By Armbrister S.B. No. 1751 75R5142 CBH-D A BILL TO BE ENTITLED 1-1 AN ACT 1-2 relating to the adoption of a nonsubstantive revision of statutes 1-3 relating to utilities, including conforming amendments, repeals, 1-4 and penalties. 1-5 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: 1-6 SECTION 1. ADOPTION OF CODE. The Utilities Code is adopted 1-7 to read as follows: 1-8 UTILITIES CODE 1-9 TITLE 1. GENERAL PROVISIONS 1-10 CHAPTER 1. GENERAL PROVISIONS 1-11 (Chapters 2-10 reserved for expansion) 1-12 TITLE 2. PUBLIC UTILITY REGULATORY ACT 1-13 SUBTITLE A. PROVISIONS APPLICABLE TO ALL UTILITIES 1-14 CHAPTER 11. GENERAL PROVISIONS 1-15 CHAPTER 12. ORGANIZATION OF COMMISSION 1-16 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNCIL 1-17 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 1-18 OTHER REGULATORY AUTHORITIES 1-19 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 1-20 CHAPTER 16. COMMISSION FINANCING 1-21 (Chapters 17-30 reserved for expansion) 1-22 SUBTITLE B. ELECTRIC UTILITIES 1-23 CHAPTER 31. GENERAL PROVISIONS 1-24 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION AND 2-1 OTHER REGULATORY AUTHORITIES 2-2 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 2-3 CHAPTER 34. ELECTRICAL PLANNING 2-4 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 2-5 CHAPTER 36. RATES 2-6 CHAPTER 37. CERTIFICATES OF CONVENIENCE AND NECESSITY 2-7 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 2-8 (Chapters 39-50 reserved for expansion) 2-9 SUBTITLE C. TELECOMMUNICATIONS UTILITIES 2-10 CHAPTER 51. GENERAL PROVISIONS 2-11 CHAPTER 52. COMMISSION JURISDICTION 2-12 CHAPTER 53. RATES 2-13 CHAPTER 54. CERTIFICATES 2-14 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 2-15 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE AND UNIVERSAL 2-16 SERVICE FUND 2-17 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 2-18 CHAPTER 58. INCENTIVE REGULATION 2-19 CHAPTER 59. INFRASTRUCTURE PLAN 2-20 CHAPTER 60. COMPETITIVE SAFEGUARDS 2-21 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 2-22 CHAPTER 62. BROADCASTER SAFEGUARDS 2-23 CHAPTER 63. ELECTRONIC PUBLISHING 2-24 (Chapters 64-100 reserved for expansion) 3-1 TITLE 3. GAS REGULATION 3-2 SUBTITLE A. GAS UTILITY REGULATORY ACT 3-3 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF PUBLIC 3-4 UTILITY COUNSEL 3-5 CHAPTER 102. JURISDICTION AND POWERS OF RAILROAD COMMISSION 3-6 AND OTHER REGULATORY AUTHORITIES 3-7 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 3-8 CHAPTER 104. RATES AND SERVICES 3-9 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 3-10 (Chapters 106-120 reserved for expansion) 3-11 SUBTITLE B. REGULATION OF TRANSPORTATION AND USE 3-12 CHAPTER 121. GAS PIPELINES 3-13 CHAPTER 122. GAS UTILITY PIPELINE TAX 3-14 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 3-15 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS AND 3-16 APARTMENT HOUSES 3-17 (Chapters 125-160 reserved for expansion) 3-18 TITLE 4. DELIVERY OF UTILITY SERVICES 3-19 SUBTITLE A. UTILITY CORPORATIONS AND OTHER PROVIDERS 3-20 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 3-21 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 3-22 CHAPTER 163. JOINT POWERS AGENCIES 3-23 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES BY 3-24 PUBLIC ENTITIES 3-25 (Chapters 165-180 reserved for expansion) 3-26 SUBTITLE B. PROVISIONS REGULATING DELIVERY OF SERVICES 3-27 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 4-1 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 4-2 CHAPTER 183. UTILITY DEPOSITS 4-3 CHAPTER 184. ELECTRIC AND WATER METERING 4-4 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 4-5 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY AND INTEGRITY 4-6 OF UTILITY SERVICE 4-7 UTILITIES CODE 4-8 TITLE 1. GENERAL PROVISIONS 4-9 CHAPTER 1. GENERAL PROVISIONS 4-10 Sec. 1.001. PURPOSE OF CODE 4-11 Sec. 1.002. CONSTRUCTION OF CODE 4-12 Sec. 1.003. REFERENCE IN LAW TO STATUTE REVISED BY CODE 4-13 CHAPTER 1. GENERAL PROVISIONS 4-14 Sec. 1.001. PURPOSE OF CODE. (a) This code is enacted as a 4-15 part of the state's continuing statutory revision program, begun by 4-16 the Texas Legislative Council in 1963 as directed by the 4-17 legislature in the law codified as Section 323.007, Government 4-18 Code. The program contemplates a topic-by-topic revision of the 4-19 state's general and permanent statute law without substantive 4-20 change. 4-21 (b) Consistent with the objectives of the statutory revision 4-22 program, the purpose of this code is to make the law encompassed by 4-23 this code more accessible and understandable by: 4-24 (1) rearranging the statutes into a more logical 4-25 order; 4-26 (2) employing a format and numbering system designed 4-27 to facilitate citation of the law and to accommodate future 5-1 expansion of the law; 5-2 (3) eliminating repealed, duplicative, 5-3 unconstitutional, expired, executed, and other ineffective 5-4 provisions; and 5-5 (4) restating the law in modern American English to 5-6 the greatest extent possible. (New.) 5-7 Sec. 1.002. CONSTRUCTION OF CODE. Chapter 311, Government 5-8 Code (Code Construction Act), applies to the construction of each 5-9 provision in this code except as otherwise expressly provided by 5-10 this code. (New.) 5-11 Sec. 1.003. REFERENCE IN LAW TO STATUTE REVISED BY CODE. A 5-12 reference in a law to a statute or a part of a statute revised by 5-13 this code is considered to be a reference to the part of this code 5-14 that revises that statute or part of that statute. (New.) 5-15 (Chapters 2-10 reserved for expansion) 5-16 TITLE 2. PUBLIC UTILITY REGULATORY ACT 5-17 SUBTITLE A. PROVISIONS APPLICABLE TO ALL UTILITIES 5-18 CHAPTER 11. GENERAL PROVISIONS 5-19 Sec. 11.001. SHORT TITLE 5-20 Sec. 11.002. PURPOSE AND FINDINGS 5-21 Sec. 11.003. DEFINITIONS 5-22 Sec. 11.004. DEFINITION OF UTILITY 5-23 Sec. 11.005. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN 5-24 MANNER OTHER THAN BY SETTING OF RATES 5-25 Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE 5-26 Sec. 11.007. ADMINISTRATIVE PROCEDURE 5-27 Sec. 11.008. LIBERAL CONSTRUCTION 6-1 Sec. 11.009. CONSTRUCTION WITH FEDERAL AUTHORITY 6-2 CHAPTER 11. GENERAL PROVISIONS 6-3 Sec. 11.001. SHORT TITLE. This title may be cited as the 6-4 Public Utility Regulatory Act. (V.A.C.S. Art. 1446c-0, Sec. 6-5 1.001.) 6-6 Sec. 11.002. PURPOSE AND FINDINGS. (a) This title is 6-7 enacted to protect the public interest inherent in the rates and 6-8 services of public utilities. The purpose of this title is to 6-9 establish a comprehensive and adequate regulatory system for public 6-10 utilities to assure rates, operations, and services that are just 6-11 and reasonable to the consumers and to the utilities. 6-12 (b) Public utilities traditionally are by definition 6-13 monopolies in the areas they serve. As a result, the normal forces 6-14 of competition that regulate prices in a free enterprise society do 6-15 not operate. Public agencies regulate utility rates, operations, 6-16 and services as a substitute for competition. (V.A.C.S. 6-17 Art. 1446c-0, Sec. 1.002.) 6-18 Sec. 11.003. DEFINITIONS. In this title: 6-19 (1) "Affected person" means: 6-20 (A) a public utility affected by an action of a 6-21 regulatory authority; 6-22 (B) a person whose utility service or rates are 6-23 affected by a proceeding before a regulatory authority; or 6-24 (C) a person who: 6-25 (i) is a competitor of a public utility 6-26 with respect to a service performed by the utility; or 6-27 (ii) wants to enter into competition with 7-1 a public utility. 7-2 (2) "Affiliate" means: 7-3 (A) a person who directly or indirectly owns or 7-4 holds at least five percent of the voting securities of a public 7-5 utility; 7-6 (B) a person in a chain of successive ownership 7-7 of at least five percent of the voting securities of a public 7-8 utility; 7-9 (C) a corporation that has at least five percent 7-10 of its voting securities owned or controlled, directly or 7-11 indirectly, by a public utility; 7-12 (D) a corporation that has at least five percent 7-13 of its voting securities owned or controlled, directly or 7-14 indirectly, by: 7-15 (i) a person who directly or indirectly 7-16 owns or controls at least five percent of the voting securities of 7-17 a public utility; or 7-18 (ii) a person in a chain of successive 7-19 ownership of at least five percent of the voting securities of a 7-20 public utility; 7-21 (E) a person who is an officer or director of a 7-22 public utility or of a corporation in a chain of successive 7-23 ownership of at least five percent of the voting securities of a 7-24 public utility; or 7-25 (F) a person determined to be an affiliate under 7-26 Section 11.006. 7-27 (3) "Allocation" means the division among 8-1 municipalities or among municipalities and unincorporated areas of 8-2 the plant, revenues, expenses, taxes, and reserves of a utility 8-3 used to provide public utility service in a municipality or for a 8-4 municipality and unincorporated areas. 8-5 (4) "Commission" means the Public Utility Commission 8-6 of Texas. 8-7 (5) "Commissioner" means a member of the Public 8-8 Utility Commission of Texas. 8-9 (6) "Cooperative corporation" means: 8-10 (A) an electric cooperative corporation 8-11 organized under Chapter 161 or a predecessor statute to Chapter 161 8-12 and operating under that chapter; or 8-13 (B) a telephone cooperative corporation 8-14 organized under Chapter 162 or a predecessor statute to Chapter 162 8-15 and operating under that chapter. 8-16 (7) "Corporation" means a domestic or foreign 8-17 corporation, joint-stock company, or association, and each lessee, 8-18 assignee, trustee, receiver, or other successor in interest of the 8-19 corporation, company, or association, that has any of the powers or 8-20 privileges of a corporation not possessed by an individual or 8-21 partnership. The term does not include a municipal corporation, 8-22 except as expressly provided by this title. 8-23 (8) "Counsellor" means the public utility counsel. 8-24 (9) "Facilities" means all of the plant and equipment 8-25 of a public utility, and includes the tangible and intangible 8-26 property, without limitation, owned, operated, leased, licensed, 8-27 used, controlled, or supplied for, by, or in connection with the 9-1 business of the public utility. 9-2 (10) "Municipally owned utility" means a utility 9-3 owned, operated, and controlled by a municipality or by a nonprofit 9-4 corporation the directors of which are appointed by one or more 9-5 municipalities. 9-6 (11) "Office" means the Office of Public Utility 9-7 Counsel. 9-8 (12) "Order" means all or a part of a final 9-9 disposition by a regulatory authority in a matter other than 9-10 rulemaking, without regard to whether the disposition is 9-11 affirmative or negative or injunctive or declaratory. The term 9-12 includes: 9-13 (A) the issuance of a certificate of convenience 9-14 and necessity; and 9-15 (B) the setting of a rate. 9-16 (13) "Person" includes an individual, a partnership of 9-17 two or more persons having a joint or common interest, a mutual or 9-18 cooperative association, and a corporation. 9-19 (14) "Proceeding" means a hearing, investigation, 9-20 inquiry, or other procedure for finding facts or making a decision 9-21 under this title. The term includes a denial of relief or 9-22 dismissal of a complaint. 9-23 (15) "Rate" includes: 9-24 (A) any compensation, tariff, charge, fare, 9-25 toll, rental, or classification that is directly or indirectly 9-26 demanded, observed, charged, or collected by a public utility for a 9-27 service, product, or commodity described in the definition of 10-1 utility in Section 31.002 or 51.002; and 10-2 (B) a rule, practice, or contract affecting the 10-3 compensation, tariff, charge, fare, toll, rental, or 10-4 classification. 10-5 (16) "Ratemaking proceeding" means: 10-6 (A) a proceeding in which a rate is changed; and 10-7 (B) a proceeding initiated under Chapter 34. 10-8 (17) "Regulatory authority" means either the 10-9 commission or the governing body of a municipality, in accordance 10-10 with the context. 10-11 (18) "Service" has its broadest and most inclusive 10-12 meaning. The term includes any act performed, anything supplied, 10-13 and any facilities used or supplied by a public utility in the 10-14 performance of the utility's duties under this title to its 10-15 patrons, employees, other public utilities, and the public. The 10-16 term also includes the interchange of facilities between two or 10-17 more public utilities. The term does not include the printing, 10-18 distribution, or sale of advertising in a telephone directory. 10-19 (19) "Test year" means the most recent 12 months, 10-20 beginning on the first day of a calendar or fiscal year quarter, 10-21 for which operating data for a public utility are available. 10-22 (20) "Trade association" means a nonprofit, 10-23 cooperative, and voluntarily joined association of business or 10-24 professional persons who are employed by public utilities or 10-25 utility competitors to assist the public utility industry, a 10-26 utility competitor, or the industry's or competitor's employees in 10-27 dealing with mutual business or professional problems and in 11-1 promoting their common interest. (V.A.C.S. Art. 1446c-0, Secs. 11-2 1.003(1), (2) (part), (3), (4), (5), (6), (7), (8), (9), (10), 11-3 (11), (12), (13), (13A), (14), (15), (16), (17), (18); New.) 11-4 Sec. 11.004. DEFINITION OF UTILITY. In Subtitle A, "public 11-5 utility" or "utility" means: 11-6 (1) an electric utility, as that term is defined by 11-7 Section 31.002; or 11-8 (2) a public utility or utility, as those terms are 11-9 defined by Section 51.002. (V.A.C.S. Art. 1446c-0, Sec. 1.004.) 11-10 Sec. 11.005. ENTITY, COMPETITOR, OR SUPPLIER AFFECTED IN 11-11 MANNER OTHER THAN BY SETTING OF RATES. In this title, an entity, 11-12 including a utility competitor or utility supplier, is considered 11-13 to be affected in a manner other than by the setting of rates for 11-14 that class of customer if during a relevant calendar year the 11-15 entity provides fuel, utility-related goods, utility-related 11-16 products, or utility-related services to a regulated or unregulated 11-17 provider of telecommunications or electric services or to an 11-18 affiliate in an amount equal to the greater of $10,000 or 10 11-19 percent of the person's business. (V.A.C.S. Art. 1446c-0, Sec. 11-20 1.006.) 11-21 Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE. (a) The 11-22 commission may determine that a person is an affiliate for purposes 11-23 of this title if the commission after notice and hearing finds that 11-24 the person: 11-25 (1) actually exercises substantial influence or 11-26 control over the policies and actions of a public utility; 11-27 (2) is a person over which a public utility exercises 12-1 the control described by Subdivision (1); 12-2 (3) is under common control with a public utility; or 12-3 (4) together with one or more persons with whom the 12-4 person is related by ownership or blood relationship, or by action 12-5 in concert, actually exercises substantial influence over the 12-6 policies and actions of a public utility even though neither person 12-7 may qualify as an affiliate individually. 12-8 (b) For purposes of Subsection (a)(3), "common control with 12-9 a public utility" means the direct or indirect possession of the 12-10 power to direct or cause the direction of the management and 12-11 policies of another, without regard to whether that power is 12-12 established through ownership or voting of securities or by any 12-13 other direct or indirect means. (V.A.C.S. Art. 1446c-0, Sec. 12-14 1.003(2) (part).) 12-15 Sec. 11.007. ADMINISTRATIVE PROCEDURE. (a) Chapter 2001, 12-16 Government Code, applies to a proceeding under this title except to 12-17 the extent inconsistent with this title. 12-18 (b) A communication of a member or employee of the 12-19 commission with any person, including a party or a party's 12-20 representative, is governed by Section 2001.061, Government Code. 12-21 (V.A.C.S. Art. 1446c-0, Sec. 1.005(a).) 12-22 Sec. 11.008. LIBERAL CONSTRUCTION. This title shall be 12-23 construed liberally to promote the effectiveness and efficiency of 12-24 regulation of public utilities to the extent that this construction 12-25 preserves the validity of this title and its provisions. (V.A.C.S. 12-26 Art. 1446c-0, Sec. 1.404 (part).) 12-27 Sec. 11.009. CONSTRUCTION WITH FEDERAL AUTHORITY. This 13-1 title shall be construed to apply so as not to conflict with any 13-2 authority of the United States. (V.A.C.S. Art. 1446c-0, Sec. 1.404 13-3 (part).) 13-4 CHAPTER 12. ORGANIZATION OF COMMISSION 13-5 SUBCHAPTER A. GENERAL PROVISIONS 13-6 Sec. 12.001. PUBLIC UTILITY COMMISSION OF TEXAS 13-7 Sec. 12.002. OFFICE 13-8 Sec. 12.003. SEAL 13-9 Sec. 12.004. REPRESENTATION BY THE ATTORNEY GENERAL 13-10 Sec. 12.005. APPLICATION OF SUNSET ACT 13-11 (Sections 12.006-12.050 reserved for expansion) 13-12 SUBCHAPTER B. COMMISSION APPOINTMENT AND FUNCTIONS 13-13 Sec. 12.051. APPOINTMENT; TERM 13-14 Sec. 12.052. PRESIDING OFFICER 13-15 Sec. 12.053. MEMBERSHIP QUALIFICATIONS 13-16 Sec. 12.054. REMOVAL OF COMMISSIONER 13-17 Sec. 12.055. PROHIBITION ON SEEKING ANOTHER OFFICE 13-18 Sec. 12.056. EFFECT OF VACANCY 13-19 Sec. 12.057. COMPENSATION 13-20 Sec. 12.058. MEETINGS 13-21 Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS 13-22 (Sections 12.060-12.100 reserved for expansion) 13-23 SUBCHAPTER C. COMMISSION PERSONNEL 13-24 Sec. 12.101. COMMISSION EMPLOYEES 13-25 Sec. 12.102. DUTIES OF EMPLOYEES 13-26 Sec. 12.103. DUTIES OF EXECUTIVE DIRECTOR 13-27 Sec. 12.104. DUTIES OF GENERAL COUNSEL 14-1 Sec. 12.105. CAREER LADDER PROGRAM; PERFORMANCE 14-2 EVALUATIONS; MERIT PAY 14-3 Sec. 12.106. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT 14-4 (Sections 12.107-12.150 reserved for expansion) 14-5 SUBCHAPTER D. PROHIBITED RELATIONSHIPS AND ACTIVITIES 14-6 Sec. 12.151. REGISTERED LOBBYIST 14-7 Sec. 12.152. CONFLICT OF INTEREST 14-8 Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION 14-9 Sec. 12.154. PROHIBITED ACTIVITIES 14-10 Sec. 12.155. PROHIBITION ON EMPLOYMENT OR REPRESENTATION 14-11 Sec. 12.156. QUALIFICATIONS AND STANDARDS OF 14-12 CONDUCT INFORMATION 14-13 (Sections 12.157-12.200 reserved for expansion) 14-14 SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND REPORTS 14-15 Sec. 12.201. PUBLIC INTEREST INFORMATION 14-16 Sec. 12.202. PUBLIC PARTICIPATION 14-17 Sec. 12.203. ANNUAL REPORT 14-18 (Sections 12.204-12.250 reserved for expansion) 14-19 SUBCHAPTER F. HISTORICALLY UNDERUTILIZED BUSINESSES 14-20 Sec. 12.251. DEFINITION 14-21 Sec. 12.252. COMMISSION AUTHORITY 14-22 Sec. 12.253. REPORT REQUIRED 14-23 Sec. 12.254. DISCRIMINATION PROHIBITED 14-24 Sec. 12.255. CAUSE OF ACTION NOT CREATED 14-25 CHAPTER 12. ORGANIZATION OF COMMISSION 14-26 SUBCHAPTER A. GENERAL PROVISIONS 14-27 Sec. 12.001. PUBLIC UTILITY COMMISSION OF TEXAS. The Public 15-1 Utility Commission of Texas exercises the jurisdiction and powers 15-2 conferred by this title. (V.A.C.S. Art. 1446c-0, Sec. 1.021(a) 15-3 (part).) 15-4 Sec. 12.002. OFFICE. (a) The principal office of the 15-5 commission is in Austin. 15-6 (b) The office shall be open daily during usual business 15-7 hours. The office is not required to be open on Saturday, Sunday, 15-8 or a legal holiday. (V.A.C.S. Art. 1446c-0, Sec. 1.031(a) (part).) 15-9 Sec. 12.003. SEAL. (a) The commission has a seal bearing 15-10 the inscription: "Public Utility Commission of Texas." 15-11 (b) The seal shall be affixed to each record and to an 15-12 authentication of a copy of a record. The commission may require 15-13 the seal to be affixed to other instruments. 15-14 (c) A court of this state shall take judicial notice of the 15-15 seal. (V.A.C.S. Art. 1446c-0, Sec. 1.032.) 15-16 Sec. 12.004. REPRESENTATION BY THE ATTORNEY GENERAL. The 15-17 attorney general shall represent the commission in a matter before 15-18 a state court, a court of the United States, or a federal public 15-19 utility regulatory commission. (V.A.C.S. Art. 1446c-0, Secs. 15-20 1.037, 1.301 (part).) 15-21 Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility 15-22 Commission of Texas is subject to Chapter 325, Government Code 15-23 (Texas Sunset Act). Unless continued in existence as provided by 15-24 that chapter, the commission is abolished and this title expires 15-25 September 1, 2001. (V.A.C.S. Art. 1446c-0, Sec. 1.022 (part).) 15-26 (Sections 12.006-12.050 reserved for expansion) 15-27 SUBCHAPTER B. COMMISSION APPOINTMENT AND FUNCTIONS 16-1 Sec. 12.051. APPOINTMENT; TERM. (a) The commission is 16-2 composed of three commissioners appointed by the governor with the 16-3 advice and consent of the senate. 16-4 (b) An appointment to the commission shall be made without 16-5 regard to the race, color, disability, sex, religion, age, or 16-6 national origin of the appointee. 16-7 (c) Commissioners serve staggered, six-year terms. 16-8 (V.A.C.S. Art. 1446c-0, Secs. 1.021(a) (part), (d).) 16-9 Sec. 12.052. PRESIDING OFFICER. (a) The governor shall 16-10 designate a commissioner as the presiding officer. 16-11 (b) The presiding officer serves in that capacity at the 16-12 pleasure of the governor. (V.A.C.S. Art. 1446c-0, Sec. 1.021(c).) 16-13 Sec. 12.053. MEMBERSHIP QUALIFICATIONS. (a) To be eligible 16-14 for appointment, a commissioner must be: 16-15 (1) a qualified voter; 16-16 (2) a citizen of the United States; and 16-17 (3) a representative of the general public. 