAL WATER SYSTEMS 739-22 Sec. 402.101. MUNICIPAL WATER CONTRACTS. The governing body 739-23 of a municipality in which there is a water corporation may 739-24 contract with the corporation to supply water to a street, alley, 739-25 lot, square, or public place in a municipality. (V.A.C.S. 740-1 Art. 1434.) 740-2 Sec. 402.102. EMINENT DOMAIN BY MUNICIPAL SEWER PROVIDERS. 740-3 (a) A corporation incorporated in this state for the purpose of 740-4 owning, constructing, or maintaining a sewer system in a 740-5 municipality may by eminent domain condemn private property to: 740-6 (1) construct and maintain sewer pipes, mains and 740-7 laterals, and connections; and 740-8 (2) maintain vats, filtration pipes, and other pipes 740-9 for the final disposition of sewage. 740-10 (b) A corporation may exercise a power described by 740-11 Subsection (a) only if: 740-12 (1) the use of private property is necessary for the 740-13 successful operation of the sewer system; and 740-14 (2) the sewer system is beneficial to the public use, 740-15 health, or convenience. 740-16 (c) The power of eminent domain may not be used under this 740-17 section in the boundaries of a municipality unless permitted or 740-18 required by the municipality granting a franchise to the 740-19 corporation seeking the right of condemnation. (V.A.C.S. 740-20 Art. 1439.) 740-21 Sec. 402.103. RIGHTS OF WATER CORPORATION PROVIDING SERVICE 740-22 TO MUNICIPALITY; EMINENT DOMAIN. (a) A water corporation in a 740-23 municipality may sell and furnish water required by a municipality 740-24 for a public or private building or for any other purpose. 740-25 (b) A water corporation may lay water system pipes, mains, 741-1 or conductors through a street, alley, lane, or square of a 741-2 municipality if the governing body of the municipality consents, 741-3 subject to any regulation by the governing body. 741-4 (c) If necessary to preserve the public health, a water 741-5 corporation incorporated under state law to construct waterworks or 741-6 to furnish water supply to a municipality may exercise the power of 741-7 eminent domain to condemn private property necessary to construct a 741-8 supply reservoir or standpipe for water work. (V.A.C.S. Art. 1433 741-9 (part).) 741-10 Sec. 402.104. LOCATION OF WATER LINES OUTSIDE MUNICIPAL 741-11 BOUNDARIES. (a) A water corporation or municipality may lay water 741-12 system pipes, mains, conductors, or other fixtures through, under, 741-13 along, across, or over a public road, a public street, or a public 741-14 waterway not in a municipality in a manner that does not 741-15 inconvenience the public using the road, street, or waterway. 741-16 (b) A water corporation or municipality proposing under this 741-17 subchapter to build a water line along the right-of-way of a state 741-18 highway or county road not in a municipality shall give notice of 741-19 the proposal to: 741-20 (1) the Texas Transportation Commission, if the 741-21 proposal relates to a state highway; or 741-22 (2) the commissioners court of the county if the 741-23 proposal relates to a county road. 741-24 (c) On receipt of notice under Subsection (b), the Texas 741-25 Transportation Commission or commissioners court may designate the 742-1 location in the right-of-way where the corporation or municipality 742-2 may construct the water line. (V.A.C.S. Arts. 1433 (part), 1433a 742-3 (part).) 742-4 Sec. 402.105. RELOCATION OF WATER LINE TO ALLOW CHANGE TO 742-5 TRAFFIC LANE. (a) The authority of the Texas Transportation 742-6 Commission under this section is limited to a water line on a state 742-7 highway not in a municipality. The authority of the commissioners 742-8 court under this section is limited to a water line on a county 742-9 road not in a municipality. 742-10 (b) The Texas Transportation Commission or the commissioners 742-11 court of a county may require a water corporation or municipality 742-12 to relocate the corporation's or municipality's water line at the 742-13 corporation's or municipality's own expense to allow the widening 742-14 or other changing of a traffic lane. 742-15 (c) To impose a requirement under this section, the Texas 742-16 Transportation Commission or the commissioners court, as 742-17 appropriate, must give to the water corporation or municipality 30 742-18 days' written notice of the requirement. The notice must identify 742-19 the water line to be relocated and indicate the location on the new 742-20 right-of-way where the corporation or municipality may place the 742-21 line. (V.A.C.S. Arts. 1433 (part), 1433a (part).) 742-22 SECTION 4. CONFORMING AMENDMENT. Subchapter Z, Chapter 402, 742-23 Local Government Code, is amended by adding Section 402.906 to read 742-24 as follows: 742-25 Sec. 402.906. MUNICIPAL UTILITY PLANTS. (a) This section 743-1 applies only to a general-law municipality that owns a utility 743-2 plant that provides utility service. 743-3 (b) The governing body of a municipality may: 743-4 (1) by ordinance regulate the rates and compensation 743-5 charged the public by the municipality for utility service; 743-6 (2) establish and operate a plant to manufacture, 743-7 generate, or produce utility service; and 743-8 (3) sell and distribute utility service to the public 743-9 in the municipality's boundaries. 743-10 (c) In this section, "utility service" means the provision 743-11 of water, sewer service, gas, electric energy, or a substance used 743-12 for lighting, heat, or power. (V.A.C.S. Art. 1123.) 743-13 SECTION 5. CONFORMING AMENDMENT. Chapter 91, Natural 743-14 Resources Code, is amended by adding Subchapter H to read as 743-15 follows: 743-16 SUBCHAPTER H. UNDERGROUND STORAGE FACILITIES FOR NATURAL GAS 743-17 Sec. 91.251. DEFINITIONS. In this subchapter: 743-18 (1) "Intrastate gas pipeline facility" has the meaning 743-19 assigned by the United States Department of Transportation under 743-20 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 743-21 et seq.), and its subsequent amendments. 743-22 (2) "Natural gas" means any gaseous material composed 743-23 primarily of methane in either its original or its manufactured 743-24 state. 743-25 (3) "Natural gas underground storage" means the 744-1 storage of natural gas beneath the surface of the earth in a 744-2 formation, stratum, or reservoir. 