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A BILL TO BE ENTITLED
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AN ACT
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relating to state-issued certificates of franchise authority to |
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provide cable service and video service. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Section 66.003(a), Utilities Code, is amended to |
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read as follows: |
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(a) An entity or person seeking to provide cable service or |
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video service in this state [after September 1, 2005,] shall file an |
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application for a state-issued certificate of franchise authority |
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with the commission as required by this section. An entity |
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providing cable service or video service under a franchise |
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agreement with a municipality is not subject to this subsection |
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with respect to such municipality until the franchise agreement is |
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terminated under Section 66.004 or until the franchise agreement |
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expires[, except as provided by Section 66.004]. |
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SECTION 2. Section 66.004, Utilities Code, is amended by |
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amending Subsections (a), (c), and (f) and adding Subsection (b-1) |
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to read as follows: |
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(a) A cable service provider or a video service provider |
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that currently has or had previously received a franchise to |
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provide cable service or video service with respect to a |
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municipality may [such municipalities is not eligible to] seek a |
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state-issued certificate of franchise authority to provide service |
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to the municipality under this section [chapter as to those
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municipalities until the expiration date of the existing franchise
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agreement, except as provided by Subsections (b) and (c)]. |
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(b-1) Beginning September 1, 2011, a cable service provider |
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or video service provider that was not allowed to or did not |
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terminate a municipal franchise under Subsection (b) may elect to |
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terminate that franchise and seek a state-issued certificate of |
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franchise authority for the area served under the municipal |
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franchise by providing written notice to the commission and the |
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affected municipality before January 1, 2012. The municipal |
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franchise is terminated on the date the commission issues the |
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state-issued certificate of franchise authority. |
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(c) A cable service provider [that serves fewer than 40
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percent of the total cable customers in a municipal franchise area
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and] that elects under Subsection (b) or (b-1) to terminate an |
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existing municipal franchise is responsible for remitting to the |
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affected municipality before the 91st day after the date the |
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municipal franchise is terminated any accrued but unpaid franchise |
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fees due under the terminated franchise. If the cable service |
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provider has credit remaining from prepaid franchise fees, the |
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provider may deduct the amount of the remaining credit from any |
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future fees or taxes it must pay to the municipality, either |
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directly or through the comptroller. |
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(f) Except as provided in this chapter, nothing in this |
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chapter is intended to abrogate, nullify, or adversely affect in |
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any way the contractual rights, duties, and obligations existing |
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and incurred by a cable service provider or a video service provider |
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before the enactment of this chapter, or before the date the |
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provider terminates a franchise under Subsection (b-1), as |
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applicable, and owed or owing to any private person, firm, |
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partnership, corporation, or other entity including without |
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limitation those obligations measured by and related to the gross |
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revenue hereafter received by the holder of a state-issued |
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certificate of franchise authority for services provided in the |
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geographic area to which such prior franchise or permit applies. |
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All liens, security interests, royalties, and other contracts, |
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rights, and interests in effect on September 1, 2005, or the date a |
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franchise is terminated under Subsection (b-1) shall continue in |
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full force and effect, without the necessity for renewal, |
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extension, or continuance, and shall be paid and performed by the |
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holder of a state-issued certificate of franchise authority, and |
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shall apply as though the revenue generated by the holder of a |
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state-issued certificate of franchise authority continued to be |
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generated pursuant to the permit or franchise issued by the prior |
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local franchising authority or municipality within the geographic |
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area to which the prior permit or franchise applies. It shall be a |
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condition to the issuance and continuance of a state-issued |
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certificate of franchise authority that the private contractual |
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rights and obligations herein described continue to be honored, |
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paid, or performed to the same extent as though the cable service |
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provider continued to operate under its prior franchise or permit, |
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for the duration of such state-issued certificate of franchise |
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authority and any renewals or extensions thereof, and that the |
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applicant so agrees. Any person, firm, partnership, corporation, |
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or other entity holding or claiming rights herein reserved may |
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enforce same by an action brought in a court of competent |
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jurisdiction. |
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SECTION 3. Section 66.005(b), Utilities Code, is amended to |
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read as follows: |
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(b) The franchise fee payable under this section is to be |
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paid quarterly, within 45 days after the end of the quarter for the |
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preceding calendar quarter. Each payment shall be accompanied by a |
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summary explaining the basis for the calculation of the fee. A |
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municipality may review the business records of the cable service |
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provider or video service provider to the extent necessary to |
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ensure compensation in accordance with Subsection (a), provided |
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that the municipality may only review records that relate to the |
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48-month period preceding the date of the last franchise fee |
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payment. Each party shall bear the party's own costs of the |
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examination. A municipality may, in the event of a dispute |
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concerning compensation under this section, bring an action in a |
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court of competent jurisdiction. |
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SECTION 4. Section 66.006, Utilities Code, is amended by |
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amending Subsections (a), (b), (c), and (d) to read as follows: |
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(a) Until the expiration or termination of the incumbent |
