Sunday, May 22, 2005

HOUSE JOURNAL

SEVENTY-NINTH LEGISLATURE, REGULAR SESSION

PROCEEDINGS

SEVENTY-FOURTH DAY — SUNDAY, MAY 22, 2005

The house met at 2 p.m. and was called to order by the speaker.

The roll of the house was called and a quorum was announced present (Recordi738).

Present — Mr. Speaker; Allen, A.; Allen, R.; Alonzo; Anchia; Anderson; Baxter; Berman; Blake; Bohac; Bonnen; Branch; Brown, B.; Brown, F.; Burnam; Callegari; Campbell; Casteel; Castro; Chavez; Chisum; Coleman; Cook, B.; Cook, R.; Corte; Crabb; Crownover; Davis, J.; Davis, Y.; Dawson; Delisi; Denny; Deshotel; Driver; Dukes; Dunnam; Dutton; Edwards; Eiland; Eissler; Elkins; Escobar; Farabee; Farrar; Flores; Flynn; Frost; Gattis; Geren; Giddings; Gonzales; Gonzalez Toureilles; Goodman; Goolsby; Griggs; Grusendorf; Guillen; Haggerty; Hamilton; Hamric; Hardcastle; Harper-Brown; Hartnett; Hegar; Herrero; Hilderbran; Hill; Hochberg; Hodge; Homer; Hope; Hopson; Howard; Hughes; Hunter; Hupp; Isett; Jackson; Jones, D.; Jones, J.; Keel; Keffer, B.; Keffer, J.; King, P.; King, T.; Kolkhorst; Krusee; Kuempel; Laney; Laubenberg; Leibowitz; Luna; Madden; Martinez; Martinez Fischer; McCall; McClendon; McReynolds; Menendez; Merritt; Miller; Moreno, P.; Morrison; Mowery; Naishtat; Nixon; Noriega, M.; Oliveira; Olivo; Orr; Otto; Paxton; Peña; Phillips; Pickett; Puente; Quintanilla; Raymond; Reyna; Riddle; Ritter; Rodriguez; Rose; Seaman; Smith, T.; Smith, W.; Smithee; Solis; Solomons; Strama; Straus; Swinford; Talton; Taylor; Thompson; Truitt; Turner; Uresti; Van Arsdale; Veasey; Villarreal; Vo; West; Wong; Woolley; Zedler.

Absent, Excused — Bailey; Gallego; Pitts.

The invocation was offered by Representative Dutton, as follows:

To the God of the Panhandle. To the God of the Rio Grande Valley. To the God of the high plains. To the God of the Gulf Coast. To the God of the piney woods. To the God of Central Texas. To the God of West Texas. To the God of rural Texas. To the God of urban Texas. To the God of the poor. To the God of the powerful. We thank you for being one God, and we pray that our differences serve to keep Texas one under God. Amen.

The speaker recognized Representative Dutton who led the house in the pledges of allegiance to the United States and Texas flags.

REGULAR ORDER OF BUSINESS SUSPENDED

On motion of Representative Denny and by unanimous consent, the reading and referral of bills was postponed until just prior to adjournment.

LEAVES OF ABSENCE GRANTED

The following member was granted leave of absence temporarily for today because of important business:

Pitts on motion of Woolley.

The following member was granted leave of absence for today because of illness in the family:

Bailey on motion of Hochberg.

The following member was granted leave of absence for today because of illness:

Gallego on motion of Hochberg.

MESSAGE FROM THE SENATE

A message from the senate was received at this time (see the addendum to the daily journal, Messages from the Senate, Message No. 1).

POSTPONED BUSINESS

The following bills were laid before the house as postponed business:

SB 1246 ON SECOND READING
(Woolley, Flores, et al. - House Sponsors)

SB 1246, A bill to be entitled An Act relating to local option elections in certain populous areas on the sale of mixed beverages by food and beverage establishments.

SB 1246 was read second time on May 20 and was postponed until 2 p.m. today.

(Taylor in the chair)

Amendment No. 1

Representative Woolley offered the following amendment to SBi1246:

Amend SB 1246 as follows:

(1) On page 1, line 11, between "county" and "adjacent" insert "with a population in excess of 300,000".

(2) On page 1, line 19, following Subsection (b), insert the following new subsection (c):

(c) If the issue fails to pass in a municipality located within a county described in Subsection (a), the election shall have no effect on the status of the municipality.

Amendment No. 1 was adopted.

LEAVES OF ABSENCE GRANTED

The following member was granted leave of absence for the remainder of today because of important business in the district:

Isett on motion of F. Brown.

3750 79th LEGISLATURE — REGULAR SESSION

The following member was granted leave of absence for the remainder of today because of illness in the family:

Hodge on motion of Deshotel.

SB 1246 - (consideration continued)

Amendment No. 2

Representatives Deshotel and Ritter offered the following amendment to SBi1246:

Amend SB 1246 as follows:

(1) On page 1, line 10, strike "and".

(2) On page 1, line 12, strike the period and substitute "; and".

(3) On page 1, between lines 12 and 13, insert the following:

(3) a municipality with a population of at least 50,000 located in a county with a population of at least 250,000 that is located on the Gulf of Mexico and along the Texas-Louisiana border.

Amendment No. 2 was adopted.

A record vote was requested.

SB 1246, as amended, was passed to third reading by (Record 739): 73 Yeas, 65 Nays, 1 Present, not voting.

Yeas — Allen, A.; Allen, R.; Alonzo; Baxter; Bonnen; Burnam; Casteel; Chavez; Coleman; Cook, R.; Crownover; Denny; Deshotel; Dukes; Dutton; Eiland; Elkins; Escobar; Farabee; Geren; Gonzalez Toureilles; Goodman; Goolsby; Grusendorf; Guillen; Haggerty; Hamilton; Hamric; Hartnett; Hegar; Herrero; Hilderbran; Homer; Hopson; Hunter; Hupp; Keel; King, T.; Kolkhorst; Krusee; Kuempel; Laney; Leibowitz; Martinez; Martinez Fischer; McClendon; Menendez; Merritt; Moreno, P.; Morrison; Naishtat; Nixon; Oliveira; Olivo; Pickett; Puente; Quintanilla; Raymond; Reyna; Ritter; Rodriguez; Rose; Solis; Strama; Straus; Truitt; Turner; Uresti; Veasey; Villarreal; Vo; Wong; Woolley.

Nays — Anchia; Anderson; Berman; Blake; Bohac; Branch; Brown, B.; Brown, F.; Callegari; Campbell; Chisum; Cook, B.; Corte; Crabb; Davis, J.; Davis, Y.; Dawson; Delisi; Driver; Dunnam; Edwards; Eissler; Farrar; Flynn; Frost; Gattis; Giddings; Gonzales; Griggs; Hardcastle; Harper-Brown; Hill; Hochberg; Hope; Howard; Hughes; Jackson; Jones, D.; Jones, J.; Keffer, B.; King, P.; Laubenberg; Luna; Madden; McCall; McReynolds; Mowery; Noriega, M.; Orr; Otto; Paxton; Peña; Phillips; Riddle; Seaman; Smith, T.; Smith, W.; Solomons; Swinford; Talton; Taylor(C); Thompson; Van Arsdale; West; Zedler.

Present, not voting — Mr. Speaker.

Absent, Excused — Bailey; Gallego; Hodge; Isett; Pitts.

Absent — Castro; Flores; Keffer, J.; Miller; Smithee.

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3751

STATEMENTS OF VOTE

I was shown voting yes on Record No. 739. I intended to vote no.

Hartnett

When Record No. 739 was taken, I was in the house but away from my desk. I would have voted no.

Miller

I was shown voting yes on Record No. 739. I intended to vote no.

Reyna

SB 1494 ON SECOND READING
(P. King - House Sponsor)

SB 1494, A bill to be entitled An Act relating to the unbundling of electric utilities in the transition to competitive retail electric markets.

SB 1494 was read second time on May 19 and was postponed until 3 p.m. today.

Representative P. King moved to postpone consideration of SBi1494 until the end of today's calendar.

The motion prevailed.

SB 1495 ON SECOND READING
(P. King - House Sponsor)

SB 1495, A bill to be entitled An Act relating to the securitization of the nonbypassable delivery rates of transmission and distribution utilities.

SB 1495 was read second time on May 19 and was postponed until 3 p.m. today.

Representative P. King moved to postpone consideration of SBi1495 until the end of today's calendar.

The motion prevailed.

MAJOR STATE CALENDAR
SENATE BILLS
SECOND READING

The following bills were laid before the house and read second time:

SB 410 ON SECOND READING
(Truitt - House Sponsor)

SB 410, A bill to be entitled An Act relating to the continuation and functions of the Texas State Board of Pharmacy; providing administrative penalties.

Amendment No. 1

Representative Thompson offered the following amendment to SBi410:

Amend SB 410, SECTION 22, on page 14, as follows:

3752 79th LEGISLATURE — REGULAR SESSION

(1) on page 14, following line 7, insert a new SECTION 22, to read as follows, and renumber subsequent sections:

"SECTION 22. Section 483.042, Health and Safety Code, is amended by adding Subsection (g) to read as follows:

(g) It is an exception to the application of Subsection (a) that a dangerous drug was a contraceptive and was delivered by a pharmacist in accordance with Section 562.112 through 562.114, Occupations Code."

(2) on page 14, line 9, between "562.111" and "to" insert "through 562.114";

(3) on page 14, following line 21, add Subsection (c) to read as follows:

"(c) Under a protocol agreement between a pharmacy and a physician, pharmacists are exempted from the practitioner-patient relationship requirement when prescribing and dispensing emergency contraception.

Sec. 562.112. EMERGENCY CONTRACEPTION DRUG THERAPY. A pharmacist may initiate emergency contraception drug therapy in accordance with Section 562.113 and 562.114."

Sec. 562.113. EMERGENCY CONTRACEPTION DRUG THERAPY. (a) The board shall adopt rules necessary to administer this Chapter.

(b) a pharmacist may exercise the pharmacist's professional judgment to initiate and distribute emergency contraception drug therapy to a patient in accordance with:

(1) this Chapter and board rules; and

(2) standardized procedures and protocols developed by the pharmacist and a physician with whom the pharmacist has entered into an agreement required by Subsection (c).

(c) A pharmacist may not initiate and distribute emergency contraception drug therapy to a patient in accordance with standing drug therapy protocol unless the pharmacist enters into an agreement with at least one physician for purposes of the initiation and distribution of the drug therapy. The requirement of Section 157.101(c) (2) does not apply to drug therapy initiated and distributed under this section.

(d) For each emergency contraception drug therapy initiated and distributed, a pharmacist shall:

(1) provide the patient with a standardized fact sheet developed by the board in accordance with Subsection (f);

(2) require the patient to complete a form requesting information on possible contraindications to the drug therapy; and

(3) inform the physician with whom the pharmacist has an agreement of the initiation and distribution of the emergency contraception drug therapy in accordance with standing drug therapy protocol.

(e) In consultation with Texas State Board of Medical Examiners, the Department of State Health Services, and the American College of Obstetricians and Gynecologists, the board shall develop a standardized fact sheet that includes:

(1) the indications for use of the drug therapy;

(2) the appropriate method for using the drug therapy; and

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3753

(3) the necessity and importance of medical follow-up.

(f) Subsection (e) does not preclude the use of existing publications developed by nationally recognized medical organizations.

Sec. 562.114. TRAINING PROGRAM ON EMERGENCY CONTRACEPTION DRUG THERAPY INITIATION AND DISTRIBUTION. (a) A pharmacist may not initiate or distribute emergency contraception drug therapy unless the pharmacist has successfully completed a training program on emergency contraception drug therapy initiation and distribution.

(b) The board and the Texas State Board of Medical Examiners must develop and approve the training program.

(1) the relevant medical circumstances and contraindications that make emergency contraception appropriate for a patient;

(2) appropriate methods of conducting sensitive communications related to providing the therapy;

(3) quality assurance;

(4) the availability of additional services and procedures for making referrals to the services; and

(5) the documentation required by the board.

(d) The program provider shall issue a certificate of completion to the pharmacist on completion of the training program.

(e) A pharmacist who initiates and distributes emergency contraception drug therapy may display the certificate of completion as provided by board rules."

Representative Truitt moved to table Amendment No. 1.

A record vote was requested.

The motion to table prevailed by (Record 740): 94 Yeas, 45 Nays, 1 Present, not voting.

Yeas — Allen, R.; Anderson; Baxter; Berman; Blake; Bohac; Bonnen; Branch; Brown, B.; Brown, F.; Callegari; Campbell; Chisum; Cook, B.; Cook, R.; Corte; Crabb; Crownover; Davis, J.; Dawson; Delisi; Denny; Driver; Dutton; Eissler; Elkins; Farabee; Flynn; Frost; Gattis; Geren; Goodman; Goolsby; Griggs; Grusendorf; Haggerty; Hamilton; Hamric; Hardcastle; Harper-Brown; Hartnett; Hegar; Hilderbran; Hill; Homer; Hope; Hopson; Howard; Hughes; Hunter; Jackson; Jones, D.; Keel; Keffer, B.; Keffer, J.; King, P.; King, T.; Kolkhorst; Krusee; Kuempel; Laney; Laubenberg; Madden; McCall; Merritt; Miller; Morrison; Mowery; Nixon; Olivo; Orr; Otto; Paxton; Peña; Phillips; Pickett; Quintanilla; Reyna; Riddle; Ritter; Seaman; Smith, T.; Smith, W.; Solomons; Straus; Swinford; Talton; Taylor(C); Truitt; Van Arsdale; West; Wong; Woolley; Zedler.

Nays — Allen, A.; Alonzo; Anchia; Burnam; Casteel; Castro; Chavez; Coleman; Davis, Y.; Dukes; Dunnam; Edwards; Eiland; Escobar; Farrar; Flores; Giddings; Gonzales; Gonzalez Toureilles; Guillen; Herrero; Hochberg; Hupp;

3754 79th LEGISLATURE — REGULAR SESSION

Jones, J.; Leibowitz; Martinez; Martinez Fischer; McClendon; Menendez; Moreno, P.; Naishtat; Noriega, M.; Oliveira; Puente; Raymond; Rodriguez; Rose; Solis; Strama; Thompson; Turner; Uresti; Veasey; Villarreal; Vo.

Present, not voting — Mr. Speaker.

Absent, Excused — Bailey; Gallego; Hodge; Isett; Pitts.

Absent — Deshotel; Luna; McReynolds; Smithee.

STATEMENTS OF VOTE

When Record No. 740 was taken, my vote failed to register. I would have voted yes.

Deshotel

When Record No. 740 was taken, I was temporarily out of the house chamber. I would have voted yes.

Smithee

Amendment No. 2

Representative Hopson offered the following amendment to SBi410:

Amend SB 410 by adding the following appropriately numbered section to the bill and renumbering existing sections accordingly:

SECTIONi__.ii(a) Sections 481.074(o) and (p), Health and Safety Code, are amended to read as follows:

(o)iiA pharmacist may dispense a Schedule II controlled substance pursuant to a facsimile copy of an official prescription completed in the manner required by Section 481.075 and transmitted by the practitioner or the practitioner's agent to the pharmacy if:

(1)iithe prescription is written for:

(A)iia Schedule II narcotic or nonnarcotic substance for a patient in a long-term care facility (LTCF), and the practitioner notes on the prescription "LTCF patient";

(B)iia Schedule II narcotic product to be compounded for the direct administration to a patient by parenteral, intravenous, intramuscular, subcutaneous, or intraspinal infusion; or

(C)iia Schedule II narcotic substance for a patient with a medical diagnosis documenting a terminal illness or a patient enrolled in a hospice care program certified or paid for by Medicare under Title XVIII, Social Security Act (42 U.S.C. Section 1395 et seq.), as amended, or a hospice program that is licensed under Chapter 142, and the practitioner or the practitioner's agent notes on the prescription "terminally ill" or "hospice patient"; and

(2)iiafter transmitting the prescription, the prescribing practitioner or the practitioner's agent:

(A)iiwrites across the face of the official prescription "VOID–sent by fax to (name and telephone number of receiving pharmacy)"; and

(B)iifiles the official prescription in the patient's medical records instead of delivering it to the patient [~~promptly complies with Subsection (p)~~].

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3755

(p)ii[Not later than the seventh day after the date a prescribing practitioner transmits the facsimile copy of the official prescription to the pharmacy, the prescribing practitioner shall deliver in person or mail the official written prescription to the dispensing pharmacist at the pharmacy where the prescription was dispensed. The envelope of a prescription delivered by mail must be postmarked not later than the seventh day after the date the official prescription was written.] On receipt of the prescription, the dispensing pharmacy shall file the facsimile copy of the prescription [~~with the official prescription~~] and shall send information to the director as required by Section 481.075.

(b)iiThis section takes effect immediately if this Act receives a vote of two-thirds of all the members elected to each house, as provided by Section 39, Article III, Texas Constitution. If this Act does not receive the vote necessary for immediate effect, this section takes effect September 1, 2005.

Amendment No. 2 was adopted.

Amendment No. 3

Representative Hochberg offered the following amendment to SBi410:

Amend SB 410 by adding the following appropriately numbered SECTIONS to the bill and renumbering subsequent SECTIONS of the bill accordingly:

SECTIONi___.iiThe legislature finds that:

(1)iiprescription drugs are expensive to the point that some residents of this state have been forced to choose between purchasing prescription drugs and paying for other essentials, such as groceries or rent;

(2)iiprescription drugs can be purchased at much lower costs in Canada;

(3)iiscams offering low-cost prescription drugs are prevalent on the Internet and in spam e-mail, and these practices make it difficult for consumers in this state to determine how and where to purchase safe and effective prescription drugs at affordable prices;

(4)iithe Regulatory Procedures Manual of the Federal Drug Administration authorizes agency personnel to allow the importation of products regulated by that agency when the quantity and purpose are clearly for personal use and the product does not present an unreasonable risk to the user; and

(5)iiother states and municipalities provide Internet websites and other methods to allow residents of those states or municipalities to safely purchase prescription drugs from Canada.

SECTIONi___.iiSubchapter A, Chapter 554, Occupations Code, is amended by adding Section 554.016 to read as follows:

Sec.i554.016.iiCANADIAN PHARMACY INSPECTION; DESIGNATION; FEES; INFORMATION. (a) The board shall designate at least one and not more than 10 Canadian pharmacies whose primary business is to dispense prescription drugs under prescription drug orders to Canadian residents, as having passed inspection by the board for shipping, mailing, or delivering to this state a prescription dispensed under a prescription drug order to a resident in this state.

3756 79th LEGISLATURE — REGULAR SESSION

(b)iiThe board by rule shall set fees in amounts reasonable and necessary to cover the costs incurred by the board in inspecting Canadian pharmacies as provided by Subsection (a).

(c)iiThe board shall establish and maintain an Internet website to provide information necessary to enable residents of this state to conveniently order prescription drugs from Canadian pharmacies designated by the board as having passed inspection to dispense prescription drugs to residents in this state in accordance with this subtitle and board rules. The board shall include on the website a statement that the board is not liable for any act or omission of a Canadian pharmacy designated as having passed inspection to dispense prescription drugs to residents in this state.

SECTIONi___.iiSubchapter B, Chapter 556, Occupations Code, is amended by adding Section 556.0555 to read as follows:

Sec.i556.0555.iiINSPECTIONS. (a) At least annually, the board shall conduct random inspections of Canadian pharmacies designated under Section 554.016 as necessary to ensure compliance with the safety standards and other requirements of this subtitle and board rules.

(b)iiNotwithstanding the requirements of this chapter, the board by rule may establish the standards and procedures for inspections under this section.

(c)iiThe board may enter into a written agreement with another state for an agency or employee of the state to perform services for the board related to inspecting a Canadian pharmacy designated by the board under Section 554.016 to dispense prescription drugs to residents in this state. This subsection does not apply to the initial inspection of the pharmacy.

SECTIONi___.iiSection 560.001, Occupations Code, is amended by adding Subsection (c) to read as follows:

(c)iiA pharmacy located in Canada may not ship, mail, or deliver to this state a prescription drug dispensed under a prescription drug order to a resident of this state unless the pharmacy is designated by the board under Section 554.016.

SECTIONi___.iiSubchapter B, Chapter 560, Occupations Code, is amended by adding Section 560.0525 to read as follows:

Sec.i560.0525.iiADDITIONAL QUALIFICATION REQUIREMENTS FOR CANADIAN PHARMACIES. (a) To pass an inspection by the board, a Canadian pharmacy must meet Texas licensing standards.

(b)iiIn addition to satisfying the other requirements of this chapter, to qualify for designation by the board under Section 554.016, a Canadian pharmacy applicant must submit to the board:

(1)iievidence satisfactory to the board that the applicant holds a pharmacy license, registration, or permit in good standing issued by Canada or the Canadian province in which the pharmacy is located and is not subject to any pending disciplinary action or legal action by any regulatory authority;

(2)iithe name and address of the pharmacy's owner and pharmacist-in-charge for service of process;

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3757

(3)iievidence of the applicant's ability to provide to the board, not later than 72 hours after the time the board requests the record, a record of a prescription drug order authorizing the pharmacy to dispense a prescription drug to a resident of this state;

(4)iian affidavit by the pharmacist-in-charge that states the pharmacist has read and understands this subtitle and the rules adopted under this subtitle that relate to a Canadian pharmacy designated by the board as having passed inspection to dispense prescription drugs to residents in this state;

(5)iievidence satisfactory to the board that the applicant meets the standards established by board rule to ensure customer safety for each order filled and in the dispensing, storing, packaging, shipping, and delivering of prescription drugs; and

(6)iievidence satisfactory to the board that the applicant's employees hold the appropriate Canadian licenses required to dispense prescription drugs in Canada.

(c)iiBefore a Canadian pharmacy is designated as having passed inspection to dispense prescription drugs to residents in this state, a representative of the board shall visit the pharmacy's facilities and review the pharmacy's compliance with the requirements and safety standards established under this subtitle.

SECTIONi___.iiSection 562.101, Occupations Code, is amended by adding Subsection (f-1) to read as follows:

(f-1)iiA Canadian pharmacy designated by the board as having passed inspection to dispense prescription drugs to residents in this state is required to be under the continuous on-site supervision of a pharmacist and shall designate one pharmacist licensed to practice pharmacy by the regulatory or licensing agency of Canada or of the Canadian province in which the Canadian pharmacy is located to serve as the pharmacist-in-charge of the Canadian pharmacy.

SECTIONi___.iiSubchapter C, Chapter 562, Occupations Code, is amended by adding Section 562.111 to read as follows:

Sec.i562.111.iiPRESCRIPTION DRUG ORDER FOR CONSUMER. (a) A pharmacy in this state may order for a consumer a prescription drug from a Canadian pharmacy designated by the board under Section 554.016 to dispense prescription drugs to residents in this state.

(b)iiA pharmacy may order a prescription drug under this section only with the knowledge and clear consent of the consumer.

SECTIONi___.iiChapter 562, Occupations Code, is amended by adding Subchapter E to read as follows:

SUBCHAPTER E. PRACTICE BY CANADIAN PHARMACY

Sec.i562.201.iiADDITIONAL PRACTICE REQUIREMENTS. In addition to complying with the other requirements of this chapter, a Canadian pharmacy designated by the board under Section 554.016 shall:

(1)iidispense a prescription drug to a resident of this state only under the lawful order of a practitioner licensed in the United States;

(2)iidispense to a resident of this state only a prescription drug that is approved by Canada's Therapeutic Products Directorate for sale to residents of Canada;

3758 79th LEGISLATURE — REGULAR SESSION

(3)iidispense to a resident of this state a prescription drug in the original, unopened manufacturer's packaging whenever possible; and

(4)iidispense to a resident of this state only drugs prescribed for long-term use.

Sec.i562.202.iiLIMITATIONS ON PRACTICE. A Canadian pharmacy designated by the board under Section 554.016 to dispense prescription drugs to residents in this state may not:

(1)iidispense to a resident of this state a prescription drug for which there is not an equivalent drug approved by the United States Food and Drug Administration for sale in the United States;

(2)iidispense to a resident of this state a prescription drug that cannot be safely shipped by mail, common carrier, or delivery service;

(3)iidispense in one order to a resident of this state a quantity of a prescription drug that exceeds:

(A)iia three-month supply; or

(B)iithe amount ordered by the practitioner;

(4)iifill a prescription drug order for a consumer who is a resident of this state that the consumer indicates is the consumer's first prescription for that drug; or

(5)iidispense to a resident of this state any of the following:

(A)iia substance designated as a controlled substance under Chapter 481, Health and Safety Code (Texas Controlled Substances Act);

(B)iia biological product, as described by Section 351, Public Health Service Act (42 U.S.C. Section 262);

(C)iian infused drug, including a peritoneal dialysis solution;

(D)iian intravenously injected drug; or

(E)iia drug that is inhaled during surgery.

Sec.i562.203.iiCOMPLAINT REPORT. A Canadian pharmacy designated by the board under Section 554.016 to dispense prescription drugs to residents in this state shall provide to the board periodic reports in accordance with board rules on each complaint received by the pharmacy from a consumer in this state who purchases a prescription drug from the pharmacy.

Sec.i562.204.iiPRICE LIST. A Canadian pharmacy designated by the board under Section 554.016 shall:

(1)iicompile and maintain a current price list for prescription drugs provided to residents in this state; and

(2)iiguarantee those prices for not less than 30 days from the date the list is effective.