16-18 (b) A person is not eligible for appointment as a 16-19 commissioner if the person: 16-20 (1) at any time during the two years preceding 16-21 appointment: 16-22 (A) personally served as an officer, director, 16-23 owner, employee, partner, or legal representative of a public 16-24 utility, affiliate, or direct competitor of a public utility; or 16-25 (B) owned or controlled, directly or indirectly, 16-26 stocks or bonds of any class with a value of $10,000 or more in a 16-27 public utility, affiliate, or direct competitor of a public 17-1 utility; or 17-2 (2) is not qualified to serve under Section 12.151, 17-3 12.152, or 12.153. (V.A.C.S. Art. 1446c-0, Secs. 1.023(a) (part), 17-4 (c).) 17-5 Sec. 12.054. REMOVAL OF COMMISSIONER. (a) It is a ground 17-6 for removal from the commission if a commissioner: 17-7 (1) does not have at the time of appointment or 17-8 maintain during service on the commission the qualifications 17-9 required by Section 12.053; 17-10 (2) violates a prohibition provided by Section 12.053 17-11 or by Subchapter D; 17-12 (3) cannot discharge the commissioner's duties for a 17-13 substantial part of the term for which the commissioner is 17-14 appointed because of illness or disability; or 17-15 (4) is absent from more than half of the regularly 17-16 scheduled commission meetings that the commissioner is eligible to 17-17 attend during a calendar year unless the absence is excused by 17-18 majority vote of the commission. 17-19 (b) The validity of an action of the commission is not 17-20 affected by the fact that the action is taken when a ground for 17-21 removal of a commissioner exists. 17-22 (c) If the executive director has knowledge that a potential 17-23 ground for removal exists, the executive director shall notify the 17-24 presiding officer of the commission of the potential ground. The 17-25 presiding officer shall then notify the governor and the attorney 17-26 general that a potential ground for removal exists. If the 17-27 potential ground for removal involves the presiding officer, the 18-1 executive director shall notify the next highest officer of the 18-2 commission, who shall notify the governor and the attorney general 18-3 that a potential ground for removal exists. (V.A.C.S. 18-4 Art. 1446c-0, Secs. 1.026(a), (b), (c).) 18-5 Sec. 12.055. PROHIBITION ON SEEKING ANOTHER OFFICE. A 18-6 person may not seek nomination or election to another civil office 18-7 of this state or of the United States while serving as a 18-8 commissioner. If a commissioner files for nomination or election 18-9 to another civil office of this state or of the United States, the 18-10 person's office as commissioner immediately becomes vacant, and the 18-11 governor shall appoint a successor. (V.A.C.S. Art. 1446c-0, Sec. 18-12 1.024(f).) 18-13 Sec. 12.056. EFFECT OF VACANCY. A vacancy or 18-14 disqualification does not prevent the remaining commissioner or 18-15 commissioners from exercising the powers of the commission. 18-16 (V.A.C.S. Art. 1446c-0, Sec. 1.033 (part).) 18-17 Sec. 12.057. COMPENSATION. The annual salary of the 18-18 commissioners is determined by the legislature. (V.A.C.S. 18-19 Art. 1446c-0, Sec. 1.030.) 18-20 Sec. 12.058. MEETINGS. The commission shall hold meetings 18-21 at its office and at other convenient places in this state as 18-22 expedient and necessary for the proper performance of the 18-23 commission's duties. (V.A.C.S. Art. 1446c-0, Sec. 1.031(a) 18-24 (part).) 18-25 Sec. 12.059. TRAINING PROGRAM FOR COMMISSIONERS. (a) 18-26 Before a commissioner may assume the commissioner's duties and 18-27 before the commissioner may be confirmed by the senate, the 19-1 commissioner must complete at least one course of the training 19-2 program established under this section. 19-3 (b) A training program established under this section shall 19-4 provide information to the commissioner regarding: 19-5 (1) the enabling legislation that created the 19-6 commission and its policymaking body to which the commissioner is 19-7 appointed to serve; 19-8 (2) the programs operated by the commission; 19-9 (3) the role and functions of the commission; 19-10 (4) the rules of the commission with an emphasis on 19-11 the rules that relate to disciplinary and investigatory authority; 19-12 (5) the current budget for the commission; 19-13 (6) the results of the most recent formal audit of the 19-14 commission; 19-15 (7) the requirements of Chapters 551, 552, and 2001, 19-16 Government Code; 19-17 (8) the requirements of the conflict of interest laws 19-18 and other laws relating to public officials; and 19-19 (9) any applicable ethics policies adopted by the 19-20 commission or the Texas Ethics Commission. (V.A.C.S. Art. 1446c-0, 19-21 Secs. 1.026(d), (e).) 19-22 (Sections 12.060-12.100 reserved for expansion) 19-23 SUBCHAPTER C. COMMISSION PERSONNEL 19-24 Sec. 12.101. COMMISSION EMPLOYEES. The commission shall 19-25 employ: 19-26 (1) an executive director; 19-27 (2) a general counsel; and 20-1 (3) officers and other employees the commission 20-2 considers necessary to administer this title. (V.A.C.S. 20-3 Art. 1446c-0, Sec. 1.028(a) (part).) 20-4 Sec. 12.102. DUTIES OF EMPLOYEES. The commission shall 20-5 develop and implement policies that clearly define the respective 20-6 responsibilities of the commission and commission employees. 20-7 (V.A.C.S. Art. 1446c-0, Sec. 1.028(a) (part).) 20-8 Sec. 12.103. DUTIES OF EXECUTIVE DIRECTOR. The executive 20-9 director is responsible for the daily operations of the commission 20-10 and shall coordinate the activities of commission employees. 20-11 (V.A.C.S. Art. 1446c-0, Sec. 1.028(b).) 20-12 Sec. 12.104. DUTIES OF GENERAL COUNSEL. The duties of the 20-13 general counsel include: 20-14 (1) gathering information relating to each matter 20-15 within the authority of the commission; 20-16 (2) accumulating evidence and other information for 20-17 the purposes specified by this section from: 20-18 (A) public utilities; 20-19 (B) the accounting, technical, and other 20-20 commission staff; and 20-21 (C) other sources; 20-22 (3) preparing and presenting the evidence described by 20-23 Subdivision (2) in a proceeding before the commission or the 20-24 commission's appointed examiner; 20-25 (4) conducting an investigation of a public utility 20-26 under the jurisdiction of the commission; 20-27 (5) preparing proposed changes in the rules of the 21-1 commission; 21-2 (6) preparing recommendations that the commission 21-3 investigate a matter within its authority; 21-4 (7) preparing recommendations and a report by 21-5 commission employees for inclusion in the annual report of the 21-6 commission; 21-7 (8) protecting and representing the public interest 21-8 and, as necessary to effect the objectives and purposes stated in 21-9 this title and protect the public interest, coordinating and 21-10 directing the preparation and presentation of evidence from 21-11 commission employees in each case before the commission; and 21-12 (9) performing any other activity reasonably necessary 21-13 to the general counsel's duties. (V.A.C.S. Art. 1446c-0, Secs. 21-14 1.028(c), (d).) 21-15 Sec. 12.105. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 21-16 MERIT PAY. (a) The executive director or the executive 21-17 director's designee shall develop an intra-agency career ladder 21-18 program that addresses opportunities for mobility and advancement 21-19 for commission employees. The program shall require intra-agency 21-20 posting of each position concurrently with any public posting. 21-21 (b) The executive director or the executive director's 21-22 designee shall develop a system of annual performance evaluations 21-23 that are based on documented employee performance. Merit pay for 21-24 commission employees must be based on the system established under 21-25 this subsection. (V.A.C.S. Art. 1446c-0, Sec. 1.029(a).) 21-26 Sec. 12.106. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT. 21-27 (a) The executive director or the executive director's designee 22-1 shall prepare and maintain a written policy statement to ensure 22-2 implementation of a program of equal employment opportunity under 22-3 which all personnel transactions are made without regard to race, 22-4 color, disability, sex, religion, age, or national origin. 22-5 (b) The policy statement under Subsection (a) must include: 22-6 (1) personnel policies, including policies related to 22-7 recruitment, evaluation, selection, appointment, training, and 22-8 promotion of personnel, that are in compliance with the 22-9 requirements of Chapter 21, Labor Code; 22-10 (2) a comprehensive analysis of the commission 22-11 workforce that meets federal and state guidelines; 22-12 (3) procedures by which a determination can be made 22-13 about the extent of underuse in the commission workforce of all 22-14 persons for whom federal or state guidelines encourage a more 22-15 equitable balance; and 22-16 (4) reasonable methods to appropriately address the 22-17 underuse. 22-18 (c) A policy statement prepared under Subsection (b) must: 22-19 (1) cover an annual period; 22-20 (2) be updated at least annually; 22-21 (3) be reviewed by the Commission on Human Rights for 22-22 compliance with Subsection (b)(1); and 22-23 (4) be filed with the governor's office. 22-24 (d) The governor's office shall deliver a biennial report to 22-25 the legislature based on the information received under Subsection 22-26 (c). The report may be made separately or as a part of other 22-27 biennial reports to the legislature. (V.A.C.S. Art. 1446c-0, Secs. 23-1 1.029(b), (c), (d).) 23-2 (Sections 12.107-12.150 reserved for expansion) 23-3 SUBCHAPTER D. PROHIBITED RELATIONSHIPS AND ACTIVITIES 23-4 Sec. 12.151. REGISTERED LOBBYIST. A person required to 23-5 register as a lobbyist under Chapter 305, Government Code, because 23-6 of the person's activities for compensation on behalf of a 23-7 profession related to the operation of the commission may not serve 23-8 as a commissioner or act as general counsel to the commission. 23-9 (V.A.C.S. Art. 1446c-0, Sec. 1.023(d) (part).) 23-10 Sec. 12.152. CONFLICT OF INTEREST. (a) A person is not 23-11 eligible for appointment as a commissioner or for employment as the 23-12 general counsel or executive director of the commission if: 23-13 (1) the person serves on the board of directors of a 23-14 company that supplies fuel, utility-related services, or 23-15 utility-related products to regulated or unregulated electric or 23-16 telecommunications utilities; or 23-17 (2) the person or the person's spouse: 23-18 (A) is employed by or participates in the 23-19 management of a business entity or other organization that is 23-20 regulated by or receives funds from the commission; 23-21 (B) directly or indirectly owns or controls more 23-22 than a 10 percent interest or a pecuniary interest with a value 23-23 exceeding $10,000 in: 23-24 (i) a business entity or other 23-25 organization that is regulated by or receives funds from the 23-26 commission; or 23-27 (ii) a utility competitor, utility 24-1 supplier, or other entity affected by a commission decision in a 24-2 manner other than by the setting of rates for that class of 24-3 customer; 24-4 (C) uses or receives a substantial amount of 24-5 tangible goods, services, or funds from the commission, other than 24-6 compensation or reimbursement authorized by law for commission 24-7 membership, attendance, or expenses; or 24-8 (D) notwithstanding Paragraph (B), has an 24-9 interest in a mutual fund or retirement fund in which more than 10 24-10 percent of the fund's holdings at the time of appointment is in a 24-11 single utility, utility competitor, or utility supplier in this 24-12 state and the person does not disclose this information to the 24-13 governor, senate, commission, or other entity, as appropriate. 24-14 (b) A person otherwise ineligible because of Subsection 24-15 (a)(2)(B) may be appointed to the commission and serve as a 24-16 commissioner or may be employed as the general counsel or executive 24-17 director if the person: 24-18 (1) notifies the attorney general and commission that 24-19 the person is ineligible because of Subsection (a)(2)(B); and 24-20 (2) divests the person or the person's spouse of the 24-21 ownership or control: 24-22 (A) before beginning service or employment; or 24-23 (B) if the person is already serving or 24-24 employed, within a reasonable time. (V.A.C.S. Art. 1446c-0, Secs. 24-25 1.023(e), (f).) 24-26 Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION. A person 24-27 may not serve as a commissioner or be a commission employee who is 25-1 exempt from the state's position classification plan or is 25-2 compensated at or above the amount prescribed by the General 25-3 Appropriations Act for step 1, salary group 17, of the position 25-4 classification salary schedule if the person is: 25-5 (1) an officer, employee, or paid consultant of a 25-6 trade association; or 25-7 (2) the spouse of an officer, manager, or paid 25-8 consultant of a trade association. (V.A.C.S. Art. 1446c-0, Secs. 25-9 1.023(g), (h).) 25-10 Sec. 12.154. PROHIBITED ACTIVITIES. (a) During the period 25-11 of service with the commission, a commissioner or commission 25-12 employee may not: 25-13 (1) have a pecuniary interest, including an interest 25-14 as an officer, director, partner, owner, employee, attorney, or 25-15 consultant, in: 25-16 (A) a public utility or affiliate; or 25-17 (B) a person a significant portion of whose 25-18 business consists of furnishing goods or services to public 25-19 utilities or affiliates; 25-20 (2) directly or indirectly own or control securities 25-21 in a public utility, affiliate, or direct competitor of a public 25-22 utility; or 25-23 (3) accept a gift, gratuity, or entertainment from: 25-24 (A) a public utility, affiliate, or direct 25-25 competitor of a public utility; 25-26 (B) a person a significant portion of whose 25-27 business consists of furnishing goods or services to public 26-1 utilities, affiliates, or direct competitors of public utilities; 26-2 or 26-3 (C) an agent, representative, attorney, 26-4 employee, officer, owner, director, or partner of a person 26-5 described by Paragraph (A) or (B). 26-6 (b) A commissioner or a commission employee may not directly 26-7 or indirectly solicit, request from, or suggest or recommend to a 26-8 public utility or an agent, representative, attorney, employee, 26-9 officer, owner, director, or partner of a public utility the 26-10 appointment to a position or the employment of a person by the 26-11 public utility or affiliate. 26-12 (c) A person may not give or offer to give a gift, gratuity, 26-13 employment, or entertainment to a commissioner or commission 26-14 employee if that person is: 26-15 (1) a public utility, affiliate, or direct competitor 26-16 of a public utility; 26-17 (2) a person who furnishes goods or services to a 26-18 public utility, affiliate, or direct competitor of a public 26-19 utility; or 26-20 (3) an agent, representative, attorney, employee, 26-21 officer, owner, director, or partner of a person described by 26-22 Subdivision (1) or (2). 26-23 (d) A public utility, affiliate, or direct competitor of a 26-24 public utility or a person furnishing goods or services to a public 26-25 utility, affiliate, or direct competitor of a public utility may 26-26 not aid, abet, or participate with a commissioner, commission 26-27 employee, or former commission employee in conduct that violates 27-1 Subsection (a)(3) or (c). 27-2 (e) Subsection (a)(1) does not apply to an interest in a 27-3 nonprofit group or association, other than a trade association, 27-4 that is solely supported by gratuitous contributions of money, 27-5 property, or services. 27-6 (f) It is not a violation of this section if a commissioner 27-7 or commission employee, on becoming the owner of stocks, bonds, or 27-8 another pecuniary interest in a public utility, affiliate, or 27-9 direct competitor of a public utility otherwise than voluntarily, 27-10 informs the commission and the attorney general of the ownership 27-11 and divests the ownership or interest within a reasonable time. 27-12 (g) It is not a violation of this section if a pecuniary 27-13 interest is held indirectly by ownership of an interest in a 27-14 retirement system, institution, or fund that in the normal course 27-15 of business invests in diverse securities independently of the 27-16 control of the commissioner or commission employee. 27-17 (h) This section does not apply to a contract for a public 27-18 utility product or service or equipment for use of a public utility 27-19 product when a commissioner or commission employee is acting as a 27-20 consumer. 27-21 (i) In this section, a "pecuniary interest" includes income, 27-22 compensation, and payment of any kind, in addition to an ownership 27-23 interest. (V.A.C.S. Art. 1446c-0, Secs. 1.024(a) (part), (b), (c), 27-24 (d), (e).) 27-25 Sec. 12.155. PROHIBITION ON EMPLOYMENT OR REPRESENTATION. 27-26 (a) A commissioner, a commission employee, or an employee of the 27-27 State Office of Administrative Hearings involved in hearing utility 28-1 cases may not: 28-2 (1) be employed by a public utility that was in the 28-3 scope of the commissioner's or employee's official responsibility 28-4 while the commissioner or employee was associated with the 28-5 commission or the State Office of Administrative Hearings; or 28-6 (2) represent a person before the commission or State 28-7 Office of Administrative Hearings or a court in a matter: 28-8 (A) in which the commissioner or employee was 28-9 personally involved while associated with the commission or State 28-10 Office of Administrative Hearings; or 28-11 (B) that was within the commissioner's or 28-12 employee's official responsibility while the commissioner or 28-13 employee was associated with the commission or State Office of 28-14 Administrative Hearings. 28-15 (b) The prohibition of Subsection (a)(1) applies until the: 28-16 (1) second anniversary of the date the commissioner 28-17 ceases to serve as a commissioner; and 28-18 (2) first anniversary of the date the employee's 28-19 employment with the commission or State Office of Administrative 28-20 Hearings ceases. 28-21 (c) The prohibition of Subsection (a)(2) applies while a 28-22 commissioner, commission employee, or employee of the State Office 28-23 of Administrative Hearings involved in hearing utility cases is 28-24 associated with the commission or State Office of Administrative 28-25 Hearings and at any time after. (V.A.C.S. Art. 1446c-0, Secs. 28-26 1.025(a), (b).) 28-27 Sec. 12.156. QUALIFICATIONS AND STANDARDS OF CONDUCT 29-1 INFORMATION. The executive director or the executive director's 29-2 designee shall provide to commissioners and commission employees as 29-3 often as necessary information regarding their: 29-4 (1) qualifications for office or employment under this 29-5 title; and 29-6 (2) responsibilities under applicable laws relating to 29-7 standards of conduct for state officers and employees. (V.A.C.S. 29-8 Art. 1446c-0, Sec. 1.025(c).) 29-9 (Sections 12.157-12.200 reserved for expansion) 29-10 SUBCHAPTER E. PUBLIC INTEREST INFORMATION AND REPORTS 29-11 Sec. 12.201. PUBLIC INTEREST INFORMATION. (a) The 29-12 commission shall prepare information of public interest describing 29-13 the functions of the commission and the commission's procedures by 29-14 which a complaint is filed with and resolved by the commission. 29-15 The commission shall make the information available to the public 29-16 and appropriate state agencies. 29-17 (b) The commission by rule shall establish methods by which 29-18 consumers and service recipients are notified of the name, mailing 29-19 address, and telephone number of the commission for the purpose of 29-20 directing complaints to the commission. (V.A.C.S. Art. 1446c-0, 29-21 Secs. 1.036(a), (b).) 29-22 Sec. 12.202. PUBLIC PARTICIPATION. (a) The commission 29-23 shall develop and implement policies that provide the public with a 29-24 reasonable opportunity to appear before the commission and to speak 29-25 on any issue under the jurisdiction of the commission. 29-26 (b) The commission shall comply with federal and state laws 29-27 related to program and facility accessibility. 30-1 (c) The commission shall prepare and maintain a written plan 30-2 that describes how a person who does not speak English may be 30-3 provided reasonable access to the commission's programs and 30-4 services. (V.A.C.S. Art. 1446c-0, Secs. 1.031(b), 1.036(c).) 30-5 Sec. 12.203. ANNUAL REPORT. (a) The commission shall 30-6 prepare annually a complete and detailed written report accounting 30-7 for all funds received and disbursed by the commission during the 30-8 preceding fiscal year. The annual report must meet the reporting 30-9 requirements applicable to financial reporting in the General 30-10 Appropriations Act. 30-11 (b) In the annual report issued in the year preceding the 30-12 convening of each regular session of the legislature, the 30-13 commission shall make suggestions regarding modification and 30-14 improvement of the commission's statutory authority and for the 30-15 improvement of utility regulation in general that the commission 30-16 considers appropriate for protecting and furthering the interest of 30-17 the public. (V.A.C.S. Art. 1446c-0, Sec. 1.035.) 30-18 (Sections 12.204-12.250 reserved for expansion) 30-19 SUBCHAPTER F. HISTORICALLY UNDERUTILIZED BUSINESSES 30-20 Sec. 12.251. DEFINITION. In this subchapter, "historically 30-21 underutilized business" has the meaning assigned by Section 30-22 481.101, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.407(c).) 30-23 Sec. 12.252. COMMISSION AUTHORITY. The commission, after 30-24 notice and hearing, may require each utility subject to regulation 30-25 under this title to make an effort to overcome the underuse of 30-26 historically underutilized businesses. (V.A.C.S. Art. 1446c-0, 30-27 Sec. 1.407(a).) 