Amend CSHB 1777 by striking all below the enacting clause and
substituting the following:
SECTION 1. Subtitle A, Title 9, Local Government Code, is
amended by adding Chapter 283 to read as follows:
CHAPTER 283. MANAGEMENT OF PUBLIC RIGHT-OF-WAY USED BY
TELECOMMUNICATIONS PROVIDER IN MUNICIPALITY
SUBCHAPTER A. GENERAL PROVISIONS
Sec. 283.001. STATE POLICY; PURPOSE. (a) It is the policy
of this state to:
(1) encourage competition in the provision of
telecommunications services;
(2) reduce the barriers to entry for providers of
services so that the number and types of services offered by
providers continue to increase through competition;
(3) ensure that providers of telecommunications
services do not obtain a competitive advantage or disadvantage in
their ability to obtain use of a public right-of-way within a
municipality; and
(4) fairly reduce the uncertainty and litigation
concerning franchise fees.
(b) It is also the policy of this state that municipalities:
(1) retain the authority to manage a public
right-of-way within the municipality to ensure the health, safety,
and welfare of the public; and
(2) receive from certificated telecommunications
providers fair and reasonable compensation for the use of a public
right-of-way within the municipality.
(c) The purpose of this chapter is to establish a uniform
method for compensating municipalities for the use of a public
right-of-way by certificated telecommunications providers that:
(1) is administratively simple for municipalities and
telecommunications providers;
(2) is consistent with state and federal law;
(3) is competitively neutral;
(4) is nondiscriminatory;
(5) is consistent with the burdens on municipalities
created by the incursion of certificated telecommunications
providers into a public right-of-way; and
(6) provides fair and reasonable compensation for the
use of a public right-of-way.
Sec. 283.002. DEFINITIONS. In this chapter:
(1) "Access line":
(A) means, unless the commission adopts a
different definition under Section 283.003, a unit of measurement
representing:
(i) each switched transmission path of the
transmission media that is physically within a public right-of-way
extended to the end-use customer's premises within the
municipality, that allows the delivery of local exchange telephone
services within a municipality, and that is provided by means of
owned facilities, unbundled network elements or leased facilities,
or resale;
(ii) each termination point or points of a
nonswitched telephone or other circuit consisting of transmission
media located within a public right-of-way connecting specific
locations identified by, and provided to, the end-use customer for
delivery of nonswitched telecommunications services within the
municipality; or
(iii) each switched transmission path
within a public right-of-way used to provide central office-based
PBX-type services for systems of any number of stations within the
municipality, and in that instance, each path shall be counted for
every 10 stations served; and
(B) may not be construed to include interoffice
transport or other transmission media that do not terminate at an
end-use customer's premises or to permit duplicate or multiple
assessment of access line rates on the provision of a single
service.
(2) "Certificated telecommunications provider" means a
person who has been issued a certificate of convenience and
necessity, certificate of operating authority, or service provider
certificate of operating authority by the commission to offer local
exchange telephone service.
(3) "Commission" means the Public Utility Commission
of Texas.
(4) "Consumer price index" means the annual revised
consumer price index for all urban consumers for Texas, as
published by the Federal Bureau of Labor Statistics.
(5) "Local exchange telephone service" has the meaning
assigned by Section 51.002, Utilities Code.
(6) "Public right-of-way" means the area on, below, or
above a public roadway, highway, street, public sidewalk, alley,
waterway, or utility easement in which the municipality has an
interest. The term does not include the airwaves above a
right-of-way with regard to wireless telecommunications.
Sec. 283.003. COMMISSION REVIEW. (a) Not later than
September 1, 2002, the commission shall determine whether changes
in technology, facilities, or competitive or market conditions
justify a modification in the commission-established categories of
access lines or, if necessary, the adoption of a definition of
"access line" provided by this section. The commission may not
begin a review authorized by this section before March 1, 2002.
(b) As part of the proceeding described by Subsection (a),
and as necessary after that proceeding, the commission by rule may
modify the definition of "access line" and the categories of access
lines as necessary to ensure competitive neutrality and
nondiscriminatory application and to maintain consistent levels of
compensation, as annually increased by growth in access lines and
consumer price index, as applicable, to the municipalities.