SECTIONi___.ii(a) Not later than the 30th day after the effective date of this Act, the Texas State Board of Pharmacy shall adopt the initial rules necessary to implement the changes in law made by this Act to Subtitle J, Title 3, Occupations Code, in the manner provided by law for adoption of emergency rules. This subsection expires January 1, 2006.

(b)iiNot later than January 1, 2006, the Texas State Board of Pharmacy shall adopt the rules necessary to implement the changes in law made by this Act to Subtitle J, Title 3, Occupations Code.

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(c)iiThe requirements for a Canadian pharmacy to be designated under Section 554.016, Occupations Code, as added by this Act, to dispense prescription drugs in this state under Subtitle J, Title 3, Occupations Code, as amended by this Act, take effect March 1, 2006.

Representative Truitt moved to table Amendment No. 3.

(Gattis in the chair)

A record vote was requested.

The motion to table was lost by (Record 741): 17 Yeas, 114 Nays, 4 Present, not voting.

Yeas — Anderson; Chisum; Cook, B.; Corte; Crownover; Dawson; Delisi; Hamric; Hardcastle; Harper-Brown; Hilderbran; Jones, D.; Miller; Straus; Talton; Taylor; Zedler.

Nays — Allen, A.; Allen, R.; Alonzo; Anchia; Baxter; Berman; Blake; Bohac; Bonnen; Branch; Brown, B.; Brown, F.; Burnam; Callegari; Campbell; Casteel; Castro; Chavez; Coleman; Cook, R.; Crabb; Davis, Y.; Denny; Deshotel; Driver; Dukes; Dunnam; Dutton; Edwards; Eiland; Eissler; Elkins; Escobar; Farabee; Farrar; Flores; Flynn; Frost; Geren; Giddings; Gonzales; Gonzalez Toureilles; Goodman; Goolsby; Griggs; Grusendorf; Guillen; Haggerty; Hamilton; Hartnett; Hegar; Herrero; Hill; Hochberg; Homer; Hope; Howard; Hunter; Hupp; Jackson; Jones, J.; Keel; Keffer, J.; King, P.; King, T.; Kolkhorst; Krusee; Kuempel; Laney; Leibowitz; Madden; Martinez; Martinez Fischer; McCall; McClendon; McReynolds; Menendez; Merritt; Moreno, P.; Morrison; Mowery; Naishtat; Noriega, M.; Oliveira; Olivo; Orr; Otto; Peña; Phillips; Pickett; Puente; Quintanilla; Raymond; Reyna; Ritter; Rodriguez; Rose; Seaman; Smith, T.; Smith, W.; Smithee; Solis; Solomons; Strama; Swinford; Thompson; Turner; Uresti; Van Arsdale; Veasey; Villarreal; Vo; West; Wong.

Present, not voting — Mr. Speaker; Gattis(C); Hopson; Nixon.

Absent, Excused — Bailey; Gallego; Hodge; Isett; Pitts.

Absent — Davis, J.; Hughes; Keffer, B.; Laubenberg; Luna; Paxton; Riddle; Truitt; Woolley.

STATEMENTS OF VOTE

I was shown voting yes on Record No. 741. I intended to vote no.

B. Cook

I was shown voting yes on Record No. 741. I intended to vote no.

Dawson

I was shown voting yes on Record No. 741. I intended to vote no.

Hilderbran

I was shown voting yes on Record No. 741. I intended to vote no.

Zedler

3760 79th LEGISLATURE — REGULAR SESSION

Amendment No. 3 was adopted.

SB 410 - POINT OF ORDER

Representative Thompson raised a point of order against further consideration of SB 410 under Rule 4, Section 32(c)(3) of the House Rules on the grounds that the committee report is missing a statement indicating whether or not any rulemaking authority is expressly delegated to a state officer, department, agency, or institution.

(Speaker in the chair)

The point of order was withdrawn.

SB 410, as amended, was passed to third reading. (In accordance with House Rule 5, Section 51(b), every member present must have favored passage of the measure, but any member may register their position with the journal clerk. Members registering votes are as follows: Delisi recorded voting yes; Harper-Brown recorded voting no; Hopson recorded voting present, not voting.)

CSSB 411 ON SECOND READING
(Hamric - House Sponsor)

CSSB 411, A bill to be entitled An Act relating to the regulation of barbers and cosmetologists by the Texas Department of Licensing and Regulation and the abolition of the State Board of Barber Examiners and the Texas Cosmetology Commission.

(Nixon in the chair)

Amendment No. 1

On behalf of Representative Chisum, Representative Hamric offered the following amendment to CSSBi411:

Amend CSSB 411 (House Committee Report) by adding the following appropriately numbered SECTION to the bill and renumbering subsequent SECTIONS of the bill accordingly:

SECTIONi__.iiSection 1602.002, Occupations Code, is amended to read as follows:

Sec.i1602.002.iiDEFINITION OF COSMETOLOGY. In this chapter, "cosmetology" means the practice of performing or offering to perform for compensation any of the following services:

(1)iitreating a person's hair by:

(A)iiproviding any method of treatment as a primary service, including arranging, beautifying, bleaching, cleansing, coloring, cutting, dressing, dyeing, processing, shampooing, shaping, singeing, straightening, styling, tinting, or waving;

(B)iiproviding a necessary service that is preparatory or ancillary to a service under Paragraph (A), including bobbing, clipping, cutting, or trimming; or

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(C)iicutting the person's hair as a separate and independent service for which a charge is directly or indirectly made separately from charges for any other service;

(2)iiweaving [~~or braiding~~] a person's hair;

(3)iishampooing and conditioning a person's hair;

(4)iiservicing a person's wig or artificial hairpiece on a person's head or on a block after the initial retail sale and servicing in any manner listed in Subdivision (1);

(5)iitreating a person's mustache or beard by arranging, beautifying, coloring, processing, styling, or trimming;

(6)iicleansing, stimulating, or massaging a person's scalp, face, neck, or arms:

(A)iiby hand or by using a device, apparatus, or appliance; and

(B)iiwith or without the use of any cosmetic preparation, antiseptic, tonic, lotion, or cream;

(7)iibeautifying a person's face, neck, or arms using a cosmetic preparation, antiseptic, tonic, lotion, powder, oil, clay, cream, or appliance;

(8)iiadministering facial treatments;

(9)iiremoving superfluous hair from a person's body using depilatories or mechanical tweezers;

(10)iitreating a person's nails by:

(A)iicutting, trimming, polishing, tinting, coloring, cleansing, or manicuring; or

(B)iiattaching false nails; or

(11)iimassaging, cleansing, treating, or beautifying a person's hands or feet.

Amendment No. 1 was adopted.

CSSB 411, as amended, was passed to third reading. (In accordance with House Rule 5, Section 51(b), every member present must have favored passage of the measure, but any member may register their position with the journal clerk. Members registering votes are as follows: A. Allen, Edwards, Haper-Brown, J.iKeffer, and Phillips recorded voting no.)

CSSB 408 ON SECOND READING
(P. King - House Sponsor)

CSSB 408, A bill to be entitled An Act relating to the continuation, administration, and operations of the Public Utility Commission of Texas.

Amendment No. 1

Representative P. King offered the following amendment to CSSBi408:

Amend CSSB 408 as follows:

(1)iiIn Section 11.0042(a)(5), Utilities Code, as added by SECTION 4 of the bill (page 6, lines 9-10), strike "but not more than 15 percent".

(2)iiIn Section 11.0042(b), Utilities Code, as added by SECTION 4 of the bill (page 6, line 22), strike "five percent or more but not more than 15 percent of".

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(3)iiIn Section 11.010(a), Utilities Code, as added by SECTION 6 of the bill (page 8, line 17), strike "contested proceeding before" and substitute "contested proceeding hearing before".

(4)iiIn Section 11.010(a), Utilities Code, as added by SECTION 6 of the bill (page 8, line 20), insert the following after the period:

This subsection does not affect the ability of an entity to hire or contract for other persons to provide services, including professional services, to the entity in relation to a contested proceeding, including a hearing related to a contested proceeding.

(5)iiStrike SECTION 9 (page 9, lines 7-11) and SECTION 44 of the bill (page 46, lines 17-23).

(6)iiIn Section 14.101(d)(5), Utilities Code, as added by SECTION 25 of the bill (page 19, line 14), strike ", another state, or another state agency".

(7)iiIn the recital to SECTION 27 of the bill (page 19, lines 22 and 23), strike "Subsections (d), (e), and (f)" and substitute "Subsections (d) and (e)".

(8)iiIn Section 15.023(b), Utilities Code, as amended by SECTION 27 of the bill (page 19, line 25), strike "$10,000" and substitute "$25,000".

(9)iiStrike Subsection (f), Section 15.023, Utilities Code, as added by SECTION 27 of the bill (page 21, lines 5-10).

(10)iiIn Section 16.001(b), Utilities Code, as amended by SECTION 34 of the bill (page 26, lines 5 and 6), strike "[~~public utility's, retail electric provider's, or electric cooperative's~~]" and substitute "[~~public~~] utility's, retail electric provider's, provider's, or electric cooperative's".

(11)iiIn Section 39.301, Utilities Code, as amended by SECTION 37 of the bill (page 27, lines 14-17), strike "It is the policy of this state to encourage electric utilities and transmission and distribution utilities to use securitization financing [~~stranded costs,~~] because this" and substitute "This [~~stranded costs, because this~~]".

(12)iiInsert the following appropriately numbered SECTIONS to the bill and renumber following SECTIONS as appropriate:

SECTIONi__.iiSection 31.003, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c)iiThe commission may include with the report required by this section any other report required to be made to the legislature before January 15 of an odd-numbered year. A report included with the report required by this section must be clearly distinct from the report required by this section.

SECTIONi____.iiSection 32.001(b), Utilities Code, is amended to read as follows:

(b)iiThe commission has exclusive appellate jurisdiction to review an order or ordinance of a municipality exercising exclusive original jurisdiction under this subtitle, including under Chapter 33.

SECTIONi__.iiSection 39.151, Utilities Code, is amended by amending Subsections (b) through (e), (g), and (h) and adding Subsections (d-1) and (g-1) to read as follows:

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(b)ii"Independent organization" means an independent system operator or other person that is sufficiently independent of any producer or seller of electricity that its decisions will not be unduly influenced by any producer or seller. [An entity will be deemed to be independent if it is governed by a board that has three representatives from each segment of the electric market, with the consumer segment being represented by one residential customer, one commercial customer, and one industrial retail customer.]

(c)iiThe commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission shall apply the provisions of this section and Sections 39.1511, 39.1512, and 39.1515 so as to avoid conflict with a ruling of a federal regulatory body.

(d)iiThe commission shall adopt and enforce rules [~~An independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules,~~] relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants, or may delegate to an independent organization responsibilities for establishing or enforcing such rules. Any such rules adopted by an independent organization and any enforcement actions taken by the organization are[~~. The procedures shall be~~] subject to commission oversight and review. An independent organization certified by the commission is directly responsible and accountable to the commission. The commission has complete authority to oversee and investigate the organization's finances, budget, and operations as necessary to ensure the organization's accountability and to ensure that the organization adequately performs the organization's functions and duties. The organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may take appropriate action against an organization that does not adequately perform the organization's functions or duties or does not comply with this section, including decertifying the organization or assessing an administrative penalty against the organization. The commission by rule shall adopt procedures governing decertification of an independent organization, selecting and certifying a successor organization, and transferring assets to the successor organization to ensure continuity of operations in the region. The commission may not implement, by order or by rule, a requirement that is contrary to an applicable federal law or rule.

(d-1)iiThe commission may:

(1)iirequire an independent organization to provide reports and information relating to the independent organization's performance of the functions prescribed by this section and relating to the organization's revenues, expenses, and other financial matters;

(2)iiprescribe a system of accounts for an independent organization;

(3)iiconduct audits of an independent organization's performance of the functions prescribed by this section or relating to its revenues, expenses, and other financial matters and may require an independent organization to conduct such an audit;

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(4)iiinspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;

(5)iiassess administrative penalties against an independent organization that violates this title or a rule or order adopted by the commission and, at the request of the commission, the attorney general may apply for a court order to require an independent organization to comply with commission rules and orders in the manner provided by Chapter 15; and

(6)iiresolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.

(e)iiThe commission may authorize an independent organization that is certified under this section to charge a reasonable and competitively neutral rate to wholesale buyers and sellers to cover the independent organization's costs. The commission shall investigate the organization's cost efficiencies, salaries and benefits, and use of debt financing and may require the organization to provide any information needed to effectively evaluate the organization's budget and the reasonableness and neutrality of a rate or proposed rate or to evaluate the effectiveness or efficiency of the organization. The commission shall work with the organization to establish the detail of information, both current and historical, and the time frames the commission needs to effectively evaluate a rate or a rate request.

(g)iiTo maintain certification as an independent organization under this section, an organization's [If it amends its governance rules to provide that its governing body is composed as prescribed by this subsection, the existing independent system operator in ERCOT will meet the criteria provided by Subsection (a) with respect to ensuring access to the transmission systems for all buyers and sellers of electricity in the ERCOT region and ensuring the reliability of the regional electrical network. To comply with this subsection, the] governing body must be composed of persons specified by this section and selected in accordance with formal bylaws or protocols of the organization. The bylaws or protocols must be approved by the commission and must reflect the input of the commission. The bylaws must specify the process by which appropriate stakeholders elect members and, for unaffiliated members, prescribe professional qualifications for selection as a member. The bylaws must require the use of a professional search firm to identify candidates for membership of unaffiliated members. The process must allow for commission input in identifying candidates. The governing body must be composed of:

(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [~~director~~] of the independent organization [~~system operator~~] as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

(B)iione representing investor-owned utilities;

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(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

(F)iione representing electric cooperatives [~~four representatives of the power generation sector as voting members~~];

(5)iione member representing industrial consumer interests and elected by the industrial consumer market segment to serve a one-year term [~~four representatives of the transmission and distribution sector as voting members~~];

(6)iione member representing large commercial consumer interests selected in accordance with the bylaws to serve a one-year term [~~four representatives of the power sales sector as voting members~~]; and

(7)iifive members unaffiliated with any market segment and selected by the other members of the governing body to serve three-year terms [~~the following people as voting members, appointed by the commission:~~

[~~(A)iione representative of residential customers;~~

[~~(B)iione representative of commercial customers; and~~

[~~(C)iione representative of industrial customers~~].

[~~The four representatives specified in each of Subdivisions (4), (5), and (6) shall be selected in a manner that ensures equitable representation for the various sectors of industry participants.~~]

(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

(h)iiThe ERCOT independent system operator may meet the criteria relating to the other functions of an independent organization provided by Subsection (a) by adopting procedures and acquiring resources needed to carry out those functions, consistent with any rules or orders of the commission.

SECTIONi__.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511 and 39.1512 to read as follows:

Sec.i39.1511.iiPUBLIC MEETINGS OF THE GOVERNING BODY OF AN INDEPENDENT ORGANIZATION. (a) Meetings of the governing body of an independent organization certified under Section 39.151 and meetings of a subcommittee that includes a member of the governing body must be open to the public. The bylaws of the independent organization and the rules of the commission may provide for the governing body or subcommittee to enter into executive session closed to the public to address sensitive matters such as confidential personnel information, contracts, lawsuits, competitively sensitive information, or other information related to the security of the regional electrical network.

(b)iiThe bylaws of the independent organization and rules of the commission must ensure that a person interested in the activities of the independent organization has an opportunity to obtain at least seven days' advance notice of meetings and the planned agendas of the meetings and an opportunity to comment on matters under discussion at the meetings. The bylaws and commission rules governing meetings of the governing body may provide for a shorter period of advance notice and for meetings by teleconference technology for governing body meetings to take action on urgent matters. The bylaws and

3766 79th LEGISLATURE — REGULAR SESSION

rules must require actions taken on short notice or at teleconference meetings to be ratified at the governing body's next regular meeting. The notice requirements may be met by a timely electronic posting on the Internet.

Sec.i39.1512.iiDISCLOSURE OF INTEREST IN MATTER BEFORE INDEPENDENT ORGANIZATION'S GOVERNING BODY; PARTICIPATION IN DECISION. (a)iiIf a matter comes before the governing body of an independent organization certified under Section 39.151 and a member has a direct interest in that matter or is employed by or has a substantial financial interest in a person who has a direct interest in that matter, that member shall publicly disclose the fact of that interest to the governing body at a public meeting of the body. The member shall recuse himself or herself from the governing body's deliberations and actions on the matter and may not vote on the matter or otherwise participate in a governing body decision on the matter.

(b)iiA disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.

(c)iiThe fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.

SECTIONi__.iiAn independent organization certified by the Public Utility Commission of Texas before September 1, 2005, shall modify the organization's governing body to comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act, not later than September 1, 2006. On or after September 1, 2006, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act.

SECTIONi__.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Section 39.1515 to read as follows:

Sec.i39.1515.iiWHOLESALE ELECTRIC MARKET MONITOR. (a) An independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's wholesale electric market monitor to detect and prevent market manipulation strategies and recommend measures to enhance the efficiency of the wholesale market.

(b)iiThe independent organization shall provide to the personnel of the market monitor:

(1)iifull access to the organization's main operations center and the organization's records that concern operations, settlement, and reliability; and

(2)iiother support and cooperation the commission determines is necessary for the market monitor to perform the market monitor's functions.

(c)iiThe independent organization shall use money from the rate authorized by Section 39.151(e) to pay for the market monitor's activities.

(d)iiThe commission is responsible for ensuring that the market monitor has the resources, expertise, and authority necessary to monitor the wholesale electric market effectively and shall adopt rules and perform oversight of the market monitor as necessary. The market monitor shall operate under the supervision and oversight of the commission. The commission shall retain all enforcement authority conferred under this title, and this section may not be construed to

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3767

confer enforcement authority on the market monitor or to authorize the commission to delegate the commission's enforcement authority to the market monitor. The commission by rule shall define:

(1)iithe market monitor's monitoring responsibilities, including reporting obligations and limitations;

(2)iithe standards for funding the market monitor, including staffing requirements;

(3)iiqualifications for personnel of the market monitor; and

(4)iiethical standards for the market monitor and the personnel of the market monitor.

(e)iiIn adopting rules governing the standards for funding the market monitor, the commission shall consult with a subcommittee of the independent organization's governing body to receive information on how money is or should be spent for monitoring functions. Rules governing ethical standards must include provisions designed to ensure that the personnel of the market monitor are professionally and financially independent from market participants. The commission shall develop and implement policies that clearly separate the policymaking responsibilities of the commission and the monitoring, analysis, and reporting responsibilities of the market monitor.

(f)iiThe market monitor immediately shall report directly to the commission any potential market manipulations and any discovered or potential violations of commission rules or rules of the independent organization.

(g)iiThe personnel of the market monitor may communicate with commission staff on any matter without restriction.

(h)iiThe market monitor annually shall submit to the commission and the independent organization a report that identifies market design flaws and recommends methods to correct the flaws. The commission and the independent organization shall review the report and evaluate whether changes to rules of the commission or the independent organization should be made.

SECTIONi____.iiSection 39.205, Utilities Code, is amended to read as follows:

Sec.i39.205.iiREGULATION OF COSTS FOLLOWING FREEZE PERIOD. At the conclusion of the freeze period, any remaining costs associated with nuclear decommissioning obligations continue to be subject to cost of service rate regulation and shall be included as a nonbypassable charge to retail customers. The commission may adopt rules necessary to ensure that money for decommissioning is prudently collected, managed, and spent for its intended purpose and that money that remains unspent after decommissioning is completed is returned to retail customers.

SECTIONi__.iiChapter 51, Utilities Code, is amended by adding Section 51.011 to read as follows:

Sec.i51.011.iiRECOVERY OF TAXABLE TELECOM RECEIPT ASSESSMENT. (a) To the extent an annual assessment is imposed on each telecommunications provider, including each commercial mobile service

3768 79th LEGISLATURE — REGULAR SESSION

provider, doing business in this state, a certificated telecommunications provider may, beginning June 1, 2005, recover from the provider's customers, an assessment imposed on the provider under this title.

(b)iiA certificated telecommunications provider may recover only the amount of the assessment imposed and may recover the assessment through a monthly billing process.

SECTIONi__.iiSection 52.006, Utilities Code, is amended by adding Subsection (e) to read as follows:

(e)iiThe commission may include with the report required by this section any other report required to be made to the legislature before January 15 of an odd-numbered year. A report included with the report required by this section must be clearly distinct from the report required by this section.

Amendment No. 2

Representative Solomons offered the following amendment to Amendment No.i1:

Amend Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 9, strike lines 12 through 31.

(2) Strike page 10.

(3) On page 11, strike lines 1 through 10.

(4) Add the following new SECTIONS and renumber accordingly:Add the following new SECTIONS and renumber accordingly:

SECTION _____. Subchapter D, Chapter 39, Utilities Code, is amended by adding Section 39.1515 to read as follows:

Sec.i39.1515.iiWHOLESALE ELECTRIC MARKET MONITOR. (a)iiAn independent organization certified under Section 39.151 shall contract with an entity selected by the commission to act as the commission's wholesale electric market monitor to detect and prevent market manipulation strategies and recommend measures to enhance the efficiency of the wholesale market.

(b)iiThe independent organization shall provide to the personnel of the market monitor:

(1)iifull access to the organization's main operations center and the organization's records that concern operations, settlement, and reliability; and

(2)iiother support and cooperation the commission determines is necessary for the market monitor to perform the market monitor's functions.

(c)iiThe independent organization shall use money from the rate authorized by Section 39.151(e) to pay for the market monitor's activities.

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3769

(1)iithe market monitor's monitoring responsibilities, including reporting obligations and limitations;

(2)iithe standards for funding the market monitor, including staffing requirements;

(3)iiqualifications for personnel of the market monitor; and

(4)iiethical standards for the market monitor and the personnel of the market monitor.

(g)iiThe personnel of the market monitor may communicate with commission staff on any matter without restriction.

Representative P. King moved to table Amendment No. 2.

A record vote was requested.

The motion to table prevailed by (Record 742): 84 Yeas, 54 Nays, 2 Present, not voting.

Yeas — Allen, R.; Alonzo; Anderson; Baxter; Bohac; Bonnen; Branch; Brown, B.; Callegari; Campbell; Casteel; Coleman; Cook, R.; Corte; Crabb; Davis, J.; Dawson; Delisi; Denny; Deshotel; Driver; Dukes; Dunnam; Eissler; Elkins; Flynn; Frost; Gattis; Giddings; Gonzales; Gonzalez Toureilles; Goodman; Goolsby; Griggs; Grusendorf; Haggerty; Harper-Brown; Hartnett; Hegar; Hilderbran; Hill; Homer; Howard; Hughes; Hunter; Hupp; Jackson; Keel; Keffer, B.; Keffer, J.; King, P.; Kolkhorst; Krusee; Kuempel; Laubenberg; Madden; McClendon; Menendez; Merritt; Miller; Morrison; Mowery; Noriega, M.; Olivo; Orr; Otto; Paxton; Peña; Phillips; Puente; Quintanilla; Raymond; Riddle; Rose; Smith, T.; Smith, W.; Smithee; Straus; Swinford; Truitt; Turner; Van Arsdale; Woolley; Zedler.

Nays — Allen, A.; Anchia; Berman; Blake; Brown, F.; Burnam; Castro; Chavez; Chisum; Cook, B.; Crownover; Davis, Y.; Dutton; Edwards; Eiland; Escobar; Farabee; Farrar; Geren; Hamilton; Hamric; Hardcastle; Herrero; Hope;

3770 79th LEGISLATURE — REGULAR SESSION

Hopson; Jones, D.; Jones, J.; King, T.; Laney; Leibowitz; Luna; Martinez; Martinez Fischer; McCall; McReynolds; Moreno, P.; Naishtat; Oliveira; Pickett; Reyna; Ritter; Rodriguez; Seaman; Solis; Solomons; Strama; Talton; Taylor; Thompson; Uresti; Veasey; Vo; West; Wong.

Present, not voting — Mr. Speaker; Nixon(C).

Absent, Excused — Bailey; Gallego; Hodge; Isett; Pitts.

Absent — Flores; Guillen; Hochberg; Villarreal.

STATEMENT OF VOTE

When Record No. 742 was taken, my vote failed to register. I would have voted yes.

Guillen

Amendment No. 3

Representative Solomons offered the following amendment to Amendment No.i1:

Amend Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 2, strike lines 29 through 31.

(2) Strike pages 3 through 8.

(3) On page 9, strike lines 1 through 11.

(4) Add the following new SECTIONS and renumber accordingly:

SECTIONi_____.iiSection 39.151, Utilities Code, is amended by amending Subsections (b) through (e), (g), and (h) and adding Subsections (d-1) and (g-1) to read as follows:

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3771

organization certified by the commission is directly responsible and accountable to the commission. The commission has complete authority to oversee and investigate the organization's finances, budget, and operations as necessary to ensure the organization's accountability and to ensure that the organization adequately performs the organization's functions and duties. The organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may take appropriate action against an organization that does not adequately perform the organization's functions or duties or does not comply with this section, including decertifying the organization or assessing an administrative penalty against the organization. The commission by rule shall adopt procedures governing decertification of an independent organization, selecting and certifying a successor organization, and transferring assets to the successor organization to ensure continuity of operations in the region. The commission may not implement, by order or by rule, a requirement that is contrary to an applicable federal law or rule.