31-1 Sec. 12.253. REPORT REQUIRED. The commission shall require 31-2 each utility subject to regulation under this title to prepare and 31-3 submit to the commission a comprehensive annual report detailing 31-4 its use of historically underutilized businesses. (V.A.C.S. 31-5 Art. 1446c-0, Sec. 1.407(b).) 31-6 Sec. 12.254. DISCRIMINATION PROHIBITED. The rules adopted 31-7 under this subchapter may not be used to discriminate against a 31-8 citizen on the basis of sex, race, color, creed, or national 31-9 origin. (V.A.C.S. Art. 1446c-0, Sec. 1.407(d).) 31-10 Sec. 12.255. CAUSE OF ACTION NOT CREATED. This subchapter 31-11 does not create a public or private cause of action. (V.A.C.S. 31-12 Art. 1446c-0, Sec. 1.407(e).) 31-13 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNSEL 31-14 SUBCHAPTER A. GENERAL PROVISIONS; POWERS AND DUTIES 31-15 Sec. 13.001. OFFICE OF PUBLIC UTILITY COUNSEL 31-16 Sec. 13.002. APPLICATION OF SUNSET ACT 31-17 Sec. 13.003. OFFICE POWERS AND DUTIES 31-18 (Sections 13.004-13.020 reserved for expansion) 31-19 SUBCHAPTER B. PUBLIC UTILITY COUNSEL 31-20 Sec. 13.021. APPOINTMENT; TERM 31-21 Sec. 13.022. QUALIFICATIONS 31-22 Sec. 13.023. GROUNDS FOR REMOVAL 31-23 Sec. 13.024. PROHIBITED ACTS 31-24 (Sections 13.025-13.040 reserved for expansion) 31-25 SUBCHAPTER C. OFFICE PERSONNEL 31-26 Sec. 13.041. PERSONNEL 31-27 Sec. 13.042. RELATIONSHIP WITH TRADE ASSOCIATION 32-1 Sec. 13.043. PROHIBITION ON EMPLOYMENT OR REPRESENTATION 32-2 Sec. 13.044. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 32-3 MERIT PAY 32-4 Sec. 13.045. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT 32-5 Sec. 13.046. QUALIFICATIONS AND STANDARDS OF CONDUCT 32-6 INFORMATION 32-7 (Sections 13.047-13.060 reserved for expansion) 32-8 SUBCHAPTER D. PUBLIC INTEREST INFORMATION AND REPORTS 32-9 Sec. 13.061. PUBLIC INTEREST INFORMATION 32-10 Sec. 13.062. PUBLIC PARTICIPATION 32-11 Sec. 13.063. ANNUAL REPORT 32-12 CHAPTER 13. OFFICE OF PUBLIC UTILITY COUNSEL 32-13 SUBCHAPTER A. GENERAL PROVISIONS; POWERS AND DUTIES 32-14 Sec. 13.001. OFFICE OF PUBLIC UTILITY COUNSEL. The 32-15 independent office of public utility counsel represents the 32-16 interests of residential and small commercial consumers. (V.A.C.S. 32-17 Art. 1446c-0, Sec. 1.051(a).) 32-18 Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of 32-19 Public Utility Counsel is subject to Chapter 325, Government Code 32-20 (Texas Sunset Act). Unless continued in existence as provided by 32-21 that chapter, the office is abolished and this chapter expires 32-22 September 1, 2001. (V.A.C.S. Art. 1446c-0, Sec. 1.022 (part).) 32-23 Sec. 13.003. OFFICE POWERS AND DUTIES. (a) The office: 32-24 (1) shall assess the effect of utility rate changes 32-25 and other regulatory actions on residential consumers in this 32-26 state; 32-27 (2) shall advocate in the office's own name a position 33-1 determined by the counsellor to be most advantageous to a 33-2 substantial number of residential consumers; 33-3 (3) may appear or intervene, as a party or otherwise, 33-4 as a matter of right on behalf of: 33-5 (A) residential consumers, as a class, in any 33-6 proceeding before the commission; and 33-7 (B) small commercial consumers, as a class, in 33-8 any proceeding in which the counsellor determines that small 33-9 commercial consumers are in need of representation; 33-10 (4) may initiate or intervene as a matter of right or 33-11 otherwise appear in a judicial proceeding that involves an action 33-12 taken by an administrative agency in a proceeding in which the 33-13 counsellor is authorized to appear; 33-14 (5) is entitled to the same access as a party, other 33-15 than commission staff, to records gathered by the commission under 33-16 Section 14.204; 33-17 (6) is entitled to discovery of any nonprivileged 33-18 matter that is relevant to the subject matter of a proceeding or 33-19 petition before the commission; 33-20 (7) may represent an individual residential or small 33-21 commercial consumer with respect to the consumer's disputed 33-22 complaint concerning utility services that is unresolved before the 33-23 commission; and 33-24 (8) may recommend legislation to the legislature that 33-25 the office determines would positively affect the interests of 33-26 residential and small commercial consumers. 33-27 (b) This section does not limit the authority of the 34-1 commission to represent residential or small commercial consumers. 34-2 (c) The appearance of the counsellor in a proceeding does 34-3 not preclude the appearance of other parties on behalf of 34-4 residential or small commercial consumers. The counsellor may not 34-5 be grouped with any other party. (V.A.C.S. Art. 1446c-0, Sec. 34-6 1.054.) 34-7 (Sections 13.004-13.020 reserved for expansion) 34-8 SUBCHAPTER B. PUBLIC UTILITY COUNSEL 34-9 Sec. 13.021. APPOINTMENT; TERM. (a) The chief executive of 34-10 the office is the counsellor. 34-11 (b) The counsellor is appointed by the governor with the 34-12 advice and consent of the senate. 34-13 (c) The appointment of the counsellor shall be made without 34-14 regard to the race, color, disability, sex, religion, age, or 34-15 national origin of the appointee. 34-16 (d) The counsellor serves a two-year term that expires on 34-17 February 1 of the final year of the term. (V.A.C.S. Art. 1446c-0, 34-18 Sec. 1.051(b).) 34-19 Sec. 13.022. QUALIFICATIONS. (a) The counsellor must: 34-20 (1) be licensed to practice law in this state; 34-21 (2) have demonstrated a strong commitment to and 34-22 involvement in efforts to safeguard the rights of the public; and 34-23 (3) possess the knowledge and experience necessary to 34-24 practice effectively in utility proceedings. 34-25 (b) A person is not eligible for appointment as counsellor 34-26 if: 34-27 (1) the person or the person's spouse: 35-1 (A) is employed by or participates in the 35-2 management of a business entity or other organization that is 35-3 regulated by or receives funds from the commission; 35-4 (B) directly or indirectly owns or controls more 35-5 than a 10 percent interest or a pecuniary interest with a value 35-6 exceeding $10,000 in: 35-7 (i) a business entity or other 35-8 organization that is regulated by or receives funds from the 35-9 commission or the office; or 35-10 (ii) a utility competitor, utility 35-11 supplier, or other entity affected by a commission decision in a 35-12 manner other than by the setting of rates for that class of 35-13 customer; 35-14 (C) uses or receives a substantial amount of 35-15 tangible goods, services, or funds from the commission or the 35-16 office, other than compensation or reimbursement authorized by law 35-17 for service as counsellor or for commission membership, attendance, 35-18 or expenses; or 35-19 (D) notwithstanding Paragraph (B), has an 35-20 interest in a mutual fund or retirement fund in which more than 10 35-21 percent of the fund's holdings is in a single utility, utility 35-22 competitor, or utility supplier in this state and the person does 35-23 not disclose this information to the governor, senate, or other 35-24 entity, as appropriate; or 35-25 (2) the person is not qualified to serve under Section 35-26 13.042. 35-27 (c) A person required to register as a lobbyist under 36-1 Chapter 305, Government Code, because of the person's activities 36-2 for compensation on behalf of a profession related to the operation 36-3 of the commission or the office may not serve as counsellor. 36-4 (d) A person otherwise ineligible because of Subsection 36-5 (b)(1)(B) may be appointed and serve as counsellor if the person: 36-6 (1) notifies the attorney general and commission that 36-7 the person is ineligible because of Subsection (b)(1)(B); and 36-8 (2) divests the person or the person's spouse of the 36-9 ownership or control: 36-10 (A) before beginning service; or 36-11 (B) if the person is already serving, within a 36-12 reasonable time. (V.A.C.S. Art. 1446c-0, Secs. 1.023(d) (part), 36-13 1.051(c), (d), (e), (g).) 36-14 Sec. 13.023. GROUNDS FOR REMOVAL. (a) It is a ground for 36-15 removal from office if the counsellor: 36-16 (1) does not have at the time of appointment or 36-17 maintain during service as counsellor the qualifications required 36-18 by Section 13.022; 36-19 (2) violates a prohibition provided by Section 13.022, 36-20 13.042, or 13.043; or 36-21 (3) cannot discharge the counsellor's duties for a 36-22 substantial part of the term for which the counsellor is appointed 36-23 because of illness or disability. 36-24 (b) The validity of an action of the office is not affected 36-25 by the fact that the action is taken when a ground for removal of 36-26 the counsellor exists. (V.A.C.S. Art. 1446c-0, Sec. 1.0511.) 36-27 Sec. 13.024. PROHIBITED ACTS. (a) The counsellor may not: 37-1 (1) have a direct or indirect interest in a utility 37-2 company regulated under this title; or 37-3 (2) provide legal services directly or indirectly to 37-4 or be employed in any capacity by a utility company regulated under 37-5 this title, its parent, or its subsidiary companies, corporations, 37-6 or cooperatives or a utility competitor, utility supplier, or other 37-7 entity affected in a manner other than by the setting of rates for 37-8 that class of customer. 37-9 (b) The prohibition under Subsection (a) applies during the 37-10 period of the counsellor's service and until the second anniversary 37-11 of the date the counsellor ceases to serve as counsellor. 37-12 (c) This section does not prohibit a person from otherwise 37-13 engaging in the private practice of law after the person ceases to 37-14 serve as counsellor. (V.A.C.S. Art. 1446c-0, Sec. 1.052.) 37-15 (Sections 13.025-13.040 reserved for expansion) 37-16 SUBCHAPTER C. OFFICE PERSONNEL 37-17 Sec. 13.041. PERSONNEL. (a) The counsellor may employ 37-18 lawyers, economists, engineers, consultants, statisticians, 37-19 accountants, clerical staff, and other employees as the counsellor 37-20 considers necessary to carry out this chapter. 37-21 (b) An employee receives compensation as prescribed by the 37-22 legislature from the assessment imposed by Subchapter A, Chapter 37-23 16. (V.A.C.S. Art. 1446c-0, Sec. 1.053(a).) 37-24 Sec. 13.042. RELATIONSHIP WITH TRADE ASSOCIATION. A person 37-25 may not serve as counsellor or be an employee of the office who is 37-26 exempt from the state's position classification plan or is 37-27 compensated at or above the amount prescribed by the General 38-1 Appropriations Act for step 1, salary group 17, of the position 38-2 classification salary schedule if the person is: 38-3 (1) an officer, employee, or paid consultant of a 38-4 trade association; or 38-5 (2) the spouse of an officer, manager, or paid 38-6 consultant of a trade association. (V.A.C.S. Art. 1446c-0, Sec. 38-7 1.051(f).) 38-8 Sec. 13.043. PROHIBITION ON EMPLOYMENT OR REPRESENTATION. 38-9 (a) The counsellor or an employee of the office may not: 38-10 (1) be employed by a public utility that was in the 38-11 scope of the counsellor's or employee's official responsibility 38-12 while the counsellor or employee was associated with the office; or 38-13 (2) represent a person before the commission or a 38-14 court in a matter: 38-15 (A) in which the counsellor or employee was 38-16 personally involved while associated with the office; or 38-17 (B) that was within the counsellor's or 38-18 employee's official responsibility while the counsellor or employee 38-19 was associated with the office. 38-20 (b) The prohibition of Subsection (a)(1) applies until the: 38-21 (1) second anniversary of the date the counsellor 38-22 ceases to serve as a counsellor; and 38-23 (2) first anniversary of the date the employee's 38-24 employment with the office ceases. 38-25 (c) The prohibition of Subsection (a)(2) applies while a 38-26 counsellor or employee of the office is associated with the office 38-27 and at any time after. (V.A.C.S. Art. 1446c-0, Sec. 1.0512.) 39-1 Sec. 13.044. CAREER LADDER PROGRAM; PERFORMANCE EVALUATIONS; 39-2 MERIT PAY. (a) The counsellor or the counsellor's designee shall 39-3 develop an intra-agency career ladder program that addresses 39-4 opportunities for mobility and advancement for office employees. 39-5 The program shall require intra-agency postings of each position 39-6 concurrently with any public posting. 39-7 (b) The counsellor or the counsellor's designee shall 39-8 develop a system of annual performance evaluations that are based 39-9 on documented employee performance. Merit pay for office employees 39-10 must be based on the system established under this subsection. 39-11 (V.A.C.S. Art. 1446c-0, Sec. 1.053(b).) 39-12 Sec. 13.045. EQUAL EMPLOYMENT OPPORTUNITY POLICY STATEMENT. 39-13 (a) The counsellor or the counsellor's designee shall prepare and 39-14 maintain a written policy statement to ensure implementation of a 39-15 program of equal employment opportunity under which all personnel 39-16 transactions are made without regard to race, color, disability, 39-17 sex, religion, age, or national origin. 39-18 (b) The policy statement under Subsection (a) must include: 39-19 (1) personnel policies, including policies related to 39-20 recruitment, evaluation, selection, appointment, training, and 39-21 promotion of personnel, that are in compliance with the 39-22 requirements of Chapter 21, Labor Code; 39-23 (2) a comprehensive analysis of the office workforce 39-24 that meets federal and state guidelines; 39-25 (3) procedures by which a determination can be made 39-26 about the extent of underuse in the office workforce of all persons 39-27 for whom federal or state guidelines encourage a more equitable 40-1 balance; and 40-2 (4) reasonable methods to appropriately address the 40-3 underuse. 40-4 (c) A policy statement prepared under Subsection (b) must: 40-5 (1) cover an annual period; 40-6 (2) be updated at least annually; 40-7 (3) be reviewed by the Commission on Human Rights for 40-8 compliance with Subsection (b)(1); and 40-9 (4) be filed with the governor's office. 40-10 (d) The governor's office shall deliver a biennial report to 40-11 the legislature based on the information received under Subsection 40-12 (c). The report may be made separately or as a part of other 40-13 biennial reports to the legislature. (V.A.C.S. Art. 1446c-0, Secs. 40-14 1.053(c), (d).) 40-15 Sec. 13.046. QUALIFICATIONS AND STANDARDS OF CONDUCT 40-16 INFORMATION. The office shall provide to office employees as often 40-17 as necessary information regarding their: 40-18 (1) qualifications for employment under this title; 40-19 and 40-20 (2) responsibilities under applicable laws relating to 40-21 standards of conduct for employees. (V.A.C.S. Art. 1446c-0, Sec. 40-22 1.053(e).) 40-23 (Sections 13.047-13.060 reserved for expansion) 40-24 SUBCHAPTER D. PUBLIC INTEREST INFORMATION AND REPORTS 40-25 Sec. 13.061. PUBLIC INTEREST INFORMATION. The office shall 40-26 prepare information of public interest describing the functions of 40-27 the office. The office shall make the information available to the 41-1 public and appropriate state agencies. (V.A.C.S. Art. 1446c-0, 41-2 Sec. 1.0513(b).) 41-3 Sec. 13.062. PUBLIC PARTICIPATION. (a) The office shall 41-4 comply with federal and state laws related to program and facility 41-5 accessibility. 41-6 (b) The office shall prepare and maintain a written plan 41-7 that describes how a person who does not speak English may be 41-8 provided reasonable access to the office's programs and services. 41-9 (V.A.C.S. Art. 1446c-0, Sec. 1.0513(c).) 41-10 Sec. 13.063. ANNUAL REPORT. The office shall prepare 41-11 annually a complete and detailed written report accounting for all 41-12 funds received and disbursed by the office during the preceding 41-13 fiscal year. The annual report must meet the reporting 41-14 requirements applicable to financial reporting in the General 41-15 Appropriations Act. (V.A.C.S. Art. 1446c-0, Sec. 1.0513(a).) 41-16 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 41-17 OTHER REGULATORY AUTHORITIES 41-18 SUBCHAPTER A. GENERAL POWERS OF COMMISSION 41-19 Sec. 14.001. POWER TO REGULATE AND SUPERVISE 41-20 Sec. 14.002. RULES 41-21 Sec. 14.003. COMMISSION POWERS RELATING TO REPORTS 41-22 Sec. 14.004. REPORT OF SUBSTANTIAL INTEREST 41-23 Sec. 14.005. CRITERIA AND GUIDELINES GOVERNING TERMINATION 41-24 OF SERVICES TO ELDERLY AND DISABLED 41-25 Sec. 14.006. INTERFERENCE WITH TERMS OR CONDITIONS OF 41-26 EMPLOYMENT; PRESUMPTION OF REASONABLENESS 41-27 Sec. 14.007. ASSISTANCE TO MUNICIPALITY 42-1 Sec. 14.008. MUNICIPAL FRANCHISES 42-2 (Sections 14.009-14.050 reserved for expansion) 42-3 SUBCHAPTER B. PRACTICE AND PROCEDURE 42-4 Sec. 14.051. PROCEDURAL POWERS 42-5 Sec. 14.052. RULES 42-6 Sec. 14.053. POWERS AND DUTIES OF STATE OFFICE OF 42-7 ADMINISTRATIVE HEARINGS 42-8 Sec. 14.054. SETTLEMENTS 42-9 Sec. 14.055. RECORD OF PROCEEDINGS 42-10 Sec. 14.056. RIGHT TO BE HEARD 42-11 Sec. 14.057. ORDERS OF COMMISSION; TRANSCRIPTS AND EXHIBITS; 42-12 PUBLIC RECORDS 42-13 (Sections 14.058-14.100 reserved for expansion) 42-14 SUBCHAPTER C. RESTRICTIONS ON CERTAIN TRANSACTIONS 42-15 Sec. 14.101. REPORT OF CERTAIN TRANSACTIONS; COMMISSION 42-16 CONSIDERATION 42-17 Sec. 14.102. REPORT OF PURCHASE OF VOTING STOCK IN PUBLIC 42-18 UTILITY 42-19 Sec. 14.103. REPORT OF LOAN TO STOCKHOLDERS 42-20 (Sections 14.104-14.150 reserved for expansion) 42-21 SUBCHAPTER D. RECORDS 42-22 Sec. 14.151. RECORDS OF PUBLIC UTILITY 42-23 Sec. 14.152. MAINTENANCE OF OFFICE AND RECORDS IN THIS STATE 42-24 Sec. 14.153. COMMUNICATIONS WITH REGULATORY AUTHORITY 42-25 Sec. 14.154. JURISDICTION OVER AFFILIATE 42-26 (Sections 14.155-14.200 reserved for expansion) 42-27 SUBCHAPTER E. AUDITS AND INSPECTIONS 43-1 Sec. 14.201. INQUIRY INTO MANAGEMENT AND AFFAIRS 43-2 Sec. 14.202. MANAGEMENT AUDITS BY COMMISSION 43-3 Sec. 14.203. AUDIT OF ACCOUNTS 43-4 Sec. 14.204. INSPECTION 43-5 Sec. 14.205. EXAMINATIONS UNDER OATH 43-6 Sec. 14.206. ENTERING PREMISES OF PUBLIC UTILITY 43-7 Sec. 14.207. PRODUCTION OF OUT-OF-STATE RECORDS 43-8 CHAPTER 14. JURISDICTION AND POWERS OF COMMISSION AND 43-9 OTHER REGULATORY AUTHORITIES 43-10 SUBCHAPTER A. GENERAL POWERS OF COMMISSION 43-11 Sec. 14.001. POWER TO REGULATE AND SUPERVISE. The 43-12 commission has the general power to regulate and supervise the 43-13 business of each public utility within its jurisdiction and to do 43-14 anything specifically designated or implied by this title that is 43-15 necessary and convenient to the exercise of that power and 43-16 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 1.101(a).) 43-17 Sec. 14.002. RULES. The commission shall adopt and enforce 43-18 rules reasonably required in the exercise of its powers and 43-19 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 1.101(b) (part).) 43-20 Sec. 14.003. COMMISSION POWERS RELATING TO REPORTS. The 43-21 commission may: 43-22 (1) require a public utility to report to the 43-23 commission information relating to: 43-24 (A) the utility; and 43-25 (B) a transaction between the utility and an 43-26 affiliate inside or outside this state, to the extent that the 43-27 transaction is subject to the commission's jurisdiction; 44-1 (2) establish the form for a report; 44-2 (3) determine the time for a report and the frequency 44-3 with which the report is to be made; 44-4 (4) require that a report be made under oath; 44-5 (5) require the filing with the commission of a copy 44-6 of: 44-7 (A) a contract or arrangement between a public 44-8 utility and an affiliate; 44-9 (B) a report filed with a federal agency or a 44-10 governmental agency or body of another state; and 44-11 (C) an annual report that shows each payment of 44-12 compensation, other than salary or wages subject to federal income 44-13 tax withholding: 44-14 (i) to residents of this state; 44-15 (ii) with respect to legal, 44-16 administrative, or legislative matters in this state; or 44-17 (iii) for representation before the 44-18 legislature of this state or any governmental agency or body; and 44-19 (6) require that a contract or arrangement described 44-20 by Subdivision (5)(A) that is not in writing be reduced to writing 44-21 and filed with the commission. (V.A.C.S. Art. 1446c-0, Sec. 44-22 1.202(a).) 44-23 Sec. 14.004. REPORT OF SUBSTANTIAL INTEREST. The commission 44-24 may require disclosure of the identity and respective interests of 44-25 each owner of at least one percent of the voting securities of a 44-26 public utility or its affiliate. (V.A.C.S. Art. 1446c-0, Sec. 44-27 1.272.) 45-1 Sec. 14.005. CRITERIA AND GUIDELINES GOVERNING TERMINATION 45-2 OF SERVICES TO ELDERLY AND DISABLED. The commission may establish 45-3 criteria and guidelines with the utility industry relating to 45-4 industry procedures used in terminating services to the elderly and 45-5 disabled. (V.A.C.S. Art. 1446c-0, Sec. 1.405.) 45-6 Sec. 14.006. INTERFERENCE WITH TERMS OR CONDITIONS OF 45-7 EMPLOYMENT; PRESUMPTION OF REASONABLENESS. The commission may not 45-8 interfere with employee wages and benefits, working conditions, or 45-9 other terms or conditions of employment that are the product of a 45-10 collective bargaining agreement recognized under federal law. An 45-11 employee wage rate or benefit that is the product of the collective 45-12 bargaining is presumed to be reasonable. (V.A.C.S. Art. 1446c-0, 45-13 Sec. 1.206.) 45-14 Sec. 14.007. ASSISTANCE TO MUNICIPALITY. On request by the 45-15 governing body of a municipality, the commission may provide 45-16 commission employees as necessary to advise and consult with the 45-17 municipality on a pending matter. (V.A.C.S. Art. 1446c-0, Sec. 45-18 1.202(b).) 