SRC-AXB H.B. 1777 76(R)   BILL ANALYSIS


Senate Research Center   H.B. 1777
By: Wolens (Lucio)
Economic Development
5/13/1999
Engrossed


DIGEST 

Currently, there is no statutory provision specifying the method and level
of compensation that a municipality may collect from a telecommunications
provider (provider) for the use of the public rights-of-way and the right
to provide services within that municipality. The purpose of this bill is
to provide policies and guidelines relating to compensation that a
municipality may receive from a provider within the municipality. H.B. 1777
provides for municipalities to be compensated by certificated
telecommunications providers through franchise fees.  

PURPOSE

As proposed, H.B.1777 provides for municipalities to be compensated by
certificated telecommunications providers through franchise fees.  

RULEMAKING AUTHORITY

Rulemaking authority is granted to the Public Utility Commission of Texas
in SECTION 1 (Sections 283.003(b) and 283.006(c), Local Government Code) of
this bill. 

SECTION BY SECTION ANALYSIS

SECTION 1.  Amends Title 9A, Local Government Code, by adding Chapter 283,
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.  Sets forth the policy of Texas
regarding competition and telecommunication (telecom) services.  Sets forth
the policy of Texas regarding the authority of an compensation to
municipalities.  Provides that the purpose of this chapter is to establish
a certain uniform method for compensating municipalities for the use of a
public right-of-way by certificated telecom providers. 

Sec.  283.002.  DEFINITIONS.  Defines "access line," "certificated
telecommunications provider," "commission," "consumer price index," "local
exchange telephone service," and "public right-of-way." 

Sec.  283.003.  COMMISSION REVIEW.  Requires the Public Utility Commission
of Texas (PUCT) to determine, not later than September 1, 2002, whether
certain changes justify a modification in categories of access lines or the
adoption of an "access line" definition. Prohibits PUCT from beginning a
review before March 1, 2002.  Authorizes PUCT, by rule, to modify the
"access line" definition and categories to ensure competitive neutrality
and nondiscriminatory application and to maintain consistent levels of
compensation.  Requires PUCT to make the determination required by this
section at least once every three years. 

Sec.  283.004.  APPLICATION.  Provides that this chapter only applies to
municipal regulations and fees imposed on and collected from certificated
telecom providers. 

 Sec.  283.005.  INFORMATION.  Authorizes PUCT to collect and compile
certain information necessary to implement this section, and requires the
maintenance of this information's confidentiality.  Sets forth provisions
for complying confidentiality procedures 

Sec.  283.006.  FEE REQUIREMENT FOR USE OF RIGHT-OF-WAY.  Sets forth
provisions to exempt certain certificated telecom providers from paying
required fees. Provides that this section does not affect the number of
access lines counted and reported to PUCT.  Requires PUCT to adopt rules to
determine methods of payment and ensure payments are neutral and
non-discriminatory 

SUBCHAPTER B.  RIGHT-OF-WAY FEES  

Sec.  283.051.  RIGHT-OF-WAY FEE.  Sets forth limitations on a fee certain
certificated telecom providers are required to pay.  Sets forth municipal
rights which this section does not affect.  Provides that fees imposed
under this chapter constitute municipal fees within the meaning of the
Utilities Code. 

Sec.  283.052.  EFFECT OF PAYMENT OF RIGHT-OF-WAY FEES TO MUNICIPALITY.
Sets forth authorizations for a certificated telecom provider that complies
with this chapter and PUCT orders.  Provides that all use of a public
right-of-way is nonexclusive and subject to Section 283.056, Local
Government Code. 

Sec.  283.053.  BASE AMOUNT.  Sets forth fees and taxes which are not
included in a municipality's base amount.  Describes the "base amount."
Sets forth provisions for the base amount for municipalities, with a
maximum population of 25,000.  Provides that a litigating municipality, by
making certain elections, does not waive any defense it may have to claims
by other parties to the litigation.  Sets forth conditions which prevent a
litigating municipality from waiving certain defenses.  Sets forth
conditions which require a litigating municipality to be governed by
Subsection (b).  Sets forth required values of in-kind services or
facilities provided to certain municipalities, for the purpose of
determining the base amount. 