(d-1)iiThe commission may:

(2)iiprescribe a system of accounts for an independent organization;

(4)iiinspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;

(6)iiresolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.

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(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [~~director~~] of the independent organization [~~system operator~~] as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

(B)iione representing investor-owned utilities;

(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

(F)iione representing electric cooperatives [~~four representatives of the power generation sector as voting members~~];

[~~(A)iione representative of residential customers;~~

[~~(B)iione representative of commercial customers; and~~

[~~(C)iione representative of industrial customers~~].

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(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

SECTIONi_____.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511 and 39.1512, to read as follows:

Sec.i39.1511.iiPUBLIC MEETINGS OF THE GOVERNING BODY OF AN INDEPENDENT ORGANIZATION. (a)iiMeetings of the governing body of an independent organization certified under Section 39.151 and meetings of a subcommittee that includes a member of the governing body must be open to the public. The bylaws of the independent organization and the rules of the commission may provide for the governing body or subcommittee to enter into executive session closed to the public to address sensitive matters such as confidential personnel information, contracts, lawsuits, competitively sensitive information, or other information related to the security of the regional electrical network.

(b)iiA disclosure made under Subsection (a) shall be entered in the minutes of the meeting at which the disclosure is made.

(c)iiThe fact that a member is recused from a vote or decision by application of this section does not affect the existence of a quorum.

SECTIONi_____.iiAn independent organization certified by the Public Utility Commission of Texas before September 1, 2005, shall modify the organization's governing body to comply with Subsection (g), Section 39.151,

3774 79th LEGISLATURE — REGULAR SESSION

Utilities Code, as amended by this Act, not later than September 1, 2006. On or after September 1, 2006, the Public Utility Commission of Texas may decertify an independent organization whose governing body does not comply with Subsection (g), Section 39.151, Utilities Code, as amended by this Act.

Representative P. King moved to table Amendment No. 3.

A record vote was requested.

The motion to table was lost by (Record 743): 59 Yeas, 80 Nays, 2 Present, not voting.

Yeas — Alonzo; Anderson; Baxter; Bohac; Branch; Brown, B.; Callegari; Campbell; Casteel; Chisum; Cook, R.; Corte; Crabb; Davis, J.; Delisi; Driver; Eissler; Elkins; Flores; Flynn; Goolsby; Griggs; Guillen; Haggerty; Harper-Brown; Hartnett; Hegar; Hilderbran; Hill; Howard; Hughes; Hunter; Hupp; Jackson; Keel; Keffer, B.; Keffer, J.; King, P.; Krusee; Kuempel; Laubenberg; Madden; McClendon; Merritt; Miller; Moreno, P.; Morrison; Mowery; Olivo; Paxton; Quintanilla; Riddle; Smith, W.; Straus; Swinford; Taylor; Van Arsdale; Wong; Zedler.

Nays — Allen, A.; Anchia; Berman; Blake; Brown, F.; Burnam; Castro; Chavez; Coleman; Cook, B.; Crownover; Davis, Y.; Dawson; Denny; Deshotel; Dukes; Dunnam; Dutton; Edwards; Eiland; Escobar; Farabee; Farrar; Frost; Gattis; Geren; Giddings; Gonzales; Gonzalez Toureilles; Goodman; Grusendorf; Hamilton; Hamric; Hardcastle; Herrero; Hochberg; Homer; Hope; Hopson; Jones, D.; Jones, J.; King, T.; Kolkhorst; Leibowitz; Luna; Martinez; Martinez Fischer; McCall; McReynolds; Menendez; Naishtat; Noriega, M.; Oliveira; Orr; Otto; Peña; Phillips; Pickett; Puente; Raymond; Reyna; Ritter; Rodriguez; Rose; Seaman; Smith, T.; Smithee; Solis; Solomons; Strama; Talton; Thompson; Truitt; Turner; Uresti; Veasey; Villarreal; Vo; West; Woolley.

Present, not voting — Mr. Speaker; Nixon(C).

Absent, Excused — Bailey; Gallego; Hodge; Isett; Pitts.

Absent — Allen, R.; Bonnen; Laney.

STATEMENT OF VOTE

I was shown voting yes on Record No. 743. I intended to vote no.

Baxter

Amendment No. 3 was adopted.

Amendment No. 4

Representative Hopson offered the following amendment to Amendment No.i1:

Amend Amendment No. 1 by King to CSSB 408 as follows:

(1) In item (12) of the amendment, in the recital to the unnumbered SECTION that amends Section 39.151, Utilities Code (page 2, line 31), strike "Subsections (d-1) and (g-1)" and substitute "Subsection (g-1)".

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3775

(2) In item (12) of the amendment, strike Subsections (c), (d), (d-1), and (e), Section 39.151, Utilities Code, as amended by the unnumbered SECTION (page 3, line 9, through page 5, line 18), and substitute the following:

(c) The commission shall certify an independent organization or organizations to perform the functions prescribed by this section. The commission has complete authority to oversee, require the commission's approval of, and order modifications of any part of the finances, budget, or operations of an independent organization certified under this section.

(d) An independent organization certified by the commission for a power region shall establish and enforce procedures, consistent with this title and the commission's rules, relating to the reliability of the regional electrical network and accounting for the production and delivery of electricity among generators and all other market participants. The procedures shall be subject to commission oversight and review. An independent organization certified by the commission is directly responsible and accountable to the commission. The organization shall fully cooperate with the commission in the commission's oversight and investigatory functions. The commission may decertify an organization that does not adequately perform the organization's functions or duties or does not comply with this section.

(e) The commission by rule shall require an independent organization certified under this section to provide the commission with sufficiently detailed information to allow the commission to review and approve or disapprove the independent organization's budget for cost efficiencies and for the reasonableness and necessity of budget items. The rules must include a timetable for an independent organization to file its budget for review under the rules. The commission's budget review must include a review of salaries, employee benefits, and the independent organization's use of debt financing. After determining the overall reasonableness and necessity of an independent organization's budget, the [~~The~~] commission, in the same proceeding, may authorize the [an] independent organization [~~that is certified under this section~~] to charge [~~a reasonable and competitively neutral rate~~] to wholesale buyers and sellers a reasonable and competitively neutral rate determined by the commission to allow [~~cover~~] the independent organization a reasonable opportunity to take in a reasonable and necessary amount of revenue, as determined by the commission in the budget review process. The independent organization may change the rate established by the commission in the budget review process only with the commission's approval. On the commission's own initiative or on receiving a complaint, the commission may inquire into the reasonableness of an independent organization's budget or rate [~~costs~~].

Amendment No. 4 was adopted.

Amendment No. 5

Representative Solomons offered the following amendment to Amendment No. 1:

Amend Amendment No. 1 by King to CSSB 408 as follows:

(1) On page 1, strike lines 27 through 29 and insert the following:

3776 79th LEGISLATURE — REGULAR SESSION

(8) In Section 15.023(b), Utilities Code, as amended by SECTION 27 of the bill, strike lines 24 through 27 on page 19 and lines 1 through 4 on page 20, and insert the following:

(b) The penalty for a violation may be in an amount not to exceed $25,000 [~~$5,000~~]. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.".

Amendment No. 5 was adopted.

Amendment No. 6

Representative Hopson offered the following amendment to Amendment No. 1:

Amend Amendment No. 1 by King by adding the following appropriately numbered item to read as follows:

(__) Insert the following appropriately numbered SECTION to read as follows and renumber subsequent SECTIONS accordingly:

SECTION __. (a) The Public Utility Commission of Texas, as part of the commission's continuing analysis of reserve margins and capacity needs for the ERCOT system, shall consider creating and may establish a new alternative market mechanism to allow a potential interruptible industrial load that is greater than one megawatt and that is not participating in the ERCOT market as a load acting as a resource to provide the benefits of interruptible load to the system and to be compensated for that service.

(b) The legislature finds that businesses in this state that are able to participate in an alternative interruptible service compete in interstate and global markets and that the opportunity for the businesses to be compensated for their interruptible loads is essential to the businesses' ability to remain competitive and to provide significant benefits to the economy of this state. The Public Utility Commission of Texas shall consider these economic benefits in analyzing the potential of interruptible service.

(c) Not later than January 1, 2006, The Public Utility Commission of Texas shall report any actions taken regarding interruptible service and the results of its analysis of interruptible service to the governor, the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each legislative committee with jurisdiction over electric services.

Amendment No. 6 was adopted.

Amendment No. 2 - Vote Reconsidered

Representative Homer moved to reconsider the vote by which Amendment No. 2 was tabled.

The motion to reconsider prevailed.

Amendment No. 2 was adopted.

Amendment No. 1, as amended, was adopted. (Hopson recorded voting no.)

Amendment No. 7

Representative P. King offered the following amendment to CSSBi408:

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Amend CSSB 408 (House committee printing) by adding the following sections to the bill, numbered appropriately:

SECTIONi__.iiThe heading to Subtitle C, Title 2, Utilities Code, is amended to read as follows:

SUBTITLE C. ADVANCED SERVICE INFRASTRUCTURE AND INTERMODAL COMPETITION [~~TELECOMMUNICATIONS UTILITIES~~]

SECTIONi__.iiSections 51.001(a)-(f), Utilities Code, are amended to read as follows:

(a)iiSignificant technological changes have occurred in telecommunications since the law from which this title is derived was originally adopted. To encourage and accelerate the development of a competitive and advanced services [~~telecommunications~~] environment and infrastructure, new rules, policies, and principles must be formulated consistent with the understanding that, as new technologies become available, all public policy must be driven by free market principles for the benefit of consumers in this state [and applied to protect the public interest. Changes in technology and market structure have increased the need for minimum standards of service quality, customer service, and fair business practices to ensure high-quality service to customers and a healthy marketplace where competition is permitted by law. It is the purpose of this subtitle to grant the commission authority to make and enforce rules necessary to protect customers of telecommunications services] consistent with the public interest.

(b)iiIt is the policy of this state to:

(1)iipromote diversity of telecommunications and advanced services providers and interconnectivity;

(2)iipromote and encourage the development of competitive broadband networks;

(3)iiencourage a fully competitive telecommunications and advanced services marketplace; and

(4)i[~~(3)~~]iimaintain a wide availability of high quality, interoperable, standards-based telecommunications services at affordable rates.

(c)iiThe policy goals described by Subsection (b) are best achieved by legislation that modernizes the state's regulatory framework [~~telecommunications regulation~~] by:

(1)iiguaranteeing the affordability of basic telephone service for low-income persons in a competitively neutral manner; [~~and~~]

(2)iifostering free market intermodal competition; and

(3)iimaintaining and enforcing effective remedies to discourage and redress anticompetitive conduct [~~in the telecommunications industry~~].

(d)iiThe technological advancements, deployment of broadband network [~~advanced telecommunications~~] infrastructure, and increased customer choices for telecommunications and advanced services generated by a truly competitive market play a critical role in this state's [~~Texas'~~] economic future by raising living standards for Texans through:

(1)iienhanced economic development; and

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(2)iiimproved delivery of education, health, and other public and private services.

(e)iiThe strength of competitive forces varies widely between markets, products, and services. It is the policy of this state to require the commission to take action necessary to enhance competition by avoiding the imposition of unnecessary [~~adjusting~~] regulation in light of [~~to match~~] the degree of intramodal and intermodal competition in the marketplace to[:

[~~(1)~~]iireduce the cost and burden of regulation[;] and to

[~~(2)~~]iiprotect markets that are not competitive.

(f)iiIt is the policy of this state to ensure that high quality telecommunications and advanced services are available, accessible, and usable by an individual with a disability, unless making the services available, accessible, or usable would:

(1)iiresult in an undue burden, including unreasonable cost or technical infeasibility; or

(2)iihave an adverse competitive effect.

SECTIONi__.iiSection 51.002, Utilities Code, is amended to read as follows:

Sec.i51.002.iiDEFINITIONS. In this title [~~subtitle~~]:

(1)ii"Advanced service" means a service that may be delivered only over a broadband network.

(2)ii"Basic local telecommunications service" means:

(A)ii[~~flat rate~~] residential and business local exchange telephone service, including primary directory listings;

(B)iitone dialing service;

(C)iiaccess to operator services;

(D)iiaccess to directory assistance services;

(E)iiaccess to 911 service provided by a local authority or dual party relay service;

(F)iithe ability to report service problems seven days a week;

(G)iilifeline [~~and tel-assistance~~] services; and

(H)iiany other service the commission determines after a hearing is a basic local telecommunications service.

(3)ii"Broadband network" means a wireline network that offers a minimum downstream speed of 200 kilobits a second and a minimum upstream speed of 128 kilobits a second to or from the premises of an end user. The term includes DSL, fiber-to-the-premises, and cable modem networks.

(4)i[~~(2)~~]ii"Dominant carrier" means a provider of a communication service provided wholly or partly over a telephone system who the commission determines has sufficient market power in a telecommunications market to control prices for that service in that market in a manner adverse to the public interest. The term includes a provider who provided local exchange telephone service within a certificated exchange area on September 1, 1995, as to that service and as to any other service for which a competitive alternative is not available in a particular geographic market. In addition, with respect to[:

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[(A)iiintraLATA long distance message telecommunications service originated by dialing the access code "1-plus," the term includes a provider of local exchange telephone service in a certificated exchange area for whom the use of that access code for the origination of "1-plus" intraLATA calls in the exchange area is exclusive; and

[~~(B)~~]iiinterexchange telecommunications services, the term does not include an interexchange carrier that is not a certificated local exchange company.

(5)i[~~(3)~~]ii"Incumbent local exchange company" means a local exchange company that held [~~has~~] a certificate of convenience and necessity on September 1, 2004 [~~1995~~].

(6)ii"Information service" has the meaning assigned by 47 U.S.C. Section 153.

(7)ii"Interexchange telecommunications service" means landline telecommunications service provided between a point located within a local access and transport area and a point located within another local access and transport area.

(8)ii"IntraLATA interexchange" or "intraLATA message toll" service means landline telecommunications service between a point located within an exchange in a local access and transport area, as defined by the Federal Communications Commission, and a point within another exchange located in the same local access and transport area.

(9)i[~~(4)~~]ii"Local exchange company" means an entity [~~a telecommunications utility~~] that has a certificate and is providing [~~of convenience and necessity or a certificate of operating authority to provide~~] in this state:

(A)iilocal exchange telephone service;

(B)iibasic local telecommunications service; or

(C)iiswitched access service.

(10)i[~~(5)~~]ii"Local exchange telephone service" means telecommunications service provided [~~within an exchange~~] to establish connections between customer premises [~~within the exchange~~], including connections between a customer premises within a local access and transport area and an entity providing interexchange telecommunications service, using any landline technology or radio or wireless type facility components used to provide traditional landline service [~~and a long distance provider serving the exchange~~]. The term includes basic network service as defined by Section 58.051, services classified as nonbasic network services by Section 58.151, [~~tone dialing service, service connection charges, and directory assistance services offered in connection with basic local telecommunications service~~] and interconnection with other service providers. The term does not include the following services, whether offered on an intraexchange or interexchange basis:

(A)iicentral office based PBX-type services for systems of 75 stations or more;

(B)iibilling and collection services;

(C)iihigh-speed private line services of 1.544 megabits or greater;

(D)iicustomized services;

(E)iiprivate line or virtual private line services;

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(F)iiresold or shared local exchange telephone services if permitted by tariff;

(G)iidark fiber services;

(H)iinon-voice data transmission service offered as a separate service and not as a component of basic local telecommunications service;

(I)iidedicated or virtually dedicated access services; or

(J)iian information service or any other service the commission determines is not a "local exchange telephone service."

(11)ii"Network provider" means an entity, whether or not certificated, that is not a service provider, as defined by this section, and that uses any technology to offer voice communication to the public over a wireline network that the provider or an affiliate of the provider owns or controls.

(12)i[~~(6)ii"Long run incremental cost" has the meaning assigned by 16 T.A.C. Section 23.91 or its successor.~~

[~~(7)~~]ii"Pricing flexibility" includes:

(A)iicustomer specific contracts;

(B)iipackaging of services;

(C)iivolume, term, and discount pricing;

(D)iizone density pricing, with a zone to be defined as an exchange; and

(E)iiother promotional pricing.

(13)ii"Provider" means a network provider or a service provider.

(14)i[~~(8)~~]ii"Public utility" or "utility" means a person or river authority that owns or operates for compensation in this state equipment or facilities to convey, transmit, or receive communications over a telephone system as a dominant carrier. The term includes a lessee, trustee, or receiver of any of those entities, or a combination of those entities. The term does not include a municipal corporation. A person is not a public utility solely because the person:

(A)iifurnishes or furnishes and maintains a private system;

(B)iimanufactures, distributes, installs, or maintains customer premise communications equipment and accessories; or

(C)iifurnishes a telecommunications service or commodity only to itself, its employees, or its tenants as an incident of employment or tenancy, if that service or commodity is not resold to or used by others.

(15)ii"Rural incumbent local exchange company" means an incumbent local exchange company that:

(A)iiis a cooperative corporation; or

(B)iihas, together with all affiliated incumbent local exchange companies, fewer than 31,000 access lines in service in this state on September 1, 2005.

(16)i[~~(9)~~]ii"Separation" means the division of plant, revenues, expenses, taxes, and reserves applicable to exchange or local service if these items are used in common to provide public [~~utility~~] service to both local exchange telephone service and other service, such as interstate or intrastate toll service.

(17)ii"Service provider" means a local exchange company or a provider of interexchange telecommunications service.

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(18)ii"Telecommunications" has the meaning assigned by 47 U.S.C. Section 153.

(19)i[~~(10)~~]ii"Telecommunications provider" means a person or entity that offers telecommunications to others for a fee[:

[~~(A)iimeans:~~

[~~(i)iia certificated telecommunications utility;~~

[~~(ii)iia shared tenant service provider;~~

[~~(iii)iia nondominant carrier of telecommunications services;~~

[(iv)iia provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), except that the term does not include these entities for the purposes of Chapter 17, 55, or 64;

[~~(v)iia telecommunications entity that provides central office based PBX-type sharing or resale arrangements;~~

[~~(vi)iian interexchange telecommunications carrier;~~

[~~(vii)iia specialized common carrier;~~

[~~(viii)iia reseller of communications;~~

[~~(ix)iia provider of operator services;~~

[~~(x)iia provider of customer-owned pay telephone service; or~~

[~~(xi)iia person or entity determined by the commission to provide telecommunications services to customers in this state; and~~

[~~(B)iidoes not mean:~~

[~~(i)iia provider of enhanced or information services, or another user of telecommunications services, who does not also provide telecommunications services; or~~

[~~(ii)iia state agency or state institution of higher education, or a service provided by a state agency or state institution of higher education.~~

[~~(11)ii"Telecommunications utility" means:~~

[~~(A)iia public utility;~~

[~~(B)iian interexchange telecommunications carrier, including a reseller of interexchange telecommunications services;~~

[~~(C)iia specialized communications common carrier;~~

[~~(D)iia reseller of communications;~~

[~~(E)iia communications carrier who conveys, transmits, or receives communications wholly or partly over a telephone system;~~

[~~(F)iia provider of operator services as defined by Section 55.081, unless the provider is a subscriber to customer-owned pay telephone service; and~~

[~~(G)iia separated affiliate or an electronic publishing joint venture as defined in Chapter 63.~~

[~~(12)ii"Tier 1 local exchange company" has the meaning assigned by the Federal Communications Commission~~].

SECTIONi__.iiSection 51.003, Utilities Code, is amended to read as follows:

Sec.i51.003.iiAPPLICABILITY.ii(a) Except as otherwise expressly provided by this title, this title does not apply to:

3782 79th LEGISLATURE — REGULAR SESSION

(1)iia company that as its only form of business:

(A)iiis a telecommunications manager; or

(B)iiadministers central office based or customer based PBX-type sharing/resale arrangements;

(2)iitelegraph services;

(3)iitelevision or radio stations;

(4)iicommunity antenna television services; or

(5)iia provider of commercial mobile service as defined by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 151 et seq.), Federal Communications Commission rules, and the Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), other than conventional rural radio-telephone services provided by a wire-line telephone company under the Public Mobile Service rules of the Federal Communications Commission (47 C.F.R. Part 22).

(b)iiA service provider or network provider is subject to the commission's jurisdiction except to the extent federal law specifically preempts the commission from exercising authority.

(c)iiA state agency, a state institution of higher education, or a service provided by a state agency or state institution of higher education is not a network provider, service provider, or telecommunications provider for purposes of this title.

SECTIONi__.iiSection 51.009, Utilities Code, is amended to read as follows:

Sec.i51.009.iiMUNICIPAL FEES. (a) Nothing in this title, including Section 53.201, may be construed as in any way limiting the right of a network provider or service provider [~~public utility~~] to pass through a municipal fee the provider is required to pay, including an increase in a municipal fee. A municipality must provide 30-day public notice of the fee and/or increase and the notice should include that the network provider or service provider may pass through the fee to the customer.

(b)iiA network provider or service provider [~~public utility~~] that [~~traditionally~~] passes through municipal fees shall promptly pass through any municipal fee reduction.

SECTIONi__.iiSection 52.002, Utilities Code, is amended to read as follows:

Sec.i52.002.iiAUTHORITY TO REGULATE. [(a) To carry out the public policy stated by Section 52.001 and to regulate rates, operations, and services so that the rates are just, fair, and reasonable and the services are adequate and efficient, the commission has exclusive original jurisdiction over the business and property of a telecommunications utility in this state subject to the limitations imposed by this title.

[~~(b)~~]iiThe commission's regulatory authority [~~as to a telecommunications utility other than a public utility~~] is only as prescribed by this title.

SECTIONi__.iiSection 52.003, Utilities Code, is amended to read as follows:

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Sec.i52.003.iiCOOPERATION WITH OTHER REGULATORY AUTHORITIES. In regulating the [~~rates, operations, and~~] services of a provider of local exchange telephone service [~~telecommunications utility~~] providing service in a municipality located on the state line adjacent to a municipality in an adjoining state, the commission may cooperate with the [~~utility~~] regulatory commission of the adjoining state or of the federal government and may hold a joint hearing or make a joint investigation with that commission.

SECTIONi__.iiSection 51.005, Utilities Code, is transferred to Subchapter A, Chapter 52, Utilities Code, redesignated as Section 52.0041, and amended to read as follows:

Sec.i52.0041.iiCOOPERATION WITH MUNICIPALITIES [~~51.005.iiASSISTANCE TO MUNICIPALITY~~]. (a) On request of a municipality, the commission may advise and assist the municipality with respect to a question or proceeding arising under this title. Assistance provided by the commission may include aid to a municipality on a matter pending before the commission or a court, such as making a staff member available as a witness or otherwise providing evidence to the municipality.

(b)iiA municipality has standing in each case before the commission that relates to a provider of local exchange telephone service providing retail service to the municipality. A municipality's standing is subject to the right of the commission to:

(1)iidetermine standing in a case involving a retail service area dispute that involves two or more providers of local exchange telephone service; and

(2)iiconsolidate municipalities on an issue of common interest.

(c)iiThe governing body of a municipality participating in a ratemaking proceeding may engage rate consultants, accountants, auditors, attorneys, and engineers to:

(1)iiconduct investigations, present evidence, and advise and represent the governing body; and

(2)iiassist the governing body with litigation before the commission or a court.

(d)iiA provider of local exchange telephone service in the ratemaking proceeding may not be required to reimburse the governing body of the municipality for the reasonable cost of the services of a person engaged under Subsection (c) except to the extent the commission determines is reasonable.

SECTIONi__.iiSection 52.006, Utilities Code, is amended to read as follows:

Sec.i52.006.iiCOMMISSION TO REPORT TO LEGISLATURE. (a) Before January 15 of each odd-numbered year, the commission shall report to the legislature on:

(1)iithe scope of competition in all [~~regulated~~] telecommunications and information services markets, regardless of technology used; and

(2)iithe effect of competition on customers [~~in both competitive and noncompetitive markets~~], with a specific focus on rural markets and underserved areas in urban markets.

(b)iiThe report shall include[:

3784 79th LEGISLATURE — REGULAR SESSION

[~~(1)~~]iian assessment of the effect of competition on the rates and availability of all telecommunications and information services for residential and business customers, regardless of technology used[;

[~~(2)iia summary of commission action over the preceding two years that reflects changes in the scope of competition in regulated telecommunications markets; and~~

[~~(3)iirecommendations for legislation the commission determines is appropriate to promote the public interest in the context of a partially competitive telecommunications market~~].

(c)iiThe commission, in its assessment under Subsection (b) [~~(b)(1)~~], shall specifically address any effects on universal service.

(d)iiEach network provider and service provider [~~A telecommunications utility~~] shall cooperate with the commission as reasonably necessary for the commission to satisfy the requirements of this section.

SECTIONi__.iiThe heading to Subchapter C, Chapter 52, Utilities Code, is amended to read as follows:

SUBCHAPTER C. PROVIDERS OF INTEREXCHANGE TELECOMMUNICATIONS SERVICES [~~UTILITIES THAT ARE NOT DOMINANT CARRIERS~~]

SECTIONi__.iiSection 52.101, Utilities Code, is amended to read as follows:

Sec.i52.101.iiAPPLICABILITY. This subchapter applies only to a provider of interexchange telecommunications services [~~utility that is not:~~

[~~(1)iia dominant carrier; or~~

[~~(2)iithe holder of a certificate of operating authority or a service provider certificate of operating authority~~].

