Texas 2017 - 85th Regular

Texas Senate Bill SB586 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	By: Perry, et al. S.B. No. 586
2		-	(Geren)
	1	+	S.B. No. 586
3	2
4	3
5		-	A BILL TO BE ENTITLED
6	4		AN ACT
7	5		relating to the distribution of universal service funds to certain
8	6		small and rural incumbent local exchange companies.
9	7		BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
10	8		SECTION 1. Section 56.032, Utilities Code, as effective
11	9		September 1, 2017, is amended to read as follows:
12	10		Sec. 56.032. ADJUSTMENTS: SMALL AND RURAL INCUMBENT LOCAL
13	11		EXCHANGE COMPANY UNIVERSAL SERVICE PLAN. (a) In this section:
14	12		(1) "Rate of return" means the Federal Communications
15	13		Commission's prescribed rate of return as of the date of any
16	14		determination, review, or adjustment under this section, to be no
17	15		greater than 9.75 percent prior to July 1, 2021. If the commission
18	16		finds that the Federal Communications Commission no longer
19	17		prescribes a rate of return necessary to implement this section,
20	18		the commission shall initiate proceedings to determine or modify
21	19		the rate of return to be used for purposes of this section as
22	20		necessary.
23	21		(2) "Small provider" means:
24	22		(A) an incumbent local exchange company or
25	23		cooperative that, on September 1, 2013, together with all local
26	24		exchange companies affiliated with the company or cooperative on
27	25		that date, served 31,000 or fewer access lines in this state; or
28	26		(B) a company or cooperative that is a successor
29	27		to a company or cooperative described by Paragraph (A).
30	28		(b) Except as provided by Subsections (c) through (j) [(d)
31	29		and (e)], the commission may revise the monthly support amounts to
32	30		be made available from the Small and Rural Incumbent Local Exchange
33	31		Company Universal Service Plan by any mechanism, including support
34	32		reductions resulting from rate rebalancing approved by the
35	33		commission, after notice and an opportunity for hearing. In
36	34		determining appropriate monthly support amounts, the commission
37	35		shall consider the adequacy of basic rates to support universal
38	36		service.
39	37		(c) On the written request of a small provider that is not an
40	38		electing company under Chapter 58 or 59, the commission shall
41	39		determine and disburse support to the small provider in fixed
42	40		monthly amounts based on an annualized support amount the
43	41		commission determines to be sufficient, when combined with
44	42		regulated revenues, to permit the small provider the opportunity to
45	43		earn a reasonable return in accordance with Section 53.051. A small
46	44		provider that makes a request under this subsection shall continue
47	45		to receive the same level of support it was receiving on the date of
48	46		the written request until the commission makes a determination or
49	47		adjustment through the mechanism described by Subsection (d).
50	48		(d) Not later than January 1, 2018, the commission shall
51	49		initiate rulemaking proceedings to develop and implement a
52	50		mechanism to determine the annualized support amount to be
53	51		disbursed under Subsection (c). The mechanism must:
54	52		(1) require the annual filing of a report by each small
55	53		provider that submits a request under Subsection (c) for the
56	54		purpose of:
57	55		(A) establishing a continued level of support for
58	56		the provider or the eligibility of the provider for support
59	57		adjustment filings for the purposes of Subsections (f), (g), (h),
60	58		and (i); and
61	59		(B) determining whether support levels, when
62	60		combined with regulated revenues, provide the provider an
63	61		opportunity to earn a reasonable return as described by Subsection
64	62		(f);
65	63		(2) provide requirements for the annual filing, which
66	64		may include annual earnings reports filed with the commission under
67	65		16 T.A.C. Section 26.73 and any underlying data that, during the
68	66		rulemaking process, the commission determines to be reasonably
69	67		necessary for the purposes of Subdivision (1);
70	68		(3) provide requirements and procedures for
71	69		adjustment proceedings that are consistent with Subsections (h) and
72	70		(i); and
73	71		(4) provide a procedure for the commission to assess,
74	72		as necessary, whether the reported return of a small provider is
75	73		based on expenses that are not reasonable and necessary.
76	74		(e) In a proceeding to adjust support levels using the
77	75		mechanism described by Subsection (d), the commission may consider
78	76		the small provider's data for a period not to exceed three fiscal
79	77		years before the date the proceeding is initiated.
80	78		(f) For purposes of the mechanism described by Subsection
81	79		(d), a return is deemed reasonable if the return is within two
82	80		percentage points above or three percentage points below the rate
83	81		of return as defined in this section. A small provider's reported
84	82		return is subject to assessment under the procedures described in
85	83		Subsection (d)(4).
86	84		(g) The commission may not approve a support adjustment
87	85		under Subsection (h) or (i) if the commission determines that a
88	86		small provider's return for the previous fiscal year was reasonable
89	87		under Subsection (f).
90	88		(h) A small provider whose return is not reasonable under
91	89		Subsection (f) because the return is more than three percentage
92	90		points below the rate of return as defined in this section may file
93	91		an application that is eligible for administrative review or
94	92		informal disposition to adjust support or rates to a level that
95	93		would bring the small provider's return into the range that would be
96	94		deemed reasonable under Subsection (f), except that the adjustment
97	95		may not set a small provider's support level at more than 140
98	96		percent of the annualized support amount the provider received in
99	97		the 12-month period before the date of adjustment. A rate
100	98		adjustment under this subsection may not adversely affect universal
101	99		service. Except for good cause, a small provider that files an
102	100		application for adjustment under this subsection may not file a
103	101		subsequent application for adjustment before the third anniversary
104	102		of the date on which the small provider's most recent application
105	103		for adjustment is initiated.
