By: Hilderbran H.B. No. 3384

A BILL TO BE ENTITLED

AN ACT

relating to the eligibility for and distributions of universal service funds.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:

SECTION 1. Section 56.001, Utilities Code, is amended by adding Subdivisions (3) and (4) to read as follows:

(3) "Unsubsidized competitor" means a facilities-based provider of voice telephony service that does not receive support from a plan established under Section 56.021(1).

(4) "Voice telephony service" means a voice service that satisfies the requirements of 47 CFR 54.101.

SECTION 2. Section 56.021, Utilities Code, is amended to read as follows:

Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The commission shall adopt and enforce rules requiring local exchange companies to establish a universal service fund to:

(1) assist telecommunications providers in providing basic local telecommunications service at reasonable rates in high cost rural areas that are not served by an unsubsidized competitor under two plans:

(A) the Texas High Cost Universal Service Plan (16 T.A.C. Section 26.403); and

(B) the Small and Rural Incumbent Local Exchange Company Universal Service Plan (16 T.A.C. Section 26.404);

(2) reimburse the telecommunications carrier that provides the statewide telecommunications relay access service under Subchapter D;

(3) finance the specialized telecommunications assistance program established under Subchapter E;

(4) reimburse the department, the Department of Assistive and Rehabilitative Services [Texas Commission for the Deaf and Hard of Hearing], and the commission for costs incurred in implementing this chapter [and Chapter 57];

(5) reimburse a telecommunications carrier providing lifeline service as provided by Section 55.015 [47 C.F.R. Part 54, Subpart E, as amended];

(6) finance the implementation and administration of an integrated eligibility process created under Section 17.007 for customer service discounts relating to telecommunications services, including outreach expenses the commission determines are reasonable and necessary;

(7) reimburse a designated provider under Subchapter F;

(8) reimburse a successor utility under Subchapter G; and

(9) finance the program established under Subchapter H.

SECTION 3. Section 56.023(a), Utilities Code, is amended to read as follows:

(a) The commission shall:

(1) in a manner that assures reasonable rates for basic local telecommunications service, adopt eligibility criteria and review procedures, including a method for administrative review, the commission finds necessary to fund the universal service fund and make distributions from that fund;

(2) determine which telecommunications providers meet the eligibility criteria;

(3) determine the amount of and approve a procedure for reimbursement to telecommunications providers of revenue lost in providing lifeline [tel-assistance] service under Section 55.015 [Subchapter C];

(4) establish and collect fees from the universal service fund necessary to recover the costs the department and the commission incur in administering this chapter [and Chapter 57]; and

(5) approve procedures for the collection and disbursal of the revenue of the universal service fund.

SECTION 4. Section 56.031, Utilities Code, as effective September 1, 2013, is amended to read as follows:

Sec. 56.031. ADJUSTMENTS: TEXAS HIGH COST UNIVERSAL SERVICE PLAN. The commission may revise the monthly per line support amounts to be made available from the Texas High Cost Universal Service Plan for an exchange of a local exchange company or cooperative that is not ineligible for support under Section 56.0315 [and from the Small and Rural Incumbent Local Exchange Company Universal Service Plan at any time after September 1, 2007,] after notice and an opportunity for hearing. In determining appropriate monthly per line support amounts, the commission shall consider the adequacy of basic rates to support universal service.

SECTION 5. Subchapter B, Chapter 56, Utilities Code, is amended by adding Section 56.0315 to read as follows:

Sec. 56.0315. INELIGIBILITY FOR SUPPORT. (a) A local exchange company or cooperative that serves 31,000 or more access lines is not eligible to receive support from a plan established under Section 56.021(1) in an exchange in which 50 percent or more of the residents in the exchange are offered voice telephony service by one or more unsubsidized competitors.

(b) When the commission determines that an exchange is no longer eligible for support under Subsection (a), the commission shall withdraw support through a reasonable transition period of not more than three years.