SECTIONi__.iiSection 52.102, Utilities Code, is amended to read as follows:

Sec.i52.102.iiLIMITED REGULATORY AUTHORITY. [~~(a)~~] Except as otherwise provided by this subchapter and Subchapter[~~, Subchapters~~] D, [~~and K,~~] Chapter 55, [~~and Section 55.011,~~] the commission has [~~only the following~~] jurisdiction over a provider of interexchange telecommunications services only to require compliance with [~~utility subject to~~] this subchapter[:

[~~(1)iito require registration under Section 52.103;~~

[~~(2)iito conduct an investigation under Section 52.104;~~

[~~(3)iito require the filing of reports as the commission periodically directs;~~

[~~(4)iito require the maintenance of statewide average rates or prices of telecommunications service;~~

[(5)iito require a telecommunications utility that had more than six percent of the total intrastate access minutes of use as measured for the most recent 12-month period to pass switched access rate reductions under this title to customers as required by Section 52.112;

[~~(6)iito require access to telecommunications service under Section 52.105; and~~

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[~~(7)iito require the quality of telecommunications service provided to be adequate under Section 52.106.~~

[~~(b)iiThe authority provided by Subsection (a)(5) expires on the date on which Section 52.112 expires~~].

SECTIONi__.iiSection 52.103, Utilities Code, is amended to read as follows:

Sec.i52.103.iiREGISTRATION REQUIRED. (a) A provider of interexchange telecommunications service to customers residing in this state [~~utility~~] shall register with the commission not later than the 30th day after the date the provider [~~utility~~] commences service to the public.

(b)iiA provider of interexchange telecommunications service [~~utility~~] that registers under Subsection (a) shall file with the commission a description of:

(1)iithe location and type of service provided; and

(2)iithe price to the public of that service[~~; and~~

[~~(3)iiother registration information the commission directs~~].

(c)iiA provider of [An] interexchange telecommunications service [~~utility~~] doing business in this state shall maintain on file with the commission tariffs or lists governing the terms of providing its services.

SECTIONi__.iiSection 52.108, Utilities Code, is amended to read as follows:

Sec.i52.108.iiOTHER PROHIBITED PRACTICES. The commission may enter any order necessary to protect the public interest if the commission finds after notice and hearing that a provider of interexchange telecommunications service [~~utility~~] has ceased providing[:

[~~(1)iifailed to maintain statewide average rates;~~

[~~(2)iiabandoned~~] interexchange [~~message~~] telecommunications service to a local exchange area in which there is no competitive alternative [~~in a manner contrary to the public interest;~~

[~~(3)iiengaged in a pattern of preferential or discriminatory activities prohibited by Section 53.003, 55.005, or 55.006; or~~

[~~(4)iifailed to pass switched access rate reductions to customers under Chapter 56 or other law, as required by Section 52.112~~].

SECTIONi__.iiThe heading to Subchapter F, Chapter 52, Utilities Code, is amended to read as follows:

SUBCHAPTER F. REQUIRED [~~REPORTS AND~~] FILINGS AND ACCESS RATE PROHIBITIONS[~~; RECORDS~~]

SECTIONi__.iiSection 52.251, Utilities Code, is amended to read as follows:

Sec.i52.251.iiTARIFF FILINGS. (a) An incumbent local exchange company [~~A public utility~~] shall file with the commission a tariff or price list showing each rate that is:

(1)iisubject to the commission's jurisdiction; or [~~and~~]

(2)iiin effect for the provision of local exchange telephone service [~~a utility service, product, or commodity offered by the utility~~].

3786 79th LEGISLATURE — REGULAR SESSION

(b)iiThe incumbent local exchange company [~~public utility~~] shall file as a part of the tariff required under Subsection (a) each term or condition [~~rule~~] that relates to or affects:

(1)iia rate [~~of the utility~~]; or

(2)iithe [~~a utility~~] service, product, or commodity furnished [~~by the utility~~].

(c)iiA certificated provider of local exchange telephone service that is not an incumbent local exchange company shall file a price list as provided by Subsection (a).

SECTIONi__.iiSection 52.155, Utilities Code, is transferred to Subchapter F, Chapter 52, Utilities Code, redesignated as Section 52.2521, and amended to read as follows:

Sec.i52.2521i[~~52.155~~].iiPROHIBITION OF EXCESSIVE ACCESS CHARGES. (a) A provider of local exchange telephone service that is not an incumbent local exchange company [~~telecommunications utility that holds a certificate of operating authority or a service provider certificate of operating authority~~] may not charge a higher amount for a combined originating and [or] terminating intrastate switched access than the prevailing rates charged by the incumbent local exchange company [~~holder of the certificate of convenience and necessity~~] in whose territory the call originated or terminated unless:

(1)iithe commission specifically approves the higher rate; or

(2)iisubject to commission review, the provider of local exchange telephone service [~~telecommunications utility~~] establishes statewide average composite originating and terminating intrastate switched access rates based on a reasonable approximation of traffic originating and terminating between all certificated providers [~~holders of certificates of convenience and necessity~~] in this state.

(b)iiNotwithstanding any other provision of this title, the commission has all jurisdiction necessary to enforce this section.

SECTIONi__.iiSection 52.255, Utilities Code, is amended to read as follows:

Sec.i52.255.iiAVAILABILITY OF RECORDS. Notwithstanding Section 14.152, a book, account, record, or memorandum of a provider of local exchange telephone service [~~public utility~~] may be removed from this state if the book, account, record, or memorandum is returned to this state for any commission inspection authorized by this title.

SECTIONi__.iiSection 52.256(c), Utilities Code, is amended to read as follows:

(c)iiEach provider of local exchange telephone service [~~telecommunications utility~~] shall submit an annual report to the commission and the legislature relating to its efforts to improve workforce diversity and contracting opportunities for small and historically underutilized businesses. The report must include:

(1)iithe diversity of the provider's [~~telecommunications utility's~~] workforce as of the time of the report;

(2)iithe provider's [~~telecommunications utility's~~] level of contracting with small and historically underutilized businesses;

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(3)iithe specific [~~progress made under the plan under Subsection (b);~~

[~~(4)iithe specific~~] initiatives, programs, and activities undertaken [~~under the plan~~] during the preceding year;

(4)i[~~(5)~~]iian assessment of the success of each of those initiatives, programs, and activities;

(5)i[~~(6)~~]iithe extent to which the provider [~~telecommunications utility~~] has carried out its initiatives to facilitate opportunities for contracts or joint ventures with small and historically underutilized businesses; and

(6)i[~~(7)~~]iithe initiatives, programs, and activities the provider [~~telecommunications utility~~] will pursue during the next year to increase the diversity of its workforce and contracting opportunities for small and historically underutilized businesses.

SECTIONi__.iiSubchapter A, Chapter 53, Utilities Code, is amended by adding Section 53.0001 to read as follows:

Sec.i53.0001.iiAPPLICABILITY OF CHAPTER. This chapter applies only to an incumbent local exchange company that is not regulated under Chapter 58 or 59.

SECTIONi__.iiSection 53.056(c), Utilities Code, is amended to read as follows:

(c)iiThe rates and methods established under this section and the depreciation account required by the commission [~~Section 52.252~~] shall be used uniformly and consistently throughout rate-setting and appeal proceedings.

SECTIONi__.iiSection 53.061(a), Utilities Code, is amended to read as follows:

(a)iiThe commission may not allow as a cost or expense for ratemaking purposes:

(1)iian expenditure for legislative advocacy; or

(2)iian expenditure for business gifts and entertainment, advertising, or public relations, including expenditures for institutional and consumption-inducing purposes, [~~described by Section 52.254~~] that the commission determines to be not in the public interest.

SECTIONi__.iiSection 53.065(b), Utilities Code, is amended to read as follows:

(b)iiThis section does not limit the ability of an incumbent local exchange company to contract for high-speed private line services of 1.544 megabits or greater [~~under Section 52.057~~].

SECTIONi__.iiSection 53.308, Utilities Code, is amended to read as follows:

Sec.i53.308.iiFEES AND ASSESSMENTS. The commission may prescribe and collect a fee or assessment from incumbent local exchange companies necessary to recover the cost to the commission and to the office of activities carried out and services provided under:

(1)iithis subchapter;

(2)iiSection 53.112; and

(3)iiSubchapter H[~~; and~~

[~~(4)iiSection 55.004~~].

3788 79th LEGISLATURE — REGULAR SESSION

SECTIONi__.iiChapter 53, Utilities Code, is amended by adding Subchapter I to read as follows:

SUBCHAPTER I. SPECIAL PROVISIONS FOR RURAL INCUMBENT LOCAL EXCHANGE COMPANIES

Sec.i53.401.iiAPPLICATION OF SUBCHAPTER. This subchapter applies only to a rural incumbent local exchange company.

Sec.i53.402.iiNEW SERVICES. (a) A rural incumbent local exchange company shall price each new service at or above the service's long run incremental cost. The commission shall allow the company to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.

(b)iiAn affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by a rural incumbent local exchange company of a new service is in compliance with Subsection (a).

(c)iiIf a complaint is filed under Subsection (b), the rural incumbent local exchange company has the burden of proving that the company set the price for the new service in accordance with the applicable provisions of this subchapter. If the complaint is finally resolved in favor of the complainant, the company:

(1)iishall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or

(2)iimay, at the company's option, discontinue the service.

Sec.i53.403.iiPRICING AND PACKAGING FLEXIBILITY; CUSTOMER PROMOTIONAL OFFERINGS. (a) Notwithstanding any other provision of this title, a rural incumbent local exchange company may exercise pricing flexibility in accordance with this section, including the packaging of any regulated service such as basic local telecommunications service with any other regulated or unregulated service or any service of an affiliate. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packaging of any regulated service with any unregulated service or any service of an affiliate.

(b)iiA rural incumbent local exchange company, at the company's option, shall price each regulated service offered separately or as part of a package under Subsection (a) at either the service's tariffed rate or at a rate not lower than the service's long run incremental cost. The commission shall allow the company to establish a service's long run incremental cost by adopting, at that company's option, the cost studies of a larger company for that service that have been accepted by the commission.

(c)iiAn affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint alleging that a rural incumbent local exchange company has priced a regulated service in a manner that does not meet the pricing standards of this subchapter. The complaint must be filed before the 31st day after the date the company implements the rate.

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Sec.i53.404.iiCUSTOMER PROMOTIONAL OFFERINGS. (a) A rural incumbent local exchange company may offer a promotion for a regulated service for not more than 90 days in any 12-month period.

(b)iiThe company shall file with the commission a promotional offering that consists of:

(1)iia waiver of installation charges or service order charges, or both, for not more than 90 days in a 12-month period; or

(2)iia temporary discount of not more than 25 percent from the tariffed rate for not more than 60 days in a 12-month period.

(c)iiA rural incumbent local exchange company is not required to obtain commission approval to make a promotional offering described by Subsection (b).

(d)iiA rural incumbent local exchange company may offer a promotion of any regulated service as part of a package of services consisting of any regulated service with any other regulated or unregulated service or any service of an affiliate.

SECTIONi__.iiSection 54.001, Utilities Code, is amended to read as follows:

Sec.i54.001.iiCERTIFICATE REQUIRED. (a) Unless the entity qualifies for the exemption provided by Section 54.002, an entity [~~A person~~] may not provide a telecommunications service or an advanced service or otherwise conduct business in this state as a network provider or service provider without first obtaining a certificate issued by the commission under this chapter [~~local exchange telephone service, basic local telecommunications service, or switched access service unless the person obtains a:~~

[~~(1)iicertificate of convenience and necessity;~~

[~~(2)iicertificate of operating authority; or~~

[~~(3)iiservice provider certificate of operating authority~~].

(b)iiEffective October 1, 2005, an entity that holds a certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority is considered to hold a service provider certificate unless the certificate holder files with the commission before that date:

(1)iia request for a network provider certificate; or

(2)iia notice of certificate relinquishment declaring that the entity is exempt under Section 54.002 and stating the reasons the entity is exempt.

(c)iiAn entity that holds a certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority on September 30, 2005, may present that certificate to the commission and the commission shall immediately issue to that entity a network provider or service provider certificate, as appropriate. The new certificate is effective October 1, 2005.

SECTIONi__.iiSection 54.002, Utilities Code, is amended to read as follows:

Sec.i54.002.iiEXCEPTIONS [~~TO CERTIFICATE REQUIREMENT FOR SERVICE EXTENSION~~]. A network provider or service provider is [~~(a) A telecommunications utility is~~] not required to obtain a certificate if the Federal

3790 79th LEGISLATURE — REGULAR SESSION

Communications Commission has exercised lawful preemptive authority precluding state certification requirements in relation to the provider [~~of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority for an:~~

[~~(1)iiextension into territory that is:~~

[~~(A)iicontiguous to the territory the telecommunications utility serves;~~

[~~(B)iinot receiving similar service from another telecommunications utility; and~~

[~~(C)iinot in another telecommunications utility's certificated area;~~

[(2)iiextension in or to territory the telecommunications utility serves or is authorized to serve under a certificate of public convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority; or

[~~(3)iioperation, extension, or service in progress on September 1, 1975.~~

[~~(b)iiAn extension allowed by Subsection (a) is limited to a device used:~~

[~~(1)iito interconnect existing facilities; or~~

[~~(2)iisolely to transmit telecommunications utility services from an existing facility to a customer of retail utility service~~].

SECTIONi__.iiSection 54.005(a), Utilities Code, is amended to read as follows:

(a)iiWhen an application for a network provider or service provider certificate is filed by an entity that did not possess a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority on September 30, 2005 [~~is filed~~], the commission shall:

(1)iigive notice of the application to interested parties; and

(2)iiif requested:

(A)iiset a time and place for a hearing; and

(B)iigive notice of the hearing.

SECTIONi__.iiSubchapter A, Chapter 54, Utilities Code, is amended by adding Section 54.0055 to read as follows:

Sec.i54.0055.iiGRANT OR DENIAL OF CERTIFICATE. (a) The commission must grant or deny an application for a certificate filed under Section 54.005 not later than the 60th day after the date the application is filed.

(b)iiThe commission shall grant each certificate on a nondiscriminatory basis after considering the technical and financial qualifications of the applicant. An applicant may not receive a certificate if an officer or director of the applicant has ever been convicted of a felony.

SECTIONi__.iiSection 54.008, Utilities Code, is amended to read as follows:

Sec.i54.008.iiREVOCATION OR AMENDMENT OF CERTIFICATE. [~~(a)~~] The commission shall [~~may~~] revoke or amend a certificate [~~of convenience and necessity, a certificate of operating authority or a service provider certificate of operating authority~~] after notice and hearing if the commission finds that the certificate holder has never provided or is no longer providing service in all or any part of the certificated area.

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[~~(b)iiThe commission may require one or more public utilities to provide service in an area affected by the revocation or amendment of a certificate held by a public utility.~~]

SECTIONi__.iiSection 54.201, Utilities Code, is amended to read as follows:

Sec.i54.201.iiCERTIFICATION PROHIBITED. The commission may not grant to a municipality a network provider or service provider certificate[:

[~~(1)iicertificate of convenience and necessity;~~

[~~(2)iicertificate of operating authority; or~~

[~~(3)iiservice provider certificate of operating authority~~].

SECTIONi__.iiSection 54.202, Utilities Code, is amended by amending Subsection (a) and adding Subsections (c) and (d) to read as follows:

(a)iiA municipality or municipally owned utility [~~municipal electric system~~] may not offer for sale to the public:

(1)iia service for which a certificate [~~of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~] is required; or

(2)iia nonswitched telecommunications service used to connect a customer's premises with:

(A)iianother customer's premises within the exchange; or

(B)iia long distance provider that serves the exchange.

(c)iiSubsection (a) does not prevent a municipally owned utility from:

(1)iiproviding a governmental function or a service to its customers that is enabled, enhanced, delivered to, or available to the public using the Internet, including:

(A)iibill paying services;

(B)iiemergency services;

(C)iiconstituent services;

(D)iiutility meter reading; and

(E)iipermitting; and

(2)iiproviding access to its transmission and distribution facilities under a contract with another entity that allows the entity to offer to the entity's customers high speed data services using broadband over power line technology, provided, however, that the compensation owed to the municipally owned utility for such access shall, at a minimum, recover all costs including debt service incurred by the municipally owned utility in the provision of such access.

(d)iiThis section may not be construed to prevent a municipally owned utility from providing to its energy customers, either directly or indirectly, any energy related service involving the transfer or receipt of information or data concerning the use, measurement, monitoring, or management of energy utility services provided by the municipally owned utility, including services such as load management or automated meter reading.

SECTIONi__.iiSubchapter E, Chapter 54, Utilities Code, is amended by adding Section 54.2022 to read as follows:

3792 79th LEGISLATURE — REGULAR SESSION

Sec.i54.2022.iiPROHIBITION ON MUNICIPAL CHARGES FOR WIRELESS BROADBAND SERVICES. (a) Notwithstanding any other law, a municipality may not charge for wireless broadband services, including wireless fidelity, or Wi-Fi, services, that the municipality may provide under this title, except as provided by Subsection (b).

(b)iiA municipality that charged for services described by Subsection (a) on January 1, 2005, may continue to charge for those services.

SECTIONi__.iiSections 54.203(a)-(c), Utilities Code, are amended to read as follows:

(a)iiIf an area is or will be included within a municipality as the result of annexation, incorporation, or another reason, each entity [~~telecommunications utility~~] that holds or is entitled to hold a certificate under this title to provide service or operate a facility in the area before the inclusion has the right to continue to provide the service or operate the facility and extend service in the entity's [~~utility's~~] certificated area within the annexed or incorporated area under the rights granted by the certificate and this title.

(b)iiNotwithstanding any other law, a certificated provider [~~telecommunications utility~~] has the right to:

(1)iicontinue and extend service within the provider's [~~utility's~~] certificated area; and

(2)iiuse roads, streets, highways, alleys, and public property to furnish communications [~~retail utility~~] service.

(c)iiThe governing body of a municipality may require a certificated provider [~~telecommunications utility~~] to relocate the provider's [~~utility's~~] facility at the provider's [~~utility's~~] expense to permit the widening or straightening of a street by:

(1)iigiving the provider [~~utility~~] 30 days' notice; and

(2)iisimultaneously specifying the new location for the facility along the right-of-way of the street.

SECTIONi__.iiSections 54.204(a)-(c), Utilities Code, are amended to read as follows:

(a)iiNotwithstanding Section 14.008, a municipality or a municipally owned utility may not discriminate against a certificated provider [~~telecommunications utility~~] regarding:

(1)iithe authorization or placement of a [~~telecommunications~~] facility in a public right-of-way;

(2)iiaccess to a building; or

(3)iia municipal utility pole attachment rate or term[~~, to the extent not addressed by federal law~~].

(b)iiIn granting consent, a franchise, or a permit for the use of a public street, alley, or right-of-way within its municipal boundaries, a municipality or municipally owned utility may not discriminate in favor of or against a certificated provider [~~telecommunications utility that holds or has applied for a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~] regarding:

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(1)iimunicipal utility pole attachment or underground conduit rates or terms[~~, to the extent not addressed by federal law~~]; or

(2)iithe authorization, placement, replacement, or removal of a [~~telecommunications~~] facility in a public right-of-way and the reasonable compensation for the authorization, placement, replacement, or removal regardless of whether the compensation is in the form of:

(A)iimoney;

(B)iiservices;

(C)iiuse of facilities; or

(D)iianother kind of consideration.

(c)iiA municipality or municipally owned [~~Notwithstanding Subsection (b)(1), a municipal~~] utility may not charge any entity, regardless of the nature of the services provided by that entity, a pole attachment rate or underground conduit rate that exceeds the fee the municipality or municipally owned utility would be permitted to charge under rules adopted by the Federal Communications Commission under 47 U.S.C. Section 224(e) if the municipality's or municipally owned utility's rates were regulated under federal law and the rules of the Federal Communications Commission. In addition, not later than September 1, 2006, a municipality or municipally owned utility shall charge a single, uniform pole attachment or underground conduit rate to all entities that are not affiliated with the municipality or municipally owned utility regardless of the services carried over the networks attached to the poles or underground conduit.

SECTIONi__.iiSection 54.206(a), Utilities Code, is amended to read as follows:

(a)iiA provider that is required to pay a municipal fee [~~holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~] has the right to collect a fee that a municipality imposes under Section 54.204 [~~or 54.205~~] through a pro rata charge to the customers in the boundaries of the municipality.

SECTIONi__.iiSection 54.251, Utilities Code, is amended to read as follows:

Sec.i54.251.iiPROVISION OF SERVICE. [~~(a)~~] Except as provided by this subchapter and Subchapter G, an incumbent local exchange company has the obligation of a provider of last resort. The company may meet that obligation using any available technology [~~section, Section 54.252, Section 54.253, and Section 54.254, a telecommunications utility that holds a certificate of convenience and necessity or a certificate of operating authority shall:~~

[~~(1)iioffer all basic local telecommunications services to each customer in the utility's certificated area; and~~

[~~(2)iiprovide continuous and adequate service in that area.~~

[(b)iiExcept as specifically determined otherwise by the commission under this subchapter or Subchapter G, the holder of a certificate of convenience and necessity for an area has the obligations of a provider of last resort regardless of whether another provider has a certificate of operating authority or service provider certificate of operating authority for that area].

3794 79th LEGISLATURE — REGULAR SESSION

SECTIONi__.iiSection 54.252, Utilities Code, is amended to read as follows:

Sec.i54.252.iiGROUNDS FOR REDUCTION OF SERVICE BY PREVIOUS HOLDER OF CERTIFICATE OF CONVENIENCE AND NECESSITY. [~~(a)~~] Except to the extent otherwise ordered by the commission in accordance with this subchapter, the holder of a certificate of convenience and necessity before October 1, 2005, may not discontinue, reduce, or impair local exchange telephone service to any part of the holder's certificated service area except for:

(1)iinonpayment of charges;

(2)iinonuse; or

(3)iianother similar reason that occurs in the usual course of business.

[~~(b)iiA discontinuance, reduction, or impairment of service must be in compliance with and is subject to any condition or restriction the commission prescribes.~~]

SECTIONi__.iiSection 54.254, Utilities Code, is amended to read as follows:

Sec.i54.254.iiREQUIRED REFUSAL OF SERVICE. A certificated provider [~~holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~] shall refuse to serve a customer in the provider's [~~holder's~~] certificated area if the provider [~~holder~~] is prohibited from providing the service under Section 212.012 or 232.029, Local Government Code.

SECTIONi__.iiSection 54.259(a), Utilities Code, is amended to read as follows:

(a)iiIf a certificated provider [~~telecommunications utility~~] holds a consent, franchise, or permit as determined to be the appropriate grants of authority by the municipality [~~and holds a certificate if required by this title~~], a public or private property owner may not:

(1)iiprevent the provider [~~utility~~] from installing on the owner's property a telecommunications service facility a tenant requests;

(2)iiinterfere with the provider's [~~utility's~~] installation on the owner's property of a telecommunications service facility a tenant requests;

(3)iidiscriminate against such a provider [~~utility~~] regarding installation, terms, or compensation of a telecommunications service facility to a tenant on the owner's property;

(4)iidemand or accept an unreasonable payment of any kind from a tenant or the provider [~~utility~~] for allowing the provider [~~utility~~] on or in the owner's property; or

(5)iidiscriminate in favor of or against a tenant in any manner, including rental charge discrimination, because of the provider [~~utility~~] from which the tenant receives a telecommunications service.

SECTIONi__.iiSection 54.260(a), Utilities Code, is amended to read as follows:

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(a)iiNotwithstanding Section 54.259, if a certificated provider [~~telecommunications utility~~] holds a municipal consent, franchise, or permit as determined to be the appropriate grant of authority by the municipality [~~and holds a certificate if required by this title~~], a public or private property owner may:

(1)iiimpose a condition on the provider [~~utility~~] that is reasonably necessary to protect:

(A)iithe safety, security, appearance, and condition of the property; and

(B)iithe safety and convenience of other persons;

(2)iiimpose a reasonable limitation on the time at which the provider [~~utility~~] may have access to the property to install a telecommunications service facility;

(3)iiimpose a reasonable limitation on the number of such providers [~~utilities~~] that have access to the owner's property, if the owner can demonstrate a space constraint that requires the limitation;

(4)iirequire the provider [~~utility~~] to agree to indemnify the owner for damage caused installing, operating, or removing a facility;

(5)iirequire the tenant or the provider [~~utility~~] to bear the entire cost of installing, operating, or removing a facility; and

(6)iirequire the provider [~~utility~~] to pay compensation that is reasonable and nondiscriminatory among such service providers [~~telecommunications utilities~~].

SECTIONi__.iiSection 54.301, Utilities Code, is amended to read as follows:

Sec.i54.301.iiDEFINITIONS. In this subchapter:

(1)ii"Exiting provider [~~utility~~]" means a certificated provider of local exchange telephone service [~~telecommunications utility~~] that:

(A)ii[~~holds a certificate of operating authority or a service provider certificate of operating authority;~~

[~~(B)~~]iiis the dominant carrier as to local exchange telephone [~~predominant provider of basic local telecommunications~~] service in a defined geographic area and provides those services using the provider's [~~utility's~~] own facilities; and

(B)i[~~(C)~~]iiceases operations in all or part of the provider's [~~utility's~~] certificated service area under Section [~~54.253 or~~] 54.303.