45-19 Sec. 14.008. MUNICIPAL FRANCHISES. (a) This title does not 45-20 restrict the rights and powers of a municipality to grant or refuse 45-21 a franchise to use the streets and alleys in the municipality or to 45-22 make a statutory charge for that use. 45-23 (b) A franchise agreement may not limit or interfere with a 45-24 power conferred on the commission by this title. (V.A.C.S. 45-25 Art. 1446c-0, Sec. 1.103.) 45-26 (Sections 14.009-14.050 reserved for expansion) 46-1 SUBCHAPTER B. PRACTICE AND PROCEDURE 46-2 Sec. 14.051. PROCEDURAL POWERS. The commission may: 46-3 (1) call and hold a hearing; 46-4 (2) administer an oath; 46-5 (3) receive evidence at a hearing; 46-6 (4) issue a subpoena to compel the attendance of a 46-7 witness or the production of a document; and 46-8 (5) make findings of fact and decisions to administer 46-9 this title or a rule, order, or other action of the commission. 46-10 (V.A.C.S. Art. 1446c-0, Sec. 1.101(d).) 46-11 Sec. 14.052. RULES. (a) The commission shall adopt and 46-12 enforce rules governing practice and procedure before the 46-13 commission and, as applicable, practice and procedure before the 46-14 utility division of the State Office of Administrative Hearings. 46-15 (b) The commission shall adopt rules that authorize an 46-16 administrative law judge to: 46-17 (1) limit the amount of time that a party may have to 46-18 present its case; 46-19 (2) limit the number of requests for information that 46-20 a party may make in a contested case; 46-21 (3) require a party to a contested case to identify 46-22 contested issues and facts before the hearing begins; 46-23 (4) limit cross-examination to only those issues and 46-24 facts identified before the hearing and to any new issues that may 46-25 arise as a result of the discovery process; and 46-26 (5) group parties, other than the office, that have 46-27 the same position on an issue to facilitate cross-examination on 47-1 that issue. 47-2 (c) A rule adopted under Subsection (b)(5) must permit each 47-3 party in a group to present that party's witnesses for 47-4 cross-examination during the hearing. 47-5 (d) A rule adopted under this section must ensure that each 47-6 party receives due process. (V.A.C.S. Art. 1446c-0, Secs. 1.101(b) 47-7 (part), (c).) 47-8 Sec. 14.053. POWERS AND DUTIES OF STATE OFFICE OF 47-9 ADMINISTRATIVE HEARINGS. (a) The utility division of the State 47-10 Office of Administrative Hearings shall conduct each hearing in a 47-11 contested case that is not conducted by one or more commissioners. 47-12 (b) The commission may delegate to the utility division of 47-13 the State Office of Administrative Hearings the authority to make a 47-14 final decision and to issue findings of fact, conclusions of law, 47-15 and other necessary orders in a proceeding in which there is not a 47-16 contested issue of fact or law. 47-17 (c) The commission by rule shall define the procedures by 47-18 which it delegates final decision-making authority under Subsection 47-19 (b). 47-20 (d) For review purposes an administrative law judge's final 47-21 decision under Subsection (b) has the same effect as a final 47-22 decision of the commission unless a commissioner requests formal 47-23 review of the decision. (V.A.C.S. Art. 1446c-0, Sec. 1.101(e).) 47-24 Sec. 14.054. SETTLEMENTS. (a) The commission by rule shall 47-25 adopt procedures governing the use of settlements to resolve 47-26 contested cases. 47-27 (b) Rules adopted under this section must ensure that: 48-1 (1) each party retains the right to: 48-2 (A) a full hearing before the commission on 48-3 issues that remain in dispute; and 48-4 (B) judicial review of issues that remain in 48-5 dispute; 48-6 (2) an issue of fact raised by a nonsettling party may 48-7 not be waived by a settlement or stipulation of the other parties; 48-8 and 48-9 (3) a nonsettling party may use an issue of fact 48-10 raised by that party as the basis for judicial review. (V.A.C.S. 48-11 Art. 1446c-0, Sec. 1.104.) 48-12 Sec. 14.055. RECORD OF PROCEEDINGS. The regulatory authority 48-13 shall keep a record of each proceeding before the authority. 48-14 (V.A.C.S. Art. 1446c-0, Sec. 1.402 (part).) 48-15 Sec. 14.056. RIGHT TO BE HEARD. Each party to a proceeding 48-16 before a regulatory authority is entitled to be heard by attorney 48-17 or in person. (V.A.C.S. Art. 1446c-0, Sec. 1.402 (part).) 48-18 Sec. 14.057. ORDERS OF COMMISSION; TRANSCRIPTS AND EXHIBITS; 48-19 PUBLIC RECORDS. (a) A commission order must be in writing and 48-20 contain detailed findings of the facts on which it is passed. 48-21 (b) The commission shall retain a copy of the transcript and 48-22 the exhibits in any matter in which the commission issues an order. 48-23 (c) Subject to Chapter 552, Government Code, each file 48-24 pertaining to a matter that was at any time pending before the 48-25 commission or to a record, report, or inspection required by 48-26 Section 14.003, 14.151, 14.152, 14.153, 14.201, or 14.203-14.207 or 48-27 by Subtitle B or C is public information. (V.A.C.S. Art. 1446c-0, 49-1 Sec. 1.034.) 49-2 (Sections 14.058-14.100 reserved for expansion) 49-3 SUBCHAPTER C. RESTRICTIONS ON CERTAIN TRANSACTIONS 49-4 Sec. 14.101. REPORT OF CERTAIN TRANSACTIONS; COMMISSION 49-5 CONSIDERATION. (a) Unless a public utility reports the 49-6 transaction to the commission within a reasonable time, the public 49-7 utility may not: 49-8 (1) sell, acquire, or lease a plant as an operating 49-9 unit or system in this state for a total consideration of more than 49-10 $100,000; or 49-11 (2) merge or consolidate with another public utility 49-12 operating in this state. 49-13 (b) A public utility shall report to the commission within a 49-14 reasonable time each transaction that involves the sale of at least 49-15 50 percent of the stock of the utility. On the filing of a report 49-16 with the commission, the commission shall investigate the 49-17 transaction, with or without a public hearing, to determine whether 49-18 the action is consistent with the public interest. In reaching its 49-19 determination, the commission shall consider: 49-20 (1) the reasonable value of the property, facilities, 49-21 or securities to be acquired, disposed of, merged, transferred, or 49-22 consolidated; 49-23 (2) whether the transaction will: 49-24 (A) adversely affect the health or safety of 49-25 customers or employees; 49-26 (B) result in the transfer of jobs of citizens 49-27 of this state to workers domiciled outside this state; or 50-1 (C) result in the decline of service; 50-2 (3) whether the public utility will receive 50-3 consideration equal to the reasonable value of the assets when it 50-4 sells, leases, or transfers assets; and 50-5 (4) whether the transaction is consistent with the 50-6 public interest. 50-7 (c) If the commission finds that a transaction is not in the 50-8 public interest, the commission shall take the effect of the 50-9 transaction into consideration in ratemaking proceedings and 50-10 disallow the effect of the transaction if the transaction will 50-11 unreasonably affect rates or service. 50-12 (d) This section does not apply to: 50-13 (1) the purchase of a unit of property for 50-14 replacement; or 50-15 (2) an addition to the facilities of a public utility 50-16 by construction. (V.A.C.S. Art. 1446c-0, Sec. 1.251.) 50-17 Sec. 14.102. REPORT OF PURCHASE OF VOTING STOCK IN PUBLIC 50-18 UTILITY. A public utility may not purchase voting stock in another 50-19 public utility doing business in this state unless the utility 50-20 reports the purchase to the commission. (V.A.C.S. Art. 1446c-0, 50-21 Sec. 1.252.) 50-22 Sec. 14.103. REPORT OF LOAN TO STOCKHOLDERS. A public 50-23 utility may not loan money, stocks, bonds, notes, or other evidence 50-24 of indebtedness to a person who directly or indirectly owns or 50-25 holds any stock of the public utility unless the public utility 50-26 reports the transaction to the commission within a reasonable time. 50-27 (V.A.C.S. Art. 1446c-0, Sec. 1.253.) 51-1 (Sections 14.104-14.150 reserved for expansion) 51-2 SUBCHAPTER D. RECORDS 51-3 Sec. 14.151. RECORDS OF PUBLIC UTILITY. (a) Each public 51-4 utility shall keep and provide to the regulatory authority, in the 51-5 manner and form prescribed by the commission, uniform accounts of 51-6 all business transacted by the utility. 51-7 (b) The commission may prescribe the form of books, 51-8 accounts, records, and memoranda to be kept by a public utility, 51-9 including: 51-10 (1) the books, accounts, records, and memoranda of: 51-11 (A) the provision of and capacity for service; 51-12 and 51-13 (B) the receipt and expenditure of money; and 51-14 (2) any other form, record, and memorandum that the 51-15 commission considers necessary to carry out this title. 51-16 (c) For a public utility subject to regulation by a federal 51-17 regulatory agency, compliance with the system of accounts 51-18 prescribed for the particular class of utilities by the federal 51-19 agency may be considered sufficient compliance with the system 51-20 prescribed by the commission. The commission may prescribe the form 51-21 of books, accounts, records, and memoranda covering information in 51-22 addition to that required by the federal agency. The system of 51-23 accounts and the form of books, accounts, records, and memoranda 51-24 prescribed by the commission for a public utility or class of 51-25 utilities may not be inconsistent with the systems and forms 51-26 established by a federal agency for that public utility or class of 51-27 utilities. 52-1 (d) Each public utility shall: 52-2 (1) keep and provide its books, accounts, records, and 52-3 memoranda accurately in the manner and form prescribed by the 52-4 commission; and 52-5 (2) comply with the directions of the regulatory 52-6 authority relating to the books, accounts, records, and memoranda. 52-7 (e) In this section, "public utility" includes a municipally 52-8 owned utility. (V.A.C.S. Art. 1446c-0, Secs. 1.201(a), (b), (c), 52-9 (d) (part), (e).) 52-10 Sec. 14.152. MAINTENANCE OF OFFICE AND RECORDS IN THIS 52-11 STATE. (a) Each public utility shall maintain an office in this 52-12 state in a county in which some part of the utility's property is 52-13 located. The utility shall keep in this office all books, 52-14 accounts, records, and memoranda required by the commission to be 52-15 kept in this state. 52-16 (b) A book, account, record, or memorandum required by the 52-17 regulatory authority to be kept in this state may not be removed 52-18 from this state, except as: 52-19 (1) provided by Section 52.255; and 52-20 (2) prescribed by the commission. (V.A.C.S. 52-21 Art. 1446c-0, Sec. 1.204.) 52-22 Sec. 14.153. COMMUNICATIONS WITH REGULATORY AUTHORITY. (a) 52-23 The regulatory authority shall adopt rules governing communications 52-24 with the regulatory authority or a member or employee of the 52-25 regulatory authority by: 52-26 (1) a public utility; 52-27 (2) an affiliate; or 53-1 (3) a representative of a public utility or affiliate. 53-2 (b) A record of a communication must contain: 53-3 (1) the name of the person contacting the regulatory 53-4 authority or member or employee of the regulatory authority; 53-5 (2) the name of the business entity represented; 53-6 (3) a brief description of the subject matter of the 53-7 communication; and 53-8 (4) the action, if any, requested by the public 53-9 utility, affiliate, or representative. 53-10 (c) Records compiled under Subsection (b) shall be available 53-11 to the public monthly. (V.A.C.S. Art. 1446c-0, Sec. 1.205.) 53-12 Sec. 14.154. JURISDICTION OVER AFFILIATE. (a) The 53-13 commission has jurisdiction over an affiliate that has a 53-14 transaction with a public utility under the commission's 53-15 jurisdiction to the extent of access to a record of the affiliate 53-16 relating to the transaction, including a record of joint or general 53-17 expenses, any portion of which may be applicable to the 53-18 transaction. 53-19 (b) A record obtained by the commission relating to sale of 53-20 electrical energy at wholesale by an affiliate to the public 53-21 utility is confidential and is not subject to disclosure under 53-22 Chapter 552, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.271.) 53-23 (Sections 14.155-14.200 reserved for expansion) 53-24 SUBCHAPTER E. AUDITS AND INSPECTIONS 53-25 Sec. 14.201. INQUIRY INTO MANAGEMENT AND AFFAIRS. A 53-26 regulatory authority may inquire into the management and affairs of 53-27 each public utility and shall keep itself informed as to the manner 54-1 and method in which each public utility is managed and its affairs 54-2 are conducted. (V.A.C.S. Art. 1446c-0, Sec. 1.203(c).) 54-3 Sec. 14.202. MANAGEMENT AUDITS BY COMMISSION. (a) The 54-4 commission shall: 54-5 (1) inquire into the management of the business of 54-6 each public utility under its jurisdiction; 54-7 (2) keep itself informed as to the manner and method 54-8 in which the utility's business is managed; and 54-9 (3) obtain from the public utility any information 54-10 necessary to enable the commission to perform a management audit. 54-11 (b) The commission may audit a utility under its 54-12 jurisdiction as frequently as needed. Six months after an audit, 54-13 the utility shall report to the commission on the status of the 54-14 implementation of the recommendations of the audit and shall file 54-15 subsequent reports at times the commission considers appropriate. 54-16 (V.A.C.S. Art. 1446c-0, Sec. 1.102.) 54-17 Sec. 14.203. AUDIT OF ACCOUNTS. A regulatory authority may 54-18 require the examination and audit of the accounts of a public or 54-19 municipally owned utility. (V.A.C.S. Art. 1446c-0, Secs. 1.201(d) 54-20 (part), (e).) 54-21 Sec. 14.204. INSPECTION. (a) A regulatory authority and, 54-22 to the extent authorized by the regulatory authority, its counsel, 54-23 agent, or employee, may: 54-24 (1) inspect and obtain copies of the papers, books, 54-25 accounts, documents, and other business records of a public utility 54-26 within its jurisdiction; and 54-27 (2) inspect the plant, equipment, and other property 55-1 of a public utility within its jurisdiction. 55-2 (b) An action under this section must be conducted at a 55-3 reasonable time for a reasonable purpose. (V.A.C.S. Art. 1446c-0, 55-4 Sec. 1.203(a) (part).) 55-5 Sec. 14.205. EXAMINATIONS UNDER OATH. In connection with an 55-6 action taken under Section 14.204, the regulatory authority may: 55-7 (1) examine under oath an officer, agent, or employee 55-8 of a public utility; or 55-9 (2) authorize the person conducting the action to make 55-10 the examination under oath. (V.A.C.S. Art. 1446c-0, Sec. 1.203(a) 55-11 (part).) 55-12 Sec. 14.206. ENTERING PREMISES OF PUBLIC UTILITY. (a) A 55-13 member, agent, or employee of a regulatory authority may enter the 55-14 premises occupied by a public utility to conduct an inspection, 55-15 examination, or test or to exercise any other authority provided by 55-16 this title. 55-17 (b) A member, agent, or employee of the regulatory authority 55-18 may act under this section only during reasonable hours and after 55-19 reasonable notice to the public utility. 55-20 (c) A public utility is entitled to be represented when an 55-21 inspection, examination, or test is conducted on its premises. The 55-22 utility is entitled to a reasonable time to secure a representative 55-23 before the inspection, examination, or test begins. (V.A.C.S. 55-24 Art. 1446c-0, Secs. 1.203(b), 2.156(a) (part).) 55-25 Sec. 14.207. PRODUCTION OF OUT-OF-STATE RECORDS. (a) A 55-26 regulatory authority may require, by order or subpoena served on a 55-27 public utility, the production, at the time and place in this state 56-1 that the regulatory authority designates, of any books, accounts, 56-2 papers, or records kept by that public utility outside this state 56-3 or, if ordered by the commission, verified copies of the books, 56-4 accounts, papers, or records. 56-5 (b) A public utility that fails or refuses to comply with an 56-6 order or subpoena under this section violates this title. 56-7 (V.A.C.S. Art. 1446c-0, Sec. 1.203(a) (part).) 56-8 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 56-9 SUBCHAPTER A. JUDICIAL REVIEW 56-10 Sec. 15.001. RIGHT TO JUDICIAL REVIEW 56-11 Sec. 15.002. COMMISSION AS DEFENDANT 56-12 Sec. 15.003. COSTS AND ATTORNEY'S FEES 56-13 Sec. 15.004. JUDICIAL STAY OR SUSPENSION 56-14 (Sections 15.005-15.020 reserved for expansion) 56-15 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 56-16 Sec. 15.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE 56-17 Sec. 15.022. CONTEMPT 56-18 Sec. 15.023. ADMINISTRATIVE PENALTY 56-19 Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE 56-20 Sec. 15.025. PAYMENT OF ADMINISTRATIVE PENALTY 56-21 Sec. 15.026. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY 56-22 Sec. 15.027. ADMINISTRATIVE PENALTY COLLECTION; GENERAL 56-23 PROVISIONS 56-24 Sec. 15.028. CIVIL PENALTY AGAINST PUBLIC UTILITY, PAY 56-25 TELEPHONE SERVICE PROVIDER, OR AFFILIATE 56-26 Sec. 15.029. CIVIL PENALTY FOR VIOLATING SECTION 12.055 56-27 OR 12.154 57-1 Sec. 15.030. OFFENSE 57-2 Sec. 15.031. PLACE FOR SUIT 57-3 Sec. 15.032. PENALTIES CUMULATIVE 57-4 Sec. 15.033. DISPOSITION OF FINES AND PENALTIES 57-5 (Sections 15.034-15.050 reserved for expansion) 57-6 SUBCHAPTER C. COMPLAINTS 57-7 Sec. 15.051. COMPLAINT BY AFFECTED PERSON 57-8 Sec. 15.052. COMPLAINT REGARDING RECREATIONAL VEHICLE 57-9 PARK OWNER 57-10 CHAPTER 15. JUDICIAL REVIEW, ENFORCEMENT, AND PENALTIES 57-11 SUBCHAPTER A. JUDICIAL REVIEW 57-12 Sec. 15.001. RIGHT TO JUDICIAL REVIEW. Any party to a 57-13 proceeding before the commission is entitled to judicial review 57-14 under the substantial evidence rule. (V.A.C.S. Art. 1446c-0, Sec. 57-15 1.301 (part).) 57-16 Sec. 15.002. COMMISSION AS DEFENDANT. The commission must 57-17 be a defendant in a proceeding for judicial review. (V.A.C.S. 57-18 Art. 1446c-0, Sec. 1.301 (part).) 57-19 Sec. 15.003. COSTS AND ATTORNEY'S FEES. (a) A party 57-20 represented by counsel who alleges that existing rates are 57-21 excessive or that rates prescribed by the commission are excessive 57-22 and who prevails in a proceeding for review of a commission order 57-23 or decision is entitled in the same action to recover against the 57-24 regulation fund reasonable fees for attorneys and expert witnesses 57-25 and other costs for the party's efforts before the commission and 57-26 the court. 57-27 (b) The court shall set the amount of attorney's fees 58-1 awarded under Subsection (a). 58-2 (c) If a court finds that an action under Section 15.001 or 58-3 this section was groundless and brought in bad faith and for the 58-4 purpose of harassment, the court may award reasonable attorney's 58-5 fees to the defendant public utility. (V.A.C.S. Art. 1446c-0, Sec. 58-6 1.302.) 58-7 Sec. 15.004. JUDICIAL STAY OR SUSPENSION. While an appeal 58-8 of an order, ruling, or decision of a regulatory authority is 58-9 pending, the district court, court of appeals, or supreme court, as 58-10 appropriate, may stay or suspend all or part of the operation of 58-11 the order, ruling, or decision. In granting or refusing a stay or 58-12 suspension, the court shall act in accordance with the practice of 58-13 a court exercising equity jurisdiction. (V.A.C.S. Art. 1446c-0, 58-14 Sec. 1.403.) 58-15 (Sections 15.005-15.020 reserved for expansion) 58-16 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 58-17 Sec. 15.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. (a) 58-18 The attorney general, on the request of the commission, shall apply 58-19 in the name of the commission for a court order under Subsection 58-20 (b) if the commission determines that a public utility or other 58-21 person is: 58-22 (1) engaging in or about to engage in an act that 58-23 violates this title or an order or rule of the commission entered 58-24 or adopted under this title; or 58-25 (2) failing to comply with the requirements of this 58-26 title or a rule or order of the commission. 58-27 (b) A court, in an action under this section, may: 59-1 (1) prohibit the commencement or continuation of an 59-2 act that violates this title or an order or rule of the commission 59-3 entered or adopted under this title; or 59-4 (2) require compliance with a provision of this title 59-5 or an order or rule of the commission. 59-6 (c) The remedy under this section is in addition to any 59-7 other remedy provided under this title. (V.A.C.S. Art. 1446c-0, 59-8 Sec. 1.321.) 59-9 Sec. 15.022. CONTEMPT. The commission may file a court 59-10 action for contempt against a person who: 59-11 (1) fails to comply with a lawful order of the 59-12 commission; 59-13 (2) fails to comply with a subpoena or subpoena duces 59-14 tecum; or 59-15 (3) refuses to testify about a matter on which the 59-16 person may be lawfully interrogated. (V.A.C.S. Art. 1446c-0, Sec. 59-17 1.326.) 59-18 Sec. 15.023. ADMINISTRATIVE PENALTY. (a) The commission 59-19 may impose an administrative penalty against a person regulated 59-20 under this title who violates this title or a rule or order adopted 59-21 under this title. 59-22 (b) The penalty for a violation may be in an amount not to 59-23 exceed $5,000. Each day a violation continues or occurs is a 59-24 separate violation for purposes of imposing a penalty. 59-25 (c) The amount of an administrative penalty shall be based 59-26 on: 59-27 (1) the seriousness of the violation, including: 60-1 (A) the nature, circumstances, extent, and 60-2 gravity of a prohibited act; and 60-3 (B) the hazard or potential hazard created to 60-4 the health, safety, or economic welfare of the public; 60-5 (2) the economic harm to property or the environment 60-6 caused by the violation; 60-7 (3) the history of previous violations; 60-8 (4) the amount necessary to deter future violations; 60-9 (5) efforts to correct the violation; and 60-10 (6) any other matter that justice may require. 