(c) The commission shall conduct a contested case to determine the eligibility of an exchange for support under this section on receipt of a petition by an unsubsidized competitor who claims the exchange is ineligible for support under this section.

(d) This section does not apply to a local exchange company or cooperative that, before October 1, 2013, commits to the commission that the company or cooperative will eliminate the company's or cooperative's support from a plan established under Section 56.021(1) beginning January 1, 2017, or before that date.

SECTION 6. Sections 56.032(b), (c), (d), (e), (f), and (h), Utilities Code, as added by Chapter 535 (H.B. 2603), Acts of the 82nd Legislature, Regular Session, 2011, are amended to read as follows:

(b) Except as provided by Subsections [(c),] (d), (e), and (f), the commission may revise the monthly support amounts to be made available from the Small and Rural Incumbent Local Exchange Company Universal Service Plan [by revising the monthly per line support amounts,] after notice and an opportunity for hearing. In determining appropriate monthly [per line] support amounts, the commission shall consider the adequacy of basic rates to support universal service.

(c) A company receiving a fixed monthly support amount prescribed in a final order issued by the commission in Docket No. 39643 shall continue to receive that fixed support amount until the amount is revised under Subsection (b). [On the written request of a small or rural incumbent local exchange company that receives monthly per-line support amounts, the commission shall disburse funds to the company in fixed monthly amounts based on the company's annualized amount of recovery for the calendar year ending on December 31, 2010. A company may submit only one request under this subsection and must submit the request on or before December 31, 2011.]

(d) For each [On the written request of a] small or rural incumbent local exchange company that is not an electing company under Chapter 58 or 59, or receiving fixed support amounts described by Subsection (c), the commission annually shall set the company's monthly support amounts for the following 12 months by dividing by 12 the annualized support amount calculated under this subsection. The commission shall calculate the annualized amount:

(1) for the initial 12-month period for which a company makes an election under this subsection, by[:

[A] determining the annualized support amount received by the company as of January 1, 2013 [calculated for the requestor in the final order issued by the commission in Docket No. 18516; and

[(B) adjusting the support amount determined under Paragraph (A) at the beginning of each calendar year by a factor equal to the most recent consumer price index published at that time, beginning with the 1999 calendar year and ending in the year the company makes an election under this subsection]; and

(2) for [the 12 month period following the initial period for which a company made an election under this subsection and for] subsequent 12-month periods, by adjusting the most recent annualized support amount calculated by the commission by a factor equal to the percentage change in the consumer price index for the most recent 12-month period.

(e) The [If a company elects to receive monthly support amounts under Subsection (d), the] commission, on its own motion or on the written request of the company, may initiate a proceeding to recalculate the most recent annualized support amount to be used as the basis for adjustment for a subsequent 12-month period under Subsection (d)(2). If, based on the recalculation, the commission by order adjusts a company's most recent annualized support amount, the adjusted support amount supersedes the annualized support amount calculated in accordance with Subsection (d).

(f) [The commission shall administratively review requests filed under Subsections (c) and (d).] Except for good cause, the commission shall set monthly support amounts under Subsection (d) [approve the request] not later than the 60th day after the date the commission determines the company is eligible [and has met all the procedural requirements under this subchapter].

[(h) This section and any monthly support amount approved under this section expire on September 1, 2013.]

SECTION 7. (a) The Public Utility Commission of Texas immediately shall investigate the eligibility for support under Section 56.0315, Utilities Code, as added by this Act, of exchanges served by a local exchange company or cooperative and shall determine not later than October 1, 2013, whether to initiate, on the commission's own motion, one or more contested cases to determine the eligibility of exchanges served by a local exchange company or cooperative for support under Section 56.0315, Utilities Code, as added by this Act.

(b) The Public Utility Commission of Texas is required to conduct a contested case under Section 56.0315, Utilities Code, as added by this Act, only on receipt of a petition described by that section that is presented to the commission on or after July 1, 2014.

SECTION 8. This Act takes effect August 31, 2013.