(2)ii"Provider of last resort" means a certificated provider of local exchange telephone service [~~certificated telecommunications utility~~] that must offer local exchange telephone [~~basic local telecommunications~~] service throughout a defined geographic area.

(3)ii"Successor provider [~~utility~~]" means a service provider or a network provider [~~telecommunications utility that holds a certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority, and~~] that is or is designated to become the provider of last resort for the defined geographic area previously served by an exiting provider [~~utility~~].

3796 79th LEGISLATURE — REGULAR SESSION

SECTIONi__.iiSections 54.302(a) and (b), Utilities Code, are amended to read as follows:

(a)iiNotwithstanding any other provision of this title, if a certificated provider of local exchange telephone service [~~telecommunications utility~~] installs facilities to serve customers located in a defined geographic area to provide telecommunications services, including local exchange telephone [~~basic local telecommunications~~] service, before the previously designated provider of last resort [~~holder of the certificate of convenience and necessity~~] installs facilities to serve customers located in that defined geographic area, the previously designated provider of last resort [~~holder of the certificate of convenience and necessity~~] may petition the commission for an order relieving the previously designated provider [~~utility~~] of the provider's obligations [~~utility's designation~~] as the provider of last resort in that defined geographic area.

(b)iiThe commission shall relieve the previously designated provider of last resort of the provider's obligations in that [~~holder of the certificate of convenience and necessity of the obligations of service as the provider of last resort for the~~] defined geographic area, and the commission shall designate the facilities-based certificated provider of local exchange telephone service [~~telecommunications utility~~] as the provider of last resort if the commission determines that:

(1)iithe previously designated provider of last resort [~~holder of the certificate of convenience and necessity~~] does not have facilities in place to provide [~~basic~~] local exchange telephone [~~telecommunications~~] service to all customers within that defined geographic area;

(2)iia certificated provider of local exchange telephone service [~~another certificated telecommunications utility~~] has installed facilities adequate to provide that service throughout that area; and

(3)iithe public interest would be served by transferring the provider of last resort obligations for that area.

SECTIONi__.iiSection 54.303, Utilities Code, is amended to read as follows:

Sec.i54.303.iiSUCCESSOR TELECOMMUNICATIONS PROVIDER [~~UTILITY~~] WHEN NO SUFFICIENT FACILITIES EXIST. (a) When the commission obtains notice [~~as required under Section 54.253 or otherwise~~] that a certificated provider of local exchange telephone service [~~a utility~~] intends to become an exiting provider [~~utility~~] and no other certificated provider of local exchange telephone service [~~telecommunications utility~~] has facilities sufficient to provide [~~basic~~] local exchange telephone [~~telecommunications~~] service in that defined geographic area, the commission shall open a contested case proceeding to determine:

(1)iithe identity of the successor provider [~~utility~~] under this section; and

(2)iithe amount of universal service funding under Subchapter G, Chapter 56, to be made available to the successor provider [~~utility~~].

(b)iiOn designation of [as] the successor provider [~~utility~~] under this section, the commission, if applicable, shall provide to the successor provider [~~utility~~]:

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(1)iia reasonable time, in accordance with industry practices and not subject to otherwise applicable commission service quality rules or standards, to modify, construct, or obtain facilities necessary to serve the customers of the exiting provider [~~telecommunications utility~~]; and

(2)iian exemption on a transitional basis from any obligation to unbundle the successor provider's [~~utility's~~] network elements or to provide service for resale within that defined geographic area for nine months or another reasonable period the commission may authorize as necessary to modify the successor provider's [~~utility's~~] network to provide that unbundling or resale.

(c)iiA customer within the defined geographic area to be served by the successor provider [~~utility~~] is considered to have applied for service from the successor provider [~~utility~~] on the effective date of that designation by the commission. Each right, privilege, and obligation of being a customer of the successor provider [~~utility~~] applies to that customer and the customer is subject to the successor provider's [~~utility's~~] applicable terms of service as specified in an applicable tariff or contract.

SECTIONi__.iiSection 54.304, Utilities Code, is amended to read as follows:

Sec.i54.304.iiABANDONMENT OR CESSATION BY FACILITIES-BASED PROVIDER; EMERGENCY RESTORATION. (a) The commission, on its own motion or on the petition of an interested party, may institute an expedited proceeding under this section if the commission finds that:

(1)iia certificated provider of local exchange telephone service [holder of a certificate of operating authority or service provider certificate of operating authority is the predominant provider of basic local telecommunications service in a defined geographic area and the utility] provides that service using the provider's [~~utility's~~] own facilities;

(2)iino other certificated provider [~~telecommunications utility~~] has facilities sufficient to provide [~~basic~~] local exchange telephone [~~telecommunications~~] service in that defined geographic area; and

(3)iithe certificated provider of local exchange telephone service [~~holder of the certificate of operating authority or service provider certificate of operating authority~~] has:

(A)iiceased providing [~~basic~~] local exchange telephone [~~telecommunications~~] service to [~~the utility's~~] customers in that defined geographic area; or

(B)iiabandoned the operation of the provider's [~~utility's~~] facilities in the defined geographic area that are used to provide [~~basic~~] local exchange telephone [~~telecommunications~~] service.

(b)iiIn a proceeding under this section, the commission may declare that an emergency exists and issue any order necessary to protect the health, safety, and welfare of affected customers [~~of the utility~~] and to expedite the restoration and continuation of [~~basic~~] local exchange telephone [~~telecommunications~~] service to those customers. An order issued by the commission under this subsection may include an order to:

3798 79th LEGISLATURE — REGULAR SESSION

(1)iiprovide for a temporary arrangement for operation of the certificated provider's [~~utility's~~] facilities by an uncertificated entity that agrees to provide service;

(2)iiauthorize one or more third parties to enter the premises of the abandoned facilities; or

(3)iigrant temporary waivers from quality of service requirements.

(c)iiThe commission may designate a successor provider [~~utility~~] in accordance with Section 54.303 during a proceeding under this section.

SECTIONi__.iiSection 54.305(a), Utilities Code, is amended to read as follows:

(a)iiThe commission, on written notice that a certificated provider [~~telecommunications utility~~] has filed a petition in bankruptcy or is the subject of an involuntary petition in bankruptcy, may inform the appropriate court and parties of the commission's interest in obtaining notice of proceedings.

SECTIONi__.iiSubchapter A, Chapter 55, Utilities Code, is amended by adding Section 55.0011 to read as follows:

Sec.i55.0011.iiEMERGENCY SERVICE. A certificated provider shall provide access to 911 service provided by a local authority or dual party relay service.

SECTIONi__.iiSection 55.013, Utilities Code, is amended to read as follows:

Sec.i55.013.iiLIMITATIONS ON DISCONTINUANCE OF BASIC NETWORK [~~LOCAL TELECOMMUNICATIONS~~] SERVICE. (a) In this section, "basic network service" has the meaning assigned by Section 58.051.

(b)iiA provider of basic network [~~local telecommunications~~] service may not discontinue that service because of nonpayment by a residential customer of charges for interexchange telecommunications [~~long distance~~] service. Payment shall first be allocated to basic network [~~local telecommunications~~] service.

[(b)iiFor purposes of allocating payment in this section, if the provider of basic local telecommunications service bundles its basic local telecommunications service with long distance service or any other service and provides a discount for the basic local telecommunications service because of that bundling, the rate of basic local telecommunications service shall be the rate the provider charges for stand-alone basic local telecommunications service.

[(c)iiNotwithstanding Subsection (a), the commission shall adopt and implement rules, not later than January 1, 2000, to prevent customer abuse of the protections afforded by this section. The rules must include:

[(1)iiprovisions requiring a provider of basic local telecommunications service to offer and implement toll blocking capability to limit a customer's ability to incur additional charges for long distance services after nonpayment for long distance services; and

[~~(2)iiprovisions regarding fraudulent activity in response to which a provider may discontinue a residential customer's basic local telecommunications service.~~]

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(c)i[~~(d)~~]iiNotwithstanding any other provision of this title, the commission has all jurisdiction necessary to establish a maximum price that a [~~an incumbent~~] local exchange company may charge a [~~long distance service~~] provider of interexchange telecommunications service to initiate the toll blocking capability required to be offered under commission [~~the~~] rules [~~adopted under Subsection (c)~~]. The maximum price established under this subsection shall be observed by all providers of basic network [~~local telecommunications~~] service in the [~~incumbent~~] local exchange company's certificated service area. The [~~Notwithstanding Sections 52.102 and 52.152, the~~] commission has all jurisdiction necessary to enforce this section.

[~~(e)iiA provider of basic local exchange telecommunications service shall comply with the requirements of this section not later than March 1, 2000.~~]

SECTIONi__.iiSection 55.014(b), Utilities Code, is amended to read as follows:

(b)iiThis section applies to a company electing under Chapter 58 or a certificated provider of local exchange telephone service that is not an incumbent local exchange company [~~company that holds a certificate of operating authority or service provider certificate of operating authority~~].

SECTIONi__.iiSection 55.015, Utilities Code, is amended by amending Subsections (a), (c), and (d) and adding Subsections (b-1), (d-1), and (d-2) to read as follows:

(a)iiThe commission shall adopt rules prohibiting a certificated provider of local exchange telephone service [~~telecommunications provider~~] from discontinuing basic network [~~local exchange telephone~~] service, as that term is defined by Section 58.051, to a consumer who receives lifeline service because of nonpayment by the consumer of charges for other services billed by the provider, including interexchange telecommunications [~~long distance~~] service.

(b-1)iiThe commission shall adopt rules requiring certificated providers to implement procedures to ensure that all consumers are clearly informed both orally and in writing of the existence of the telephone lifeline service program when they request or initiate service or change service locations or providers. By June 1, 2006, the commission shall enter into a memorandum of understanding with the Health and Human Services Commission and, to the maximum extent feasible, housing authorities in the principal cities of each metropolitan statistical area, to improve enrollment rates in the telephone lifeline service program.

(c)iiA certificated provider of local exchange telephone service [~~telecommunications provider~~] may block a lifeline service participant's access to all interexchange telecommunications [~~long distance~~] service except toll-free numbers when the participant owes an outstanding amount for that service. The provider [~~telecommunications provider~~] shall remove the block without additional cost to the participant on payment of the outstanding amount.

(d)iiA certificated provider of local exchange telephone service [~~telecommunications provider~~] shall offer a consumer who applies for or receives lifeline service the option of blocking all toll calls or, if technically capable,

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placing a limit on the amount of toll calls. The provider may not charge the consumer an administrative charge or other additional amount for the blocking service.

(d-1)iiA certificated provider of local exchange telephone service shall provide access to lifeline service to a customer whose income is not more than 150 percent of the applicable income level established by the federal poverty guidelines or in whose household resides a person who receives or has a child that receives:

(1)iiMedicaid;

(2)iifood stamps;

(3)iiSupplemental Security Income;

(4)iifederal public housing assistance;

(5)iiLow Income Home Energy Assistance Program (LIHEAP) assistance; or

(6)iihealth insurance benefits through the Children's Health Insurance Program (CHIP).

(d-2)iiA certificated provider of local exchange telephone service shall provide consumers who apply for or receive lifeline service access to available vertical services or custom calling features, including caller ID, call waiting, and call blocking, at the same price as other consumers. Lifeline discounts shall only apply to that portion of the bill that is for basic network service.

SECTIONi__.iiSection 55.021, Utilities Code, is amended to read as follows:

Sec.i55.021.iiEXTENDED AREA SERVICE. After notice and a hearing, the commission may order one or more incumbent local exchange companies [~~that are dominant carriers~~] to provide:

(1)iimandatory extended area service in accordance with Section 55.022; or

(2)iioptional extended area service [~~in accordance with Section 55.023~~].

SECTIONi__.iiSection 55.048, Utilities Code, is amended to read as follows:

Sec.i55.048.iiCHARGES. (a) The incumbent local exchange company may impose a monthly fee against each residential and business customer in the petitioning exchange [shall recover all costs incurred and all loss of revenue from an expansion of a toll-free local calling area under this subchapter through a request other than a revenue requirement showing by imposing a monthly fee under Subsection (b) or (c), or both].

(b)ii[The company may impose a monthly fee against each residential and business customer in the petitioning exchange. The fee may not exceed $3.50 a line for a residential customer and $7 a line for a business customer unless the customer's toll-free local calling area includes more than five exchanges. The company may impose an additional monthly fee of $1.50 for each exchange in excess of five. This subsection applies regardless of the number of petitions required to obtain access to the exchanges. A company may impose a fee under this subsection only until the company's next general rate case.

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[~~(c)~~]iiThe company may impose a monthly fee against each of the company's local exchange service customers in this state. This fee is in addition to the company's local exchange rates.

[~~(d)iiThe company may not recover regulatory case expenses under this subchapter by imposing a surcharge on the subscribers of the petitioning exchange.~~]

SECTIONi__.iiSection 55.084(c), Utilities Code, is amended to read as follows:

(c)iiThe information must state:

(1)iithe provider's name;

(2)ii[~~that the operator service provider will provide rate information on a caller's request;~~

[~~(3)~~]iithat a caller, on the caller's request, will be informed of the method of access to the local exchange carrier operator; and

(3)i[~~(4)~~]iithat a complaint about the service may be made to the provider or to the commission at the designated telephone number.

SECTIONi__.iiSection 55.085, Utilities Code, is amended to read as follows:

Sec.i55.085.iiCONNECTION ANNOUNCEMENT. Before connecting a call, the operator service provider shall[:

[~~(1)~~]iiannounce the provider's name[~~; and~~

[~~(2)iiat the caller's request, quote the rate and any other fee or surcharge that applies to the call and is charged by the provider~~].

SECTIONi__.iiThe heading to Section 55.087, Utilities Code, is amended to read as follows:

Sec.i55.087.iiACCESS TO LOCAL EXCHANGE COMPANY [~~AND OTHER UTILITIES REQUIRED~~].

SECTIONi__.iiSection 55.087(a), Utilities Code, is amended to read as follows:

(a)iiThe commission by rule shall require an operator service provider to include in its contract with each entity through which it provides operator service a provision that requires each telephone subscribed to its service to allow access to[:

[~~(1)~~]iithe local exchange carrier operator serving the exchange from which the call is made[~~; and~~

[~~(2)iiother telecommunications utilities~~].

SECTIONi__.iiSection 55.088(a), Utilities Code, is amended to read as follows:

(a)iiAny entity [~~A dominant or nondominant telecommunications utility~~] that provides operator service shall ensure that a caller has access to a live operator at the beginning of the [~~a live or mechanized operator-assisted~~] call through a method designed to be easily and clearly understandable and accessible to the caller.

SECTIONi__.iiSection 55.089(a), Utilities Code, is amended to read as follows:

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(a)iiIf the commission determines that an operator service provider has violated [~~or is about to violate~~] this subchapter, the commission, after notice and evidentiary hearing, may take action to stop, correct, or prevent the violation.

SECTIONi__.iiSection 55.173(b), Utilities Code, is amended to read as follows:

(b)iiThis section does not apply to a provider who holds a certificate as a network provider or service provider [~~of convenience and necessity~~].

SECTIONi__.iiSubchapter H, Chapter 55, Utilities Code, is amended by adding Section 55.1735 to read as follows:

Sec.i55.1735.iiCHARGE FOR PAY PHONE ACCESS LINE. The charge or surcharge a local exchange company imposes for an access line used to provide pay telephone service in an exchange may not exceed the amount of the charge or surcharge the company imposes for an access line used for regular business purposes in that exchange.

SECTIONi__.iiSection 55.178(d), Utilities Code, is amended to read as follows:

(d)iiThe commission has jurisdiction over a provider to the extent necessary to enforce this section regardless of whether a provider is a telecommunications provider [~~utility~~] regulated under this title.

SECTIONi__.iiSections 55.201(a) and (b), Utilities Code, are amended to read as follows:

(a)iiEach certificated provider of [~~company that provides~~] local exchange telephone service that provides service in overlapping certificated areas shall negotiate the terms of printed directory listings and directory assistance in those areas.

(b)iiOn complaint by a certificated provider of local exchange service [~~the incumbent local exchange company or the holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~], the commission may:

(1)iiresolve a dispute between the parties; and

(2)iiissue an order setting the terms of the directory listings or directory assistance, if necessary.

SECTIONi__.iiSection 55.203(c), Utilities Code, is amended to read as follows:

(c)iiThe commission may not adopt a rule that dictates the format or content of a telephone directory or otherwise prescribes in relation to a directory a requirement that is in addition to or exceeds a requirement prescribed by this subchapter [~~by rule may specify:~~

[~~(1)iithe format of the listing; and~~

[~~(2)iicriteria for inclusion of agencies, services, and officials~~].

SECTIONi__.iiSection 55.252, Utilities Code, is amended to read as follows:

Sec.i55.252.ii900 SERVICE USED BY PROBATIONERS OR PAROLEES. (a) This section applies only to a certificated provider [~~telecommunications utility~~] that transports or provides an intrastate 900 service that is:

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(1)iicovered by a contract authorized by Chapter 76 or 508, Government Code; and

(2)iiused by a defendant under the supervision of a community supervision and corrections department or the pardons and paroles division of the Texas Department of Criminal Justice to:

(A)iipay a fee or cost; or

(B)iicomply with telephone reporting requirements.

(b)iiA certificated provider [~~telecommunications utility~~] may adjust or authorize the adjustment of an end-user's bill for 900 service described by Subsection (a) only with the consent of the contracting community supervision and corrections department or the contracting pardons and paroles division of the Texas Department of Criminal Justice.

SECTIONi__.iiSection 56.021, Utilities Code, is amended to read as follows:

Sec.i56.021.iiUNIVERSAL SERVICE FUND ESTABLISHED. The commission shall adopt and enforce rules requiring telecommunications providers [~~local exchange companies~~] to establish a universal service fund to:

(1)iiassist telecommunications providers in providing [~~basic~~] local exchange telephone [~~telecommunications~~] service at reasonable rates in high cost rural areas;

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

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

(4)iireimburse 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)iireimburse a certificated provider of local exchange telephone service [~~telecommunications carrier~~] providing lifeline service under Section 55.015 [~~as provided by 47 C.F.R. Part 54, Subpart E, as amended~~];

(6)iifinance the implementation and administration of an integrated eligibility process created under Section 64.005 [~~17.007~~] for customer service discounts relating to local exchange telephone service [~~telecommunications services~~], including outreach expenses the commission determines are reasonable and necessary;

(7)iireimburse a designated provider under Subchapter F; [~~and~~]

(8)iireimburse a successor provider [~~utility~~] under Subchapter G; and

(9)iifinance the program established under Subchapter H.

SECTIONi__.iiSections 56.023(a), (b), (c), and (e), Utilities Code, are amended to read as follows:

(a)iiThe commission shall:

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(1)iiin a manner that assures reasonable rates for [~~basic~~] local exchange telephone [~~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)iidetermine which local exchange companies [~~telecommunications providers~~] meet the eligibility criteria;

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

(4)iiestablish 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)iiapprove procedures for the collection and disbursal of the revenue of the universal service fund.

(b)iiThe eligibility criteria must require that local exchange companies [~~a telecommunications provider, in compliance with the commission's quality of service requirements~~]:

(1)iioffer service to each consumer within the company's certificated area and to any permanent residential or business premises to which the company is designated to provide services under Subchapter F; and

(2)iirender continuous and adequate service within the company's certificated area and to any permanent residential or business premises to which the company is designated to provide services under Subchapter F.

(c)iiA local exchange company designated under Subchapter F to provide services to permanent residential or business premises within an uncertificated area and that complies with Subsection (b) shall receive universal service fund distributions to assist the provider in providing those services. In addition, the commission shall designate the provider as an eligible telecommunications carrier under 47 U.S.C. Section 214(e)(2), as amended, for those permanent residential or business premises.

(e)iiA successor provider [~~utility~~], as that term is defined by Section 54.301, that is or becomes an eligible telecommunications carrier under 47 U.S.C. Section 214(e)(2), as amended, is entitled to receive universal service fund distributions for costs in accordance with Subchapter G.

SECTIONi__.iiSection 56.025, Utilities Code, is amended by amending Subsections (a) and (c) and adding Subsection (a-1) to read as follows:

(a)iiThis section applies only to a rural incumbent local exchange company.

(a-1)iiIn addition to the authority provided by Section 56.021, for each [~~local exchange~~] company [~~that serves fewer than five million access lines~~], the commission:

(1)iimay adopt a mechanism necessary to maintain reasonable rates for local exchange telephone service; and

(2)iishall adopt rules to expand the universal service fund in the circumstances prescribed by this section.

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(c)iiThe commission shall implement a mechanism to replace the reasonably projected change in revenue caused by a Federal Communications Commission order, rule, or policy that changes:

(1)iithe federal universal service fund revenue of a [~~local exchange~~] company; or

(2)iicosts or revenue assigned to the intrastate jurisdiction.

SECTIONi__.iiSection 56.026, Utilities Code, is amended by adding Subsection (c-1) to read as follows:

(c-1)iiAn incumbent local exchange company governed under Chapter 58 is not entitled to receive disbursements from the universal service fund to compensate for reductions in access charges made after August 31, 2005.

SECTIONi__.iiSection 56.028, Utilities Code, is amended to read as follows:

Sec.i56.028.iiUNIVERSAL SERVICE FUND REIMBURSEMENT FOR CERTAIN INTRALATA SERVICE. (a) On request of a rural [an] incumbent local exchange company that is not an electing company under Chapters 58 and 59, the commission shall provide reimbursement through the universal service fund for reduced rates for intraLATA interexchange high capacity (1.544 Mbps) service for:

(1)iian educational institution as defined by Section 59.071;

(2)iia library as defined by Section 59.071;

(3)iia nonprofit telemedicine center, as defined by Section 59.071;

(4)iia public or not-for-profit hospital; or

(5)iia federally qualified health care center [~~entities described in Section 58.253(a)~~].

(b)iiThe amount of reimbursement shall be the difference between the company's tariffed rate for that service as of January 1, 1998, and the lowest rate offered for that service by any local exchange company electing incentive regulation under Chapter 58.

SECTIONi__.iiSubchapter B, Chapter 56, Utilities Code, is amended by adding Section 56.0285 to read as follows:

Sec.i56.0285.iiREIMBURSEMENT OF FEDERALLY QUALIFIED HEALTH CENTERS. (a) The health centers defined in Section 58.2535 are entitled to receive from the universal service fund the equivalent of a rebate equal to the difference between the company's tariffed rate for interexchange high capacity service (at or in excess of 1.544 Mbps) as of January 1, 1998, and the lowest rate offered for that service by any local exchange company electing incentive rate regulation under Chapter 58.

(b)iiThis section shall govern to the extent there is a conflict with any other provision of the Utilities Code.

SECTIONi__.iiSubchapter B, Chapter 56, Utilities Code, is amended by adding Section 56.029 to read as follows:

Sec.i56.029.iiTEXAS UNIVERSAL SERVICE FUND STUDY; ATTESTATION REQUIREMENT. (a) The commission shall contract with an independent person to conduct a review and evaluation of whether the universal service fund accomplishes the fund's purposes as prescribed by Section 56.021

3806 79th LEGISLATURE — REGULAR SESSION

and the commission's final orders issued in Docket No. 18515 and Docket No. 18516. The evaluation shall determine whether the fund's purposes have been sufficiently achieved, whether the fund should be abolished or phased out, whether the fund should be brought within the state's treasury, and whether those receiving said funds are expending the dollars for their intended purposes. The evaluation must include a forward–looking, comprehensive assessment of the appropriate use of the money in the fund and the manner in which that money is collected and disbursed. The commission shall pay for the review and evaluation from the universal service fund.

(b)iiThe commission shall adopt a process under which, not later than January 1, 2006:

(1)iithe commission:

(A)iiissues a request for proposals that specifically states the maximum amount to be paid under the contract, which may not be more than a commercially reasonable amount;

(B)iievaluates the received proposals; and

(C)iienters into a fixed price, lump-sum contract with a person under this section; and

(2)iithe person with whom the commission contracts is ready to require and receive information under this section and begin the review and evaluation.

(c)iiNot later than January 1, 2006, the contractor shall require telecommunications providers receiving disbursements under the universal service fund to provide to the contractor the information that the contractor determines is necessary to discharge the contractor's duties under this section, including information necessary to review and evaluate how money is collected for the universal service fund and expended.

(d)iiInformation provided under Subsection (c) is confidential and is not subject to disclosure under Chapter 552, Government Code. The provisions of this title relating to failure by a telecommunications provider to comply with a commission order apply to the failure by a telecommunications provider to comply with a requirement from the contractor to provide information under this section.

(e)iiThe contractor may classify telecommunications providers as the contractor considers appropriate for efficiency and may permit providers to share the cost of developing information the contractor determines is necessary to discharge the contractor's responsibilities under this section.