744-3 (4) "Storage facility" has the meaning assigned by 744-4 Section 91.173. (V.A.C.S. Art. 6053-3, Secs. 1, 4(f) (part).) 744-5 Sec. 91.252. COMMISSION JURISDICTION. (a) The commission 744-6 has jurisdiction over: 744-7 (1) natural gas underground storage; and 744-8 (2) surface and subsurface equipment and facilities 744-9 used for natural gas underground storage. 744-10 (b) This subchapter does not apply to a storage facility 744-11 that is: 744-12 (1) part of an interstate gas pipeline facility as 744-13 defined by the United States Department of Transportation; and 744-14 (2) subject to federal minimum standards adopted under 744-15 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 744-16 et seq.), and its subsequent amendments. (V.A.C.S. Art. 6053-3, 744-17 Secs. 2, 3.) 744-18 Sec. 91.253. COMMISSION ENFORCEMENT. (a) In addition to 744-19 other authority specifically granted to the commission under this 744-20 subchapter, the commission may enforce this subchapter or a rule 744-21 adopted or an order or permit issued under this subchapter as 744-22 provided by Section 91.207. 744-23 (b) Section 91.003 does not apply to this subchapter. 744-24 (V.A.C.S. Art. 6053-3, Sec. 10; New.) 744-25 Sec. 91.254. INSPECTION; EXAMINATION; CREDENTIALS. (a) The 745-1 commission may inspect a storage facility for compliance with the 745-2 safety standards and practices and the recordkeeping requirements 745-3 adopted under Sections 91.255, 91.257, and 91.258. 745-4 (b) To conduct an inspection under this section, a 745-5 commissioner or a designated commission employee or agent may enter 745-6 property on which a storage facility is located at a reasonable 745-7 time and in a reasonable manner to examine: 745-8 (1) the facility and any related buildings or 745-9 equipment; and 745-10 (2) the records required to be maintained at the 745-11 storage facility under Section 91.258. 745-12 (c) A commissioner or a commission employee or agent may not 745-13 enter the premises of a storage facility having personnel on the 745-14 premises of the facility unless proper credentials are first 745-15 presented to the person at the facility who is in charge of the 745-16 property. (V.A.C.S. Art. 6053-3, Sec. 6.) 745-17 Sec. 91.255. SAFETY STANDARDS AND PRACTICES. (a) The 745-18 commission by rule shall adopt safety standards and practices for 745-19 natural gas underground storage and storage facilities. The 745-20 standards and practices must: 745-21 (1) require the installation and periodic testing of 745-22 safety devices; 745-23 (2) establish emergency notification procedures for 745-24 the operator of a facility in the event of a release of a hazardous 745-25 substance that poses a substantial risk to the public; 746-1 (3) establish fire prevention and response procedures; 746-2 (4) require training for the employees of the storage 746-3 facility on the safe operation of the storage facility; and 746-4 (5) establish any other safety standard or practice 746-5 that is reasonable and necessary for underground natural gas 746-6 storage and the safe construction, operation, and maintenance of a 746-7 storage facility. 746-8 (b) The commission may adopt different standards and 746-9 practices for different types of storage facilities and may 746-10 distinguish among natural gas underground storage in salt dome 746-11 caverns, depleted reservoirs, and embedded salt formations. 746-12 (c) The commission may grant an exception to a standard or 746-13 practice adopted under this section in a permit or amended permit 746-14 issued to a storage facility if the exception will not constitute 746-15 an unreasonable danger to the public. 746-16 (d) The commission may impose an additional standard or 746-17 practice in a permit or amended permit issued to a storage 746-18 facility. 746-19 (e) A safety standard or practice adopted by the commission 746-20 for a storage facility that is part of an intrastate gas pipeline 746-21 facility must be compatible with federal minimum standards. 746-22 (f) The commission shall require that records of safety 746-23 device tests required by Subsection (a)(1) be: 746-24 (1) filed with the commission; or 746-25 (2) maintained by the owner or operator and made 747-1 available for inspection by the commission. (V.A.C.S. Art. 6053-3, 747-2 Secs. 4(a), (b), (c), (d), (f) (part).) 747-3 Sec. 91.256. LIMITATION ON POWERS OF MUNICIPALITIES AND 747-4 COUNTIES. A municipality or county may not adopt or enforce an 747-5 ordinance that establishes a safety standard or practice applicable 747-6 to a storage facility that is subject to regulation under this 747-7 subchapter, another state law, or a federal law. (V.A.C.S. 747-8 Art. 6053-3, Sec. 11.) 747-9 Sec. 91.257. SAFETY PROCEDURE MANUAL. The commission may 747-10 require the owner or operator of a storage facility to prepare a 747-11 safety procedure manual for each storage facility and to: 747-12 (1) file a copy of the manual with the commission; or 747-13 (2) make the manual available for inspection under 747-14 Section 91.254. (V.A.C.S. Art. 6053-3, Sec. 4(e).) 747-15 Sec. 91.258. RECORDS; REPORTS. (a) An owner or operator of 747-16 a storage facility shall: 747-17 (1) maintain records and make reports relating to 747-18 construction, operation, or maintenance of the facility as required 747-19 by commission rule; and 747-20 (2) provide any other information required by the 747-21 commission relating to construction, operation, or maintenance of 747-22 the facility. 747-23 (b) The commission may provide forms for reports required 747-24 under Subsection (a). (V.A.C.S. Art. 6053-3, Sec. 5.) 747-25 Sec. 91.259. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY 748-1 DEVICE. A person may not: 748-2 (1) intentionally damage or destroy a storage 748-3 facility; or 748-4 (2) disable a safety device in a storage facility 748-5 except to: 748-6 (A) repair, maintain, test, or replace the 748-7 device; or 748-8 (B) conduct other activities that are reasonably 748-9 necessary for the safe operation of the storage facility. 748-10 (V.A.C.S. Art. 6053-3, Sec. 7.) 