76R12535 CBH-F                           
         By Counts                                             H.B. No. 2692
         Substitute the following for H.B. No. 2692:
         By Counts                                         C.S.H.B. No. 2692
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to universal service revenue recovery and affiliated
 1-3     activities of local exchange telephone companies.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Subchapter B, Chapter 56, Utilities Code, is
 1-6     amended by adding Sections 56.027 and 56.028 to read as follows:
 1-7           Sec. 56.027.  UNIVERSAL SERVICE CHARGE SURCHARGE.  A local
 1-8     exchange company may recover its universal service fund assessment
 1-9     through a surcharge added to the bills of the local exchange
1-10     company's customers.
1-11           Sec. 56.028.  UNIVERSAL SERVICE FUND REIMBURSEMENT FOR
1-12     CERTAIN INTRALATA SERVICE.  On request of a local exchange company
1-13     that is not an electing company under Chapter 58 or 59, the
1-14     commission shall provide reimbursement through the universal
1-15     service fund for reduced rates for intraLATA interexchange high
1-16     capacity (1.544 Mbps) service for entities described by Section
1-17     58.253(a).  The amount of reimbursement shall be equal to the
1-18     difference between the company's tariffed rates for that service on
1-19     January 1, 1998, and the lowest rate offered for that service by
1-20     any company electing incentive regulation under Chapter 58.
1-21           SECTION 2.  Subchapter I, Chapter 60, Utilities Code, is
1-22     amended by adding Sections 60.164 and 60.165 to read as follows:
1-23           Sec. 60.164.  PERMISSIBLE JOINT MARKETING.  Except as
1-24     prescribed by Chapters 61 and 63, the commission may not adopt a
 2-1     rule or order that would prohibit a local exchange company from
 2-2     marketing or selling the company's products and services jointly
 2-3     with the products and services of an affiliate in a manner
 2-4     permitted by federal law or applicable rules of the Federal
 2-5     Communications Commission.
 2-6           Sec. 60.165.  AFFILIATE RULES.  (a)  Except as prescribed by
 2-7     Chapters 61 and 63, the commission may not adopt a rule or order
 2-8     that would prescribe for a local exchange company an affiliate
 2-9     rule, including an accounting rule, cost allocation rule, or
2-10     structural separation rule, that is more burdensome than prescribed
2-11     by federal law or applicable rules of the Federal Communications
2-12     Commission.
2-13           (b)  Notwithstanding any other provision of this title, the
2-14     commission may not attribute or impute to a local exchange company
2-15     a price discount offered by an affiliate to the affiliate's
2-16     customers.
2-17           SECTION 3.  The importance of this legislation and the
2-18     crowded condition of the calendars in both houses create an
2-19     emergency and an imperative public necessity that the
2-20     constitutional rule requiring bills to be read on three several
2-21     days in each house be suspended, and this rule is hereby suspended,
2-22     and that this Act take effect and be in force from and after its
2-23     passage, and it is so enacted.