(f)iiNot later than January 5, 2007, the contractor shall deliver to the legislature a report for the legislature's revision and approval on the results of the review and evaluation. The report must:

(1)iiinclude recommendations that are consistent with the policies provided by this title;

(2)iiinclude the contractor's assessment of the universal service fund, including:

(A)iihow the money in the fund should be collected;

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(B)iihow the money in the fund should be disbursed and the purposes for which the money should be used by the telecommunications provider receiving the money; and

(C)iiany recommendations the contractor has in relation to accountability for use of the money, including the usefulness of the attestation required by Subsection (g); and

(3)iiinclude recommendations that ensure that a telecommunications provider's support from the universal service fund for a geographic area is consistent with Section 56.021 and the commission's final orders issued in Docket No. 18515 and Docket No. 18516.

(f-1)iiThe evaluation shall determine whether the fund's purposes have been sufficiently achieved, whether the fund should be abolished or phased out, whether the fund should be brought within the state's treasury, and whether those receiving said funds are expending the dollars for their intended purposes.

(g)iiNot later than December 31, 2005, each telecommunications provider receiving universal service funds shall file with the commission an affidavit attesting that the money from the fund has been used in a manner that is consistent with the purposes provided by Section 56.021 and the commission's final orders issued in Docket No. 18515 and Docket No. 18516.

(h)iiIn addition to the study required by this section, the commission shall compile information necessary to determine whether the current funding mechanism for the universal service fund will be adequate in the future to sustain the purposes for which the fund was created considering the development of new technologies that are not subject to the existing funding mechanism and the shift in jurisdictional control from this state to the federal government. Not later than January 5, 2007, the commission shall deliver to the legislature a report on this issue. If the commission determines that the existing funding mechanism is not adequate, the commission must include recommendations for alternative funding methods that will be adequate and are consistent with a policy of technology and competitive neutrality in the assessment of fees and other state-imposed economic burdens.

SECTIONi__.iiSection 56.106(a), Utilities Code, is amended to read as follows:

(a)iiThe commission shall set appropriate assessments for all telecommunications providers [~~utilities~~] to fund the telecommunications relay access service.

SECTIONi__.iiSection 56.107, Utilities Code, is amended to read as follows:

Sec.i56.107.iiUNIVERSAL SERVICE FUND SURCHARGE. (a) A telecommunications provider [~~utility~~] may recover the provider's [~~utility's~~] universal service fund assessment for the telecommunications relay access service through a surcharge added to [~~the utility~~] customers' bills.

(b)iiThe commission shall specify how each telecommunications provider [~~utility~~] is to determine the amount of the surcharge.

(c)iiIf a telecommunications provider [~~utility~~] imposes the surcharge, the bill shall list the surcharge as the "universal service fund surcharge."

3808 79th LEGISLATURE — REGULAR SESSION

SECTIONi__.iiSection 56.110(a), Utilities Code, is amended to read as follows:

(a)iiAn advisory committee to assist the commission in administering this subchapter is composed of the following persons appointed by the commission:

(1)iitwo persons with disabilities that impair the ability to effectively access the telephone network other than disabilities described by Subdivisions (2)-(7);

(2)iione deaf person recommended by the Texas Deaf Caucus;

(3)iione deaf person recommended by the Texas Association of the Deaf;

(4)iione person with a hearing impairment recommended by Self-Help for the Hard of Hearing;

(5)iione person with a hearing impairment recommended by the AARP [~~American Association of Retired Persons~~];

(6)iione deaf and blind person recommended by the Texas Deaf/Blind Association;

(7)iione person with a speech impairment and one person with a speech and hearing impairment recommended by the Coalition of Texans with Disabilities;

(8)iitwo representatives of telecommunications providers [~~utilities~~], one representing a nonlocal exchange company [~~utility~~] and one representing a local exchange company, chosen from a list of candidates provided by the Texas Telephone Association;

(9)iitwo persons, at least one of whom is deaf, with experience in providing relay services recommended by the Department of Assistive and Rehabilitative Services [~~Texas Commission for the Deaf and Hard of Hearing~~]; and

(10)iitwo public members recommended by organizations representing consumers of telecommunications services.

SECTIONi__.iiSection 56.155, Utilities Code, is amended to read as follows:

Sec.i56.155.iiRECOVERY OF SPECIALIZED TELECOMMUNICATIONS DEVICE ASSISTANCE PROGRAM SURCHARGE. (a) The commission shall allow a telecommunications provider [~~utility~~] to recover the universal service fund assessment related to the specialized telecommunications assistance program through a surcharge added to [~~the utility's~~] customers' bills.

(b)iiThe commission shall specify how each telecommunications provider [~~utility~~] must determine the amount of the surcharge and by rule shall prohibit a telecommunications provider [~~utility~~] from recovering an aggregation of more than 12 months of assessments in a single surcharge. The rules must require a telecommunications provider [~~utility~~] to apply for approval of a surcharge before the 91st day after the date the period during which the aggregated surcharges were assessed closes.

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(c)iiIf a telecommunications provider [~~utility~~] chooses to impose the surcharge, the telecommunications provider [~~utility~~] shall include the surcharge in the "universal service fund surcharge" listing as provided by Section 56.107.

SECTIONi__.iiSection 56.202(a), Utilities Code, is amended to read as follows:

(a)iiNotwithstanding Section 54.001, the commission may designate a local exchange company [~~telecommunications provider under this section~~] to provide voice-grade services to permanent residential or business premises that are not included within the certificated area of a local exchange company [~~holder of a certificate of convenience and necessity~~].

SECTIONi__.iiSection 56.203, Utilities Code, is amended to read as follows:

Sec.i56.203.iiPETITION FOR SERVICE. Persons residing in permanent residential premises or owners of permanent residential or business premises that are not included within the certificated area of a certificated provider of local exchange telephone service [~~holder of a certificate of convenience and necessity~~] may petition the commission to designate a telecommunications provider to provide to those premises voice-grade services supported by state and federal universal service support mechanisms.

SECTIONi__.iiSection 56.251, Utilities Code, is amended to read as follows:

Sec.i56.251.iiDEFINITION. In this subchapter, "successor provider [~~utility~~]" has the meaning assigned by Section 54.301.

SECTIONi__.iiSection 56.252, Utilities Code, is amended to read as follows:

Sec.i56.252.iiTELECOMMUNICATIONS PROVIDERS [~~UTILITIES~~] ELIGIBLE TO RECEIVE FUNDING UNDER THIS SUBCHAPTER. A telecommunications provider [~~utility~~] may receive funding under this subchapter only if:

(1)iithe telecommunications provider [~~utility~~] is eligible to receive universal service funding under Section 56.023(b); and

(2)iithe telecommunications provider [~~utility~~] is designated as a successor provider [~~utility~~] under Section 54.303.

SECTIONi__.iiSection 56.253, Utilities Code, is amended to read as follows:

Sec.i56.253.iiDETERMINATION OF SUCCESSOR PROVIDER'S [~~UTILITY'S~~] COSTS TO BE RECOVERED. (a) At the time the commission designates the successor provider [~~utility~~] under Section 54.303, the commission shall determine the extent to which the provider [~~utility~~] should recover the costs the provider [~~utility~~] will incur in accepting and establishing service to the affected service area.

(b)iiIn making the determination under Subsection (a), the commission shall consider relevant information, including the costs of acquiring and restoring or upgrading the provider's [~~utility's~~] facilities in the geographic area as necessary to

3810 79th LEGISLATURE — REGULAR SESSION

make those facilities compatible with the facilities in the provider's [~~utility's~~] other certificated service areas and to comply with commission quality of service standards.

SECTIONi__.iiSection 56.254, Utilities Code, is amended to read as follows:

Sec.i56.254.iiRECOVERY OF COSTS. The commission order designating the successor provider [~~utility~~] under Section 54.303 shall authorize the provider [~~utility~~] to recover the costs determined under Section 56.253. The costs may be amortized and recovered from the state universal service fund, together with interest at the prevailing commercial lending rate:

(1)iinot later than the first anniversary of the date of the order if the costs are not more than $1 million;

(2)iinot later than the second anniversary of the date of the order if the costs are more than $1 million but no more than $2 million; and

(3)iinot later than the third anniversary of the date of the order if the costs are more than $2 million.

SECTIONi__.iiChapter 56, Utilities Code, is amended by adding Subchapter H to read as follows:

SUBCHAPTER H. AUDIO NEWSPAPER PROGRAM

Sec.i56.301.iiAUDIO NEWSPAPER ASSISTANCE PROGRAM. The commission by rule shall establish a program to provide from the universal service fund financial assistance for a free telephone service for blind and visually impaired persons that offers the text of newspapers using synthetic speech. The commission may adopt rules to implement the program.

SECTIONi__.iiThe heading to Chapter 57, Utilities Code, is amended to read as follows:

CHAPTER 57. DEPLOYMENT INCENTIVES [~~DISTANCE LEARNING AND~~

~~OTHER ADVANCED SERVICES~~]

SECTIONi__.iiThe heading to Subchapter A, Chapter 57, Utilities Code, is amended to read as follows:

SUBCHAPTER A. BROADBAND DEPLOYMENT [~~GENERAL PROVISIONS~~]

SECTIONi__.iiSubchapter A, Chapter 57, Utilities Code, is amended by adding Section 57.002 to read as follows:

Sec.i57.002.iiSTATEMENT OF STATE GOAL. (a) It is the goal of this state to facilitate and promote the deployment of an advanced broadband network infrastructure to spur economic development throughout this state, including rural areas of this state.

(b)iiThis state should be among the leaders in achieving the goal described by Subsection (a). The primary means of achieving this goal is through encouraging private investment in this state's broadband network infrastructure by creating incentives for that investment and promoting the development of competition.

(c)iiThe most effective way to bring the benefits of an advanced broadband network infrastructure to communities in this state, including rural communities, is through innovation and competition among all communications providers in

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this state. Competition will provide residents of this state with a choice of providers and will drive technology deployment, innovation, service quality, and cost-based prices as competing firms try to satisfy customer needs.

SECTIONi__.iiThe heading to Chapter 58, Utilities Code, is amended to read as follows:

CHAPTER 58. INCENTIVE REGULATION FOR INCUMBENT LOCAL

EXCHANGE COMPANIES

SECTIONi__.iiSection 58.001, Utilities Code, is amended to read as follows:

Sec.i58.001.iiPOLICY. It is the policy of this state to regulate the telecommunications industry in a technology-neutral manner through adherence to free market principles. [~~Considering the status of competition in the telecommunications industry, it is the policy of this state to:~~

[(1)iiprovide a framework for an orderly transition from the traditional regulation of return on invested capital to a fully competitive telecommunications marketplace in which all telecommunications providers compete on fair terms;

[~~(2)iipreserve and enhance universal telecommunications service at affordable rates;~~

[~~(3)iiupgrade the telecommunications infrastructure of this state;~~

[~~(4)iipromote network interconnectivity; and~~

[~~(5)iipromote diversity in the supply of telecommunications services and innovative products and services throughout the entire state, including urban and rural areas.~~]

SECTIONi__.iiSection 58.002, Utilities Code, is amended to read as follows:

Sec.i58.002.iiELECTION [~~DEFINITION~~]. (a) In this section, "good cause" includes only matters beyond the control of the company.

(b)iiAn incumbent local exchange company may elect to be subject to this chapter by notifying the commission in writing of its election.

(c)iiThe commission may allow an electing company to withdraw the company's election under this chapter:

(1)iion application by the company; and

(2)iionly for good cause [In this chapter, "electing company" means an incumbent local exchange company that elects to be subject to incentive regulation and to make the corresponding infrastructure commitment under this chapter].

SECTIONi__.iiSubchapter A, Chapter 58, Utilities Code, is amended by adding Section 58.005 to read as follows:

Sec.i58.005.iiRATES FOR BASIC NETWORK SERVICES; APPLICABILITY OF PROVISIONS OF SUBTITLE. (a) Notwithstanding any other provision of this title, an incumbent local exchange company may not raise the company's retail price for basic network service to a price that is above the price the company charged on January 1, 2005, for basic network service that included the same components before January 1, 2008.

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(b)iiExcept as provided by Subsection (a), on the date the incumbent local exchange company reduces the company's intrastate switched access rates on a combined originating and terminating basis to parity with interstate switched access rates, as required by Section 58.301(3), and certifies to the commission that the company has made that reduction, the company is subject only to the following provisions of this subtitle:

(1)iiSections 52.101-52.108;

(2)iiSection 52.251(a);

(3)iiSection 52.255;

(4)iiSections 54.001-54.005;

(5)iiSections 54.203-54.206;

(6)iiSections 54.251-54.254;

(7)iiSections 54.259 and 54.260;

(8)iiSections 54.301-54.304;

(9)iiSections 55.0011, 55.013, 55.014, and 55.015;

(10)iiSection 55.1735;

(11)iiSections 55.201-55.203;

(12)iiSection 55.252;

(13)iiSections 56.001 and 56.002;

(14)iiSections 56.021-56.024;

(15)iiSection 56.026;

(16)iiSection 56.029;

(17)iiSections 56.101-56.109;

(18)iiSections 56.151-56.155;

(19)iiSubchapter G, Chapter 56;

(20)iiChapter 57;

(21)iiSubchapter G of this chapter;

(22)iiSections 58.301 and 58.302; and

(23)iiChapters 60 and 64.

SECTIONi__.iiSection 58.023, Utilities Code, is amended to read as follows:

Sec.i58.023.iiAPPLICABILITY OF CHAPTER; SERVICE CLASSIFICATION. (a) This chapter applies only to an incumbent local exchange company that is subject to this chapter.

(b)iiThe [~~On election, the~~] services provided by an incumbent local exchange [~~electing~~] company are classified into two categories:

(1)iibasic network service [~~services~~] governed by Subchapter C; and

(2)iinonbasic network services governed by Subchapter E.

SECTIONi__.iiSection 58.025, Utilities Code, is amended to read as follows:

Sec.i58.025.iiCOMPLAINT OR HEARING. Except as otherwise specifically provided by this title, an incumbent local exchange company that is not regulated under Chapter 53 is not subject to a traditional rate of return [~~(a) An electing company is not, under any circumstances, subject to a~~] complaint, hearing, or determination regarding the reasonableness of the company's:

(1)iirates;

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(2)iioverall revenues;

(3)iireturn on invested capital; or

(4)iinet income.

[~~(b)iiThis section does not prohibit a complaint, hearing, or determination on an electing company's implementation and enforcement of a competitive safeguard required by Chapter 60.~~]

SECTIONi__.iiSection 58.026, Utilities Code, is amended to read as follows:

Sec.i58.026.iiCONSUMER COMPLAINTS REGARDING TARIFFS. (a) This chapter does not restrict:

(1)iia consumer's right to complain to the commission about the application of an ambiguous tariff; or

(2)iithe commission's right to determine[:

[~~(A)~~]iithe proper application of that tariff[~~; or~~

[~~(B)iithe proper rate if that tariff does not apply~~].

(b)iiThis chapter [~~section~~] does not permit the commission to:

(1)iilower a tariff rate [~~except as specifically provided by this title~~];

(2)iichange the commission's interpretation of a tariff; or

(3)iiextend the application of a tariff to a new class of customers.

SECTIONi__.iiSection 58.027, Utilities Code, is amended to read as follows:

Sec.i58.027.iiCONSUMER COMPLAINTS REGARDING SERVICES[~~; ENFORCEMENT OF STANDARDS~~]. This chapter does not restrict:

(1)iia consumer's right to complain to the commission about quality of service; or

(2)iithe commission's right to enforce a quality of service standard.

SECTIONi__.iiSection 58.051, Utilities Code, is amended to read as follows:

Sec.i58.051.iiSERVICES INCLUDED. (a) "Basic [~~Unless reclassified under Section 58.024, the following services are basic~~] network service" means [~~services:~~

[~~(1)~~]iiflat rate residential local exchange telephone service delivered by landline, but only if the service is ordered and received independent of:

(1)iia nonbasic network service;

(2)iia package of services that includes nonbasic network services or other services; or

(3)iianother flat rate residential local exchange telephone service delivered by landline.

(b)ii"Basic network service" includes only: [~~, including primary directory listings and the receipt of a directory and any applicable mileage or zone charges;~~]

(1)i[~~(2)~~]iiresidential tone dialing service;

(2)i[~~(3)~~]iilifeline [~~and tel-assistance~~] service;

(3)i[~~(4)~~]iiservice connection for basic network service [~~residential services~~];

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(4)i[~~(5)~~]iidirect inward dialing service for basic residential service [~~services~~];

(5)i[~~(6)iiprivate pay telephone access service;~~

[~~(7)~~]iicall trap and trace service;

(6)i[~~(8)~~]iiaccess for all residential [~~and business~~] end users to 911 service provided by a local authority and access to dual party relay service; and

(7)iiat the election of the incumbent local exchange company, [~~(9)~~]iimandatory residential extended area service arrangements,[;

[~~(10)~~]iimandatory residential extended metropolitan service or other mandatory residential toll-free calling arrangements, mandatory expanded local calling service arrangements, or another service required under a tariff and applicable to a customer who subscribes to or may subscribe to basic network service[~~; and~~

[~~(11)iiresidential call waiting service.~~

[(b)iiElecting companies shall offer each basic network service as a separately tariffed service in addition to any packages or other pricing flexibility offerings that include those basic network services].

(c)iiThe commission may not:

(1)iiimpose on an incumbent local exchange company a mandatory extended or expanded calling plan that was not in existence on September 1, 2005; or

(2)iirequire a company to create a stand-alone basic network service in any exchange that did not have that service on January 1, 2005.

(d)iiAt the election of the affected incumbent local exchange company, the price for basic network service shall also include the fees and charges for any mandatory extended area service arrangements, mandatory expanded toll-free calling plans, and any other service included in the definition of basic network service.

(e)iiA non-permanent expanded toll-free local calling service surcharge established by the commission to recover the costs of mandatory expanded toll-free local calling service:

(1)iiis considered a part of basic network service;

(2)iimay not be aggregated under Subsection (d);

(3)iiis not subject to Section 58.005(a); and

(4)iicontinues to be transitioned in accordance with commission orders and substantive rules.

SECTIONi__.iiSection 58.061, Utilities Code, is amended to read as follows:

Sec.i58.061.iiEFFECT ON CERTAIN CHARGES. This subchapter does not affect a charge permitted under:

(1)ii[~~Section 55.024;~~

[~~(2)~~]iiSubchapter C, Chapter 55; or

(2)i[~~(3)~~]iiSubchapter B, Chapter 56.

SECTIONi__.iiSection 58.063, Utilities Code, is amended to read as follows:

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3815

Sec.i58.063.iiPRICING AND PACKAGING FLEXIBILITY. (a) Notwithstanding any other provision of this title [~~Section 58.052(b) or Subchapter F, Chapter 60~~], an electing company may exercise pricing flexibility for basic network services, including the packaging of basic network services with any other regulated or unregulated service or any service of an affiliate. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packaging of any regulated service with any unregulated service or any service of an affiliate. [The company may exercise pricing flexibility in accordance with this section 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.]

(b)iiAn electing company shall set the price of a package of services containing basic local telecommunications service [~~network services~~] and nonbasic network services at any level at or above the lesser of:

(1)iithe sum of the long run incremental costs of any basic local telecommunications service [~~network services~~] and nonbasic network services contained in the package; or

(2)iithe sum of the tariffed prices of any basic local telecommunications service [~~network services~~] contained in the package and the long run incremental costs of nonbasic network services contained in the package.

[~~(c)iiExcept as provided by Section 58.003, an electing company may flexibly price a package that includes a basic network service in any manner provided by Section 51.002(7).~~]

SECTIONi__.iiThe heading to Subchapter E, Chapter 58, Utilities Code, is amended to read as follows:

SUBCHAPTER E. NONBASIC NETWORK SERVICES

SECTIONi__.iiSection 58.151, Utilities Code, is amended to read as follows:

Sec.i58.151.iiSERVICES INCLUDED. The following services are classified as nonbasic network services:

(1)iibasic network service when ordered and received with another basic network service or with a nonbasic network service;

(2)iiflat rate business local exchange telephone service, including primary directory listings and the receipt of a directory, and any applicable mileage or zone charges[~~, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999~~];

(3)i[~~(2)~~]iibusiness tone dialing service[~~, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999~~];

(4)i[~~(3)~~]iiservice connection for all business services[~~, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999~~];

3816 79th LEGISLATURE — REGULAR SESSION

(5)i[~~(4)~~]iidirect inward dialing for basic business services[~~, except that the prices for this service shall be capped until September 1, 2005, at the prices in effect on September 1, 1999~~];

(6)i[~~(5)~~]ii"1-plus" intraLATA message toll services;

(7)i[~~(6)~~]ii0+ and 0- operator services;

(8)i[~~(7)~~]iicall waiting, call forwarding, and custom calling[~~, except that:~~

[~~(A)iiresidential call waiting service shall be classified as a basic network service; and~~

[(B)iifor an electing company subject to Section 58.301, prices for residential call forwarding and other custom calling services shall be capped at the prices in effect on September 1, 1999, until the electing company implements the reduction in switched access rates described by Section 58.301(2)];

(9)i[~~(8)~~]iicall return, caller identification, and call control options[, except that, for an electing company subject to Section 58.301, prices for residential call return, caller identification, and call control options shall be capped at the prices in effect on September 1, 1999, until the electing company implements the reduction in switched access rates described by Section 58.301(2)];

(10)i[~~(9)~~]iicentral office based PBX-type services;

(11)i[~~(10)~~]iibilling and collection services, which include only [~~including~~] installment billing and late payment charges for retail customers of the billing provider [~~electing company~~];

(12)i[~~(11)~~]iiintegrated services digital network (ISDN) services[, except that prices for Basic Rate Interface (BRI) ISDN services, which comprise up to two 64 Kbps B-channels and one 16 Kbps D-channel, shall be capped until September 1, 2005, at the prices in effect on September 1, 1999];

(13)i[~~(12)~~]iinew services;

(14)i[~~(13)~~]iidirectory assistance services, except that an electing company shall provide to a residential customer the first three directory assistance inquiries in a monthly billing cycle at no charge;

(15)i[~~(14)~~]iiservices described in the WATS tariff as the tariff existed on January 1, 1995;

(16)i[~~(15)~~]ii800 and foreign exchange services;

(17)i[~~(16)~~]iiprivate line service;

(18)i[~~(17)~~]iispecial access service;

(19)i[~~(18)~~]iiservices from public pay telephones;

(20)i[~~(19)~~]iipaging services and mobile services (IMTS);

(21)i[~~(20)~~]ii911 services provided to a local authority that are available from another provider;

(22)i[~~(21)~~]iispeed dialing;

(23)i[~~(22)~~]iithree-way calling; and

(24)i[~~(23)~~]iiall other local exchange telephone services subject to the commission's jurisdiction that are not specifically included as components of [~~classified as~~] basic network service as defined by [~~services in~~] Section 58.051 or

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3817

as switched access services[~~, except that nothing in this section shall preclude a customer from subscribing to a local flat rate residential or business line for a computer modem or a facsimile machine~~].

SECTIONi__.iiSection 58.152, Utilities Code, is amended to read as follows:

Sec.i58.152.iiPRICES. [~~(a)~~] An incumbent local exchange company [~~electing company~~] may set the retail price for any nonbasic network service at any level at or above long run incremental cost [~~the lesser of the:~~

[~~(1)iiservice's long run incremental cost in accordance with the imputation rules prescribed by or under Subchapter D, Chapter 60; or~~

[~~(2)iiprice for the service in effect on September 1, 1999.~~

[(b)iiSubject to Section 51.004, an electing company may use pricing flexibility for a nonbasic service. Pricing flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 and includes packages that include basic network services].

SECTIONi__.iiSection 58.153, Utilities Code, is amended to read as follows:

Sec.i58.153.iiNEW SERVICES. [~~(a)~~] Subject to the pricing conditions prescribed by Section 58.152, a local exchange [~~58.152(a), an electing~~] company may introduce a new service at any time [10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.

[(b)iiAn electing company serving more than five million access lines in this state shall provide notice to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company of any changes in the generally available prices and terms under which the electing company offers basic or nonbasic telecommunications services regulated by the commission at retail rates to subscribers that are not telecommunications providers. Changes requiring notice under this subsection include the introduction of any new nonbasic services, any new features or functions of basic or nonbasic services, promotional offerings of basic or nonbasic services, or the discontinuation of then-current features or services. The electing company shall provide the notice:

[~~(1)iiif the electing company is required to give notice to the commission, at the same time the company provides that notice; or~~

[(2)iiif the electing company is not required to give notice to the commission, at least 45 days before the effective date of a price change or 90 days before the effective date of a change other than a price change, unless the commission determines that the notice should not be given.

[(c)iiAn affected person, the office on behalf of residential or small commercial customers, or the commission may file a complaint at the commission challenging whether the pricing by an incumbent local exchange

3818 79th LEGISLATURE — REGULAR SESSION

~~company of a new service is in compliance with Section 58.152(a). The commission shall allow the company to continue to provide the service while the complaint is pending.~~

[(d)iiIf a complaint is filed under Subsection (c), the electing company has the burden of proving that the company set the price for the new service in accordance with Section 58.152(a). If the complaint is finally resolved in favor of the complainant, the company:

[~~(1)iishall, not later than the 10th day after the date the complaint is finally resolved, amend the price of the service as necessary to comply with the final resolution; or~~

[~~(2)iimay, at the company's option, discontinue the service.~~

[~~(e)iiThe notice requirement prescribed by Subsection (b) expires September 1, 2003~~].

