BILL ANALYSIS

Senate Research Center	S.B. 1425
	By: Perry
	Business & Commerce
	3/28/2023
	As Filed

AUTHOR'S / SPONSOR'S STATEMENT OF INTENT

The purpose of the Texas Universal Service Fund (USF) is to implement a competitively neutral mechanism to enable all residents of the state to obtain the basic telecommunications services needed to communicate with other residents, businesses, and governmental entities.

The current support that the small companies receive is set to sunset on September 1, 2023.

If this support is lost, the development and maintenance of basic telecommunications infrastructure across rural Texas will be negatively impacted. Additionally, the small companies will have to file traditional regulatory "rate cases" with the Public Utility Commission (PUC) if the USF support is reduced. These rate cases are expected to average $500,000 per company and take up to a year or more to complete. These cases will burden the resources of the small companies and the PUC.

S.B. 1425 will extend the small company USF sunset date to September 1, 2033. S.B. 1425 proposes a long-term, regulatory-efficient, and "needs-based" support program. As public utilities, the small companies will remain subject, at all times, to the full rate and revenue jurisdiction of the PUC.

As proposed, S.B. 1425 amends current law relating to the continuation of the distribution of universal service funds to certain small and rural incumbent local exchange companies.

RULEMAKING AUTHORITY

This bill does not expressly grant any additional rulemaking authority to a state officer, institution, or agency.

SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 56.032(n), Utilities Code, as follows:

(n)  Provides that Subsections (a) (relating to the definition of "rate of return" and "small provider"), (c) (relating to requiring the Public Utility Commission (PUC) to provide support upon request from a small provider), (d) (relating to requiring the PUC to initiate rulemaking to determine the annualized support amount to be dispersed under Subsection (c)), (e) (relating to authorizing the PUC to consider data provided by the provider to the PUC to determine support levels), (f) (relating to the definition of "reasonable return"), (g) (relating to prohibiting the PUC to adjust support by the PUC under certain circumstances), (h) (relating to authorizing a small provider to file for administrative review certain circumstances), (i) (relating to authorizing the PUC to review a small provider's support level and regulated revenues), (j) (relating to requiring a small provider to receive the same level of support until certain dates), (k) (relating to providing that the information submitted by a small provider to the PUC is confidential), (l) (relating to providing that the authority of the PUC is not affected or limited by certain factors), and (m) (relating to authorizing the PUC to recalculate the annualized support amount by the PUC for certain small providers) and any monthly amounts approved under those subsections expire September 1, 2033, rather than September 1, 2023.

SECTION 2. Effective date: upon passage or September 1, 2023.