748-11 Sec. 91.260. INJUNCTION; CIVIL PENALTY. (a) The attorney 748-12 general, at the request of the commission, shall bring a civil 748-13 action against a person who has violated or is violating this 748-14 subchapter or a rule adopted or an order or permit issued under 748-15 this subchapter for: 748-16 (1) injunctive relief to restrain the person from the 748-17 violation; 748-18 (2) the assessment and recovery of a civil penalty for 748-19 a violation; or 748-20 (3) both injunctive relief and a civil penalty. 748-21 (b) A civil penalty assessed under this section may not 748-22 exceed $25,000 for each violation. 748-23 (c) Each day of a continuing violation may be considered a 748-24 separate violation for the purpose of penalty assessment. 748-25 (d) The maximum penalty assessed for a related series of 749-1 violations may not exceed $500,000. (V.A.C.S. Art. 6053-3, Sec. 749-2 8.) 749-3 Sec. 91.261. ADMINISTRATIVE PENALTY. (a) The commission 749-4 may assess, as provided by this section and Sections 91.262, 749-5 91.263, and 91.264, an administrative penalty against a person who 749-6 violates this subchapter or a rule adopted or an order or permit 749-7 issued under this subchapter. 749-8 (b) Except as provided by Subsection (c), the penalty for 749-9 each violation may be in an amount not to exceed $10,000. The 749-10 maximum penalty assessed under this subsection for a related series 749-11 of violations may not exceed $200,000. 749-12 (c) The penalty for each violation of Section 91.259 may be 749-13 in an amount not to exceed $25,000. The maximum penalty assessed 749-14 under this subsection for a continuing violation may not exceed 749-15 $300,000. 749-16 (d) Each day a violation continues or occurs may be 749-17 considered a separate violation for the purpose of penalty 749-18 assessment under Subsection (b) or (c). 749-19 (e) In determining the amount of the penalty, the commission 749-20 shall consider: 749-21 (1) the seriousness of the violation, including the 749-22 nature, circumstances, extent, and gravity of the prohibited act 749-23 and the hazard or potential hazard created to the health, safety, 749-24 or economic welfare of the public; 749-25 (2) the economic harm to property or the environment 750-1 caused by the violation; 750-2 (3) the history of previous violations; 750-3 (4) the amount necessary to deter future violations; 750-4 (5) efforts to correct the violation; and 750-5 (6) any other matter that justice may require. 750-6 (V.A.C.S. Art. 6053-3, Secs. 9(a), (b), (c), (d).) 750-7 Sec. 91.262. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE. 750-8 (a) An administrative penalty may be assessed only after the 750-9 person charged under Section 91.261 has been given an opportunity 750-10 for a public hearing. If a public hearing is held, the commission 750-11 shall make findings of fact and issue a written decision as to the 750-12 occurrence of the violation and the penalty amount warranted by the 750-13 violation, incorporating, if appropriate, an order requiring that 750-14 the penalty be paid. If appropriate, the commission shall 750-15 consolidate the hearing with other proceedings. 750-16 (b) If a person charged under Section 91.261 fails to take 750-17 advantage of the opportunity for a public hearing, a penalty may be 750-18 assessed by the commission after it has determined that a violation 750-19 occurred and the penalty amount warranted by the violation. The 750-20 commission shall then issue an order requiring the penalty to be 750-21 paid. 750-22 (c) The commission shall give notice of the commission's 750-23 order to the person charged with the violation as provided by 750-24 Chapter 2001, Government Code. The notice must include a statement 750-25 of the right of the person to judicial review of the order. 751-1 (V.A.C.S. Art. 6053-3, Secs. 9(e), (f), (g), (h), (i), (j).) 751-2 Sec. 91.263. PAYMENT OF ADMINISTRATIVE PENALTY. (a) Not 751-3 later than the 30th day after the date on which the commission's 751-4 order imposing an administrative penalty becomes final as provided 751-5 by Section 2001.144, Government Code, the person charged with the 751-6 violation shall: 751-7 (1) pay the amount of the penalty; 751-8 (2) pay the amount of the penalty and file a petition 751-9 for judicial review contesting: 751-10 (A) the amount of the penalty; 751-11 (B) the fact of the violation; or 751-12 (C) both the amount of the penalty and the fact 751-13 of the violation; or 751-14 (3) without paying the amount of the penalty, file a 751-15 petition for judicial review contesting: 751-16 (A) the amount of the penalty; 751-17 (B) the fact of the violation; or 751-18 (C) both the amount of the penalty and the fact 751-19 of the violation. 751-20 (b) Within the 30-day period, a person who acts under 751-21 Subsection (a)(3) may: 751-22 (1) stay the enforcement of the penalty by: 751-23 (A) paying the amount of the penalty to the 751-24 court for placement in an escrow account; or 751-25 (B) giving to the court a supersedeas bond in a 752-1 form approved by the court that is effective until all judicial 752-2 review of the order or decision is final; or 752-3 (2) request the court to stay enforcement of the 752-4 penalty by: 752-5 (A) filing with the court a sworn affidavit 752-6 stating that the person is financially unable to pay the amount of 752-7 the penalty and is financially unable to give the supersedeas bond; 752-8 and 752-9 (B) delivering a copy of the affidavit to the 752-10 commission. 752-11 (c) If the commission receives a copy of an affidavit under 752-12 Subsection (b), the commission may file a contest to the affidavit 752-13 with the court not later than the fifth day after the date the copy 752-14 is received. The court shall hold a hearing on the facts alleged 752-15 in the affidavit as soon as practicable. The person who files an 752-16 affidavit has the burden of proving that the person is financially 752-17 unable to pay the amount of the penalty and to give a supersedeas 752-18 bond. 752-19 (d) If the person does not pay the amount of the penalty and 752-20 the penalty is not stayed, the commission may refer the matter to 752-21 the attorney general for enforcement. (V.A.C.S. Art. 6053-3, Secs. 752-22 9(k), (l), (m), (n).) 752-23 Sec. 91.264. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY. 752-24 (a) Judicial review of a commission order imposing an 752-25 administrative penalty is: 753-1 (1) instituted by filing a petition as provided by 753-2 Subchapter G, Chapter 2001, Government Code; and 753-3 (2) under the substantial evidence rule. 753-4 (b) If the person paid the amount of the penalty and that 753-5 amount is reduced or is not assessed by the court, the court shall 753-6 order that the appropriate amount plus accrued interest be remitted 753-7 to the person. The rate of interest is the rate charged on loans 753-8 to depository institutions by the New York Federal Reserve Bank and 753-9 shall be paid for the period beginning on the date the penalty is 753-10 paid and ending on the date the penalty is remitted. If the person 753-11 gave a supersedeas bond, the court shall order the release of the 753-12 bond: 753-13 (1) without further action by the person if the 753-14 penalty is not assessed by the court; or 753-15 (2) on payment of the penalty in the amount determined 753-16 by the court. 753-17 (c) A penalty collected under this section shall be 753-18 deposited to the credit of the oil-field cleanup fund account. 753-19 (V.A.C.S. Art. 6053-3, Secs. 9(o), (p), (q).) 753-20 SECTION 6. CONFORMING AMENDMENT. Chapter 111, Natural 753-21 Resources Code, is amended by adding Subchapter J to read as 753-22 follows: 753-23 SUBCHAPTER J. WELL WASTEWATER CORPORATION 753-24 Sec. 111.401. DEFINITION. In this subchapter, "well 753-25 wastewater" means water containing salt or other substances 754-1 produced during drilling or operating oil and other types of wells. 754-2 (V.A.C.S. Art. 1508 (part); New.) 754-3 Sec. 111.402. CREATION OF WELL WASTEWATER CORPORATION. A 754-4 well wastewater corporation may be created to gather, store, and 754-5 impound well wastewater and to prevent the flow of the well 754-6 wastewater into a stream when the stream may be used for 754-7 irrigation. (V.A.C.S. Art. 1508 (part).) 754-8 Sec. 111.403. CORPORATION POWERS. In addition to the 754-9 general powers conferred to a private corporation, a well 754-10 wastewater corporation may acquire, own, and operate a ditch, 754-11 canal, pipeline, levee, or reservoir, and an associated appliance 754-12 as appropriate to gather, impound, or store well wastewater and to 754-13 protect a reservoir from inflow or damage by surface water. 754-14 (V.A.C.S. Art. 1509.) 754-15 Sec. 111.404. CONDEMNATION. (a) A well wastewater 754-16 corporation may condemn land or a property right necessary for a 754-17 purpose of the corporation. 754-18 (b) A well wastewater corporation's ditch, canal, or 754-19 pipeline may cross under a highway, canal, pipeline, railroad, or 754-20 tram or logging road if the use of the highway, canal, pipeline, 754-21 railroad, or tram or logging road is not impaired except for the 754-22 time necessary to construct the crossing. 754-23 (c) Without the consent of the appropriate authority, a well 754-24 wastewater corporation's ditch, canal, or pipeline may not: 754-25 (1) pass through a cemetery; 755-1 (2) pass under a residence or public building; or 755-2 (3) cross a street or alley of a municipality. 755-3 (V.A.C.S. Art. 1510.) 755-4 Sec. 111.405. SERVICE TO WELL WASTEWATER PRODUCERS. (a) A 755-5 well wastewater corporation shall serve all well wastewater 755-6 producers in the area in which the corporation operates to the 755-7 extent the corporation has adequate facilities to gather, impound, 755-8 and store well wastewater. 755-9 (b) A well wastewater corporation: 755-10 (1) shall serve a well wastewater producer in 755-11 proportion to the needs of all of the producers in the area; 755-12 (2) shall charge a fair and reasonable fee for its 755-13 services; and 755-14 (3) may not discriminate between different producers 755-15 under similar conditions. (V.A.C.S. Art. 1511.) 755-16 Sec. 111.406. OWNERSHIP OF STOCK. A corporation interested 755-17 in the proper disposition of well wastewater may purchase, own, or 755-18 vote stock in a well wastewater corporation. (V.A.C.S. Art. 1512.) 755-19 SECTION 7. CONFORMING AMENDMENT. Subtitle D, Title 3, 755-20 Natural Resources Code, is amended by adding Chapter 115 to read as 755-21 follows: 755-22 CHAPTER 115. REGULATION OF CERTAIN TRANSPORTERS 755-23 OF OIL OR PETROLEUM PRODUCTS 755-24 SUBCHAPTER A. GENERAL PROVISIONS 755-25 Sec. 115.001. DEFINITIONS. In this chapter: 756-1 (1) "Commission" means the Railroad Commission of 756-2 Texas. 756-3 (2) "Commission order" includes a rule or order 756-4 adopted by the commission under the oil and gas conservation 756-5 statutes of this state, including this title and Subtitle B, Title 756-6 3, Utilities Code. 756-7 (3) "Gas" includes natural gas, bradenhead gas, 756-8 casinghead gas, or gas produced from an oil or gas well. 756-9 (4) "Manifest" includes a document issued by a shipper 756-10 that covers oil or a petroleum product transported by motor 756-11 vehicle. 756-12 (5) "Oil" includes crude petroleum oil: 756-13 (A) in its natural state as produced; or 756-14 (B) from which only the basic sediment and water 756-15 have been removed. 756-16 (6) "Person" includes an individual, corporation, 756-17 association, partnership, receiver, trustee, guardian, executor, 756-18 administrator, or representative. 756-19 (7) "Petroleum product" includes: 756-20 (A) refined crude oil; 756-21 (B) crude tops; 756-22 (C) topped crude; 756-23 (D) processed crude petroleum; 756-24 (E) residue from crude petroleum; 756-25 (F) cracking stock; 757-1 (G) uncracked fuel oil; 757-2 (H) fuel oil; 757-3 (I) treated crude oil; 757-4 (J) residuum; 757-5 (K) gas oil; 757-6 (L) casinghead gasoline; 757-7 (M) natural gas gasoline; 757-8 (N) naphtha; 757-9 (O) distillate; 757-10 (P) gasoline; 757-11 (Q) kerosene; 757-12 (R) benzine; 757-13 (S) wash oil; 757-14 (T) waste oil; 757-15 (U) blended gasoline; 757-16 (V) lubricating oil; 757-17 (W) blends or mixtures of petroleum; or 757-18 (X) any other liquid petroleum product or 757-19 byproduct derived from crude petroleum oil or gas. 757-20 (8) "Shipping papers" includes: 757-21 (A) a bill of lading that covers oil or a 757-22 petroleum product transported by railway; 757-23 (B) a manifest; or 757-24 (C) a document that covers oil or a petroleum 757-25 product transported by pipeline, boat, or barge. 