60-11 (V.A.C.S. Art. 1446c-0, Secs. 1.3215(a), (b), (c).) 60-12 Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE. 60-13 (a) If the executive director determines that a violation has 60-14 occurred, the executive director may issue to the commission a 60-15 report that states the facts on which the determination is based 60-16 and the executive director's recommendation on the imposition of an 60-17 administrative penalty, including a recommendation on the amount of 60-18 the penalty. 60-19 (b) Not later than the 14th day after the date the report is 60-20 issued, the executive director shall give written notice of the 60-21 report to the person against whom the penalty may be assessed. The 60-22 notice may be given by certified mail. The notice must: 60-23 (1) include a brief summary of the alleged violation; 60-24 (2) state the amount of the recommended penalty; and 60-25 (3) inform the person that the person has a right to a 60-26 hearing on the occurrence of the violation, the amount of the 60-27 penalty, or both the occurrence of the violation and the amount of 61-1 the penalty. 61-2 (c) A penalty may not be assessed under this section if the 61-3 person against whom the penalty may be assessed remedies the 61-4 violation before the 31st day after the date the person receives 61-5 the notice under Subsection (b). A person who claims to have 61-6 remedied an alleged violation has the burden of proving to the 61-7 commission that the alleged violation was remedied and was 61-8 accidental or inadvertent. 61-9 (d) Not later than the 20th day after the date the person 61-10 receives the notice, the person may accept the determination and 61-11 recommended penalty of the executive director in writing or may 61-12 make a written request for a hearing on the occurrence of the 61-13 violation, the amount of the penalty, or both the occurrence of the 61-14 violation and the amount of the penalty. 61-15 (e) If the person accepts the executive director's 61-16 determination and recommended penalty, the commission by order 61-17 shall approve the determination and impose the recommended penalty. 61-18 (f) If the person requests a hearing or fails to timely 61-19 respond to the notice, the executive director shall set a hearing 61-20 and give notice of the hearing to the person. The hearing shall be 61-21 held by an administrative law judge of the State Office of 61-22 Administrative Hearings. The administrative law judge shall make 61-23 findings of fact and conclusions of law and promptly issue to the 61-24 commission a proposal for a decision about the occurrence of the 61-25 violation and the amount of a proposed penalty. Based on the 61-26 findings of fact, conclusions of law, and proposal for a decision, 61-27 the commission by order may find that a violation has occurred and 62-1 impose a penalty or may find that no violation occurred. 62-2 (g) The notice of the commission's order shall be given to 62-3 the person as provided by Chapter 2001, Government Code, and must 62-4 include a statement of the right of the person to judicial review 62-5 of the order. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(d), (e), (f), 62-6 (g), (h), (i).) 62-7 Sec. 15.025. PAYMENT OF ADMINISTRATIVE PENALTY. (a) Not 62-8 later than the 30th day after the date the commission's order 62-9 imposing an administrative penalty is final as provided by Section 62-10 2001.144, Government Code, the person shall: 62-11 (1) pay the amount of the penalty; 62-12 (2) pay the amount of the penalty and file a petition 62-13 for judicial review contesting: 62-14 (A) the occurrence of the violation; 62-15 (B) the amount of the penalty; or 62-16 (C) both the occurrence of the violation and the 62-17 amount of the penalty; or 62-18 (3) without paying the amount of the penalty, file a 62-19 petition for judicial review contesting: 62-20 (A) the occurrence of the violation; 62-21 (B) the amount of the penalty; or 62-22 (C) both the occurrence of the violation and the 62-23 amount of the penalty. 62-24 (b) Not later than the 30th day after the date the 62-25 commission's order is final as provided by Section 2001.144, 62-26 Government Code, a person who acts under Subsection (a)(3) may: 62-27 (1) stay enforcement of the penalty by: 63-1 (A) paying the amount of the penalty to the 63-2 court for placement in an escrow account; or 63-3 (B) giving to the court a supersedeas bond that 63-4 is approved by the court for the amount of the penalty and that is 63-5 effective until all judicial review of the commission's order is 63-6 final; or 63-7 (2) request the court to stay enforcement of the 63-8 penalty by: 63-9 (A) filing with the court a sworn affidavit of 63-10 the person stating that the person is financially unable to pay the 63-11 amount of the penalty and is financially unable to give the 63-12 supersedeas bond; and 63-13 (B) giving a copy of the affidavit to the 63-14 executive director by certified mail. 63-15 (c) The executive director, on receipt of a copy of an 63-16 affidavit under Subsection (b)(2), may file with the court, not 63-17 later than the fifth day after the date the copy is received, a 63-18 contest to the affidavit. The court shall hold a hearing on the 63-19 facts alleged in the affidavit as soon as practicable and shall 63-20 stay the enforcement of the penalty on finding that the alleged 63-21 facts are true. The person who files an affidavit has the burden 63-22 of proving that the person is financially unable to pay the amount 63-23 of the penalty and to give a supersedeas bond. 63-24 (d) If the person does not pay the amount of the penalty and 63-25 the enforcement of the penalty is not stayed, the executive 63-26 director may refer the matter to the attorney general for 63-27 collection of the amount of the penalty. (V.A.C.S. Art. 1446c-0, 64-1 Secs. 1.3215(j), (k), (l), (m).) 64-2 Sec. 15.026. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY. (a) 64-3 Judicial review of a commission order imposing an administrative 64-4 penalty is: 64-5 (1) instituted by filing a petition as provided by 64-6 Subchapter G, Chapter 2001, Government Code; and 64-7 (2) under the substantial evidence rule. 64-8 (b) If the court sustains the occurrence of the violation, 64-9 the court may uphold or reduce the amount of the penalty and order 64-10 the person to pay the full or reduced amount of the penalty. If 64-11 the court does not sustain the occurrence of the violation, the 64-12 court shall order that no penalty is owed. 64-13 (c) When the judgment of the court becomes final, the court 64-14 shall proceed under this subsection. If the person paid the amount 64-15 of the penalty and that amount is reduced or is not upheld by the 64-16 court, the court shall order that the appropriate amount plus 64-17 accrued interest be remitted to the person. The rate of the 64-18 interest is the rate charged on loans to depository institutions by 64-19 the New York Federal Reserve Bank, and the interest shall be paid 64-20 for the period beginning on the date the penalty was paid and 64-21 ending on the date the penalty is remitted. If the person gave a 64-22 supersedeas bond and the amount of the penalty is not upheld by the 64-23 court, the court shall order the release of the bond. If the 64-24 person gave a supersedeas bond and the amount of the penalty is 64-25 reduced, the court shall order the release of the bond after the 64-26 person pays the amount. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(n), 64-27 (o), (p).) 65-1 Sec. 15.027. ADMINISTRATIVE PENALTY COLLECTION; GENERAL 65-2 PROVISIONS. (a) An administrative penalty collected under this 65-3 subchapter shall be sent to the comptroller. 65-4 (b) A proceeding relating to an administrative penalty under 65-5 this subchapter is subject to Chapter 2001, Government Code. 65-6 (c) The executive director may delegate any power or duty 65-7 relating to an administrative penalty given the executive director 65-8 by this subchapter to a person designated by the executive 65-9 director. (V.A.C.S. Art. 1446c-0, Secs. 1.3215(q), (r), (s).) 65-10 Sec. 15.028. CIVIL PENALTY AGAINST PUBLIC UTILITY, PAY 65-11 TELEPHONE SERVICE PROVIDER, OR AFFILIATE. (a) A public utility, 65-12 customer-owned pay telephone service provider under Section 55.178, 65-13 or affiliate is subject to a civil penalty if the utility, 65-14 provider, or affiliate knowingly violates this title, fails to 65-15 perform a duty imposed on it, or fails or refuses to obey an order, 65-16 rule, direction, or requirement of the commission or a decree or 65-17 judgment of a court. 65-18 (b) A civil penalty under this section shall be in an amount 65-19 of not less than $1,000 and not more than $5,000 for each 65-20 violation. 65-21 (c) A public utility or affiliate commits a separate 65-22 violation each day it continues to violate Subsection (a). 65-23 (d) The attorney general shall file in the name of the 65-24 commission a suit on the attorney general's own initiative or at 65-25 the request of the commission to recover the civil penalty under 65-26 this section. (V.A.C.S. Art. 1446c-0, Sec. 1.322.) 65-27 Sec. 15.029. CIVIL PENALTY FOR VIOLATING SECTION 12.055 OR 66-1 12.154. (a) A member of the commission or an officer or director 66-2 of a public utility or affiliate who knowingly violates Section 66-3 12.055 or 12.154 is subject to a civil penalty of $1,000 for each 66-4 violation. 66-5 (b) A person other than a person subject to Subsection (a) 66-6 who knowingly violates Section 12.154 is subject to a civil penalty 66-7 of $500 for each violation. 66-8 (c) A member, officer, or employee of the commission who in 66-9 any action is found by a preponderance of the evidence to have 66-10 violated a provision of Section 12.055 or 12.154 shall be removed 66-11 from the person's office or employment. 66-12 (d) A civil penalty under this section is recoverable in a 66-13 suit filed in the name of the commission by the attorney general on 66-14 the attorney general's own initiative or at the request of the 66-15 commission. (V.A.C.S. Art. 1446c-0, Sec. 1.323.) 66-16 Sec. 15.030. OFFENSE. (a) A person commits an offense if 66-17 the person wilfully and knowingly violates this title. 66-18 (b) This section does not apply to an offense described by 66-19 Section 55.138. 66-20 (c) An offense under this section is a felony of the third 66-21 degree. (V.A.C.S. Art. 1446c-0, Sec. 1.325(a).) 66-22 Sec. 15.031. PLACE FOR SUIT. A suit for an injunction or a 66-23 penalty under this title may be brought in: 66-24 (1) Travis County; 66-25 (2) a county in which the violation is alleged to have 66-26 occurred; or 66-27 (3) a county in which a defendant resides. (V.A.C.S. 67-1 Art. 1446c-0, Sec. 1.328.) 67-2 Sec. 15.032. PENALTIES CUMULATIVE. (a) A penalty that 67-3 accrues under this title is cumulative of any other penalty. 67-4 (b) A suit for the recovery of a penalty does not bar or 67-5 affect the recovery of any other penalty or bar a criminal 67-6 prosecution against any person. (V.A.C.S. Art. 1446c-0, Sec. 67-7 1.325(b).) 67-8 Sec. 15.033. DISPOSITION OF FINES AND PENALTIES. A fine or 67-9 penalty collected under this title, other than a fine or penalty 67-10 collected in a criminal proceeding or a penalty collected under 67-11 Section 15.027(a), shall be paid to the commission. (V.A.C.S. 67-12 Art. 1446c-0, Sec. 1.327.) 67-13 (Sections 15.034-15.050 reserved for expansion) 67-14 SUBCHAPTER C. COMPLAINTS 67-15 Sec. 15.051. COMPLAINT BY AFFECTED PERSON. (a) An affected 67-16 person may complain to the regulatory authority in writing setting 67-17 forth an act or omission by a public utility in violation or 67-18 claimed violation of a law that the regulatory authority has 67-19 jurisdiction to administer or of an order, ordinance, or rule of 67-20 the regulatory authority. 67-21 (b) The commission shall keep for a reasonable period 67-22 information about each complaint filed with the commission. The 67-23 information shall include: 67-24 (1) the date the complaint is received; 67-25 (2) the name of the complainant; 67-26 (3) the subject matter of the complaint; 67-27 (4) a record of each person contacted in relation to 68-1 the complaint; 68-2 (5) a summary of the results of the review or 68-3 investigation of the complaint; and 68-4 (6) if the commission took no action on the complaint, 68-5 an explanation of the reason the complaint was closed without 68-6 action. 68-7 (c) The commission shall keep a file about each written 68-8 complaint filed with the commission that the commission has 68-9 authority to resolve. The commission shall provide to the person 68-10 filing the complaint and to each person or entity complained about 68-11 information concerning the commission's policies and procedures on 68-12 complaint investigation and resolution. The commission, at least 68-13 quarterly and until final disposition of the complaint, shall 68-14 notify the person filing the complaint and each person or entity 68-15 complained about of the status of the complaint unless the notice 68-16 would jeopardize an undercover investigation. (V.A.C.S. 68-17 Art. 1446c-0, Secs. 1.401(a), (b).) 68-18 Sec. 15.052. COMPLAINT REGARDING RECREATIONAL VEHICLE PARK 68-19 OWNER. (a) An affected person may complain to the regulatory 68-20 authority in writing setting forth an act or omission by a 68-21 recreational vehicle park owner who provides metered electric 68-22 service under Subchapter C, Chapter 184, in violation or claimed 68-23 violation of a law that the regulatory authority has jurisdiction 68-24 to administer or of an order, ordinance, or rule of the regulatory 68-25 authority. 68-26 (b) The commission shall keep for a reasonable period an 68-27 information file about each complaint filed with the commission 69-1 relating to a recreational vehicle park owner. 69-2 (c) The commission, at least quarterly and until final 69-3 disposition of the written complaint, shall notify the parties to 69-4 the complaint of the status of the complaint unless the notice 69-5 would jeopardize an undercover investigation. (V.A.C.S. 69-6 Art. 1446c-0, Sec. 1.401(c).) 69-7 CHAPTER 16. COMMISSION FINANCING 69-8 SUBCHAPTER A. ASSESSMENT ON PUBLIC UTILITIES 69-9 Sec. 16.001. ASSESSMENT ON PUBLIC UTILITIES 69-10 Sec. 16.002. PAYMENT DATES 69-11 Sec. 16.003. LATE PAYMENT PENALTY 69-12 Sec. 16.0031. CERTAIN PAYMENTS BASED ON ESTIMATED GROSS 69-13 RECEIPTS 69-14 Sec. 16.004. COLLECTION BY COMPTROLLER 69-15 (Sections 16.005-16.020 reserved for expansion) 69-16 SUBCHAPTER B. GRANTS AND OTHER FINANCIAL ASSISTANCE 69-17 Sec. 16.021. GRANTS OF FEDERAL FUNDS 69-18 (Sections 16.022-16.040 reserved for expansion) 69-19 SUBCHAPTER C. MONEY DISPOSITION, ACCOUNTING, AND BUDGET 69-20 Sec. 16.041. APPLICATION OF STATE FUNDS REFORM ACT 69-21 Sec. 16.042. ACCOUNTING RECORDS 69-22 Sec. 16.043. AUDIT 69-23 Sec. 16.044. APPROVAL OF BUDGET 69-24 CHAPTER 16. COMMISSION FINANCING 69-25 SUBCHAPTER A. ASSESSMENT ON PUBLIC UTILITIES 69-26 Sec. 16.001. ASSESSMENT ON PUBLIC UTILITIES. (a) To defray 69-27 the expenses incurred in the administration of this title, an 70-1 assessment is imposed on each public utility within the 70-2 jurisdiction of the commission that serves the ultimate consumer, 70-3 including each interexchange telecommunications carrier. 70-4 (b) An assessment under this section is equal to one-sixth 70-5 of one percent of the public utility's gross receipts from rates 70-6 charged to the ultimate consumer in this state. 70-7 (c) An interexchange telecommunications carrier that does 70-8 not provide local exchange telephone service may collect the fee 70-9 imposed under this section as an additional item separately stated 70-10 on the customer bill as "utility gross receipts assessment." 70-11 (V.A.C.S. Art. 1446c-0, Secs. 1.351(a), (c).) 70-12 Sec. 16.002. PAYMENT DATES. (a) The assessment is due 70-13 August 15. 70-14 (b) A public utility may instead make quarterly payments due 70-15 August 15, November 15, February 15, and May 15. (V.A.C.S. 70-16 Art. 1446c-0, Sec. 1.352(a).) 70-17 Sec. 16.003. LATE PAYMENT PENALTY. (a) An additional fee 70-18 equal to 10 percent of the amount due shall be assessed for any 70-19 late payment of an assessment required under this subchapter. 70-20 (b) An assessment delinquent for more than 30 days accrues 70-21 interest at an annual rate of 12 percent on the amount of the 70-22 assessment and penalty due. (V.A.C.S. Art. 1446c-0, Sec. 70-23 1.352(b).) 70-24 Sec. 16.0031. CERTAIN PAYMENTS BASED ON ESTIMATED GROSS 70-25 RECEIPTS. (a) Notwithstanding Section 16.002, the assessments are 70-26 due as provided by this section and are computed on a public 70-27 utility's estimate of its gross receipts. 71-1 (b) For the assessment otherwise due August 15, 1995, 50 71-2 percent of the assessment shall be paid by August 15, 1994, and 50 71-3 percent shall be paid by February 15, 1995. 71-4 (c) For the assessment otherwise due August 15, 1996, 50 71-5 percent of the assessment shall be paid by August 15, 1995, and 50 71-6 percent shall be paid by February 15, 1996. 71-7 (d) For the assessment otherwise due August 15, 1997, 50 71-8 percent of the assessment shall be paid by August 15, 1996, and 50 71-9 percent shall be paid by February 15, 1997. 71-10 (e) For the assessment otherwise due August 15, 1998, 50 71-11 percent of the assessment shall be paid by August 15, 1997, and 50 71-12 percent shall be paid by August 15, 1998. 71-13 (f) An amount that is underpaid for an assessment due August 71-14 15, 1995, August 15, 1996, or August 15, 1997, shall be paid by 71-15 those respective dates. An assessment amount that is overpaid 71-16 shall be credited against a subsequent assessment. 71-17 (g) This section expires September 1, 1998. (V.A.C.S. 71-18 Art. 1446c-0, Sec. 1.353.) 71-19 Sec. 16.004. COLLECTION BY COMPTROLLER. The comptroller 71-20 shall collect the assessment and any penalty or interest due under 71-21 this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 1.354(a).) 71-22 (Sections 16.005-16.020 reserved for expansion) 71-23 SUBCHAPTER B. GRANTS AND OTHER FINANCIAL ASSISTANCE 71-24 Sec. 16.021. GRANTS OF FEDERAL FUNDS. (a) The commission 71-25 may apply to an appropriate agency or officer of the United States 71-26 to receive and spend federal funds available by grant or other 71-27 similar form of financial assistance. 72-1 (b) This section does not impair the ability of the 72-2 commission to contract with or receive assistance from a state, 72-3 local, or other authorized source of funds. (V.A.C.S. 72-4 Art. 1446c-0, Sec. 1.355(a).) 72-5 (Sections 16.022-16.040 reserved for expansion) 72-6 SUBCHAPTER C. MONEY DISPOSITION, ACCOUNTING, AND BUDGET 72-7 Sec. 16.041. APPLICATION OF STATE FUNDS REFORM ACT. Money 72-8 paid to the commission or to the office under this title is subject 72-9 to Subchapter F, Chapter 404, Government Code. (V.A.C.S. 72-10 Art. 1446c-0, Sec. 1.354(b).) 72-11 Sec. 16.042. ACCOUNTING RECORDS. The commission shall keep 72-12 the accounting records required by the comptroller. (V.A.C.S. 72-13 Art. 1446c-0, Sec. 1.356 (part).) 72-14 Sec. 16.043. AUDIT. The financial transactions of the 72-15 commission are subject to audit by the state auditor under Chapter 72-16 321, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 1.356 (part).) 72-17 Sec. 16.044. APPROVAL OF BUDGET. The commission budget is 72-18 subject to legislative approval as part of the General 72-19 Appropriations Act. (V.A.C.S. Art. 1446c-0, Sec. 1.357.) 72-20 (Chapters 17-30 reserved for expansion) 72-21 SUBTITLE B. ELECTRIC UTILITIES 72-22 CHAPTER 31. GENERAL PROVISIONS 72-23 Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF 72-24 SUBTITLE 72-25 Sec. 31.002. DEFINITIONS 72-26 Sec. 31.003. REPORT ON SCOPE OF COMPETITION 72-27 Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES 73-1 SUBTITLE B. ELECTRIC UTILITIES 73-2 CHAPTER 31. GENERAL PROVISIONS 73-3 Sec. 31.001. LEGISLATIVE FINDINGS; PURPOSE OF SUBTITLE. (a) 73-4 This subtitle is enacted to protect the public interest inherent in 73-5 the rates and services of electric utilities. The purpose of this 73-6 subtitle is to establish a comprehensive and adequate regulatory 73-7 system for electric utilities to assure rates, operations, and 73-8 services that are just and reasonable to the consumers and to the 73-9 electric utilities. 73-10 (b) Electric utilities are by definition monopolies in many 73-11 of the services provided and areas they serve. As a result, the 73-12 normal forces of competition that regulate prices in a free 73-13 enterprise society do not always operate. Public agencies regulate 73-14 electric utility rates, operations, and services, except as 73-15 otherwise provided by this subtitle. 73-16 (c) The wholesale electric industry, through federal 73-17 legislative, judicial, and administrative actions, is becoming a 73-18 more competitive industry that does not lend itself to traditional 73-19 electric utility regulatory rules, policies, and principles. As a 73-20 result, the public interest requires that rules, policies, and 73-21 principles be formulated and applied to protect the public interest 73-22 in a more competitive marketplace. The development of a 73-23 competitive wholesale electric market that allows for increased 73-24 participation by electric utilities and certain nonutilities is in 73-25 the public interest. (V.A.C.S. Art. 1446c-0, Sec. 2.001(a).) 