106	104		(i) There is no presumption that the return is unreasonable
107	105		for a small provider whose return is more than two percentage points
108	106		above the rate of return as defined in this section. However, on
109	107		its own motion, the commission may initiate a proceeding to review
110	108		the small provider's support level and regulated revenues and after
111	109		notice and an opportunity for a hearing, adjust the provider's
112	110		level of support or rates, if appropriate. A rate adjustment under
113	111		this subsection may not adversely affect universal service. Except
114	112		for good cause, the commission may not initiate a subsequent
115	113		adjustment proceeding for a small provider under this subsection
116	114		before the third anniversary of the date on which the small
117	115		provider's most recent adjustment proceeding is initiated.
118	116		(j) A small provider that is eligible to have support
119	117		determined and distributed under Subsection (c) shall continue to
120	118		receive the same level of support it was receiving on August 31,
121	119		2017, until the earlier of:
122	120		(1) the date on which the commission makes a
123	121		determination or adjustment through the mechanism described by
124	122		Subsection (d); or
125	123		(2) the 61st day after the date the commission adopts
126	124		the mechanism described by Subsection (d).
127	125		(k) A report or information the commission requires a small
128	126		provider to provide under Subsection (d) is confidential and is not
129	127		subject to disclosure under Chapter 552, Government Code. In any
130	128		proceeding related to Subsection (d), a third party's access to
131	129		confidential information is subject to an appropriate protective
132	130		order.
133	131		(l) Except as provided by Subsection (m), this [This]
134	132		section does not:
135	133		(1) affect the commission's authority under Chapter 53
136	134		or this chapter; or
137	135		(2) limit the commission's authority to initiate a
138	136		review of a small provider under another provision of this title.
139	137		(m) In a proceeding for a small provider initiated under
140	138		Subchapter A, B, C, or D, Chapter 53, the commission may recalculate
141	139		the annualized support amount to be disbursed to the small provider
142	140		and to be used as the basis for adjustment in any subsequent
143	141		proceeding under Subsections (c) through (j).
144	142		(n) Subsections (a), (c), (d), (e), (f), (g), (h), (i), (j),
145	143		(k), (l), and (m) and any monthly amounts approved under those
146	144		subsections expire September 1, 2023.
147	145		[(h) Subsections (a), (c), (d), (e), and (f) and any monthly
148	146		support amount approved under those subsections expire September 1,
149	147		2017.]
150	148		SECTION 2. (a) In this section, "commission" means the
151	149		Public Utility Commission of Texas.
152	150		(b) On or after January 1, 2022, and before July 1, 2022, the
153	151		commission shall initiate a proceeding to review and evaluate
154	152		whether:
155	153		(1) Section 56.032, Utilities Code, as amended by this
156	154		Act, including any rules adopted to implement that section,
157	155		accomplishes the purposes of the establishment of the universal
158	156		service fund under Section 56.021(1)(B), Utilities Code, and allows
159	157		each small provider, as defined by Section 56.032, Utilities Code,
160	158		as amended by this Act, the opportunity to earn a reasonable return
161	159		in accordance with Section 53.051, Utilities Code, and should be
162	160		continued; or
163	161		(2) changes in law to amend or replace the mechanism
164	162		created by Section 56.032, Utilities Code, are necessary to
165	163		accomplish the purposes described in Subdivision (1) of this
166	164		subsection.
167	165		(c) The commission has all authority necessary to conduct
168	166		the review under Subsection (b) of this section.
169	167		(d) After the review conducted under Subsection (b) of this
170	168		section, and not later than September 1, 2022, the commission shall
171	169		submit to the legislature a report on:
172	170		(1) the continued appropriateness of using the Federal
173	171		Communications Commission prescribed rate of return for the
174	172		mechanism established under Section 56.032(d), Utilities Code, as
175	173		added by this Act, if the Federal Communications Commission still
176	174		prescribes a rate of return that may be used for that mechanism;
177	175		(2) the efficiency and frequency of adjustment
178	176		proceedings conducted under Section 56.032(h), Utilities Code, as
179	177		amended by this Act, and Section 56.032(i), Utilities Code, as
180	178		added by this Act;
181	179		(3) the frequency and efficiency of determinations
182	180		made on reasonable and necessary expenses under Section
183	181		56.032(d)(4), Utilities Code, as added by this Act;
184	182		(4) the effect of changes in technology on regulated
185	183		revenue and support needs or determinations made under Section
186	184		56.032, Utilities Code, as amended by this Act; and
187	185		(5) any other relevant information the commission
188	186		determines is necessary for inclusion in the report and is in the
189	187		public interest.
190	188		(e) Notwithstanding Subsection (b) of this section or
191	189		Section 56.024, Utilities Code, a party to a commission proceeding
192	190		under this section examining the universal service fund and the
193	191		effectiveness of Section 56.032, Utilities Code, as amended by this
194	192		Act, is entitled to access confidential information provided to the
195	193		commission under Section 56.024(a), Utilities Code, if a protective
196	194		order is issued in the proceeding for the confidential information.
197	195		SECTION 3. This Act takes effect September 1, 2017.
	196	+	______________________________ ______________________________
	197	+	President of the Senate Speaker of the House
	198	+	I hereby certify that S.B. No. 586 passed the Senate on
	199	+	April 20, 2017, by the following vote: Yeas 28, Nays 3.
	200	+	______________________________
	201	+	Secretary of the Senate
	202	+	I hereby certify that S.B. No. 586 passed the House on
	203	+	May 16, 2017, by the following vote: Yeas 128, Nays 18, one
	204	+	present not voting.
	205	+	______________________________
	206	+	Chief Clerk of the House
	207	+	Approved:
	208	+	______________________________
	209	+	Date
	210	+	______________________________
	211	+	Governor