(c) After September 1, 2002, the commission, on its own
motion, shall make the determination required by this section at
least once every three years.
Sec. 283.004. APPLICATION. This chapter applies only to
municipal regulations and fees imposed on and collected from
certificated telecommunications providers.
Sec. 283.005. INFORMATION. (a) The commission may collect
and compile any information from certificated telecommunications
providers and municipalities as is necessary to implement this
chapter.
(b) The commission shall maintain the confidentiality of the
information described by Subsection (a) in accordance with Section
52.207, Utilities Code.
(c) Information provided to municipalities under this
chapter shall be governed by confidentiality procedures established
by the commission in compliance with Section 52.207, Utilities
Code.
Sec. 283.006. FEE REQUIREMENT FOR USE OF RIGHT-OF-WAY. (a)
Notwithstanding any other law, a certificated telecommunications
provider that does not use a public right-of-way within the
municipality may not be required to pay franchise fees,
right-of-way fees or any other fee or other compensation, other
than a fee or compensation excluded from the "base amount" under
Section 283.053(a), directly to the municipality to provide local
exchange telephone service in the municipality.
(b) This section does not affect the number of access lines
counted and reported to the commission under Section 283.055.
(c) The commission shall adopt rules to determine the method
of payment and to ensure that access line fees are paid on a
competitively neutral and non-discriminatory basis by certificated
telecommunications providers that provide more access lines than
they purchase from an underlying provider of resold services or
unbundled network elements.
Sections 283.007-283.050 reserved for expansion
SUBCHAPTER B. RIGHT-OF-WAY FEES
Sec. 283.051. RIGHT-OF-WAY FEE. (a) Notwithstanding any
other law, a certificated telecommunications provider that provides
telecommunications services within a municipality is required to
pay as compensation to a municipality for use of the public
rights-of-way in the municipality only the amount determined by the
commission under Section 283.055.
(b) This section does not affect the right of a municipality
to initiate legal action against a certificated telecommunications
provider that uses a public right-of-way to provide local exchange
telephone service within a municipality and has not compensated the
municipality in accordance with this chapter.
(c) Fees imposed under this chapter shall constitute "a
municipal fee" or "municipal fees" within the meaning of the
Utilities Code.
Sec. 283.052. EFFECT OF PAYMENT OF RIGHT-OF-WAY FEES TO
MUNICIPALITY. (a) Subject to the requirements of Sections 283.056
and 283.057, a certificated telecommunications provider that
complies with this chapter and commission orders issued under this
chapter:
(1) may erect poles or construct conduit, cable,
switches, and related appurtenances and facilities and excavate
within a public right-of-way to provide telecommunications service;
and
(2) is not subject to municipal franchise
requirements.
(b) All use of a public right-of-way is nonexclusive and
subject to Section 283.056.
Sec. 283.053. BASE AMOUNT. (a) In determining a
municipality's "base amount" under this section, pole rental fees,
special assessments, and taxes of any kind, including ad valorem or
sales and use taxes, or other compensation not related to the use
of a public right-of-way, are not included.
(b) For purposes of determining the amount of a
municipality's right-of-way fee under Section 283.055, the "base
amount" for a municipality not described by another subsection is
the total amount of revenue received by the municipality in
franchise, license, permit, and application fees and in-kind
services or facilities from certificated telecommunications
providers in 1998 within the boundaries of the municipality,
including all newly annexed areas. The base amount prescribed under
this subsection shall include the additional compensation and the
value of in-kind services or facilities received in 1998 in
accordance with Subsection (f) specifically prescribed in
applicable agreements or ordinances effective or adopted by January
12, 1999, unless the governing body of the municipality elects
otherwise. However, that additional compensation may not become
part of the base amount before it becomes effective under the
existing franchise agreement or ordinance.