73-26 Sec. 31.002. DEFINITIONS. In this subtitle: 73-27 (1) "Electric utility" means a person or river 74-1 authority that owns or operates for compensation in this state 74-2 equipment or facilities to produce, generate, transmit, distribute, 74-3 sell, or furnish electricity in this state. The term includes a 74-4 lessee, trustee, or receiver of an electric utility and a 74-5 recreational vehicle park owner who does not comply with Subchapter 74-6 C, Chapter 184, with regard to the metered sale of electricity at 74-7 the recreational vehicle park. The term does not include: 74-8 (A) a municipal corporation; 74-9 (B) a qualifying facility; 74-10 (C) an exempt wholesale generator; 74-11 (D) a power marketer; 74-12 (E) a corporation described by Section 32.053 to 74-13 the extent the corporation sells electricity exclusively at 74-14 wholesale and not to the ultimate consumer; or 74-15 (F) a person not otherwise an electric utility 74-16 who: 74-17 (i) furnishes an electric service or 74-18 commodity only to itself, its employees, or its tenants as an 74-19 incident of employment or tenancy, if that service or commodity is 74-20 not resold to or used by others; 74-21 (ii) owns or operates in this state 74-22 equipment or facilities to produce, generate, transmit, distribute, 74-23 sell, or furnish electric energy to an electric utility, if the 74-24 equipment or facilities are used primarily to produce and generate 74-25 electric energy for consumption by that person; or 74-26 (iii) owns or operates in this state a 74-27 recreational vehicle park that provides metered electric service in 75-1 accordance with Subchapter C, Chapter 184. 75-2 (2) "Exempt wholesale generator" means a person who is 75-3 engaged directly or indirectly through one or more affiliates 75-4 exclusively in the business of owning or operating all or part of a 75-5 facility for generating electric energy and selling electric energy 75-6 at wholesale and who: 75-7 (A) does not own a facility for the transmission 75-8 of electricity, other than an essential interconnecting 75-9 transmission facility necessary to effect a sale of electric energy 75-10 at wholesale; and 75-11 (B) has: 75-12 (i) applied to the Federal Energy 75-13 Regulatory Commission for a determination under 15 U.S.C. Section 75-14 79z-5a; or 75-15 (ii) registered as an exempt wholesale 75-16 generator as required by Section 35.032. 75-17 (3) "Power marketer" means a person who: 75-18 (A) becomes an owner of electric energy in this 75-19 state for the purpose of selling the electric energy at wholesale; 75-20 (B) does not own generation, transmission, or 75-21 distribution facilities in this state; 75-22 (C) does not have a certificated service area; 75-23 and 75-24 (D) has: 75-25 (i) been granted authority by the Federal 75-26 Energy Regulatory Commission to sell electric energy at 75-27 market-based rates; or 76-1 (ii) registered as a power marketer under 76-2 Section 35.032. 76-3 (4) "Qualifying cogenerator" and "qualifying small 76-4 power producer" have the meanings assigned those terms by 16 U.S.C. 76-5 Sections 796(18)(C) and 796(17)(D). 76-6 (5) "Qualifying facility" means a qualifying 76-7 cogenerator or qualifying small power producer. 76-8 (6) "Rate" includes a compensation, tariff, charge, 76-9 fare, toll, rental, or classification that is directly or 76-10 indirectly demanded, observed, charged, or collected by an electric 76-11 utility for a service, product, or commodity described in the 76-12 definition of electric utility in this section and a rule, 76-13 practice, or contract affecting the compensation, tariff, charge, 76-14 fare, toll, rental, or classification that must be approved by a 76-15 regulatory authority. 76-16 (7) "Transmission service" includes construction or 76-17 enlargement of facilities, transmission over distribution 76-18 facilities, control area services, scheduling resources, regulation 76-19 services, reactive power support, voltage control, provision of 76-20 operating reserves, and any other associated electrical service the 76-21 commission determines appropriate. (V.A.C.S. Art. 1446c-0, Secs. 76-22 2.0011, 2.0012(a) (part).) 76-23 Sec. 31.003. REPORT ON SCOPE OF COMPETITION. (a) Before 76-24 January 15 of each odd-numbered year, the commission shall report 76-25 to the legislature on the scope of competition in electric markets 76-26 and the effect of competition and industry restructuring on 76-27 customers in both competitive and noncompetitive markets. 77-1 (b) The report under this section must include: 77-2 (1) an assessment of the effect of competition on the 77-3 rates and availability of electric services for residential and 77-4 small commercial customers; 77-5 (2) a summary of commission action over the preceding 77-6 two years that reflects changes in the scope of competition in 77-7 regulated electric markets; and 77-8 (3) recommendations to the legislature for legislation 77-9 that the commission finds appropriate to promote the public 77-10 interest in the context of a partially competitive electric market. 77-11 (V.A.C.S. Art. 1446c-0, Sec. 2.003.) 77-12 Sec. 31.004. ENERGY-EFFICIENT SCHOOL FACILITIES. (a) The 77-13 commission may serve as a resource center to assist school 77-14 districts in developing energy-efficient facilities. 77-15 (b) As a resource center under this section, the commission 77-16 may: 77-17 (1) present programs to school districts relating to 77-18 managing energy, training school-plant operators, and designing 77-19 energy-efficient buildings; 77-20 (2) provide school districts with technical assistance 77-21 in managing energy; 77-22 (3) collect and distribute information relating to 77-23 energy management in school facilities; and 77-24 (4) offer energy resource workshops to educators and 77-25 make available to educators a film library on energy-related 77-26 matters and energy education lesson packages. (V.A.C.S. 77-27 Art. 1446c-0, Sec. 2.002.) 78-1 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION 78-2 AND OTHER REGULATORY AUTHORITIES 78-3 SUBCHAPTER A. COMMISSION JURISDICTION 78-4 Sec. 32.001. COMMISSION JURISDICTION 78-5 Sec. 32.002. LIMITATION ON COMMISSION JURISDICTION 78-6 Sec. 32.003. EXEMPT AREA JURISDICTION 78-7 Sec. 32.004. ASSISTANCE TO MUNICIPALITY 78-8 (Sections 32.005-32.050 reserved for expansion) 78-9 SUBCHAPTER B. EXEMPTIONS FROM COMMISSION JURISDICTION 78-10 Sec. 32.051. EXEMPTION OF RIVER AUTHORITY FROM WHOLESALE 78-11 RATE REGULATION 78-12 Sec. 32.052. ABILITY OF CERTAIN RIVER AUTHORITIES TO 78-13 CONSTRUCT IMPROVEMENTS 78-14 Sec. 32.053. ABILITY OF CERTAIN RIVER AUTHORITY 78-15 AFFILIATES TO CONSTRUCT IMPROVEMENTS 78-16 Sec. 32.054. RESTRICTIONS ON AUTHORITY OF CORPORATIONS 78-17 OR RIVER AUTHORITY 78-18 (Sections 32.055-32.100 reserved for expansion) 78-19 SUBCHAPTER C. REQUIRED REPORTS AND FILINGS 78-20 Sec. 32.101. TARIFF FILINGS 78-21 Sec. 32.102. DEPRECIATION ACCOUNT 78-22 Sec. 32.103. ACCOUNTS OF PROFITS AND LOSSES 78-23 Sec. 32.104. REPORT OF CERTAIN EXPENSES 78-24 CHAPTER 32. JURISDICTION AND POWERS OF COMMISSION 78-25 AND OTHER REGULATORY AUTHORITIES 78-26 SUBCHAPTER A. COMMISSION JURISDICTION 78-27 Sec. 32.001. COMMISSION JURISDICTION. (a) Except as 79-1 provided by Section 32.002, the commission has exclusive original 79-2 jurisdiction over the rates, operations, and services of an 79-3 electric utility in: 79-4 (1) areas outside a municipality; and 79-5 (2) areas inside a municipality that surrenders its 79-6 jurisdiction to the commission under Section 33.002. 79-7 (b) The commission has exclusive appellate jurisdiction to 79-8 review an order or ordinance of a municipality exercising exclusive 79-9 original jurisdiction under this subtitle. (V.A.C.S. 79-10 Art. 1446c-0, Secs. 2.101(d), (e).) 79-11 Sec. 32.002. LIMITATION ON COMMISSION JURISDICTION. Except 79-12 as otherwise provided by this title, this subtitle does not 79-13 authorize the commission to: 79-14 (1) regulate or supervise a rate or service of a 79-15 municipally owned utility; or 79-16 (2) affect the jurisdiction, power, or duty of a 79-17 municipality exercising exclusive original jurisdiction in that 79-18 municipality's regulation and supervision of an electric utility in 79-19 the municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.102.) 79-20 Sec. 32.003. EXEMPT AREA JURISDICTION. Notwithstanding an 79-21 election under Subchapter A, Chapter 33, by a municipality on the 79-22 issue of surrendering its jurisdiction, the commission may: 79-23 (1) consider an electric utility's revenues and return 79-24 on investment in an area exempt from commission regulation in 79-25 establishing rates and charges in an area that is not exempt from 79-26 commission regulation; and 79-27 (2) exercise necessary powers to give effect to an 80-1 order under this title for the benefit of an area that is not 80-2 exempt from commission regulation. (V.A.C.S. Art. 1446c-0, Sec. 80-3 2.104(c) (part).) 80-4 Sec. 32.004. ASSISTANCE TO MUNICIPALITY. On request of a 80-5 municipality, the commission may advise and assist the municipality 80-6 with respect to a question or proceeding arising under this title. 80-7 Assistance provided by the commission may include aid to a 80-8 municipality on a matter pending before the commission, a court, or 80-9 the municipality's governing body, such as making a staff member 80-10 available as a witness or otherwise providing evidence to the 80-11 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.107.) 80-12 (Sections 32.005-32.050 reserved for expansion) 80-13 SUBCHAPTER B. EXEMPTIONS FROM COMMISSION JURISDICTION 80-14 Sec. 32.051. EXEMPTION OF RIVER AUTHORITY FROM WHOLESALE 80-15 RATE REGULATION. Notwithstanding any other provision of this 80-16 title, the commission may not directly or indirectly regulate 80-17 revenue requirements, rates, fuel costs, fuel charges, or fuel 80-18 acquisitions that are related to the generation and sale of 80-19 electricity at wholesale, and not to ultimate consumers, by a river 80-20 authority operating a steam generating plant. (V.A.C.S. 80-21 Art. 1446c-0, Sec. 2.0012(a) (part).) 80-22 Sec. 32.052. ABILITY OF CERTAIN RIVER AUTHORITIES TO 80-23 CONSTRUCT IMPROVEMENTS. A river authority operating a steam 80-24 generating plant may acquire, finance, construct, rebuild, repower, 80-25 and use new or existing power plants, equipment, transmission 80-26 lines, or other assets to sell electricity exclusively at wholesale 80-27 to: 81-1 (1) a purchaser in San Saba, Llano, Burnet, Travis, 81-2 Bastrop, Blanco, Colorado, or Fayette County; or 81-3 (2) a purchaser in an area served by the river 81-4 authority on January 1, 1975. (V.A.C.S. Art. 1446c-0, Sec. 81-5 2.0012(b).) 81-6 Sec. 32.053. ABILITY OF CERTAIN RIVER AUTHORITY AFFILIATES 81-7 TO CONSTRUCT IMPROVEMENTS. (a) This section applies only to a 81-8 corporation that: 81-9 (1) sells electricity exclusively at wholesale, and 81-10 not to ultimate consumers; 81-11 (2) is authorized by Chapter 245, Acts of the 67th 81-12 Legislature, Regular Session, 1981 (Article 717p, Vernon's Texas 81-13 Civil Statutes); and 81-14 (3) acts on behalf of a river authority. 81-15 (b) Notwithstanding a river authority's enabling legislation 81-16 or Chapter 245, Acts of the 67th Legislature, Regular Session, 1981 81-17 (Article 717p, Vernon's Texas Civil Statutes), a corporation may: 81-18 (1) acquire, finance, construct, rebuild, repower, 81-19 operate, or sell a facility directly related to the generation of 81-20 electricity; and 81-21 (2) sell, at wholesale only, the output of the 81-22 facility to a purchaser, other than an ultimate consumer, at any 81-23 location in this state. 81-24 (c) This subchapter does not prevent a corporation from 81-25 purchasing transmission and related services from a river 81-26 authority. 81-27 (d) Except as provided by this section, the development, 82-1 financing, ownership, and operation of a facility by a corporation 82-2 is subject to all other applicable laws. 82-3 (e) The property, gross receipts, and income of a 82-4 corporation acting on behalf of a river authority under this 82-5 section are subject to, and the corporation shall pay, taxes and 82-6 assessments of the federal government, this state, a political 82-7 subdivision of this state, or a taxing district of this state on 82-8 the same basis as an exempt wholesale generator. 82-9 (f) The proceeds from the sale of bonds or other obligations 82-10 the interest on which is exempt from taxation and that are issued 82-11 by a corporation or river authority subject to this section, other 82-12 than a bond or obligation available to an investor-owned utility or 82-13 exempt wholesale generator, may not be used, and may not have been 82-14 used, to finance the construction or acquisition of or the 82-15 rebuilding or repowering of a facility for the generation of 82-16 electricity by the corporation. (V.A.C.S. Art. 1446c-0, Secs. 82-17 2.0012(a) (part), (c).) 82-18 Sec. 32.054. RESTRICTIONS ON AUTHORITY OF CORPORATIONS OR 82-19 RIVER AUTHORITY. (a) This subchapter does not authorize a river 82-20 authority to acquire, install, construct, make additions to, or 82-21 operate steam generating plants having an aggregate capacity 82-22 greater than 5,000 megawatts to serve a purchaser in the area 82-23 served by the river authority on January 1, 1975. 82-24 (b) A river authority or a corporation acting on behalf of a 82-25 river authority under this subchapter may provide retail service 82-26 only to a retail customer served by the river authority or 82-27 corporation on September 1, 1995. 83-1 (c) Except as provided by this subchapter, this subchapter 83-2 does not limit a power granted a river authority in its enabling 83-3 legislation or other applicable law. (V.A.C.S. Art. 1446c-0, Secs. 83-4 2.0012(d), (e).) 83-5 (Sections 32.055-32.100 reserved for expansion) 83-6 SUBCHAPTER C. REQUIRED REPORTS AND FILINGS 83-7 Sec. 32.101. TARIFF FILINGS. (a) An electric utility shall 83-8 file with each regulatory authority a tariff showing each rate that 83-9 is: 83-10 (1) subject to the regulatory authority's original or 83-11 appellate jurisdiction; and 83-12 (2) in effect for a utility service, product, or 83-13 commodity offered by the utility. 83-14 (b) The electric utility shall file as a part of the tariff 83-15 required under Subsection (a) each rule that relates to or affects: 83-16 (1) a rate of the utility; or 83-17 (2) a utility service, product, or commodity furnished 83-18 by the electric utility. 83-19 (c) The commission shall consider customer names and 83-20 addresses, prices, individual customer contracts, and expected load 83-21 and usage data as highly sensitive trade secrets. That information 83-22 is not subject to disclosure under Chapter 552, Government Code. 83-23 (V.A.C.S. Art. 1446c-0, Sec. 2.154.) 83-24 Sec. 32.102. DEPRECIATION ACCOUNT. The commission shall 83-25 require each electric or municipally owned utility to carry a 83-26 proper and adequate depreciation account in accordance with: 83-27 (1) the rates and methods prescribed by the commission 84-1 under Section 36.056; and 84-2 (2) any other rule the commission adopts. (V.A.C.S. 84-3 Art. 1446c-0, Secs. 2.151(a) (part), (d).) 84-4 Sec. 32.103. ACCOUNTS OF PROFITS AND LOSSES. An electric or 84-5 municipally owned utility shall keep separate accounts showing 84-6 profits or losses from the sale or lease of merchandise, including 84-7 an appliance, a fixture, or equipment. (V.A.C.S. Art. 1446c-0, 84-8 Secs. 2.151(b) (part), (d).) 84-9 Sec. 32.104. REPORT OF CERTAIN EXPENSES. A regulatory 84-10 authority may require an electric utility to annually report the 84-11 utility's expenditures for: 84-12 (1) business gifts and entertainment; and 84-13 (2) advertising or public relations, including 84-14 expenditures for institutional and consumption-inducing purposes. 84-15 (V.A.C.S. Art. 1446c-0, Sec. 2.152(a).) 84-16 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 84-17 SUBCHAPTER A. GENERAL PROVISIONS 84-18 Sec. 33.001. MUNICIPAL JURISDICTION 84-19 Sec. 33.002. SURRENDER OF MUNICIPAL JURISDICTION TO 84-20 COMMISSION 84-21 Sec. 33.003. REINSTATEMENT OF MUNICIPAL JURISDICTION 84-22 Sec. 33.004. AREA EXEMPT FROM COMMISSION REGULATION 84-23 Sec. 33.005. EXEMPT AREA REPORTING 84-24 Sec. 33.006. COMMISSION POWERS IN NONEXEMPT AREAS 84-25 Sec. 33.007. ALLOWABLE CHARGES 84-26 (Sections 33.008-33.020 reserved for expansion) 84-27 SUBCHAPTER B. RATE DETERMINATION 85-1 Sec. 33.021. RATE DETERMINATION 85-2 Sec. 33.022. CONSIDERATION OF REVENUES AND RETURN 85-3 FROM NONEXEMPT AREA 85-4 Sec. 33.023. RATEMAKING PROCEEDINGS 85-5 Sec. 33.024. STATEMENT OF INTENT 85-6 Sec. 33.025. MUNICIPAL STANDING 85-7 Sec. 33.026. JUDICIAL REVIEW 85-8 (Sections 33.027-33.050 reserved for expansion) 85-9 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 85-10 Sec. 33.051. APPEAL BY PARTY 85-11 Sec. 33.052. APPEAL BY RESIDENTS 85-12 Sec. 33.053. FILING OF APPEAL 85-13 Sec. 33.054. HEARING AND ORDER 85-14 Sec. 33.055. APPLICABILITY OF RATES 85-15 (Sections 33.056-33.100 reserved for expansion) 85-16 SUBCHAPTER D. PROVISIONS APPLICABLE TO APPEAL 85-17 BY RATEPAYERS OUTSIDE MUNICIPALITY 85-18 Sec. 33.101. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY 85-19 Sec. 33.102. IDENTIFICATION OF RATEPAYERS OUTSIDE 85-20 MUNICIPALITY 85-21 Sec. 33.103. FILING OF APPEAL 85-22 Sec. 33.104. RATE APPLICATION 85-23 (Sections 33.105-33.120 reserved for expansion) 85-24 SUBCHAPTER E. RATE DETERMINATION AND APPEAL OF ORDERS 85-25 OF CERTAIN MUNICIPAL UTILITIES 85-26 Sec. 33.121. APPLICATION OF COMMISSION REVIEW 85-27 Sec. 33.122. REVIEW OF CERTAIN RATE DECISIONS 86-1 Sec. 33.123. REVIEW OF CERTAIN DECISIONS FOR RATES 86-2 CHARGED OUTSIDE MUNICIPALITY 86-3 CHAPTER 33. JURISDICTION AND POWERS OF MUNICIPALITY 86-4 SUBCHAPTER A. GENERAL PROVISIONS 86-5 Sec. 33.001. MUNICIPAL JURISDICTION. To provide fair, just, 86-6 and reasonable rates and adequate and efficient services, the 86-7 governing body of a municipality has exclusive original 86-8 jurisdiction over the rates, operations, and services of an 86-9 electric utility in areas in the municipality, subject to the 86-10 limitations imposed by this title. (V.A.C.S. Art. 1446c-0, Sec. 86-11 2.101(a).) 86-12 Sec. 33.002. SURRENDER OF MUNICIPAL JURISDICTION TO 86-13 COMMISSION. (a) A municipality shall regulate all local utility 86-14 service in the municipality until the commission assumes 86-15 jurisdiction over a local utility under this subtitle. 86-16 (b) A municipality may elect to have the commission exercise 86-17 exclusive original jurisdiction over electric utility rates, 86-18 operations, and services in the municipality by ordinance or by 86-19 submitting the question of the surrender of its jurisdiction to the 86-20 voters at a municipal election. 86-21 (c) The governing body of a municipality shall submit at a 86-22 municipal election the question of surrendering its jurisdiction to 86-23 the commission if the governing body receives a petition signed by 86-24 a number of qualified voters of the municipality equal to at least 86-25 the lesser of 20,000 or 10 percent of the number of voters voting 86-26 in the last preceding general election in the municipality. 86-27 (V.A.C.S. Art. 1446c-0, Secs. 2.101(b), 2.104(a).) 87-1 Sec. 33.003. REINSTATEMENT OF MUNICIPAL JURISDICTION. (a) 87-2 A municipality that surrenders its jurisdiction to the commission 87-3 may at any time reinstate its jurisdiction by a vote of the 87-4 electorate. 87-5 (b) A municipality that reinstates its jurisdiction under 87-6 Subsection (a) may not surrender that jurisdiction before the fifth 87-7 anniversary of the date of the election in which the municipality 87-8 elected to reinstate its jurisdiction. 87-9 (c) A municipality may not, by a vote of the electorate, 87-10 reinstate the jurisdiction of the governing body during the time a 87-11 case involving the municipality is pending before the commission. 87-12 (V.A.C.S. Art. 1446c-0, Sec. 2.101(c).) 87-13 Sec. 33.004. AREA EXEMPT FROM COMMISSION REGULATION. (a) 87-14 If a municipality does not surrender its jurisdiction, local 87-15 utility service in the municipality is exempt from regulation by 87-16 the commission under this subtitle to the extent that this subtitle 87-17 applies to local service. 87-18 (b) The municipality may exercise in the exempt area the 87-19 same regulatory powers under the same standards and rules as the 87-20 commission or under other consistent standards and rules. 87-21 (V.A.C.S. Art. 1446c-0, Sec. 2.104(b).) 87-22 Sec. 33.005. EXEMPT AREA REPORTING. (a) An electric 87-23 utility serving an area exempt from commission regulation is 87-24 subject to the reporting requirements of this title. 87-25 (b) A report must be filed with: 87-26 (1) the governing body of the municipality; and 87-27 (2) the commission. (V.A.C.S. Art. 1446c-0, Sec. 88-1 2.104(d).) 88-2 Sec. 33.006. COMMISSION POWERS IN NONEXEMPT AREAS. This 88-3 subchapter does not limit the duty and power of the commission to 88-4 regulate the service and rates of a municipally regulated electric 88-5 utility for service provided to another area in this state. 88-6 (V.A.C.S. Art. 1446c-0, Sec. 2.104(e).) 88-7 Sec. 33.007. ALLOWABLE CHARGES. A municipality that 88-8 performs a regulatory function under this title may make each 88-9 charge that is authorized by: 88-10 (1) this title; or 88-11 (2) the applicable franchise agreement. (V.A.C.S. 88-12 Art. 1446c-0, Sec. 2.103.) 88-13 (Sections 33.008-33.020 reserved for expansion) 88-14 SUBCHAPTER B. RATE DETERMINATION 88-15 Sec. 33.021. RATE DETERMINATION. (a) A municipality 88-16 regulating an electric utility under this subtitle shall require 88-17 the utility to submit information as necessary to make a reasonable 88-18 determination of rate base, expenses, investment, and rate of 88-19 return in the municipality. 