758-1 (9) "Tender" means a permit or certificate of 758-2 clearance for the transportation of oil or a petroleum product that 758-3 is approved and issued or registered under the authority of the 758-4 commission. 758-5 (10) "Unlawful gas" includes gas produced or 758-6 transported in violation of a law of this state or commission 758-7 order. 758-8 (11) "Unlawful petroleum product" includes a petroleum 758-9 product: 758-10 (A) any part of which was processed or derived 758-11 in whole or in part from: 758-12 (i) unlawful oil; 758-13 (ii) a product of unlawful oil; or 758-14 (iii) unlawful gas; or 758-15 (B) transported in violation of a law of this 758-16 state or commission order. (V.A.C.S. Art. 6066a, Secs. 1(a), (b), 758-17 (c), (e), (f), (g) (part), (h) (part), (i), (j) (part), 2(b) 758-18 (part).) 758-19 Sec. 115.002. EXCEPTION. This chapter does not apply to the 758-20 retail purchase of a petroleum product if that product is: 758-21 (1) contained in the ordinary equipment of a motor 758-22 vehicle; and 758-23 (2) used only to operate the motor vehicle in which it 758-24 is contained. (V.A.C.S. Art. 6066a, Sec. 13.) 758-25 Sec. 115.003. DEFINITION OF UNLAWFUL OIL; PRESUMPTION. 759-1 (a) For purposes of this chapter, oil is unlawful if the oil is: 759-2 (1) produced in this state from a well in excess of 759-3 the amount allowed by a commission order or otherwise in violation 759-4 of a law of this state or commission order; or 759-5 (2) transported in violation of a law of this state or 759-6 commission order. 759-7 (b) It is presumed that oil is "unlawful oil" for purposes 759-8 of this chapter if the oil is retained in storage for more than six 759-9 years without being used, consumed, or moved into regular 759-10 commercial channels. 759-11 (c) The presumption under Subsection (b) may be rebutted by 759-12 proof that the oil: 759-13 (1) was produced from a well within the production 759-14 allowable then applying to that well; 759-15 (2) was not produced in violation of a law of this 759-16 state or commission order; and 759-17 (3) if transported from the lease from which it was 759-18 produced, was not transported in violation of a law of this state 759-19 or commission order. (V.A.C.S. Art. 6066a, Secs. 1(d), 2(b) 759-20 (part).) 759-21 (Sections 115.004-115.010 reserved for expansion 759-22 SUBCHAPTER B. TENDERS AND MANIFESTS 759-23 Sec. 115.011. TENDER REQUIREMENTS. The commission by order 759-24 may require that a tender be obtained before oil or a petroleum 759-25 product may be transported or received for transportation by 760-1 pipeline, railway, boat, or barge. (V.A.C.S. Art. 6066a, Sec. 2(a) 760-2 (part), Sec. 4(c) (part).) 760-3 Sec. 115.012. TENDER; APPLICATION REQUIREMENTS. (a) The 760-4 commission by order shall prescribe the form of a tender and a 760-5 tender application. 760-6 (b) The form must show: 760-7 (1) the name and address of the shipper or other 760-8 person who tenders oil or a petroleum product for transportation; 760-9 (2) the name and address of the transporter if the 760-10 commission order requires the transporter to be designated; 760-11 (3) the quantity and classification of each commodity 760-12 authorized to be transported; 760-13 (4) each location at which delivery is to be made to 760-14 the transporter; and 760-15 (5) other related information as prescribed by 760-16 commission order. 760-17 (c) Each tender must: 760-18 (1) bear a date and serial number; 760-19 (2) state the expiration date of the tender; and 760-20 (3) be executed by an agent authorized by the 760-21 commission to deny, approve, or register tenders. 760-22 (d) An agent may not approve or register a tender for the 760-23 transportation of unlawful oil or an unlawful petroleum product. 760-24 (V.A.C.S. Art. 6066a, Sec. 1(g) (part).) 760-25 Sec. 115.013. ACTION ON TENDER APPLICATION. (a) If an 761-1 agent of the commission rejects an application for a tender, the 761-2 agent shall return a copy of the application to the applicant with 761-3 the reasons for the rejection indicated on the copy. 761-4 (b) A person whose tender application is not acted on before 761-5 the 21st day after the date on which the application is filed is 761-6 entitled to judicial review in the manner provided by Section 761-7 115.014 for the appeal of a rejection of a tender application. 761-8 (V.A.C.S. Art. 6066a, Sec. 9 (part).) 761-9 Sec. 115.014. JUDICIAL REVIEW. (a) A person whose tender 761-10 application is rejected may appeal that action by filing a petition 761-11 against the commission in a district court of Travis County for 761-12 review of the agent's decision. 761-13 (b) The clerk of the court shall issue to the commission a 761-14 notice setting forth briefly the cause of action stated in the 761-15 petition. The court may not enter an order on the petition until 761-16 the court conducts a hearing. The court must conduct the hearing 761-17 not later than the fifth day after the date of issuance of the 761-18 notice. 761-19 (c) The court may sustain, modify, or overrule the agent's 761-20 decision and may issue a restraining order or injunction as 761-21 warranted by the facts. 761-22 (d) A person dissatisfied with the decision of the district 761-23 court may appeal to the court of appeals. (V.A.C.S. Art. 6066a, 761-24 Sec. 9 (part).) 761-25 Sec. 115.015. TRANSFER UNDER TENDER. (a) A person who 762-1 obtains a tender may not transport or deliver, or cause or permit 762-2 to be transported or delivered, any more or any different commodity 762-3 than that authorized by the tender. 762-4 (b) A connecting carrier or consignee who receives oil or a 762-5 petroleum product from another transporter by pipeline, railway, 762-6 boat, or barge under authority of shipping papers executed by the 762-7 initial transporter that bear the date and serial number of a 762-8 tender issued to that initial transporter is considered to receive 762-9 the oil or petroleum product by authority of that tender if the 762-10 commission order provides that a connecting carrier or consignee 762-11 may rely on the shipping papers. (V.A.C.S. Art. 6066a, Secs. 2(a) 762-12 (part), 4(c) (part).) 