SECTIONi__.iiSection 58.155, Utilities Code, is amended to read as follows:

Sec.i58.155.iiINTERCONNECTION. An incumbent local exchange company is subject to the interconnection obligations prescribed by Subchapter G, Chapter 60 [Because interconnection to competitive providers and interconnection for commercial mobile service providers are subject to the requirements of Sections 251 and 252, Communications Act of 1934 (47 U.S.C. Sections 251 and 252), as amended, and Federal Communications Commission rules, including the commission's authority to arbitrate issues, interconnection is not addressed in this subchapter or Subchapter B].

SECTIONi__.iiSection 58.253(a), Utilities Code, as amended by Chapters 959, 1220, 1255, and 1350, Acts of the 77th Legislature, Regular Session, 2001, is reenacted and amended to read as follows:

(a)iiOn customer request, an electing company shall provide private network services to:

(1)iian educational institution;

(2)iia library as defined in Section 57.021 [~~57.042(6)(A) and (B)~~];

(3)iia nonprofit telemedicine center;

(4)iia public or not-for-profit hospital; or

(5)ii[~~a project funded by the telecommunications infrastructure fund under Subchapter C, Chapter 57, except for a telepharmacy system; or~~

[~~(6)~~]iia legally constituted consortium or group of entities listed in this subsection.

SECTIONi__.iiSubchapter G, Chapter 58, Utilities Code, is amended by adding Section 58.2535 to read as follows:

Sec.i58.2535.iiFEDERALLY QUALIFIED HEALTH CENTERS. (a) In addition to the entities to which an incumbent local exchange company is required to provide private network services under this subchapter, the company shall provide those services to a federally qualified health center, as defined by 42 U.S.C. Section 1396d(l)(2)(B) and to an organization that receives a grant under 42 U.S.C. Section 254b.

(b)iiFor purposes of this subchapter, a reference to an entity described by Section 58.253(a) includes an entity described by Subsection (a).

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3819

SECTIONi__.iiSection 58.301, Utilities Code, is amended to read as follows:

Sec.i58.301.iiSWITCHED ACCESS RATE REDUCTION. An incumbent local exchange company [~~electing company with greater than five million access lines in this state~~] shall reduce its switched access rates on a combined originating and terminating basis as follows:

(1)iieffective January 1, 2006, the [~~electing~~] company shall reduce intrastate switched access rates on a combined originating and terminating basis to an amount not to exceed four cents for each minute of use, except that a company may not, in any event, be required to reduce its intrastate switched access rates on a combined originating and terminating basis by more than two cents for each minute of use [~~in effect on September 1, 1999, by one cent a minute~~]; [~~and~~]

(2)iieffective January 1, 2007, the company shall reduce intrastate switched access rates on a combined originating and terminating basis to an amount not to exceed 2.5 cents for each minute of use, except that a company may not, in any event, be required to reduce its intrastate switched access rates on a combined originating and terminating basis by more than four cents for each minute of use below the rate in effect on December 31, 2005; and

(3)iieffective January 1, 2008, the [~~electing~~] company shall reduce intrastate switched access rates on a combined originating and terminating basis to parity with interstate switched access rates [~~by an additional two cents a minute on the earlier of:~~

[~~(A)iiJuly 1, 2000; or~~

[(B)iithe date the electing company, or its affiliate formed in compliance with 47 U.S.C. Section 272, as amended, actually begins providing interLATA services in this state in accordance with the authorization required by 47 U.S.C. Section 271, as amended].

SECTIONi__.iiSection 58.302, Utilities Code, is amended to read as follows:

Sec.i58.302.iiSWITCHED ACCESS RATE CAP. On or after January 1, 2008, an incumbent local exchange [~~(a) An electing~~] company may not increase the per minute rates for switched access services on a combined originating and terminating basis above the interstate rates for switched access service [~~lesser of:~~

[~~(1)iithe rates for switched access services charged by that electing company on September 1, 1999, as may be further reduced on implementation of the universal service fund under Chapter 56; or~~

[~~(2)iithe applicable rate described by Section 58.301 as may be further reduced on implementation of the universal service fund under Chapter 56.~~

[(b)iiNotwithstanding Subchapter F, Chapter 60, but subject to Section 60.001, an electing company may, on its own initiative, decrease a rate charged for switched access service to any amount above the long run incremental cost of the service].

SECTIONi__.iiSection 59.002(1), Utilities Code, is amended to read as follows:

3820 79th LEGISLATURE — REGULAR SESSION

(1)ii"Electing company" means an incumbent local exchange company that elects to be subject to [~~for an infrastructure commitment and corresponding regulation under~~] this chapter.

SECTIONi__.iiSubchapter A, Chapter 59, Utilities Code, is amended by adding Section 59.003 to read as follows:

Sec.i59.003.iiAPPLICABILITY OF CHAPTER. This chapter applies only to an incumbent local exchange company that is subject to this chapter.

SECTIONi__.iiSection 59.021(a), Utilities Code, is amended to read as follows:

(a)iiAn incumbent local exchange company may elect to [~~make an infrastructure commitment and to~~] be subject to [~~corresponding regulation under~~] this chapter if the company:

(1)iiserves less than five percent of the access lines in this state; and

(2)iihas not elected incentive regulation under Chapter 58.

SECTIONi__.iiSection 59.024(a), Utilities Code, is amended to read as follows:

(a)iiExcept for the charges permitted under Subchapter C, Chapter 55, and Subchapter B, Chapter 56, [~~and Section 55.024,~~] an electing company may not, before the end of the company's election period under this chapter, increase a rate previously established for that company under this title unless the commission approves the proposed change as authorized under Subsection (c) or (d).

SECTIONi__.iiSection 59.029(b), Utilities Code, is amended to read as follows:

(b)iiIn computing the average under Subsection (a), the electing company shall exclude[:

[~~(1)~~] extraordinary investments made during the five-year period[~~; and~~

[~~(2)iiinvestments required by Section 59.052~~].

SECTIONi__.iiSection 59.030(a), Utilities Code, is amended to read as follows:

(a)iiAn electing company may introduce a new service [10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company].

SECTIONi__.iiSection 59.031(a), Utilities Code, is amended to read as follows:

(a)iiNotwithstanding any other provision of this title [~~Section 59.027(b) or Subchapter F, Chapter 60~~], an electing company may exercise pricing flexibility in accordance with this section, including the packaging of any regulated service such as basic local telecommunications service with any other regulated or unregulated service or any service of an affiliate. [The electing company may exercise pricing flexibility 10 days after providing an informational notice to the commission, to the office, and to any person who holds a certificate of operating authority in the electing company's certificated area or areas or who has an effective interconnection agreement with the electing company.] Pricing

Sunday, May 22, 2005 HOUSE JOURNAL — 74th Day 3821

flexibility includes all pricing arrangements included in the definition of "pricing flexibility" prescribed by Section 51.002 [~~51.002(7)~~] and includes packaging of regulated services with unregulated services or any service of an affiliate.

SECTIONi__.iiSection 59.055, Utilities Code, is amended to read as follows:

Sec.i59.055.iiIMPLEMENTATION COSTS; INCREASE IN RATES AND UNIVERSAL SERVICE FUNDS. The commission may not consider the cost of implementing the infrastructure goals prescribed by former Section 59.052, as enacted by Section 49, Chapter 231, Acts of the 74th Legislature, Regular Session, 1995, and as codified by Section 1, Chapter 166, Acts of the 75th Legislature, Regular Session, 1997, in determining whether an electing company is entitled to:

(1)iia rate increase under this chapter; or

(2)iiincreased universal service funds under Subchapter B, Chapter 56.

SECTIONi__.iiSections 59.071(1) and (2), Utilities Code, are amended to read as follows:

(1)ii"Educational institution" includes:

(A)iian accredited primary or secondary school;

(B)iian institution of higher education as defined by Section 61.003, Education Code;

(C)iia private institution of higher education accredited by a recognized accrediting agency as defined by Section 61.003, Education Code;

(D)iithe Texas Education Agency and its successors and assigns;

(E)iia regional education service center established and operated in accordance with Chapter 8, Education Code; or

(F)iithe Texas Higher Education Coordinating Board and its successors and assigns [~~has the meaning assigned by Section 57.021~~].

(2)ii"Library" means:

(A)iia public library or regional library system as defined by Section 441.122, Government Code; or

(B)iia library operated by an institution of higher education or a school district [~~has the meaning assigned by Section 57.042~~].

SECTIONi__.iiThe heading to Chapter 60, Utilities Code, is amended to read as follows:

CHAPTER 60. FAIR COMPETITION AND COMPETITIVE SAFEGUARDS

SECTIONi__.iiSection 60.001, Utilities Code, is amended to read as follows:

Sec.i60.001.iiFAIR COMPETITION. (a) A rate, term, condition, or practice of a provider may not be:

(1)iiunreasonably preferential, prejudicial, or discriminatory;

(2)iiimproperly subsidized either directly or indirectly; or

(3)iipredatory or anticompetitive.

(b)iiThis chapter may not be construed to require unbundling to an extent greater than is required by federal law.

3822 79th LEGISLATURE — REGULAR SESSION

(c)iiThis title does not prohibit a volume discount, other discount, or pricing flexibility that is based on a reasonable business purpose. A price that is set at or above the long run incremental cost of a service is presumed not to be a predatory price.

(d)iiThis title allows an offer that is based on a reasonable business purpose, including an offer made at any time to a selected customer or group of customers in response to a competitor's offer or a former customer's acceptance of a competitor's offer, if the price of the offer meets the requirements of this section.

(e)iiThis title may not be construed as conferring jurisdiction on the commission to regulate video or data services in this state. [To the extent necessary to ensure that competition in telecommunications is fair to each participant and to accelerate the improvement of telecommunications in this state, the commission shall ensure that the rates and rules of an incumbent local exchange company:

[~~(1)iiare not unreasonably preferential, prejudicial, or discriminatory; and~~

[~~(2)iiare applied equitably and consistently.~~]

SECTIONi__.iiSubchapter A, Chapter 60, Utilities Code, is amended by adding Sections 60.0013 and 60.0016 to read as follows:

Sec.i60.0013.iiCODE OF CONDUCT. (a) The commission shall adopt and enforce a code of conduct to ensure integrity of business practices in carrier-to-carrier, marketing, and advertising practices. The code of conduct must apply to all providers on an equal and nondiscriminatory basis and may not address any matter that is contained in or relates to an agreement for interconnection.

(b)iiA provider shall comply with the code of conduct.

Sec.i60.0016.iiARBITRATION OF COMPLAINTS. (a) In this section, "dispute resolution organization" means a private for-profit or nonprofit corporation, political subdivision, or other entity, or a combination of these, that offers alternative dispute resolution services to the public.

(b)iiA complaint that a provider has violated this subchapter shall be referred to binding arbitration at the mutual election of both parties to the dispute, but only if the election for arbitration occurs before a filing is made to the commission in relation to that dispute. If the parties elect arbitration, the dispute shall be expeditiously adjudicated by binding arbitration before a panel of three independent arbitrators. Each party shall select one member of the panel, and the two selected members shall select the third member. If the first two arbitrators cannot agree on the third member, the two arbitrators shall request a list of candidates from an independent dispute resolution organization, and the third member shall be elected in accordance with the published procedures of that organization.

(c)iiThe arbitration shall be conducted in accordance with the rules of an independent dispute resolution organization unless the parties mutually agree to conduct the arbitration in a different manner.

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(d)iiThe panel shall issue the panel's final decision not later than the 180th day after the date arbitration is requested. The decision of the arbitration panel is final. A party may file an application with a district court in Travis County for confirmation of the decision. The award is entitled to confirmation unless the court determines the decision should be vacated or modified. The court shall conduct a review de novo based on the record developed before the arbitrators.

(e)iiThe panel shall allocate between the parties the fees and expenses of the parties and panel in a manner consistent with the decision and relief granted.

SECTIONi__.iiSection 60.003, Utilities Code, is amended to read as follows:

Sec.i60.003.iiCOMMISSION AUTHORITY. (a) The commission has all necessary authority to [~~may~~]:

(1)iiestablish procedures and resolve disputes arising under this chapter and to provide, enforce, or request appropriate remedies, including injunctive relief [~~with respect to a policy stated in this subchapter or Subchapters B-H~~]; and

(2)iiallow a provider serving fewer than one million access lines in this state to establish a service's long run incremental cost by adopting, at that provider's option, the cost studies of a larger provider for that service that have been accepted by the commission [~~resolve a dispute that arises under a policy described by Subdivision (1)~~].

(b)iiNotwithstanding Section 15.023(b), the commission may impose an administrative penalty of not more than $10,000 a day for each violation of this subchapter. The commission may impose the penalty for each day the violation continues. The administrative penalty is in addition to any other remedy provided by law. [~~The commission shall adopt procedures for a proceeding under Subchapters B and C. A procedure may:~~

[~~(1)iilimit discovery; and~~

[~~(2)iifor purposes of cross-examination align any party, other than the office, with another party that has a similar position.~~]

(c)iiThe commission must resolve a complaint filed with the commission under this chapter not later than the 270th day after the date the complaint is filed. [~~In adopting a procedure under this section and in resolving a dispute, the commission shall consider the action's effect on:~~

[~~(1)iiconsumers;~~

[~~(2)iicompetitors; and~~

[~~(3)iithe incumbent local exchange company.~~]

(d)iiAn appeal from a commission order issued under this chapter, other than an order issued in relation to interconnection under Subchapter G, may be appealed directly to the court of appeals for the Third Court of Appeals District. [~~The commission, by order or rule, may not implement a requirement that is contrary to a federal law or rule.~~]

SECTIONi__.iiSubchapter A, Chapter 60, Utilities Code, is amended by adding Section 60.0035 to read as follows:

3824 79th LEGISLATURE — REGULAR SESSION

Sec.i60.0035.iiAPPLICABILITY TO CERTAIN PROVIDERS. This chapter may not be construed to impose under state law any obligation described by 47 U.S.C. Section 251(c) on an entity that is not subject to that obligation under federal law.

SECTIONi__.iiSection 60.082(b), Utilities Code, is amended to read as follows:

(b)iiThe commission rules shall be consistent [~~may not be inconsistent~~] with the rules and regulations of the Federal Communications Commission regarding telecommunications number portability and may not impose any obligations beyond the obligations required by federal law.

SECTIONi__.iiSection 60.121, Utilities Code, is amended to read as follows:

Sec.i60.121.iiDEFINITIONS [~~DEFINITION~~]. In this subchapter:

(1)ii"Interconnection" means the linking of two networks for the mutual exchange of traffic.

(2)ii"Interoperable" means operable using standards that ensure that network providers and service providers conduct their business in a manner that enables consumers to:

(A)iicommunicate with each other efficiently; and

(B)iiexercise their choice of provider and service without unreasonable disruption and delay[, "interconnection" means, for calls that originate and terminate in this state, the termination of local intraexchange traffic of another local exchange company or holder of a service provider certificate of operating authority within the local calling area of the terminating local exchange company or certificate holder].

SECTIONi__.iiSection 60.122, Utilities Code, is amended to read as follows:

Sec.i60.122.iiEXCLUSIVE JURISDICTION. (a) To the extent not preempted by federal law, the [~~The~~] commission has exclusive jurisdiction to determine interconnection rates and terms and conditions for interconnection in accordance with this title.

(b)iiThe commission has all necessary authority to adopt rules and conduct proceedings to implement this subchapter.

(c)iiThe commission has all necessary jurisdiction to resolve disputes regarding breach of interconnection obligations. The commission's jurisdiction under this subsection is not exclusive [~~for a holder of a certificate of convenience and necessity, a certificate of operating authority, or a service provider certificate of operating authority~~].

SECTIONi__.iiSection 60.123, Utilities Code, is amended to read as follows:

Sec.i60.123.iiINAPPLICABILITY OF SUBCHAPTER. This subchapter does not apply to a rate for the existing termination of commercial mobile radio service (CMRS) [~~cellular~~] or interexchange traffic. This chapter may not be construed to impose an obligation on a provider if the provider is exempt from that requirement under federal law.

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SECTIONi__.iiSection 60.124, Utilities Code, is amended to read as follows:

Sec.i60.124.iiINTEROPERABLE NETWORKS REQUIRED. (a) The commission shall require each network provider and service [~~telecommunications~~] provider to maintain interoperable networks.

(b)iiA network provider or service provider is entitled to interconnect in a manner that is efficient for the mutual exchange of traffic, from a network and economic standpoint.

(c)iiThe commission shall [~~may~~]:

(1)iiadopt rules, including generic rules that are responsive to changes in federal law or a development in the [~~local exchange~~] market; and

(2)iiset policies consistent with federal law governing interconnection arrangements.

SECTIONi__.iiSection 60.125, Utilities Code, is amended to read as follows:

Sec.i60.125.iiDETERMINATION OF INTERCONNECTION RATES. (a) Unless the parties have agreed on rates in an interconnection agreement under Subsection (b) and the agreement is approved by the commission under Subsection (c), the rates for traffic exchanged under an interconnection agreement shall be just, reasonable, and nondiscriminatory. The parties may agree to exchange traffic under an interconnection agreement on a bill and keep basis, but the commission may not require the parties to exchange traffic on that basis. This section does not preclude any right to interconnection under federal law at rates or on terms or conditions granted by federal law.

(b)iiProviders [~~Telecommunications providers~~] shall negotiate network interconnectivity[~~, charges,~~] and terms and conditions of interconnectivity. The providers may negotiate network interconnectivity rates.

(c)i[~~(b)~~]iiIf interconnectivity[~~, charges,~~] and terms and conditions or rates of interconnectivity are successfully negotiated, the commission shall approve the interconnection agreement if the commission finds the agreement is in the public interest and is nondiscriminatory [~~rates~~].

(d)iiThe commission has all necessary authority to adopt rules and conduct proceedings as necessary to implement and enforce this section.

[(c)iiIf telecommunications providers do not enter into a mutually agreed compensation rate under this section, each provider shall reciprocally terminate the other provider's traffic at no charge for the first nine months after the date the first call is terminated between the providers.

[(d)iiDuring the nine-month period prescribed by Subsection (c), the commission shall complete a proceeding to establish reciprocal interconnection rates and terms. The commission shall establish reciprocal interconnection rates and terms based solely on the commission proceeding.

[~~(e)iiIn establishing the initial interconnection rate, the commission may not require cost studies from the new entrant.~~

[(f)iiOn or after the third anniversary of the date the first call is terminated between the providers, the commission, on receipt of a complaint, may require cost studies by a new entrant to establish interconnection rates.]

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SECTIONi__.iiSection 60.126, Utilities Code, is amended to read as follows:

Sec.i60.126.iiINTERCONNECTIVITY NEGOTIATIONS; DISPUTE RESOLUTION. A party negotiating an interconnection agreement under Section 60.125(b) may file a request for the commission to resolve a disputed issue not earlier than the 135th day or later than the 160th day after the date a party receives a request for negotiation. The commission shall [~~may~~] resolve the [a] dispute not later than the 270th day after the date the request for negotiation was received by a party [~~filed by a party to a negotiation under Section 60.125(a)~~].

SECTIONi__.iiSection 60.127, Utilities Code, is amended to read as follows:

Sec.i60.127.iiADOPTION OF APPROVED INTERCONNECTION RATES. A provider may adopt in its entirety any interconnection agreement reached by another provider and approved by the commission under this chapter. [~~(a)iiAn incumbent local exchange company may adopt the interconnection rates the commission approves for a larger incumbent local exchange company without additional cost justification.~~

[~~(b)iiIf an incumbent local exchange company does not adopt the interconnection rates of a larger company or negotiates under Section 60.125(a), the company is governed by Sections 60.125(c)-(f).~~

[(c)iiIf the incumbent local exchange company adopts the interconnection rates of another incumbent local exchange company, the new entrant may adopt those rates as the new entrant's interconnection rates.

[~~(d)iiIf the incumbent local exchange company elects to file its own tariff, the new entrant must also file its own interconnection tariff.~~]

SECTIONi__.iiSubchapter G, Chapter 60, Utilities Code, is amended by adding Section 60.129 to read as follows:

Sec.i60.129.iiCONSUMER-ORIENTED STANDARDS. (a) The commission shall adopt rules applicable to all interconnecting entities that ensure the following services are efficient and secure for consumers:

(1)iiE-911 systems;

(2)iinumber portability and other customer migration processes;

(3)iitelephone directory listings and publication;

(4)iidirectory assistance; and

(5)iiother consumer-friendly services.

(b)iiRules adopted under Subsection (a) must provide for the payment of compensation to an incumbent local exchange company for loading or storing customer information, except that the rules may not provide for the payment of compensation for the preparation and transfer of files from a service order system to be used in the creation of 911 call routing data and 911 automatic location identification data. The rules may not require unbundling of a provider's network elements.

SECTIONi__.iiThe heading to Subchapter I, Chapter 60, Utilities Code, is amended to read as follows:

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SUBCHAPTER I. NETWORK PROVIDER AND SERVICE PROVIDER [~~LOCAL EXCHANGE COMPANY~~] REQUIREMENTS

SECTIONi__.iiSection 60.161, Utilities Code, is amended to read as follows:

Sec.i60.161.iiNETWORK PROVIDER AND SERVICE PROVIDER [~~INCUMBENT LOCAL EXCHANGE COMPANY~~] REQUIREMENTS. A network provider or service provider [~~An incumbent local exchange company~~] may not unreasonably:

(1)iidiscriminate against another provider in providing interconnection, traffic exchange terms and conditions, or facility use, rates, terms, and conditions to exchange traffic between and among providers [~~by refusing access to the local exchange~~];

(2)iirefuse or delay an interconnection to another provider;

(3)iidegrade the quality of access the company provides to another provider;

(4)iiimpair the speed, quality, or efficiency of a line used by another provider;

(5)iifail to fully disclose in a timely manner on request all available information necessary to design equipment that will meet the specifications of the local exchange network; [or]

(6)iirefuse or delay access by a person to another provider; or

(7)iifail to fully disclose information necessary to determine compliance with a requirement prescribed by this section.

SECTIONi__.iiSection 60.164, Utilities Code, is amended to read as follows:

Sec.i60.164.iiPERMISSIBLE JOINT MARKETING.iiThe [~~Except as prescribed in Chapters 61, 62, and 63, the~~] commission may not adopt any rule or order that would prohibit a local exchange company from jointly marketing or selling its products and services with the products and services of any of its affiliates in any manner permitted by federal law or applicable rules or orders of the Federal Communications Commission.

SECTIONi__.iiSection 60.165, Utilities Code, is amended to read as follows:

Sec.i60.165.iiAFFILIATE RULE.iiThe [~~Except as prescribed in Chapters 61, 62, and 63, the~~] commission may not adopt any rule or order that would prescribe for any local exchange company any affiliate rule, including any accounting rule, any cost allocation rule, or any structural separation rule, that is more burdensome than federal law or applicable rules or orders of the Federal Communications Commission. Notwithstanding any other provision in this title, the commission may not attribute or impute to a local exchange company a price discount offered by an affiliate of the local exchange company to the affiliate's customers. This section does not limit the authority of the commission to consider a complaint brought under Subchapter A, Chapter 52, Section 53.003, or this chapter.

SECTIONi__.iiSection 64.001(b), Utilities Code, is amended to read as follows:

3828 79th LEGISLATURE — REGULAR SESSION

(b)iiThe purpose of this chapter is to establish retail customer protection standards and confer on the commission authority to adopt and enforce rules to protect retail customers from fraudulent, unfair, misleading, deceptive, or anticompetitive practices. The commission has authority governing those matters only as expressly provided by this chapter.

SECTIONi__.iiSections 64.002(1), (2), and (4), Utilities Code, are amended to read as follows:

(1)ii"Billing agent" means any entity that submits charges to the billing provider [~~utility~~] on behalf of itself or any provider of a product or service.

(2)ii"Billing provider" [~~utility"~~] means any service [~~telecommunications~~] provider or network provider, as defined by Section 51.002, that issues a bill directly to a customer for any telecommunications product or service.

(4)ii"Customer" means any person in whose name [~~telephone~~] service from a network provider or service provider is billed, including individuals, governmental units at all levels of government, corporate entities, and any other entity with legal capacity to be billed for telecommunications [~~telephone~~] service.

SECTIONi__.iiSection 64.003, Utilities Code, is amended to read as follows:

Sec.i64.003.iiCUSTOMER AWARENESS. (a) The commission shall promote public awareness of changes in the telecommunications markets, provide customers with information necessary to make informed choices about available options, and ensure that customers have an adequate understanding of their rights.

(b)iiThe commission shall compile a report on customer service at least once each year showing the comparative customer information [~~from reports given to the commission it deems necessary~~].

(c)iiThe commission shall adopt and enforce rules to require service providers and network providers [~~a certificated telecommunications utility~~] to give clear, uniform, and understandable information to customers about rates, terms, services, and customer rights as directed by this chapter[~~, and other necessary information as determined by the commission~~].

(d)iiCustomer awareness efforts by the commission shall be conducted in English and Spanish [~~and any other language as necessary~~].