(c) The base amount for a municipality located in a county
with a population of less than 25,000 or a municipality that either
did not have an effective franchise agreement or ordinance on
January 12, 1999, or was not in existence on that date shall be, at
the election of the governing body of the municipality, equal to:
(1) an amount not greater than the statewide average
fee per line for each category of access line of the certificated
telecommunications provider with the greatest number of access
lines in that municipality, multiplied by the total number of
access lines in each category located within the boundaries of the
municipality on December 31, 1998, for a municipality in existence
on that date, or on the date of incorporation for a municipality
incorporated after that date;
(2) an amount not greater than the base amount
determined for a similarly-sized municipality in the same or an
adjacent county in which the certificated telecommunications
provider with the greatest number of access lines in the
municipality is the same for each municipality; or
(3) the total amount of revenue received by the
municipality in franchise, license, permit, and application fees
from all certificated telecommunications providers in 1998.
(d) The base amount for a municipality that was involved in
litigation relating to franchise fees with one or more certificated
telecommunications providers during any part of 1998 and that, not
later than December 1, 1999, repeals any ordinance subject to
dispute in the litigation, voluntarily dismisses with prejudice any
claims in the litigation for compensation, and agrees to waive any
potential claim for compensation under any franchise agreement or
ordinance expired or in existence on September 1, 1999, is equal
to, at the municipality's election:
(1) an amount not to exceed the state average access
line rate on a per category basis for the certificated
telecommunications provider with the greatest number of access
lines in that municipality multiplied by the total number of access
lines located within the boundaries of the municipality on December
31, 1998, including any newly annexed areas; or
(2) an amount not to exceed 21 percent of the total
sales and use tax revenue, excluding any amount received under
Section 4A or 4B, Development Corporation Act of 1979 (Article
5190.6, Vernon's Texas Civil Statutes), received by the
municipality in 1998.
(e) A litigating municipality electing to dismiss with
prejudice its claims in the litigation and repealing any ordinance
subject to dispute in the litigation does not, by making the
election, waive any defenses it may have to claims by other parties
to the litigation. A municipality in litigation relating to
franchise fees with one or more certificated telecommunications
providers during any part of 1998 that does not make an effective
election under this section shall be governed by Subsection (b).
(f) For the purpose of determining the base amount, in-kind
services or facilities provided to municipalities under existing
franchise agreements or ordinances by certificated
telecommunications providers shall be valued at one percent of the
total 1998 revenue from franchise, permit, license, and application
fees paid to the municipality under all applicable
telecommunications franchise agreements or ordinances, unless a
municipality can establish before the commission that those
services or facilities received by the municipality had a greater
value in 1998.
Sec. 283.054. EXISTING FRANCHISE AGREEMENTS AND ORDINANCES.
(a) Except as otherwise provided by this chapter, this chapter
does not affect the validity of a franchise agreement or ordinance
with a certificated telecommunications provider executed before
January 12, 1999. A municipality may continue to enforce a
franchise agreement or ordinance and to collect franchise fees and
other charges under that franchise agreement or ordinance until the
date on which the agreement or ordinance expires by its own terms
or is terminated in accordance with the terms of this section. A
provider may elect to terminate a franchise agreement or
obligations under an existing ordinance as of the effective date of
the right-of-way fee rates adopted in accordance with the
commission's rules adopted under this chapter. A provider
terminating a franchise agreement or obligations under an existing
ordinance under this section shall become governed by this chapter
on the date of termination. A termination under this subsection
does not affect the calculation of the municipality's base amount
under Section 283.053. A certificated telecommunications provider
electing to terminate an existing franchise agreement or ordinance
under this section shall provide notice to the commission and the
affected municipality not later than December 1, 1999.
(b) If a franchise agreement or ordinance in a municipality
expires or is terminated under Subsection (a) before the
commission has determined the amounts to be paid to a municipality,
the affected certificated telecommunications providers operating in
the municipality shall continue paying at the rates required under
the terms of the expired agreement or ordinance until the
commission's determination and the certificated telecommunications
provider's implementation of appropriate rates under this chapter.
(c) During the period in which a franchise agreement or
ordinance described by Subsection (a) is in effect, a certificated
telecommunications provider not subject to an existing franchise
agreement or ordinance that wants to construct facilities to offer
telecommunications services in the municipality shall pay
right-of-way fees that are competitively neutral and
non-discriminatory, consistent with the charges of the most recent
agreement or ordinance between the municipality and the
certificated telecommunications provider serving the largest number
of access lines within the municipality. The provider shall pay
those fees for the duration of that agreement or ordinance or until
the right-of-way fees established by commission rule take effect.