Sec.  283.054.  EXISTING FRANCHISE AGREEMENTS AND ORDINANCES.  Provides
that this chapter does not affect the validity of certain franchise
agreements or ordinances executed before January 12, 1999.  Authorizes a
municipality to continue to enforce agreements or ordinances and collect
fees and other charges until a certain time.  Sets forth provisions
requiring a provider to be governed by this chapter.  Provides that a
termination under this subsection does not affect the calculation of the
municipality's base amount.  Sets forth notification requirements.  Sets
forth provisions regarding expired or terminated franchise agreements or
obligations.  Sets forth conditions under which certain certificated
telecom providers are required to pay certain right-of-way fees, and makes
a provision for the payment.  Prohibits the municipality from requiring a
telecom provider to provide services or facilities without compensation.
Sets forth conditions which require PUCT to convert certain compensation to
a fee per access line on a competitively neutral or nondiscriminatory
basis.  Authorizes a certificated telecom provider to elect to pay the
municipality in a certain manner. 

Sec.  283.055.  DETERMINATION OF FEES BY COMMISSION.  Requires PUCT to
establish, no later than November 1, 1999, a maximum of three categories of
access lines for statewide use.  Requires PUCT to establish by March 1,
2000 certain rates per access line. Requires the rates when applied to the
total number of access lines by category to be equal to the base amount.
Sets forth notification requirements.  Requires PUCT to establish an
allocation of the base amount over the categories of access lines, under
certain conditions. Authorizes a municipality to request certain
modifications.  Sets forth requirements regarding a municipality's
allocation.  Prohibits certain rates from unduly impairing competition, and
requires them to be non-discriminatory and to comply with state and federal
law.  Requires PUCT to determine certain rates.  Sets forth required
payments from certificated telecom providers to the municipality.  Requires
the providers to make the quarterly payments within a certain deadline.
Sets forth timelines for PUCT regarding rate adjustments, and requires PUCT
to provide certain entities with the adjusted rates.  Authorizes an
affected municipality  to provide notice to PUCT to decline certain rate
increases.  Sets forth limitations for payments made by a certificated
telecom provider.  Requires certificated telecom providers to file a
certain report with PUCT.  Requires the report to specifically identify
certain access lines.  Requires the report to be provided to the affected
municipalities under certain conditions.  Authorizes PUCT to use a certain
report to verify the number of access lines that serve premises within the
municipality.  Sets forth conditions which satisfy the payment attributable
to the provider required by this chapter.  Prohibits a municipality from
demanding or requiring certain goods without compensation or at
below-market rates. Requires a certificated telecom provider to implement
PUCT established access line rates by a certain deadline. 

Sec.  283.056.  MUNICIPAL AUTHORIZATIONS; PROHIBITION ON OTHER FEES AND
CHARGES.  Prohibits a municipality from requiring certain actions of a
certificated telecom provider.  Authorizes a municipality to require the
issuance of a free construction permit to certain entities.  Requires the
terms of the permit to be consistent with construction permits issued to
other persons excavating in a public right-of-way.  Sets forth provisions
for a municipality to exercise police power-based regulations.  Prohibits a
municipality from imposing regulations on certain certificated telecom
providers that are not authorized by this chapter.  Requires a municipality
to take certain actions in the process of application review, and to make
every effort to not delay or unduly burden the provider in the timely
conduct of its business.  Sets forth provisions regarding an emergency
which necessitates response work or repair.  Sets forth provisions
regarding compensation.  Prohibits this chapter from being construed to
affect certain ad valorem taxation. 

Sec.  283.057.  INDEMNITY.  Requires certificated telecom providers to
indemnify and hold certain entities harmless against certain issues.
Provides that the indemnity provided by this subsection does not apply to
certain liability issues.  Sets forth provisions for joint liability.
Provides that this section is solely for the benefit of municipalities and
certificated telecom providers, and does not create or grant any rights to
any other person or entity.  Sets forth notification requirements regarding
certain claims or demands.  Sets forth authorizations for certain
municipalities with franchise agreements or ordinances.  Subjects certain
certificated telecom providers to the indemnity provided by this section. 

Sec.  283.058.  ADDITIONAL COMMISSION JURISDICTION.  Requires PUCT to have
certain jurisdiction to enforce this chapter and ensure that certain
requirements are enforced in a certain manner. 

SECTION 2.  Requires PUCT to determine the access line rates by category
for a municipality, within a certain timeframe. 

SECTION 3.  Sets forth provisions regarding the preempting of certain
regulations, ordinances, resolutions, or charter provisions.  Authorizes
the re-adoption of a city charter provision, under certain circumstances. 

SECTION 4.  Effective date:  September 1, 1999.

SECTION 5.  Emergency clause.