88-20 (b) A municipality shall make a determination under 88-21 Subsection (a) using the procedures and requirements prescribed by 88-22 this title. 88-23 (c) A municipality shall retain personnel necessary to make 88-24 the determination of reasonable rates. (V.A.C.S. Art. 1446c-0, 88-25 Secs. 2.105(a), (b).) 88-26 Sec. 33.022. CONSIDERATION OF REVENUES AND RETURN FROM 88-27 NONEXEMPT AREA. In establishing rates and charges in an area 89-1 exempt from commission regulation, the governing body may consider 89-2 an electric utility's revenues and return on investment in an area 89-3 that is not exempt from commission regulation. (V.A.C.S. 89-4 Art. 1446c-0, Sec. 2.104(c) (part).) 89-5 Sec. 33.023. RATEMAKING PROCEEDINGS. (a) The governing 89-6 body of a municipality participating in or conducting a ratemaking 89-7 proceeding may engage rate consultants, accountants, auditors, 89-8 attorneys, and engineers to: 89-9 (1) conduct investigations, present evidence, and 89-10 advise and represent the governing body; and 89-11 (2) assist the governing body with litigation in an 89-12 electric utility ratemaking proceeding before the governing body, a 89-13 regulatory authority, or a court. 89-14 (b) The electric utility in the ratemaking proceeding shall 89-15 reimburse the governing body of the municipality for the reasonable 89-16 cost of the services of a person engaged under Subsection (a) to 89-17 the extent the applicable regulatory authority determines is 89-18 reasonable. (V.A.C.S. Art. 1446c-0, Sec. 2.106(a).) 89-19 Sec. 33.024. STATEMENT OF INTENT. (a) Not later than the 89-20 31st day before the date an electric utility files a statement of 89-21 intent under Section 36.102, the electric utility shall provide 89-22 notice of intent to file the statement to each municipality having 89-23 original jurisdiction. 89-24 (b) Not later than the 30th day after the date a 89-25 municipality receives notice under Subsection (a), the municipality 89-26 may request that the electric utility file with the municipality a 89-27 statement of intent in accordance with Section 36.102. 90-1 (c) If requested by a municipality under Subsection (b), the 90-2 electric utility shall file the statement of intent with the 90-3 municipality at the same time the statement is filed with the 90-4 commission. (V.A.C.S. Art. 1446c-0, Sec. 2.105(c).) 90-5 Sec. 33.025. MUNICIPAL STANDING. (a) A municipality has 90-6 standing in each case before the commission that relates to an 90-7 electric utility providing service in the municipality. 90-8 (b) A municipality's standing is subject to the right of the 90-9 commission to: 90-10 (1) determine standing in a case involving a retail 90-11 service area dispute that involves two or more electric utilities; 90-12 and 90-13 (2) consolidate municipalities on an issue of common 90-14 interest. (V.A.C.S. Art. 1446c-0, Sec. 2.106(b) (part).) 90-15 Sec. 33.026. JUDICIAL REVIEW. A municipality is entitled to 90-16 judicial review of a commission order relating to an electric 90-17 utility providing services in the municipality as provided by 90-18 Section 15.001. (V.A.C.S. Art. 1446c-0, Sec. 2.106(b) (part).) 90-19 (Sections 33.027-33.050 reserved for expansion) 90-20 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 90-21 Sec. 33.051. APPEAL BY PARTY. A party to a rate proceeding 90-22 before a municipality's governing body may appeal the governing 90-23 body's decision to the commission. (V.A.C.S. Art. 1446c-0, Sec. 90-24 2.108(a).) 90-25 Sec. 33.052. APPEAL BY RESIDENTS. The residents of a 90-26 municipality may appeal to the commission the decision of the 90-27 municipality's governing body in a rate proceeding by filing with 91-1 the commission a petition for review signed by a number of 91-2 qualified voters of the municipality equal to at least the lesser 91-3 of 20,000 or 10 percent of the qualified voters of the 91-4 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.108(b).) 91-5 Sec. 33.053. FILING OF APPEAL. (a) An appeal under this 91-6 subchapter is initiated by filing a petition for review with the 91-7 commission and serving a copy of the petition on each party to the 91-8 original rate proceeding. 91-9 (b) The appeal must be initiated not later than the 30th day 91-10 after the date of the final decision by the governing body of the 91-11 municipality. (V.A.C.S. Art. 1446c-0, Sec. 2.108(f).) 91-12 Sec. 33.054. HEARING AND ORDER. (a) An appeal under this 91-13 subchapter or Subchapter D is de novo and based on the test year 91-14 presented to the municipality. 91-15 (b) The commission shall enter a final order establishing 91-16 the rates the commission determines the municipality should have 91-17 set in the ordinance to which the appeal applies. 91-18 (c) In a proceeding involving the rates of a municipally 91-19 owned utility, the commission must enter a final order on or before 91-20 the 185th day after the date the appeal is perfected or the utility 91-21 files a rate application as prescribed by Section 33.104. 91-22 (d) In a proceeding in which a rate change is concurrently 91-23 sought from the commission under the commission's original 91-24 jurisdiction, the commission must enter a final order on or before 91-25 the later of the 120th day after the date the appeal is perfected 91-26 or the date final action must be taken in the proceeding filed with 91-27 the commission. 92-1 (e) In a proceeding not governed by Subsection (c) or (d), 92-2 the commission must enter a final order on or before the 185th day 92-3 after the date the appeal is perfected. 92-4 (f) If the commission fails to enter a final order before 92-5 the expiration of the applicable period prescribed by Subsections 92-6 (c)-(e), the rates proposed by the utility are considered to be 92-7 approved by the commission and take effect on the expiration of 92-8 that period. (V.A.C.S. Art. 1446c-0, Sec. 2.108(g) (part).) 92-9 Sec. 33.055. APPLICABILITY OF RATES. (a) Temporary or 92-10 permanent rates set by the commission are prospective and observed 92-11 from the date of the applicable commission order, except an interim 92-12 rate order necessary to effect uniform system-wide rates or to 92-13 provide an electric utility the opportunity to avoid confiscation 92-14 during the period beginning on the date a petition for review is 92-15 filed with the commission and ending on the date of a final order 92-16 establishing rates. 92-17 (b) The commission shall order interim rates on a prima 92-18 facie showing by the electric utility that it has experienced 92-19 confiscation during that period. The electric utility shall refund 92-20 or credit against future bills: 92-21 (1) money collected under the interim rates in excess 92-22 of the rate finally ordered; and 92-23 (2) interest on that money, at the current rate as 92-24 determined by the commission. 92-25 (c) In this section, "confiscation" includes negative cash 92-26 flow experienced by an electric utility at any time a rate case 92-27 proceeding is pending. (V.A.C.S. Art. 1446c-0, Sec. 2.108(g) 93-1 (part).) 93-2 (Sections 33.056-33.100 reserved for expansion) 93-3 SUBCHAPTER D. PROVISIONS APPLICABLE TO APPEAL 93-4 BY RATEPAYERS OUTSIDE MUNICIPALITY 93-5 Sec. 33.101. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY. (a) 93-6 The ratepayers of a municipally owned utility who are outside the 93-7 municipality may appeal to the commission an action of the 93-8 governing body of the municipality affecting the municipally owned 93-9 utility's rates by filing with the commission a petition for review 93-10 signed by a number of ratepayers served by the utility outside the 93-11 municipality equal to at least the lesser of 10,000 or five percent 93-12 of those ratepayers. 93-13 (b) A petition for review is properly signed if signed by a 93-14 person or the spouse of a person in whose name residential utility 93-15 service is carried. 93-16 (c) For purposes of this section, each person who receives a 93-17 separate bill is a ratepayer. A person who receives more than one 93-18 bill may not be counted as more than one ratepayer. (V.A.C.S. 93-19 Art. 1446c-0, Sec. 2.108(c)(1).) 93-20 Sec. 33.102. IDENTIFICATION OF RATEPAYERS OUTSIDE 93-21 MUNICIPALITY. (a) A municipality that owns a utility shall: 93-22 (1) disclose to any person, on request, the number of 93-23 ratepayers who reside outside the municipality; and 93-24 (2) provide to any person, on request, a list of the 93-25 names and addresses of the ratepayers who reside outside the 93-26 municipality. 93-27 (b) The municipality may not charge a fee for disclosing the 94-1 information under Subsection (a)(1). The municipality may charge a 94-2 reasonable fee for providing information under Subsection (a)(2). 94-3 (c) The municipality shall provide information requested 94-4 under Subsection (a)(1) by telephone or in writing, as preferred by 94-5 the person making the request. (V.A.C.S. Art. 1446c-0, Sec. 94-6 2.108(c)(2).) 94-7 Sec. 33.103. FILING OF APPEAL. (a) Not later than the 14th 94-8 day after the date a governing body of a municipality makes a final 94-9 decision, the municipality shall issue a written report stating the 94-10 effect of the decision on each class of ratepayer. 94-11 (b) An appeal under this subchapter is initiated by filing a 94-12 petition for review with the commission and serving a copy of the 94-13 petition on each party to the original rate proceeding. 94-14 (c) The appeal must be initiated not later than the 45th day 94-15 after the date the municipality issues the written report required 94-16 by Subsection (a). (V.A.C.S. Art. 1446c-0, Sec. 2.108(c)(3).) 94-17 Sec. 33.104. RATE APPLICATION. Not later than the 90th day 94-18 after the date a petition for review is filed that complies with 94-19 Section 33.103, the municipality shall file with the commission a 94-20 rate application that complies in all material respects with the 94-21 rules and forms prescribed by the commission. The commission may, 94-22 for good cause shown, extend the period for filing a rate 94-23 application. (V.A.C.S. Art. 1446c-0, Sec. 2.108(c)(4).) 94-24 (Sections 33.105-33.120 reserved for expansion) 94-25 SUBCHAPTER E. RATE DETERMINATION AND APPEAL OF ORDERS 94-26 OF CERTAIN MUNICIPAL UTILITIES 94-27 Sec. 33.121. APPLICATION OF COMMISSION REVIEW. A 95-1 municipally owned utility is subject to this subchapter if the 95-2 utility is a utility: 95-3 (1) whose rates are appealed under Subchapter D; 95-4 (2) for which the commission orders a decrease in 95-5 annual nonfuel base revenues that exceeds the greater of 95-6 $25,000,000 or 10 percent of the utility's nonfuel base revenues, 95-7 as computed on a total system basis without regard to the utility's 95-8 municipal boundaries and established in the appealed rate 95-9 ordinance; and 95-10 (3) for which the commission finds that the rates paid 95-11 by the combined residential or other major customer class, other 95-12 than a class in which the municipality is the customer of the 95-13 municipally owned utility, are removed from cost-of-service levels 95-14 to the extent that, under the nonfuel base revenue requirement 95-15 adopted by the commission as computed on a total system basis 95-16 without regard to the municipality's boundaries, a change in 95-17 nonfuel base rate revenues in excess of 50 percent from adjusted 95-18 test year levels would be required to move that class to a relative 95-19 rate of return of unity (1.00 or 100 percent) under the 95-20 cost-of-service methodology adopted by the commission in an appeal 95-21 under Subchapter D. (V.A.C.S. Art. 1446c-0, Secs. 2.108(d) (part), 95-22 (e) (part).) 95-23 Sec. 33.122. REVIEW OF CERTAIN RATE DECISIONS. (a) Except 95-24 as provided by Subsections (b)-(f), for a period of 10 years 95-25 beginning on the later of August 28, 1989, or the effective date of 95-26 the rate ordinance that is the subject of the commission's final 95-27 order invoking the application of this section, the commission has 96-1 appellate jurisdiction over the rates charged by the municipally 96-2 owned utility, both inside and outside the municipality, in the 96-3 same manner and subject to the same commission powers and authority 96-4 provided by this subtitle for an electric utility. 96-5 (b) The commission has jurisdiction to review the cost 96-6 allocation and rate design methodologies adopted by the governing 96-7 body of a municipally owned utility subject to this section. If 96-8 the commission finds that the cost-of-service methodologies result 96-9 in rates that are unjust, unreasonable, or unreasonably 96-10 discriminatory, or unduly preferential to a customer class, the 96-11 commission may order the implementation of ratesetting 96-12 methodologies the commission finds reasonable. 96-13 (c) The commission shall ensure that a customer class, other 96-14 than a class in which the municipality is the customer of the 96-15 municipally owned utility, does not pay rates that result in a 96-16 relative rate of return of more than 115 percent under the 96-17 cost-of-service methodology found reasonable by the commission. A 96-18 customer class may not experience a percentage base rate increase 96-19 that is greater than 1-1/2 times the system average base increase. 96-20 In moving an above-cost class toward cost-of-service levels, each 96-21 class farthest above cost shall be moved sequentially toward cost 96-22 so that no above-cost class moves toward cost until no other class 96-23 is further removed from cost. 96-24 (d) A municipality subject to this section may design 96-25 residential rates, as a matter of intra-class rate design, to 96-26 accomplish reasonable energy conservation goals, notwithstanding 96-27 any other provision of this title. 97-1 (e) The commission's jurisdiction under this section may be 97-2 invoked by any party to a local rate proceeding required by this 97-3 section in the same manner as an appeal of the rates of an electric 97-4 utility under Section 33.051. 97-5 (f) The commission's jurisdiction under this section does 97-6 not extend to a municipally owned utility's: 97-7 (1) revenue requirements, whether base rate or fuel 97-8 revenues; 97-9 (2) invested capital; 97-10 (3) return on invested capital; 97-11 (4) debt service coverage ratio; or 97-12 (5) level of transfer of revenues from the utility to 97-13 the municipality's general fund. 97-14 (g) The governing body of a municipally owned utility 97-15 subject to this section shall establish procedures similar to the 97-16 procedures of a municipality that retains original jurisdiction 97-17 under Section 33.001 to regulate an electric utility operating in 97-18 the municipality. The procedures must include a public hearing 97-19 process in which an affected ratepayer is granted party status on 97-20 request and is grouped for purposes of participation in accordance 97-21 with common or divergent interests, including the particular 97-22 interests of all-electric residential ratepayers and residential 97-23 ratepayers outside the municipality. 97-24 (h) This section does not require the governing body of a 97-25 municipality or the governing board of a municipally owned utility 97-26 subject to this section to adopt procedures that require the use of 97-27 the Texas Rules of Evidence, the Texas Rules of Civil Procedure, or 98-1 the presentation of sworn testimony or any other form of sworn 98-2 evidence. 98-3 (i) The governing body of a municipally owned utility 98-4 subject to this section shall appoint a consumer advocate to 98-5 represent the interests of residential and small commercial 98-6 ratepayers in the municipality's local rate proceedings. The 98-7 consumer advocate's reasonable costs of participating in a 98-8 proceeding, including the reasonable costs of ratemaking 98-9 consultants and expert witnesses, shall be funded by and recovered 98-10 from residential and small commercial ratepayers. 98-11 (j) The commission shall adopt rules applicable to a party 98-12 to an appeal under Subchapter D that provide for the public 98-13 disclosure of financial and in-kind contributions and expenditures 98-14 related to preparing and filing an appeal petition and preparing 98-15 expert testimony or legal representation for an appeal. A party or 98-16 customer who is a member of a party who makes a financial 98-17 contribution or in-kind contribution to assist in an appeal by 98-18 another party or customer class under Subchapter D shall be 98-19 required, on a finding of the commission to that effect, to pay the 98-20 municipally owned utility a penalty equivalent in amount to two 98-21 times the amount of the contribution. 98-22 (k) This section does not limit the right of a party or 98-23 customer to spend money to represent its own interests following 98-24 the filing of a petition with the commission under Subchapter D. 98-25 (V.A.C.S. Art. 1446c-0, Sec. 2.108(d) (part).) 98-26 Sec. 33.123. REVIEW OF CERTAIN DECISIONS FOR RATES CHARGED 98-27 OUTSIDE MUNICIPALITY. (a) For a period of 10 years beginning on 99-1 the later of August 28, 1989, or the effective date of the rate 99-2 ordinance that is the subject of the commission's final order 99-3 invoking the application of this section, the commission has 99-4 appellate jurisdiction over the rates charged by the municipally 99-5 owned utility, outside the municipality, as provided by this 99-6 section. 99-7 (b) Except as otherwise provided by this section, a 99-8 ratepayer of a municipally owned utility subject to this section 99-9 who resides outside the municipality may appeal any action of the 99-10 governing body of a municipality affecting the rates charged by the 99-11 municipally owned utility outside the municipality by filing a 99-12 petition for review with the commission in the manner provided for 99-13 an appeal under Subchapter D. The petition must plainly disclose 99-14 that the cost of the appeal will be funded by a surcharge on the 99-15 monthly electric bills of ratepayers outside the municipality as 99-16 prescribed by the commission. 99-17 (c) After the commission approves the sufficiency of a 99-18 petition, the appellants shall submit to the office for approval a 99-19 budget itemizing the scope and expected cost of consultant services 99-20 to be purchased by the appellants in the appeal. 99-21 (d) Not later than the 120th day after the date the 99-22 commission enters its final order, the municipality shall assess a 99-23 onetime surcharge on a per capita basis among residential 99-24 ratepayers who reside outside the municipality to pay the 99-25 reasonable consultant and legal costs approved by the counsellor. 99-26 The municipality shall reimburse the appellants for incurred costs 99-27 not later than the 90th day after the date the commission enters 100-1 its final order. 100-2 (e) A municipality may not: 100-3 (1) include the costs associated with its defense of 100-4 an appeal under this section in the rates charged a ratepayer 100-5 outside the municipality; or 100-6 (2) if the municipality appeals an order entered by 100-7 the commission under this section, include the costs associated 100-8 with its appeal in the rates charged a ratepayer outside the 100-9 municipality. 100-10 (f) A ratepayer who brings an appeal under this section may 100-11 not receive funding for rate case expenses except from a 100-12 residential ratepayer who resides outside the municipality or from 100-13 another municipality inside whose boundaries the municipally owned 100-14 utility provides service. The commission shall adopt rules for 100-15 reporting financial and in-kind contributions in support of an 100-16 appeal under this section. If the commission finds that an 100-17 appellant has received contributions from a source other than from 100-18 a ratepayer who resides outside the municipality or from another 100-19 municipality, the appeal and each commission order entered in the 100-20 appeal are void. 100-21 (g) The commission has jurisdiction in an appeal under this 100-22 section to review and ensure that the revenue requirements of a 100-23 municipally owned utility subject to this section are reasonable. 100-24 The jurisdiction under this subsection does not extend to 100-25 regulating the use and level of a transfer of the utility's 100-26 revenues to the municipality's general fund. 100-27 (h) The commission has jurisdiction to review the cost 101-1 allocation and rate design methodologies adopted by the governing 101-2 body of a municipally owned utility subject to this section. If 101-3 the commission finds that the cost-of-service methodologies result 101-4 in rates that are unjust, unreasonable, or unreasonably 101-5 discriminatory or unduly preferential to a customer class, the 101-6 commission may order the implementation of ratesetting 101-7 methodologies the commission finds reasonable. The commission's 101-8 jurisdiction under this subsection does not include intra-class 101-9 residential rate design. 101-10 (i) An intervenor in an appeal under this section is limited 101-11 to presenting evidence on cost allocation and rate design 101-12 methodologies, except that an intervenor may present evidence in 101-13 support of the municipality on an issue related to utility 101-14 revenues. 101-15 (j) A ratepayer of a municipally owned utility subject to 101-16 this section who resides outside the municipality may elect to 101-17 petition for review under either this section or Subchapter D when 101-18 appealing a rate ordinance or other ratesetting action of the 101-19 governing body of a municipality. (V.A.C.S. Art. 1446c-0, Sec. 101-20 2.108(e) (part).) 