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cable service provider's agreement, the holder of a state-issued |
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certificate of franchise authority shall pay a municipality in |
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which it is offering cable service or video service the same cash |
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payments on a per subscriber basis as required by the incumbent |
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cable service provider's franchise agreement. All cable service |
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providers and all video service providers shall report quarterly to |
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the municipality the total number of subscribers served within the |
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municipality. The amount paid by the holder of a state-issued |
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certificate of franchise authority shall be calculated quarterly by |
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the municipality by multiplying the amount of cash payment under |
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the incumbent cable service provider's franchise agreement by a |
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number derived by dividing the number of subscribers served by a |
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video service provider or cable service provider by the total |
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number of video or cable service subscribers in the municipality. |
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Such pro rata payments are to be paid quarterly to the municipality |
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within 45 days after the end of the quarter for the preceding |
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calendar quarter. |
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(b) On the expiration or termination of the incumbent cable |
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service provider's agreement, the holder of a state-issued |
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certificate of franchise authority shall pay a municipality in |
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which it is offering cable service or video service one percent of |
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the provider's gross revenues, as defined by this chapter, or at the |
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municipality's election, the per subscriber fee that was paid to |
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the municipality under the expired or terminated incumbent cable |
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service provider's agreement, in lieu of in-kind compensation and |
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grants. Payments under this subsection shall be paid in the same |
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manner as outlined in Section 66.005(b). |
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(c) All fees paid to municipalities under this section are |
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paid in accordance with 47 U.S.C. Sections 531 and 541(a)(4)(B) and |
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may be used by the municipality as allowed by federal law. These [;
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further, these] payments are not chargeable as a credit against the |
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franchise fee payments authorized under this chapter, unless the |
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fees are not used by a municipality for the purposes described in 47 |
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U.S.C. Section 542(g)(2)(C). A municipality that receives fees |
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under this section must maintain revenue from those fees in a |
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separate account established for that purpose and may not commingle |
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that revenue with any other money. A municipality that receives |
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fees under this section must maintain detailed records of deposits |
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to and disbursements from the account established under this |
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subsection. Records of disbursements from the account must include |
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the payee and purpose of this disbursement. No later than January 31 |
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of each year, a municipality shall provide each cable service or |
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video service provider that pays fees to a municipality under this |
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section a detailed accounting of the deposits to and disbursement |
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from the account established under this subsection for the previous |
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calendar year. |
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(d) Cable services to community public buildings, such as |
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municipal buildings and public schools, [The following services] |
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shall continue to be provided by the cable provider that was |
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furnishing services pursuant to its municipal cable franchise |
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[until January 1, 2008, or] until the expiration or termination |
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[term] of the franchise [was to expire, whichever is later, and
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thereafter as provided in Subdivisions (1) and (2) below:
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[(1)
institutional network capacity, however defined
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or referred to in the municipal cable franchise but generally
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referring to a private line data network capacity for use by the
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municipality for noncommercial purposes, shall continue to be
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provided at the same capacity as was provided to the municipality
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prior to the date of the termination, provided that the
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municipality will compensate the provider for the actual
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incremental cost of the capacity; and
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[(2)
cable services to community public buildings,
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such as municipal buildings and public schools, shall continue to
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be provided to the same extent provided immediately prior to the
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date of the termination]. Upon [Beginning on January 1, 2008, or] |
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the expiration or termination of the franchise agreement, |
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[whichever is later,] a provider that provides the services may |
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deduct from the franchise fee to be paid to the municipality an |
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amount equal to the actual incremental cost of the services if the |
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municipality requires the services after that date. Such cable |
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service generally refers to the existing cable drop connections to |
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such facilities and the tier of cable service provided pursuant to |
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the franchise at the time of the expiration or termination. |
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SECTION 5. Section 66.009(h), Utilities Code, is amended to |
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read as follows: |
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(h) Where technically feasible, the holder of a |
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state-issued certificate of franchise authority that is not an |
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incumbent cable service provider and an incumbent cable service |
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provider, including an incumbent cable service provider that holds |
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a state-issued certificate of franchise authority issued under |
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Section 66.004(b-1), shall use reasonable efforts to interconnect |
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their cable or video systems for the purpose of providing PEG |
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programming. Interconnection may be accomplished by direct cable, |
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microwave link, satellite, or other reasonable method of |
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connection. The holder [Holders] of a state-issued certificate of |
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franchise authority and the incumbent cable service provider |
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[providers] shall negotiate in good faith, and the incumbent cable |
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service provider [providers] may not withhold interconnection of |
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PEG channels. |
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SECTION 6. On September 1, 2011, a municipality that has |
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received fees under section 66.006, Utilities Code, as it existed |
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before the effective date of this Act, and has not maintained |
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revenue from those fees in a separate account shall transfer to a |
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separate account the amount of revenue from fees collected under |
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Section 66.006, Utilities Code, that have not yet been expended for |
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purposes authorized under Section 66.006, Utilities Code. |
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SECTION 7. This Act takes effect September 1, 2011. |