If the existing franchise agreement or ordinance contains a
provision requiring in-kind services or facilities, the
certificated telecommunications provider not subject to an existing
franchise agreement or ordinance shall pay an amount equal to an
additional one percent of its total fees under the applicable
agreement or ordinance in lieu of any in-kind services or
facilities, if any, that otherwise are required under the terms of
the existing franchise agreement or ordinance. However, the
municipality may not require a certificated telecommunications
provider to provide any services or facilities without compensation
or at below-market rates for the right to use a public right-of-way
or to provide telecommunications services in the municipality. On
request of the certificated telecommunications provider not subject
to an existing franchise agreement or ordinance, the commission
shall convert the compensation under the existing franchise
agreement or ordinance to a fee per access line on a competitively
neutral and non-discriminatory basis, and the certificated
telecommunications provider may elect to pay the municipality on a
fee per access line basis rather than the manner of compensation
provided under the existing franchise agreement or ordinance.
Sec. 283.055. DETERMINATION OF FEES BY COMMISSION. (a) Not
later than November 1, 1999, the commission shall establish not
more than three categories of access lines for state-wide use.
(b) Not later than March 1, 2000, the commission shall
establish:
(1) for each municipality, rates per access line by
category for the use of the rights-of-way in that municipality;
and
(2) the statewide average of those rates per access
line by category for each certificated telecommunications provider,
if necessary.
(c) The rates when applied to the total number of access
lines by category in the municipality shall be equal to the base
amount.
(d) Not later than December 1, 1999, a municipality that
wants to effect an allocation of the base amount over specific
access line categories to be assessed rates shall notify the
commission of the desired allocation. The commission shall
establish an allocation of the base amount over the categories of
access lines if a municipality does not file its proposed
allocation within 90 days. A municipality may request a
modification of the commission's allocation not more than once
every 24 months by notifying the commission and all affected
certificated telecommunications providers in September of that year
that the municipality wants to change the allocation for the next
calendar year. A municipality's allocation shall be implemented
unless, on complaint by an affected certificated telecommunications
provider, the commission determines that the allocation is not just
and reasonable, is not competitively neutral, or is discriminatory.
(e) Rates imposed under this section and the allocation
among certificated telecommunications providers must be exercised
in a competitively neutral manner, may not unduly impair
competition, must be non-discriminatory, and must comply with state
and federal law. The commission shall determine the applicable
rates for each municipality for each category, taking into account
the allocation under Subsection (d) and the type, use, and function
of access lines.
(f) Certificated telecommunications providers shall pay to
the municipality a quarterly amount calculated monthly based on the
access line rates established by the commission under this section
and the number of access lines as reflected in the reports filed
under Subsection (j). The providers shall make the quarterly
payment not later than 45 days after the end of the quarter.
(g) Beginning 24 months after the date the commission
establishes rates per access line, the commission shall annually
adjust the rates per access line for each municipality by an amount
equal to one-half the consumer price index. At that time, the
commission shall provide each certificated telecommunications
provider and municipality with the adjusted monthly rates for each
category of access line.
(h) On an annual basis, an affected municipality may provide
notice to the commission to decline all or any portion of any
increase in the per category access line rates.
(i) A certificated telecommunications provider may not be
required to remit a right-of-way fee to a municipality on those
access lines that have been resold, leased, or otherwise provided
to another certificated telecommunications provider, if the
underlying certificated telecommunications provider supplying those
services or facilities has been furnished with adequate proof that
the provider of services to the end-use customer will directly
remit to the municipality a right-of-way fee based on those access
lines.
(j) On a quarterly basis, each certificated
telecommunications provider shall file a report with the commission
that shows the number of access lines, including access lines by
category, that the provider has within each municipality at the end
of each month of the quarter. The provider shall include with the
report a certified statement from an authorized officer or duly
authorized representative of the provider stating that the
information contained in the report is true and correct to the best
of the officer's or representative's knowledge and belief after
inquiry. On request and subject to the confidentiality protections
of Section 283.005, each certificated telecommunications provider
shall provide each affected municipality with a copy of the report
required by this subsection.