762-13 Sec. 115.016. ISSUANCE OF MANIFEST. (a) A person who 762-14 obtains a tender required under this subchapter shall sign and 762-15 issue a manifest to the operator of each motor vehicle used to 762-16 transport the oil or petroleum product that is covered by the 762-17 tender. 762-18 (b) The person shall issue a separate manifest for each load 762-19 carried by the motor vehicle. (V.A.C.S. Art. 6066a, Sec. 2(a) 762-20 (part).) 762-21 Sec. 115.017. FORM OF MANIFEST. (a) The commission by 762-22 order may prescribe the form of a manifest. 762-23 (b) A manifest must: 762-24 (1) bear a certificate signed by the shipper that 762-25 states the amount of oil or petroleum products to be transported 763-1 and specifies each petroleum product to be transported; and 763-2 (2) include, if required by commission order: 763-3 (A) the date and serial number of the tender 763-4 that authorizes the transportation or a seal, number, or other 763-5 evidence of the tender, if a tender is required; 763-6 (B) the amount and classification of each 763-7 petroleum product to be transported; 763-8 (C) the name and address of the transporter, the 763-9 name and address of the shipper, and the name and address of the 763-10 consignee, if known; 763-11 (D) the name and address of the operator of the 763-12 motor vehicle; 763-13 (E) the license plate number of the motor 763-14 vehicle; 763-15 (F) the date, time, and place at which the motor 763-16 vehicle was loaded and the destination, if known, of the load; and 763-17 (G) other related information as required by 763-18 commission order. 763-19 (c) If the form of the manifest is not prescribed by 763-20 commission order, each shipper required to issue a manifest to a 763-21 transporter shall use a form of manifest that is: 763-22 (1) commonly used in commercial transactions; or 763-23 (2) required by another state agency to accompany the 763-24 movement of gasoline. (V.A.C.S. Art. 6066a, Secs. 1(h) (part), 763-25 2(a) (part).) 764-1 Sec. 115.018. TRANSFER UNDER MANIFEST; RESTRICTIONS. (a) A 764-2 person authorized to transport oil or a petroleum product on a 764-3 manifest issued by a shipper may not receive: 764-4 (1) a commodity for transportation that is different 764-5 from the commodity described in the manifest; or 764-6 (2) oil or a petroleum product in an amount exceeding 764-7 the amount authorized by the manifest. 764-8 (b) A person authorized to transport oil or a petroleum 764-9 product by a shipper-issued manifest that bears on its face the 764-10 date and serial number of the tender may rely on the manifest 764-11 delivered to that person and each consignee or person to whom the 764-12 transporter delivers oil or a petroleum product covered by that 764-13 manifest may rely on the manifest as authority to receive the 764-14 commodity delivered if the manifest: 764-15 (1) appears to be valid on its face; 764-16 (2) is signed by the shipper; and 764-17 (3) bears the certificate of the shipper that the 764-18 transportation of the oil or petroleum product is authorized by the 764-19 tender. 764-20 (c) If the commission by order prohibits the transportation 764-21 of oil or a petroleum product by motor vehicle without a manifest 764-22 that shows the date and serial number of a tender authorizing the 764-23 transportation, a person may not ship or transport or cause to be 764-24 shipped or transported by motor vehicle oil or a petroleum product 764-25 unless the person furnishes the manifest to the operator of the 765-1 motor vehicle. The person transporting the oil or petroleum 765-2 product shall maintain the manifest in the vehicle at all times 765-3 during the shipment. If the person to whom the tender is issued is 765-4 the operator of the motor vehicle and the tender identifies the 765-5 motor vehicle by license number and covers one load, the person may 765-6 carry the tender in the vehicle in lieu of a manifest. (V.A.C.S. 765-7 Art. 6066a, Secs. 2(a) (part), (b) (part).) 765-8 Sec. 115.019. RECEIPT REQUIRED. A person who transports oil 765-9 or a petroleum product by motor vehicle under conditions that 765-10 require a tender or manifest shall obtain a receipt from each 765-11 person to whom any part of the oil or petroleum product is 765-12 delivered. The receipt must be on the reverse side of the tender 765-13 or manifest and must indicate: 765-14 (1) the number of gallons of oil or of each petroleum 765-15 product delivered; 765-16 (2) the date of delivery; and 765-17 (3) the signature and address of the purchaser or 765-18 consignee of the oil or petroleum product. (V.A.C.S. Art. 6066a, 765-19 Sec. 2(c) (part).) 765-20 Sec. 115.020. RECORDS; INSPECTION. (a) A person who 765-21 transports by motor vehicle and delivers oil or a petroleum product 765-22 shall keep in this state for two years each tender or manifest 765-23 issued to the person, together with the receipts and endorsements 765-24 on the tender or manifest. 765-25 (b) A tender or manifest is at all times subject to 766-1 inspection by the commission or an agent or inspector of the 766-2 commission. (V.A.C.S. Art. 6066a, Sec. 2(c) (part).) 766-3 (Sections 115.021-115.030 reserved for expansion 766-4 SUBCHAPTER C. FORFEITURE OF UNLAWFUL OIL OR PETROLEUM PRODUCT 766-5 Sec. 115.031. FORFEITURE AUTHORIZED. Unlawful oil and 766-6 unlawful petroleum products, regardless of the date of production 766-7 or manufacture, are declared to be a nuisance and shall be 766-8 forfeited to this state as provided by this subchapter. 766-9 (V.A.C.S. Art. 6066a, Sec. 10(a) (part).) 766-10 Sec. 115.032. REPORT TO ATTORNEY GENERAL. On the discovery 766-11 of unlawful oil or an unlawful petroleum product, a member of the 766-12 commission, an agent or employee of the commission, or a peace 766-13 officer shall immediately file with the attorney general a report 766-14 that describes the unlawful oil or unlawful petroleum product. The 766-15 report must state the ownership, party in possession, amount, 766-16 location, and classification of the oil or petroleum product. 766-17 (V.A.C.S. Art. 6066a, Sec. 10(a) (part).) 