SECTIONi__.iiSection 64.004, Utilities Code, is amended by amending Subsections (a), (b), and (d), and adding Subsections (f)-(h) to read as follows:

(a)iiAll buyers of [~~telecommunications~~] services from network providers and service providers subject to this subtitle are entitled to:

(1)iiprotection from fraudulent, unfair, misleading, deceptive, or anticompetitive practices, including protection from being billed for services that were not authorized or provided;

(2)iichoice of a [~~telecommunications service~~] provider and to have that choice honored;

(3)iiinformation in English and Spanish [~~and any other language as the commission deems necessary~~] concerning rates, key terms, and conditions;

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(4)iiprotection from discrimination on the basis of race, color, sex, nationality, religion, marital status, income level, or source of income and from unreasonable discrimination on the basis of geographic location;

(5)iiimpartial and prompt resolution of disputes with a [~~certificated telecommunications utility and disputes with a telecommunications service~~] provider related to unauthorized charges and switching of service;

(6)iiprivacy of customer consumption and credit information;

(7)iiaccuracy of metering and billing;

(8)iibills presented in a clear, readable format and easy-to-understand language;

(9)iiinformation in English and Spanish [~~and any other language as the commission deems necessary~~] concerning low-income assistance programs and deferred payment plans;

(10)iiall consumer protections and disclosures established by the Fair Credit Reporting Act (15 U.S.C. Section 1681 et seq.) and the Truth in Lending Act (15 U.S.C. Section 1601 et seq.); and

(11)iiapply for programs that assist [~~that offer~~] eligible low-income customers in receiving [an] affordable telecommunications services or provide [~~rate package and~~] bill payment assistance [~~programs~~] designed to reduce uncollectible accounts.

(b)iiThe commission may adopt and enforce rules as necessary or appropriate to carry out this section, including rules [~~for minimum service standards for a certificated telecommunications utility~~] relating to customer deposits and the extension of credit, switching fees, termination of service, [an] affordable services [~~rate package~~], and bill payment assistance programs for low-income customers. The commission may waive language requirements for good cause.

(d)iiThe commission shall coordinate its enforcement efforts regarding the prosecution of fraudulent, misleading, or deceptive[~~, and anticompetitive~~] business practices with the office of the attorney general in order to ensure consistent treatment of specific alleged violations.

(f)iiThe commission shall adopt rules to provide automatic enrollment of eligible customers for lifeline telephone service available to low-income households. Each state agency, on the request of the commission, shall assist in the adoption and implementation of those rules.

(g)iiNotwithstanding any other provision of this title, the rules adopted under Subsection (b) shall provide for full and concurrent reimbursement to network providers and service providers for the costs of any programs provided under Subsection (a)(11) and for reimbursement to providers for the difference between any affordable rate package provided under Subsection (a)(11) and any rates otherwise applicable.

(h)iiIf federal rules or requirements exist in relation to issues governed by this chapter, the commission's rules must be identical to those federal rules or requirements and may not be in any manner more burdensome or stringent on a provider of services than the federal rules or requirements.

3830 79th LEGISLATURE — REGULAR SESSION

SECTIONi__.iiSubchapter A, Chapter 64, Utilities Code, is amended by adding Section 64.005 to read as follows:

Sec.i64.005.iiELIGIBILITY PROCESS FOR CUSTOMER SERVICE DISCOUNTS. The commission by rule shall provide for an integrated eligibility process for customer service discounts.

SECTIONi__.ii(a) Subchapter A, Chapter 64, Utilities Code, is amended by adding Section 64.006 to read as follows:

Sec.i64.006.iiNOTICE REGARDING ACCESS TO EMERGENCY SERVICES. (a) As used in this section:

(1)iiThe term "VoIP service" means voice communications to residential or business customers over a broadband network using Internet Protocol.

(2)iiThe term "VoIP provider" means an entity that offers VoIP service for a fee.

(3)iiThe term "E-911" refers to the system for processing emergency calls as defined in Section 772.001, Health and Safety Code, as may be subsequently amended.

(b)iiA VoIP provider may not enter into a contract to provide VoIP service unless the entity provides clear and conspicuous notice to customers disclosing whether or not the service provides access to E-911.

(c)iiA VoIP provider which does not provide access to E-911 or which requires a customer to take steps to activate access to E-911 may not enter into a contract to provide VoIP service unless the VoIP provider provides clear and conspicuous notice of the following:

(1)iithe specific steps the customer must take to activate that service; and

(2)iian explanation of all material differences between E-911 service and the provider's system for accessing emergency services.

(d)iiThe notice required by Subsection (c) must:

(1)iibe a separate document; and

(2)iiconspicuously state that the customer acknowledges that the customer will not be able to use the service to access E-911, or that the customer must separately activate access to that service in order to receive it.

(e)iiAt least annually, a VoIP provider shall send to each customer to whom it provides VoIP service a notice that includes the information required by Subsection (c). The entity shall provide the notice as a separate document.

(f)iiExcept as specifically preempted by federal law, the commission has all jurisdiction necessary to enforce this section. In addition, a violation of this chapter is a false, misleading, or deceptive act or practice and is actionable by the attorney general under Subchapter E, Chapter 17, Business & Commerce Code.

(b)iiThis section applies to a contract entered into or renewed on or after the effective date of this section. A contract entered into or renewed before that date is governed by the law in effect on the date the contract was entered into or renewed, and that law is continued in effect for that purpose.

(c)iiThis section does not affect litigation pending on the effective date of this section.

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SECTIONi__.iiSection 64.101, Utilities Code, is amended to read as follows:

Sec.i64.101.iiPOLICY. It is the policy of this state that all customers be protected from the unauthorized switching of a [~~telecommunications~~] service provider selected by the customer to provide service.

SECTIONi__.iiSection 64.102, Utilities Code, is amended to read as follows:

Sec.i64.102.iiRULES RELATING TO CHOICE. The commission shall adopt and enforce rules that:

(1)iiensure that customers are protected from deceptive practices employed in obtaining authorizations of service and in the verification of change orders, including negative option marketing, sweepstakes, and contests that cause customers to unknowingly change their telecommunications service provider;

(2)iiprovide for clear, easily understandable identification, in each bill sent to a customer, of all [~~telecommunications~~] service providers submitting charges on the bill;

(3)iiensure that every service provider submitting charges on the bill is clearly and easily identified on the bill along with its services, products, and charges;

(4)iiprovide that unauthorized changes in service be remedied at no cost to the customer within a period established by the commission;

(5)iirequire refunds or credits to the customer in the event of an unauthorized change; and

(6)iiprovide for penalties for violations of commission rules adopted under this section, including fines and revocation of certificates or registrations[, by this action denying the certificated telecommunications utility the right to provide service in this state, except that the commission may not revoke a certificate of convenience and necessity of a telecommunications utility except as provided by Section 54.008].

SECTIONi__.iiChapter 240, Local Government Code, is amended by adding Subchapter E to read as follows:

SUBCHAPTER E. COMMUNICATION FACILITIES

Sec.i240.081.iiDEFINITIONS. In this subchapter:

(1)ii"Communication facility structure" means:

(A)iian antenna support structure for a mobile or land-based telecommunication facility, or a whip antenna, panel antenna, microwave dish, or receive-only satellite dish;

(B)iia cell enhancer and related equipment for wireless transmission from a sender to one or more receivers for a mobile telephone, or a mobile radio system facility, commercial radio service, or other service or receiver; or

(C)iia monopole tower, a steel lattice tower, or any other communication tower.

(2)ii"Residential subdivision" means a subdivision:

(A)iifor which a plat is recorded in the county real property records;

(B)iiin which the majority of the lots are subject to deed restrictions limiting the lots to residential use; and

3832 79th LEGISLATURE — REGULAR SESSION

(C)iithat includes at least five lots that are designated as homestead property.

Sec.i240.082.iiAPPLICABILITY. (a) This subchapter applies only to real property that is located in the unincorporated area of a county with a population of 1.4 million or more and located within one-quarter mile of a residential subdivision.

(b)iiThis subchapter does not apply to:

(1)iia communication facility structure built to replace an existing communication facility structure if:

(A)iithe replacement communication facility structure is constructed within 300 feet of the existing communication facility structure;

(B)iithe replacement communication facility structure is the same size and constructed for the same purpose as the existing communication facility structure; and

(C)iithe existing communication facility structure is removed not later than the 14th day after the date the replacement communication facility structure begins operation; or

(2)iia communication antenna, antenna facility, or antenna tower or support structure located in a residential area that is used by an amateur radio operator:

(A)iiexclusively for amateur radio communication or public safety services; and

(B)iiwho is licensed by the Federal Communications Commission.

Sec.i240.083.iiAUTHORITY OF COUNTY TO REGULATE. (a) The commissioners court of a county subject to this subchapter may by order regulate the location of a communication facility structure.

(b)iiThe regulations may include a requirement for a permit for the construction or expansion of the communication facility structure and may impose fees on regulated persons to recover the cost of administering the regulations.

Sec.i240.084.iiCOUNTY PERMIT. (a) This section applies only to the issuance of a permit to construct or improve a communication facility structure under a regulation adopted under this subchapter.

(b)iiThe commissioners court must, not later than the 45th day after the date the application for the permit is filed:

(1)iigrant or deny the permit application;

(2)iiprovide written notice to the applicant stating the reason the commissioners court has not acted on the permit application; or

(3)iienter into an agreement with the applicant establishing a date by which the commissioners court will grant or deny the permit application.

(c)iiIf the commissioners court provides notice to the applicant under Subsection (b)(2), the commissioners court must grant or deny the permit application not later than the 30th day after the date the applicant received the notice.

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(d)iiIf the commissioners court fails to act on a permit application within the 30-day period prescribed by Subsection (c) or under the terms of an agreement under Subsection (b)(3), the commissioners court:

(1)iimay not collect any permit fees associated with the permit application; and

(2)iishall refund to the applicant any permit fees associated with the application that have been previously collected.

Sec.i240.085.iiNOTICE BY SIGN. (a) Not later than the 60th day before the date a permit application is filed under Section 240.084, the applicant for a permit for a location not previously licensed or permitted shall prominently post an outdoor sign at the proposed location:

(1)iistating that a communication facility structure is proposed for the location; and

(2)iiproviding the name and business address of the applicant.

(b)iiThe sign must be at least 24 by 36 inches in size and must be published in lettering at least two inches in size. The county in which the proposed communication facility structure is to be located may require the sign to be published in English and in a language other than English if it is likely that a substantial number of residents in the area speak a language other than English as their familiar language.

Sec.i240.086.iiVARIANCES. (a) A person who proposes to construct or increase the height of a communication facility structure in violation of a regulation adopted by order by a county subject to this subchapter may apply to the commissioners court for a variance from the regulation.

(b)iiThe commissioners court shall hold a public hearing on the proposed variance. The commissioners court may authorize a variance from a regulation if the commissioners court finds that:

(1)iia literal application or enforcement of the regulation would result in practical difficulty or unnecessary hardship; and

(2)iigranting the relief sought would:

(A)iiresult in substantial justice;

(B)iinot be contrary to the public interest; and

(C)iibe in accordance with the spirit of the regulation and this subchapter.

(c)iiThe commissioners court may impose any reasonable conditions on the variance that the commissioners court considers necessary to accomplish the purposes of this subchapter.

(d)iiBefore the 10th day before the date the commissioners court holds a public hearing on the variance request, written notice of the public hearing shall be provided to each owner of property located within one-quarter mile of the proposed location of the communication facility structure. The notice must include:

(1)iithe date, time, and place of the public hearing;

(2)iithe proposed location, height, and use of the proposed communication facility structure; and

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(3)iithe name and telephone number of a person interested persons may contact to receive information regarding the construction of the proposed communication facility structure.

Sec.i240.087.iiADDITIONAL FILING REQUIREMENTS REGARDING CONSTRUCTION. Before the 90th day before the date construction begins, a person proposing to construct a communication facility structure in the unincorporated area of a county subject to this subchapter that is taller than 60 feet shall file with the county official designated by the commissioners court:

(1)iia statement informing the county that the construction is proposed and providing the date on or after which the construction will begin;

(2)iicopies of any necessary permits from the Federal Communications Commission;

(3)iiany necessary engineered drawings that have been approved by the Federal Aviation Administration;

(4)iithe correct phone number and address of each entity involved in the construction; and

(5)iia plat or map of the specific proposed location of the communication facility structure.

Sec.i240.088.iiOFFENSE. (a) A person commits an offense if the person violates an order adopted under this subchapter and the order defines the violation as an offense.

(b)iiAn offense under this section is prosecuted in the same manner as an offense defined under state law.

(c)iiAn offense under this section is a Class C misdemeanor.

Sec.i240.089.iiINJUNCTION. The county attorney or an attorney representing the county may file an action in a district court to enjoin a violation or threatened violation of an order adopted under this subchapter. The court may grant appropriate relief.

SECTIONi__. (a) Section 37.02(a), Business & Commerce Code, is amended to read as follows:

(a)iiA telephone solicitor may not make a consumer telephone call to a consumer unless:

(1)iithe telephone solicitor identifies himself or herself by name and identifies the business on whose behalf the telephone solicitor is calling and the purpose of the call immediately after making contact with the consumer to whom the call is made;

(2)iithe telephone solicitor makes the call after 12 noon or before 9 p.m. on a Sunday or after 9 a.m. and before 9 p.m. on a weekday or a Saturday; and

(3)iifor those calls in which an automated dial announcing device is used, the device must disconnect the consumer's telephone line within the period provided by Section 55.126, Utilities Code, as that section existed on August 31, 2005, after termination of the call by either the telephone solicitor or the consumer.

(b)iiSection 46.011(a), Business & Commerce Code, is amended to read as follows:

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(a)iiIn this section, "telecommunications utility" has the meaning assigned by Section 51.002, Utilities Code, as that section existed on August 31, 2005.

(c)iiSection 246.001(6), Local Government Code, is amended to read as follows:

(6)ii"Telecommunications utility" has the meaning assigned by Section 51.002, Utilities Code, as that section existed on August 31, 2005.

(d)iiSection 1(10), Article 18.21, Code of Criminal Procedure, is amended to read as follows:

(10)ii"Trap and trace device" means a device or process that records an incoming electronic or other impulse that identifies the originating number or other dialing, routing, addressing, or signaling information reasonably likely to identify the source of a wire or electronic communication, if the information does not include the contents of the communication. The term does not include a device or telecommunications network used in providing:

(A)iia caller identification service authorized by the Public Utility Commission of Texas under Subchapter E, Chapter 55, Utilities Code, as that subchapter existed on August 31, 2005;

(B)iithe services referenced in Section 55.102(b), Utilities Code, as that section existed on August 31, 2005; or

(C)iia caller identification service provided by a commercial mobile radio service provider licensed by the Federal Communications Commission.

SECTIONi__.ii(a) The Public Utility Commission of Texas shall conduct a study for presentation to the 80th Legislature on issues regarding the provision of wireless broadband communications services by municipalities, including wireless fidelity, or Wi-Fi, services.

(b)iiA municipality may not offer to the public, directly or indirectly, wireless broadband communications services, including wireless fidelity, or Wi-Fi, services, unless the municipality was providing the service on or before September 1, 2006, or unless the municipality has filed with the commission before June 15, 2006, a statement of intent to provide the services that meets the requirements of Subsection (c) of this section.

(c)iiA statement of intent described by Subsection (b) of this section must be presented to the commission for approval as a part of the study conducted under this section and must include information sufficient for the commission to determine that the municipality has a plan for providing the services and has the fiscal and managerial capacity to provide the intended services.

(d)iiThe commission shall present the report and approved statements of intent to the lieutenant governor, the speaker of the house of representatives, and the presiding officer of each standing committee of the house of representatives and senate that has jurisdiction over matters related to communications services and municipal government. The report must be presented not later than September 1, 2006.

(e)iiThe report may include discussion on any issue related to the provision of wireless broadband communications services by municipalities, including wireless fidelity, or Wi-Fi, services, that the commission considers important for

3836 79th LEGISLATURE — REGULAR SESSION

consideration by the legislature. The report must include the commission's recommendations for legislation and commentary on issues the commission considers important for the legislature's consideration.

SECTIONi__.ii(a) The following provisions of the Utilities Code are repealed on the effective date of this Act:

(1)iiSection 51.001(g);

(2)iiSection 51.004;

(3)iiSections 51.006-51.008;

(4)iiSection 51.010;

(5)iiSection 52.001;

(6)iiSections 52.004 and 52.005;

(7)iiSubchapter B, Chapter 52;

(8)iiSections 52.104-52.107;

(9)iiSections 52.109-52.112;

(10)iiSections 52.151-52.154;

(11)iiSubchapter E, Chapter 52;

(12)iiSections 52.252-52.254;

(13)iiSection 52.256(b);

(14)iiSections 54.003 and 54.004;

(15)iiSections 54.006 and 54.007;

(16)iiSubchapters B-D, Chapter 54;

(17)iiSection 54.2025;

(18)iiSection 54.253;

(19)iiSections 54.255-54.258;

(20)iiSection 54.261;

(21)iiSection 55.001;

(22)iiSections 55.002-55.012;

(23)iiSection 55.016;

(24)iiSections 55.024 and 55.025;

(25)iiSections 55.082 and 55.083;

(26)iiSections 55.088(b) and (c);

(27)iiSections 55.101(3) and (4);

(28)iiSections 55.102 and 55.103;

(29)iiSections 55.105-55.110;

(30)iiSubchapter F, Chapter 55;

(31)iiSection 55.172;

(32)iiSections 55.175-55.177;

(33)iiSection 55.179;

(34)iiSection 55.201(c);

(35)iiSection 55.202;

(36)iiSections 55.203(d)-(g);

(37)iiSection 55.251;

(38)iiSubchapter K, Chapter 55;

(39)iiSections 56.026(a) and (d);

(40)iiSection 56.204(b);

(41)iiSection 57.001;

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(42)iiSubchapter D, Chapter 57;

(43)iiSections 58.003-58.022;

(44)iiSection 58.024;

(45)iiSection 58.028;

(46)iiSections 58.052-58.060;

(47)iiSubchapter F, Chapter 58;

(48)iiSection 59.023(b);

(49)iiSection 59.024(e);

(50)iiSections 59.051-59.054;

(51)iiSection 59.076;

(52)iiSection 59.078(b);

(53)iiSection 60.002;

(54)iiSections 60.004-60.006;

(55)iiSubchapters B-D, Chapter 60;

(56)iiSections 60.083 and 60.084;

(57)iiSubchapter F, Chapter 60;

(58)iiSection 60.128;

(59)iiSubchapter H, Chapter 60;

(60)iiSections 60.162 and 60.163;

(61)iiChapter 61;

(62)iiChapter 63;

(63)iiSections 64.002(3), (5), and (6); and

(64)iiSubchapter B, Chapter 64.

(b)iiSection 56.026(c), Utilities Code, is repealed September 1, 2007.

(c)iiSubchapter C, Chapter 57, Utilities Code, is repealed.

SECTIONi__.iiThe repeal of Section 54.2025, Utilities Code, by this Act, shall not take effect until September 30, 2006.

Amendment No. 7 was withdrawn.

Amendment No. 8

Representative Solomons offered the following amendment to CSSBi408:

Amend CSSB 408 by striking all below the enacting clause and substituting the following:

SECTIONi1.iiSection 12.005, Utilities Code, is amended to read as follows:

Sec.i12.005.iiAPPLICATION OF SUNSET ACT. The Public Utility Commission of Texas is subject to Chapter 325, Government Code (Texas Sunset Act). Unless continued in existence as provided by that chapter or by Chapter 39, the commission is abolished and this title expires September 1, 2011 [~~2005~~].

SECTIONi2.iiSection 12.059, Utilities Code, is amended by adding Subsection (c) to read as follows:

(c)iiA person who is appointed to the commission is entitled to reimbursement, as provided by the General Appropriations Act, for the travel expenses incurred in attending the training program regardless of whether the attendance at the program occurs before or after the person qualifies for office.

SECTIONi3.iiSection 12.102, Utilities Code, is amended to read as follows:

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Sec.i12.102.iiDUTIES OF EMPLOYEES. The commission shall develop and implement policies that clearly separate [~~define~~] the policymaking [~~respective~~] responsibilities of the commission and the management responsibilities of the commission employees.

SECTIONi4.iiSection 12.153, Utilities Code, is amended to read as follows:

Sec.i12.153.iiRELATIONSHIP WITH TRADE ASSOCIATION. A person may not serve as a commissioner or be a commission employee who is employed in a "bona fide executive, administrative, or professional capacity," as that phrase is used for purposes of establishing an exemption to the overtime provisions of the federal Fair Labor Standards Act of 1938 (29 U.S.C. Section 201 et seq.), [exempt from the state's position classification plan or is compensated at or above the amount prescribed by the General Appropriations Act for step 1, salary group 17, of the position classification salary schedule] if the person is:

(1)iian officer, employee, or paid consultant of a trade association; or

(2)iithe spouse of an officer, manager, or paid consultant of a trade association.

SECTIONi5.iiSubchapter A, Chapter 14, Utilities Code, is amended by adding Section 14.0025 to read as follows:

Sec.i14.0025.iiNEGOTIATED RULEMAKING AND ALTERNATIVE DISPUTE RESOLUTION. (a)iiThe commission shall develop and implement a policy to encourage the use of:

(1)iinegotiated rulemaking procedures under Chapter 2008, Government Code, for the adoption of commission rules; and

(2)iiappropriate alternative dispute resolution procedures under Chapter 2009, Government Code, to assist in the resolution of internal and external disputes under the commission's jurisdiction.

(b)iiThe commission's procedures relating to alternative dispute resolution must conform, to the extent possible, to any model guidelines issued by the State Office of Administrative Hearings for the use of alternative dispute resolution by state agencies.

(c)iiThe commission shall designate a trained person to:

(1)iicoordinate the implementation of the policy adopted under Subsection (a);

(2)iiserve as a resource for any training needed to implement the procedures for negotiated rulemaking or alternative dispute resolution; and

(3)iicollect data concerning the effectiveness of those procedures, as implemented by the commission.

SECTIONi6.iiSubchapter B, Chapter 14, Utilities Code, is amended by adding Section 14.059 to read as follows:

Sec.i14.059.iiTECHNOLOGY POLICY. The commission shall implement a policy requiring the commission to use appropriate technological solutions to improve the commission's ability to perform its functions. The policy must ensure that the public is able to interact with the commission on the Internet.

SECTIONi7.iiSection 15.023, Utilities Code, is amended by amending Subsections (b) and (c) and adding Subsection (d) to read as follows:

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(b)iiThe penalty for a violation may be in an amount not to exceed $25,000 [~~$5,000~~]. Each day a violation continues or occurs is a separate violation for purposes of imposing a penalty.

(c)iiThe commission by rule shall establish a classification system for violations that includes a range [~~The amount~~] of [an] administrative penalties that may be assessed for each class of violation [~~penalty shall be~~] based on:

(1)iithe seriousness of the violation, including:

(A)iithe nature, circumstances, extent, and gravity of a prohibited act; and

(B)iithe hazard or potential hazard created to the health, safety, or economic welfare of the public;

(2)iithe economic harm to property or the environment caused by the violation;

(3)iithe history of previous violations;

(4)iithe amount necessary to deter future violations;

(5)iiefforts to correct the violation; and

(6)iiany other matter that justice may require.

(d)iiThe classification system established under Subsection (c) shall provide that a penalty in an amount that exceeds $5,000 may be assessed only if the violation is included in the highest class of violations in the classification system.

SECTIONi8.iiSubsection (b), Section 15.051, Utilities Code, is amended to read as follows:

(b)iiThe commission shall keep for a reasonable period information about each complaint filed with the commission that the commission has authority to resolve. The information shall include:

(1)iithe date the complaint is received;

(2)iithe name of the complainant;

(3)iithe subject matter of the complaint;

(4)iia record of each person contacted in relation to the complaint;

(5)iia summary of the results of the review or investigation of the complaint; and

(6)iiif the commission took no action on the complaint, an explanation of the reason the complaint was closed without action.

SECTIONi9.iiSection 39.151, Utilities Code, is amended by amending Subsections (b) through (e), (g), and (h) and adding Subsections (d-1) and (g-1) to read as follows:

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(d-1)iiThe commission may:

(2)iiprescribe a system of accounts for an independent organization;

(4)iiinspect an independent organization's facilities, records, and accounts during reasonable hours and after reasonable notice to the independent organization;

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(6)iiresolve disputes between an affected person and an independent organization and adopt procedures for the efficient resolution of such disputes.

(1)iithe chairman of the commission as an ex officio nonvoting member;

(2)iithe counsellor as an ex officio voting member representing residential and small commercial consumer interests;

(3)iithe chief executive officer [~~director~~] of the independent organization [~~system operator~~] as an ex officio voting member;

(4)iisix market participants elected by their respective market segments to serve one-year terms, with:

(A)iione representing independent generators;

(B)iione representing investor-owned utilities;

(C)iione representing power marketers;

(D)iione representing retail electric providers;

(E)iione representing municipally owned utilities; and

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(F)iione representing electric cooperatives [~~four representatives of the power generation sector as voting members~~];

[~~(A)iione representative of residential customers;~~

[~~(B)iione representative of commercial customers; and~~

[~~(C)iione representative of industrial customers~~].

(g-1)iiThe presiding officer of the governing body must be one of the members described by Subsection (g)(7).

SECTIONi10.iiSubchapter D, Chapter 39, Utilities Code, is amended by adding Sections 39.1511, 39.1512, and 39.1515 to read as follows:

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