(k) On request of the commission and to the extent
available, the report required by Subsection (j) shall specifically
identify access lines that are provided by means of resold
services or unbundled facilities to another certificated
telecommunications provider who is not an end-use customer and the
identity of the certificated telecommunications providers obtaining
the resold services or unbundled facilities to provide services to
end-use customers. A provider may not include in its monthly count
of access lines and is not required to remit a right-of-way fee to
the municipality on access lines that are resold, leased, or
otherwise provided to another certificated telecommunications
provider if the provider receives adequate proof that the provider
leasing or purchasing the access lines will include the access
lines in its monthly count and remit payment on those access lines
to the municipality.
(l) The commission may use a report required under
Subsection (j) only to verify the number of access lines that serve
premises within the municipality.
(m) Notwithstanding any other provision of this chapter,
payment by a certificated telecommunications provider that complies
with the terms of an unexpired franchise agreement or right-of-way
ordinance that applies to the provider satisfies the payment
attributable to the provider required by this chapter.
(n) A municipality may not demand or require from a
certificated telecommunications provider services, facilities, or
goods without compensation or at below-market rates.
(o) A certificated telecommunications provider shall, to the
extent required, implement commission established access line rates
not later than the 90th day after the date the commission
establishes the access line rates under this chapter.
Sec. 283.056. MUNICIPAL AUTHORIZATIONS; PROHIBITION ON OTHER
FEES AND CHARGES. (a) A municipality may not require a
certificated telecommunications provider to:
(1) pay any compensation other than the fee authorized
by Section 283.055, including an application, permit, excavation,
or inspection fee, for the right to use a public right-of-way to
provide telecommunications services in the municipality; or
(2) provide any services or facilities for the right
to use a public right-of-way or to provide telecommunications
services in the municipality.
(b) Notwithstanding any other law or any other provision of
this chapter, a municipality may require the issuance of a
construction permit without cost to a certificated
telecommunications provider locating facilities in or on public
rights-of-way within the municipality. The terms of the permit
shall be consistent with construction permits issued to other
persons excavating in a public right-of-way.
(c) A municipality may exercise those police power-based
regulations in the management of a public right-of-way that apply
to all persons within the municipality. A municipality may
exercise police power-based regulations in the management of the
activities of certificated telecommunications providers within a
public right-of-way only to the extent that they are reasonably
necessary to protect the health, safety, and welfare of the public.
Police power-based regulation of certificated telecommunications
providers may not include activities that are governed by this
chapter or are within the sole business discretion of the
certificated telecommunications provider. In addition, any police
power-based regulation must be competitively neutral and may not be
unreasonable or discriminatory. A municipality specifically may not
impose regulations on certificated telecommunications providers
that are not authorized by this chapter, including:
(1) requirements that particular business offices be
located in the municipality;
(2) requirements for filing reports and documents with
the municipality that are not required by state law to be filed
with the municipality and that are not related to the use of a
right-of-way;
(3) inspection of a provider's business records except
to the extent necessary to conduct an authorized review of the
provider to ensure compliance with the access line reporting
requirements of this chapter if commenced within 90 days after the
filing of a certificated telecommunications provider's annual
report of access lines; and
(4) approval of transfers of ownership or control of a
provider's business, except that a municipality may require that a
provider maintain current point of contact information and provide
notice of a transfer within a reasonable time.
(d) In the exercise of its lawful regulatory authority, a
municipality shall promptly process each valid and administratively
complete application of a certificated telecommunications provider
for any permit, license, or consent to excavate, set poles, locate
lines, construct facilities, make repairs, affect traffic flow,
obtain zoning or subdivision regulation approvals, or for other
similar approvals, and shall make every reasonable effort to not
delay or unduly burden that provider in the timely conduct of its
business.
(e) If there is an emergency necessitating response work or
repair, a certificated telecommunications provider may begin that
repair or emergency response work or take any action required under
the circumstances, provided that the certificated
telecommunications provider notifies the affected municipality as
promptly as possible after beginning the work and later acquires
any approval required by a municipal ordinance applicable to
emergency response work.
(f) The compensation paid under this chapter is in lieu of
any permit, license, approval, inspection, or other similar fee or
charge, including all general business license fees customarily
assessed by a municipality for the use of a public right-of-way
against persons operating telecommunications-related businesses.