766-18 Sec. 115.033. ACTION IN REM. (a) If the attorney general 766-19 is advised of the presence of unlawful oil or an unlawful petroleum 766-20 product, the attorney general shall bring an action in rem in the 766-21 name of the state in Travis County or in the county in which the 766-22 oil or petroleum product is located against the unlawful oil or 766-23 petroleum product and against each person who owns, claims, or is 766-24 in possession of the oil or petroleum product. 766-25 (b) If it appears to the court from an examination of the 767-1 petition or after hearing evidence on the petition at a preliminary 767-2 hearing that the unlawful oil or petroleum product mentioned in the 767-3 petition is in danger of being removed, wasted, lost, or destroyed, 767-4 the court shall: 767-5 (1) issue restraining orders or injunctive relief, 767-6 either mandatory or prohibitive; 767-7 (2) appoint a receiver to take charge of the oil or 767-8 petroleum product; or 767-9 (3) direct the sheriff of the county in which the 767-10 unlawful oil or petroleum product is located to seize and impound 767-11 the oil or petroleum product pending further orders of the court. 767-12 (c) A party to the action may demand a trial by jury on any 767-13 issue of fact raised by the pleadings, and the case shall proceed 767-14 to trial in the manner provided for other civil cases. (V.A.C.S. 767-15 Art. 6066a, Secs. 10(b), (c) (part).) 767-16 Sec. 115.034. FORFEITURE SALE. (a) If, on the trial of the 767-17 action, the oil or petroleum product in controversy is found to be 767-18 unlawful, the court shall render judgment forfeiting the oil or 767-19 petroleum product to this state. The court shall issue an order of 767-20 sale directing the sheriff or a constable of the county in which 767-21 the oil or petroleum product is located to seize and sell the oil 767-22 or petroleum product in the same manner as personal property is 767-23 sold under execution. The court may order the oil or petroleum 767-24 product sold in whole or in part. 767-25 (b) The sale shall be conducted at the courthouse door of 768-1 the county in which the oil or petroleum product is located. 768-2 (c) The court shall apply the money realized from the sale 768-3 first to the payment of the costs of the action and expenses 768-4 incident to the sale of the oil or petroleum product. The court 768-5 may then use not more than one-half of the money to compensate a 768-6 person for expenses incurred in storing the unlawful oil or 768-7 petroleum product. Any balance remaining shall be remitted to the 768-8 comptroller. 768-9 (d) The officers of the court shall receive the same fees 768-10 provided by law for other civil actions. The sheriff who executes 768-11 the sale shall issue a bill of sale or certificate to the purchaser 768-12 of the oil or petroleum product, and the commission, on 768-13 presentation of that certificate of clearance, shall issue a 768-14 tender, if a tender is required, permitting the purchaser of the 768-15 oil or petroleum product to move the oil or petroleum product into 768-16 commerce. (V.A.C.S. Art. 6066a, Secs. 10(c) (part), (d).) 768-17 (Sections 115.035-115.040 reserved for expansion 768-18 SUBCHAPTER D. ENFORCEMENT AND PENALTIES 768-19 Sec. 115.041. ENFORCEMENT; ARRESTS. (a) To enforce this 768-20 chapter, an agent of the commission or a peace officer of this 768-21 state who has probable cause and reasonable grounds to believe that 768-22 a motor vehicle is transporting unlawful oil or an unlawful 768-23 petroleum product may stop the vehicle to take samples of the cargo 768-24 and to inspect the shipping papers. 768-25 (b) If, on examination of the motor vehicle, the agent or 769-1 officer finds that the vehicle is transporting unlawful oil or an 769-2 unlawful petroleum product or is transporting oil or a petroleum 769-3 product without a required tender, the agent or officer, with or 769-4 without a warrant, shall arrest the operator of the vehicle and 769-5 file a complaint against the operator under this chapter. 769-6 (c) In a criminal action under this chapter, the agent or 769-7 officer is not entitled to a fee for executing a warrant of arrest 769-8 or capias or for making an arrest with or without a warrant. 769-9 (V.A.C.S. Art. 6066a, Sec. 3.) 769-10 Sec. 115.042. PUBLICATION OF COMMISSION ORDER PRIOR TO 769-11 ENFORCEMENT. A criminal action may not be maintained against a 769-12 person involving the violation of a rule or order that the 769-13 commission adopts, modifies, or amends until the commission 769-14 publishes a complete copy of the rule or order. (V.A.C.S. 769-15 Art. 6066a, Sec. 5 (part).) 769-16 Sec. 115.043. CERTIFICATE AS EVIDENCE. (a) A certificate 769-17 that sets forth the terms of a commission order and states that the 769-18 order has been adopted and published and was in effect on a 769-19 specified date or during a specified period is prima facie evidence 769-20 of those facts if the certificate is: 769-21 (1) made under the seal of the commission; and 769-22 (2) executed by a member or the secretary of the 769-23 commission. 769-24 (b) The certificate is admissible in evidence in any civil 769-25 or criminal action that involves the order without further proof of 770-1 the adoption, publication, or contents of the order. (V.A.C.S. 770-2 Art. 6066a, Sec. 6.) 770-3 Sec. 115.044. SERVICE OF PROCESS. (a) In an action or 770-4 proceeding that involves the enforcement of this chapter or a 770-5 commission order, a Texas Ranger or agent of the commission may 770-6 serve any judicial process, warrant, subpoena, or writ as directed 770-7 by the court issuing the process and shall serve the process in the 770-8 same manner as a peace officer. 770-9 (b) The ranger or agent may serve the process, warrant, or 770-10 subpoena anywhere in this state although it may be directed to the 770-11 sheriff or a constable of a particular county. 770-12 (c) The ranger or agent shall make the same return as any 770-13 other officer, sign the return, and add under the name the title 770-14 "State Ranger" or "Agent, Railroad Commission of Texas," as 770-15 appropriate, which is sufficient to make the writ valid if the writ 770-16 is otherwise properly prepared. 770-17 (d) A Texas Ranger or agent of the commission is not 770-18 entitled to a fee in addition to that person's regular compensation 770-19 for a service provided under this section. (V.A.C.S. Art. 6066a, 770-20 Sec. 7.) 770-21 Sec. 115.045. PLEADING; PROOF. (a) In a complaint, 770-22 information, or indictment that alleges a violation of a commission 770-23 order, it is unnecessary to set forth fully the terms of the order 770-24 and sufficient to allege the substance of the order or the 770-25 pertinent terms of the order that are alleged to have been 771-1 violated. 771-2 (b) In a criminal action filed under this chapter, a 771-3 certificate executed by a member or the secretary of the commission 771-4 that shows the amount of allowable oil that may be produced per day 771-5 or during a stated period from an oil well, proof of production 771-6 from which is involved in the criminal action, is admissible and is 771-7 prima facie evidence of the facts stated in the certificate. 771-8 (c) This section does not limit the power of the commission 771-9 to adopt rules or orders under the oil and gas conservation 771-10 statutes of this state, including this title and Subtitle B, Title 771-11 3, Utilities Code. (V.A.C.S. Art. 6066a, Secs. 8(a), (b), (d).) 771-12 Sec. 115.046. VENUE. A criminal action maintained under 771-13 this chapter must be brought in: 771-14 (1) the county in which the oil or petroleum product 771-15 involved in the criminal action is received or delivered; or 771-16 (2) any county in or through which that oil or 771-17 petroleum product is transported. (V.A.C.S. Art. 6066a, Sec. 771-18 8(c).) 771-19 Sec. 115.047. PENALTIES. (a) A person commits an offense 771-20 if the person is the operator of a motor vehicle that transports 771-21 oil or a petroleum product and the person: 771-22 (1) intentionally fails to stop the vehicle on the 771-23 command of an agent of the commission or peace officer; or 771-24 (2) intentionally fails to permit inspection by the 771-25 agent or officer of the contents of or the shipping papers 772-1 accompanying the vehicle. 772-2 (b) A person commits an offense if the person: 772-3 (1) knowingly violates Section 115.011, 115.015(a), 772-4 115.016, 115.018, 115.019, or 115.020; 772-5 (2) knowingly ships or transports or causes to be 772-6 shipped or transported unlawful oil or an unlawful petroleum 772-7 product by motor vehicle over a public highway in this state; 772-8 (3) knowingly ships or transports or causes to be 772-9 shipped or transported by motor vehicle oil or a petroleum product 772-10 without the authority of a tender if a tender is required by a 772-11 commission order; or 772-12 (4) if a tender is required by a commission order, 772-13 knowingly receives from a motor vehicle or knowingly delivers to a 772-14 motor vehicle oil or a petroleum product that is not covered by a 772-15 tender authorizing the transportation of the oil or petroleum 772-16 product. 772-17 (c) A person commits an offense if the person: 772-18 (1) knowingly ships or transports or causes or permits 772-19 to be shipped or transported by pipeline, railway, boat, or barge 772-20 unlawful oil or an unlawful petroleum product; 772-21 (2) knowingly receives or delivers for transportation 772-22 by pipeline, railway, boat, or barge unlawful oil or an unlawful 772-23 petroleum product; 772-24 (3) knowingly ships or transports or causes or permits 772-25 to be shipped or transported by pipeline, railway, boat, or barge 773-1 oil or a petroleum product without authority of a tender if a 773-2 tender is required by a commission order; or 773-3 (4) knowingly receives or delivers by pipeline, 773-4 railway, boat, or barge oil or a petroleum product without 773-5 authority of a tender if a tender is required by a commission 773-6 order. 773-7 (d) An offense under this section is punishable by a fine of 773-8 not less than $50 or more than $200. (V.A.C.S. Art. 6066a, Secs. 773-9 4(a), (b), (d).) 773-10 SECTION 8. CONFORMING AMENDMENT. Subchapter D, Chapter 54, 773-11 Water Code, is amended by adding Section 54.2051 to read as 773-12 follows: 773-13 Sec. 54.2051. SERVICE CONNECTIONS TO CERTAIN DWELLING UNITS. 773-14 (a) If the tenant of an individually metered dwelling unit applies 773-15 to a district for utility service for that unit, the district may 773-16 not require that the service be connected in the name of the 773-17 landlord or owner of the unit. 773-18 (b) This section does not apply to a dwelling unit that is 773-19 located in a building that: 773-20 (1) contains two or more dwelling units; and 773-21 (2) is served by a master meter or demand meter. 773-22 (c) In this section, "individually metered dwelling unit" 773-23 means one or more rooms: 773-24 (1) rented for use as a permanent residence under a 773-25 single verbal or written rental agreement; and 774-1 (2) served by a utility meter that belongs to the 774-2 district and measures service only for that unit. (V.A.C.S. 774-3 Art. 1446d-1.) 774-4 SECTION 9. REPEALER. The following Acts and articles as 774-5 compiled in Vernon's Texas Civil Statutes are repealed: 1120; 774-6 1123; 1124a; 1416; 1417; 1418; 1419; 1420; 1421; 1422; 1426; 1427; 774-7 1428; 1429; 1430; 1431; 1432; 1432a; 1432b; 1433; 1433a; 1434; 774-8 1434a; 1435; 1435a; 1435a-1; 1435b; 1436; 1436a; 1436b; 1437; 1438; 774-9 1439; 1440; 1440a; Sections 1, 3, 4, 6, 7, and 8, 1446a; 1446b; 774-10 1446c-0; 1446c-1; 1446c-2; 1446d; 1446d-1; 1446d-2; 1446e; 1446f; 774-11 1446g; 1446h; 1508; 1509; 1510; 1511; 1512; 1528b; 1528c; 2372q-1; 774-12 6050; 6051; 6052; 6053; 6053-1; 6053-2; 6053-3; 6054; 6055; 6056; 774-13 6057; 6057a; 6057b; 6058; 6059; 6060; 6061; 6062; 6062A; 6063; 774-14 6064; 6065; 6066; 6066a; 6066f; 6066g; and 9021. 774-15 SECTION 10. LEGISLATIVE INTENT OF NO SUBSTANTIVE CHANGE. 774-16 This Act is enacted under Section 43, Article III, Texas 774-17 Constitution. This Act is intended as a recodification only, and 774-18 no substantive change in law is intended by this Act. 774-19 SECTION 11. EFFECTIVE DATE. This Act takes effect September 774-20 1, 1997. 774-21 SECTION 12. EMERGENCY. The importance of this legislation 774-22 and the crowded condition of the calendars in both houses create an 774-23 emergency and an imperative public necessity that the 774-24 constitutional rule requiring bills to be read on three several 774-25 days in each house be suspended, and this rule is hereby suspended.