The compensation paid under this chapter constitutes full
compensation to a municipality for all of a certificated
telecommunications provider's facilities located within a public
right-of-way, including interoffice transport and other
transmission media that do not terminate at an end-use customer's
premises, even though those types of lines are not used in the
calculation of the compensation. This chapter may not be construed
to affect the ad valorem taxation of a certificated
telecommunications provider's facilities or to permit the ad
valorem taxation of a certificated telecommunication provider's
occupancy of a public right-of-way.
Sec. 283.057. INDEMNITY. (a) Certificated
telecommunications providers shall indemnify and hold the
municipality and its officers and employees harmless against any
and all claims, lawsuits, judgments, costs, liens, losses,
expenses, fees (including reasonable attorney's fees and costs of
defense), proceedings, actions, demands, causes of action,
liability, and suits of any kind and nature, including personal or
bodily injury (including death), property damage, or other harm for
which recovery of damages is sought that is found by a court of
competent jurisdiction to be caused solely by the negligent act,
error, or omission of the certificated telecommunications provider,
any agent, officer, director, representative, employee, affiliate,
or subcontractor of the certificated telecommunications provider,
or their respective officers, agents, employees, directors, or
representatives, while installing, repairing, or maintaining
facilities in a public right-of-way. The indemnity provided by
this subsection does not apply to any liability resulting from the
negligence of the municipality, its officers, employees,
contractors, or subcontractors. If a certificated
telecommunications provider and the municipality are found jointly
liable by a court of competent jurisdiction, liability shall be
apportioned comparatively in accordance with the laws of this state
without, however, waiving any governmental immunity available to
the municipality under state law and without waiving any defenses
of the parties under state law. This section is solely for the
benefit of the municipality and certificated telecommunications
provider and does not create or grant any rights, contractual or
otherwise, to any other person or entity.
(b) A certificated telecommunications provider or
municipality shall promptly advise the other in writing of any
known claim or demand against the certificated telecommunications
provider or the municipality related to or arising out of the
certificated telecommunications provider's activities in a public
right-of way.
(c) Municipalities with franchise agreements or ordinances
applicable to certificated telecommunications providers in effect
under a general-use ordinance adopted before January 12, 1999, and
after July 1, 1998, and having 1.3 million access lines or more
within the municipality on September 1, 1999, may continue to
enforce the indemnity provision contained in those franchise
agreements or ordinances until the earlier of the date the
franchise agreements or ordinances expire or December 31, 2003. A
certificated telecommunications provider providing access lines in
a municipality described by this subsection is also subject to the
indemnity provided by this section.
Sec. 283.058. ADDITIONAL COMMISSION JURISDICTION. The
commission shall have the jurisdiction over municipalities and
certificated telecommunications providers necessary to enforce this
chapter and to ensure that all other legal requirements are
enforced in a competitively neutral, non-discriminatory, and
reasonable manner.
SECTION 2. The Public Utility Commission of Texas shall
determine the access line rates by category for a municipality
described by Section 283.055, Local Government Code, as added by
this Act, as soon as possible after the effective date of this Act
but not later than 180 days after that date.
SECTION 3. (a) Notwithstanding any provision of Chapter
283, Local Government Code, as added by this Act, to the extent a
municipal regulation, ordinance, resolution, or charter provision
is applicable to certificated telecommunications providers, the
municipal regulation, ordinance, resolution, or charter provision
is preempted to the extent it:
(1) conflicts with Chapter 283, Local Government Code,
as added by this Act; or
(2) is not specifically authorized by Section 283.056,
Local Government Code, as added by this Act.
(b) A city charter provision in effect on January 12, 1999,
that does not conflict with Chapter 283, Local Government Code, as
added by this Act, may be specifically re-adopted in accordance
with Chapter 9, Local Government Code.
SECTION 4. This Act takes effect September 1, 1999.
SECTION 5. The importance of this legislation and the
crowded condition of the calendars in both houses create an
emergency and an imperative public necessity that the
constitutional rule requiring bills to be read on three several
days in each house be suspended, and this rule is hereby suspended.