101-21 CHAPTER 34. ELECTRICAL PLANNING 101-22 SUBCHAPTER A. GENERAL PROVISIONS 101-23 Sec. 34.001. DEFINITION 101-24 Sec. 34.002. APPLICABILITY TO MUNICIPALLY OWNED UTILITY 101-25 Sec. 34.003. ADOPTION OF INTEGRATED RESOURCE PLANNING 101-26 PROCESS 101-27 Sec. 34.004. STATEWIDE INTEGRATED RESOURCE PLAN 102-1 Sec. 34.005. PROMOTION OF RENEWABLE ENERGY TECHNOLOGIES 102-2 Sec. 34.006. REVIEW OF STATE TRANSMISSION SYSTEM 102-3 (Sections 34.007-34.020 reserved for expansion) 102-4 SUBCHAPTER B. PRELIMINARY INTEGRATED RESOURCE PLAN 102-5 Sec. 34.021. PRELIMINARY INTEGRATED RESOURCE PLAN REQUIRED 102-6 Sec. 34.022. CONTENTS OF PRELIMINARY INTEGRATED RESOURCE 102-7 PLAN 102-8 Sec. 34.023. PUBLIC HEARING ON PRELIMINARY INTEGRATED 102-9 RESOURCE PLAN 102-10 Sec. 34.024. INTERIM ORDER ON PRELIMINARY INTEGRATED 102-11 RESOURCE PLAN; DEADLINE 102-12 (Sections 34.025-34.050 reserved for expansion) 102-13 SUBCHAPTER C. RESOURCE SOLICITATION 102-14 Sec. 34.051. COMMENCEMENT OF SOLICITATION 102-15 Sec. 34.052. SUBMISSION OF BIDS; CONFIDENTIALITY 102-16 Sec. 34.053. ELECTRIC UTILITY DEMAND-SIDE MANAGEMENT 102-17 PROGRAMS 102-18 Sec. 34.054. QUALIFYING FACILITY BIDS; AVOIDED COSTS 102-19 Sec. 34.055. EVALUATION OF BIDS; NEGOTIATION OF CONTRACTS 102-20 Sec. 34.056. APPLICATION FOR CERTIFICATE OF CONVENIENCE 102-21 AND NECESSITY FOR RESOURCE NOT INCLUDED IN 102-22 PRELIMINARY PLAN 102-23 (Sections 34.057-34.100 reserved for expansion) 102-24 SUBCHAPTER D. FINAL INTEGRATED RESOURCE PLAN 102-25 Sec. 34.101. SUBMISSION OF FINAL INTEGRATED RESOURCE PLAN 102-26 Sec. 34.102. PUBLIC HEARING ON FINAL INTEGRATED RESOURCE 102-27 PLAN 103-1 Sec. 34.103. RULING ON FINAL INTEGRATED RESOURCE PLAN; 103-2 DEADLINE 103-3 Sec. 34.104. CERTIFICATION OF CONTRACTS 103-4 Sec. 34.105. CERTIFICATE OF CONVENIENCE AND NECESSITY 103-5 (Sections 34.106-34.150 reserved for expansion) 103-6 SUBCHAPTER E. ACQUISITION OF RESOURCES OUTSIDE THE 103-7 INTEGRATED RESOURCE PLANNING PROCESS 103-8 Sec. 34.151. EXEMPTIONS FROM SOLICITATION PROCESS 103-9 Sec. 34.152. NONGENERATING ELECTRIC UTILITY SOLICITATIONS 103-10 Sec. 34.153. EXEMPTION FOR CERTAIN FACILITIES 103-11 (Sections 34.154-34.170 reserved for expansion) 103-12 SUBCHAPTER F. MISCELLANEOUS PROVISIONS 103-13 Sec. 34.171. COST RECOVERY AND INCENTIVES 103-14 Sec. 34.172. RECONCILIATION OF RECOVERED COSTS 103-15 Sec. 34.173. RESOURCE PLANNING EXPENSES 103-16 CHAPTER 34. ELECTRICAL PLANNING 103-17 SUBCHAPTER A. GENERAL PROVISIONS 103-18 Sec. 34.001. DEFINITION. In this chapter, "electric 103-19 utility" includes a river authority subject to Subchapter B, 103-20 Chapter 32, with respect to the area served by the river authority 103-21 on January 1, 1975. (V.A.C.S. Art. 1446c-0, Sec. 2.051(aa).) 103-22 Sec. 34.002. APPLICABILITY TO MUNICIPALLY OWNED UTILITY. A 103-23 municipally owned utility is not subject to the requirements of 103-24 this chapter, except that every three years each municipally owned 103-25 utility shall submit to the commission a report containing the 103-26 information prescribed by Section 34.022. (V.A.C.S. Art. 1446c-0, 103-27 Sec. 2.051(g).) 104-1 Sec. 34.003. ADOPTION OF INTEGRATED RESOURCE PLANNING 104-2 PROCESS. (a) The commission by rule shall develop an integrated 104-3 resource planning process to provide reliable energy service at the 104-4 lowest reasonable system cost. 104-5 (b) In determining the lowest reasonable system cost of an 104-6 electric utility's integrated resource plan, the commission shall 104-7 consider: 104-8 (1) direct costs; 104-9 (2) the effect on the rates and bills of various types 104-10 of customers; 104-11 (3) minimization of the risks of future fuel costs and 104-12 regulations; 104-13 (4) the appropriateness and reliability of the mix of 104-14 resources; and 104-15 (5) the cost of compliance with environmental 104-16 protection requirements of all applicable state and federal laws, 104-17 rules, and orders. 104-18 (c) An appropriate and reliable mix under Subsection (b)(4) 104-19 may include a portfolio of cost-effective sources of power, 104-20 including fueled and nonfueled resources, such as renewable 104-21 resources and conservation measures, and a mixture of long-term and 104-22 short-term contracts. 104-23 (d) In establishing a requirement under this chapter, 104-24 including a reporting requirement, the commission shall consider 104-25 and recognize the different capabilities of small and large 104-26 electric utilities. (V.A.C.S. Art. 1446c-0, Secs. 2.051(a), (d).) 104-27 Sec. 34.004. STATEWIDE INTEGRATED RESOURCE PLAN. (a) The 105-1 commission by rule shall adopt and periodically update a statewide 105-2 integrated resource plan that includes the commission's long-term 105-3 resource planning goals. The commission shall notify each electric 105-4 utility of the approval of the plan. 105-5 (b) The commission shall send a report on the statewide 105-6 integrated resource plan to the governor when it adopts or revises 105-7 the plan and make the report available to the public. 105-8 (c) The report on the statewide integrated resource plan 105-9 must include: 105-10 (1) historical data for electric consumption statewide 105-11 and by each electric utility; 105-12 (2) historical data for electric generation by each 105-13 electric utility and by type of capacity, including alternative 105-14 energy sources; 105-15 (3) an inventory of generation capacity statewide and 105-16 by each electric utility; 105-17 (4) quantitative data on demand-side management 105-18 programs to the extent the commission determines necessary; 105-19 (5) each generating electric utility's forecast 105-20 without adjustment; 105-21 (6) the commission's long-term resource planning goals 105-22 included in the plan; 105-23 (7) a projection of the need for electric services; 105-24 (8) a description of the approved individual 105-25 integrated resource plan of each electric utility; and 105-26 (9) an assessment of transmission planning being 105-27 conducted by electric utilities in this state. (V.A.C.S. 106-1 Art. 1446c-0, Secs. 2.051(b), (c).) 106-2 Sec. 34.005. PROMOTION OF RENEWABLE ENERGY TECHNOLOGIES. 106-3 The commission shall adopt rules consistent with the integrated 106-4 resource planning process to promote the development of renewable 106-5 energy technologies. (V.A.C.S. Art. 1446c-0, Sec. 2.051(v).) 106-6 Sec. 34.006. REVIEW OF STATE TRANSMISSION SYSTEM. In 106-7 carrying out its duties related to the integrated resource planning 106-8 process, the commission may review this state's transmission system 106-9 and make recommendations to electric utilities on the need to build 106-10 new power lines, upgrade power lines, and make other necessary 106-11 improvements and additions. (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) 106-12 (part).) 106-13 (Sections 34.007-34.020 reserved for expansion) 106-14 SUBCHAPTER B. PRELIMINARY INTEGRATED RESOURCE PLAN 106-15 Sec. 34.021. PRELIMINARY INTEGRATED RESOURCE PLAN REQUIRED. 106-16 (a) Every three years each nongenerating electric utility planning 106-17 to construct generating resources and each generating electric 106-18 utility shall submit to the commission a preliminary integrated 106-19 resource plan covering a 10-year period. 106-20 (b) The commission by rule shall: 106-21 (1) establish a staggered schedule for the submission 106-22 of integrated resource plans by electric utilities; 106-23 (2) prescribe the form and manner in which a plan must 106-24 be submitted; 106-25 (3) adopt filing requirements and schedules; and 106-26 (4) prescribe the methods by which an electric utility 106-27 may recover supply-side and demand-side costs. 107-1 (c) The commission by rule may: 107-2 (1) define the scope and nature of public 107-3 participation in the development of the integrated resource plan; 107-4 and 107-5 (2) establish the general guidelines an electric 107-6 utility shall use to evaluate and to select or reject a resource, 107-7 including procedures governing the solicitation process. (V.A.C.S. 107-8 Art. 1446c-0, Sec. 2.051(e).) 107-9 Sec. 34.022. CONTENTS OF PRELIMINARY INTEGRATED RESOURCE 107-10 PLAN. (a) A preliminary integrated resource plan must include: 107-11 (1) the electric utility's forecast of future demands; 107-12 (2) an estimate of the energy savings and demand 107-13 reduction the electric utility can achieve during the time covered 107-14 by the plan by use of demand-side management resources and the 107-15 range of possible costs for those resources; 107-16 (3) if additional supply-side resources are needed to 107-17 meet future demand, an estimate of: 107-18 (A) the amount and operational characteristics 107-19 of the additional capacity needed; 107-20 (B) the types of viable supply-side resources 107-21 for meeting that need; and 107-22 (C) the range of probable costs of those 107-23 resources; 107-24 (4) if necessary, proposed requests for proposals to 107-25 be used in a solicitation of demand-side or supply-side resources, 107-26 or both; 107-27 (5) the specific criteria the electric utility will 108-1 use to evaluate and to select or reject demand-side or supply-side 108-2 resources; 108-3 (6) the methods by which the electric utility intends 108-4 to monitor demand-side or supply-side resources, or both as 108-5 appropriate, after selection; 108-6 (7) the method by which the electric utility intends 108-7 to allocate costs; 108-8 (8) a description of how the electric utility will 108-9 achieve equity among customer classes and provide demand-side 108-10 programs to each customer class, including tenants and low-income 108-11 ratepayers; 108-12 (9) any proposed incentive factors; and 108-13 (10) any other information the commission requires. 108-14 (b) If the commission adopts under Section 34.021(c) the 108-15 general guidelines an electric utility shall use to evaluate and to 108-16 select or reject a resource, the specific criteria proposed by the 108-17 electric utility under Subsection (a)(5) may deviate from those 108-18 guidelines only on a showing of good cause. (V.A.C.S. 108-19 Art. 1446c-0, Sec. 2.051(f).) 108-20 Sec. 34.023. PUBLIC HEARING ON PRELIMINARY INTEGRATED 108-21 RESOURCE PLAN. (a) If a preliminary integrated resource plan 108-22 includes a proposed solicitation of demand-side or supply-side 108-23 resources, the commission, on its own motion or on the motion of 108-24 the electric utility or an affected person, may convene a public 108-25 hearing on the adequacy and merits of the plan. 108-26 (b) Any interested person may intervene in the hearing and, 108-27 at the hearing, may present evidence and cross-examine witnesses 109-1 regarding the contents and adequacy of the preliminary integrated 109-2 resource plan. 109-3 (c) Discovery by a participant in the hearing is limited to: 109-4 (1) an issue relating to the development of the 109-5 preliminary integrated resource plan; 109-6 (2) a fact issue included in the plan; and 109-7 (3) other issues the commission is required to decide 109-8 relating to the plan. 109-9 (d) A hearing before the commission is not required for a 109-10 preliminary integrated resource plan filed by a river authority or 109-11 generating electric cooperative that does not intend to build a new 109-12 generating plant. (V.A.C.S. Art. 1446c-0, Sec. 2.051(h) (part).) 109-13 Sec. 34.024. INTERIM ORDER ON PRELIMINARY INTEGRATED 109-14 RESOURCE PLAN; DEADLINE. (a) After conducting a hearing on a 109-15 preliminary integrated resource plan under Section 34.023, the 109-16 commission shall determine: 109-17 (1) whether the plan is based on substantially 109-18 accurate data and an adequate method of forecasting; 109-19 (2) whether the plan identifies and takes into account 109-20 any present and projected reduction in the demand for energy that 109-21 may result from cost-effective measures to improve conservation and 109-22 energy efficiency in various customer classes of the area being 109-23 served; 109-24 (3) if additional supply-side resources are needed to 109-25 meet future demand, whether the plan adequately demonstrates: 109-26 (A) the amount and operational characteristics 109-27 of the additional capacity needed; 110-1 (B) the types of viable supply-side resources 110-2 for meeting that need; and 110-3 (C) the range of probable costs of those 110-4 resources; 110-5 (4) whether the plan describes opportunities for 110-6 appropriate persons to participate in developing the plan; 110-7 (5) whether the specific criteria the electric utility 110-8 will use to evaluate and to select or reject resources are 110-9 reasonable and consistent with the guidelines of the integrated 110-10 resource planning process; 110-11 (6) whether the cost allocation method proposed by the 110-12 electric utility is reasonable; 110-13 (7) how the electric utility will achieve equity among 110-14 customer classes and provide demand-side programs to each customer 110-15 class, including tenants and low-income ratepayers; and 110-16 (8) whether any incentive factors are appropriate and, 110-17 if so, the levels of the factors. 110-18 (b) Not later than the 180th day after the date an electric 110-19 utility submits a preliminary integrated resource plan, the 110-20 commission shall issue an interim order approving the plan, 110-21 approving the plan as modified by the commission, or remanding the 110-22 plan for additional proceedings. The commission may extend the 110-23 deadline for not more than 30 days for extenuating circumstances 110-24 encountered in the development and processing of the plan if the 110-25 circumstances are fully explained and agreed on by the 110-26 commissioners. (V.A.C.S. Art. 1446c-0, Secs. 2.051(i), (j).) 110-27 (Sections 34.025-34.050 reserved for expansion) 111-1 SUBCHAPTER C. RESOURCE SOLICITATION 111-2 Sec. 34.051. COMMENCEMENT OF SOLICITATION. (a) After the 111-3 commission approves an electric utility's preliminary integrated 111-4 resource plan, the utility shall conduct solicitations of 111-5 demand-side and supply-side resources as prescribed by the plan. 111-6 (b) In addition to soliciting resources from a nonaffiliated 111-7 third party, an electric utility may: 111-8 (1) prepare and submit a bid of a new utility 111-9 demand-side management program as prescribed by Section 34.053; 111-10 (2) receive bids from one or more affiliates; and 111-11 (3) request a certificate of convenience and necessity 111-12 for a new rate-based generating plant. (V.A.C.S. Art. 1446c-0, 111-13 Sec. 2.051(k).) 111-14 Sec. 34.052. SUBMISSION OF BIDS; CONFIDENTIALITY. (a) Each 111-15 bidder under Section 34.051, including the electric utility 111-16 conducting the solicitation and each bidding affiliate, shall 111-17 submit two copies of its bid to the commission. The commission 111-18 shall ensure that the electric utility has access to all bids at 111-19 the same time. 111-20 (b) The commission shall keep a copy of each bid submitted 111-21 by the electric utility conducting the solicitation or a bidding 111-22 affiliate to determine whether the utility complied with the 111-23 criteria established for conducting the solicitation. 111-24 (c) A bid submitted or retained under this section is 111-25 confidential and is not subject to disclosure under Chapter 552, 111-26 Government Code. (V.A.C.S. Art. 1446c-0, Sec. 2.051(l).) 111-27 Sec. 34.053. ELECTRIC UTILITY DEMAND-SIDE MANAGEMENT 112-1 PROGRAMS. (a) An electric utility that intends to use a proposed 112-2 demand-side management program to meet a need identified by the 112-3 utility's preliminary integrated resource plan must prepare a bid 112-4 reflecting that resource. 112-5 (b) A bid prepared by an electric utility under this section 112-6 must comply with the solicitation, evaluation, selection, and 112-7 rejection criteria specified by the utility's preliminary 112-8 integrated resource plan. The electric utility may not give 112-9 preferential treatment or consideration to the bid. (V.A.C.S. 112-10 Art. 1446c-0, Sec. 2.051(m).) 112-11 Sec. 34.054. QUALIFYING FACILITY BIDS; AVOIDED COSTS. (a) 112-12 The submission of a bid under this chapter by a qualifying 112-13 facility, regardless of whether the bid is accepted or rejected, 112-14 with respect to the capacity need for which the bid is submitted: 112-15 (1) is a waiver by the qualifying facility of any 112-16 right it may otherwise have under law to sell capacity to the 112-17 electric utility; 112-18 (2) represents the qualifying facility's agreement to 112-19 negotiate a rate for the purchase of capacity and terms relating to 112-20 the purchase that differ from the rate or terms that would 112-21 otherwise be required by 18 CFR Chapter I, Subchapter K, Part 292, 112-22 Subpart C; and 112-23 (3) is a waiver by the qualifying facility of its 112-24 right to the rate or terms for a purchase of capacity by the 112-25 electric utility that might otherwise be required by 18 CFR Chapter 112-26 I, Subchapter K, Part 292, Subpart C. 112-27 (b) The avoided capacity costs under 18 CFR Chapter I, 113-1 Subchapter K, Part 292, Subpart C, of an electric utility that has 113-2 submitted a preliminary integrated resource plan to the commission 113-3 under this chapter is $0 and remains $0, with respect to any 113-4 capacity needs shown in the preliminary plan or final plan that are 113-5 to be satisfied by resources approved in the utility's final plan. 113-6 (c) This section does not affect the validity of a contract 113-7 entered into between an electric utility and a qualifying facility 113-8 for any purchase. (V.A.C.S. Art. 1446c-0, Sec. 2.051(z).) 113-9 Sec. 34.055. EVALUATION OF BIDS; NEGOTIATION OF CONTRACTS. 113-10 (a) An electric utility shall evaluate each bid submitted, 113-11 including an affiliate bid, in accordance with the criteria 113-12 specified by the utility's preliminary integrated resource plan and 113-13 shall negotiate each necessary contract. 113-14 (b) An electric utility is not required to accept a bid and 113-15 may reject any or all bids in accordance with the selection and 113-16 rejection criteria specified by the utility's preliminary 113-17 integrated resource plan. (V.A.C.S. Art. 1446c-0, Sec. 2.051(n) 113-18 (part).) 113-19 Sec. 34.056. APPLICATION FOR CERTIFICATE OF CONVENIENCE AND 113-20 NECESSITY FOR RESOURCE NOT INCLUDED IN PRELIMINARY PLAN. 113-21 If the results of the solicitation and contract 113-22 negotiations do not meet the supply-side needs identified by the 113-23 electric utility's preliminary integrated resource plan, the 113-24 utility may apply for a certificate of convenience and necessity 113-25 for a utility-owned resource addition, notwithstanding that a 113-26 solicitation was conducted and the resource addition was not 113-27 included in the approved plan. (V.A.C.S. Art. 1446c-0, Sec. 114-1 2.051(n) (part).) 114-2 (Sections 34.057-34.100 reserved for expansion) 114-3 SUBCHAPTER D. FINAL INTEGRATED RESOURCE PLAN 114-4 Sec. 34.101. SUBMISSION OF FINAL INTEGRATED RESOURCE PLAN. 114-5 After conducting each solicitation and negotiating each contract, 114-6 an electric utility shall submit a proposed final integrated 114-7 resource plan to the commission. The proposed plan must include: 114-8 (1) the results of each solicitation; 114-9 (2) any contracts for resources; 114-10 (3) the terms under which the electric utility will 114-11 provide resources to meet a need identified by the preliminary 114-12 integrated resource plan, if the electric utility accepts a bid 114-13 submitted under Section 34.053; and 114-14 (4) an application for a certificate of convenience 114-15 and necessity, if necessary. (V.A.C.S. Art. 1446c-0, Sec. 114-16 2.051(o).) 114-17 Sec. 34.102. PUBLIC HEARING ON FINAL INTEGRATED RESOURCE 114-18 PLAN. (a) The commission, on request by an affected person, shall 114-19 convene a public hearing on the reasonableness and 114-20 cost-effectiveness of a proposed final integrated resource plan. 114-21 The commission shall convene the hearing, if requested, not later 114-22 than the 90th day after the date the electric utility files its 114-23 proposed plan. 114-24 (b) Any interested person may intervene in the hearing and, 114-25 at the hearing, may present evidence and cross-examine witnesses 114-26 regarding the reasonableness and cost-effectiveness of the proposed 114-27 final integrated resource plan. 115-1 (c) A party to the hearing may not litigate or conduct 115-2 discovery on an issue that was or could have been litigated in 115-3 connection with the filing of the electric utility's preliminary 115-4 integrated resource plan. 115-5 (d) To the extent permitted by federal law, the commission 115-6 may issue a written order for access to the books, accounts, 115-7 memoranda, contracts, or other records of an exempt wholesale 115-8 generator or power marketer selling energy at wholesale to an 115-9 electric utility, if access is required for the effective discharge 115-10 of the commission's regulatory responsibilities under this 115-11 subtitle. The materials obtained by the commission under this 115-12 subsection are confidential and are not subject to disclosure under 115-13 Chapter 552, Government Code. (V.A.C.S. Art. 1446c-0, Sec. 115-14 2.051(p).) 115-15 Sec. 34.103. RULING ON FINAL INTEGRATED RESOURCE PLAN; 115-16 DEADLINE. (a) After conducting a hearing on a proposed final 115-17 integrated resource plan under Section 34.102, the commission shall 115-18 determine whether: 115-19 (1) the final plan was developed in accordance with 115-20 the electric utility's preliminary integrated resource plan and 115-21 commission rules; 115-22 (2) the resource solicitations, evaluations, 115-23 selections, and rejections were conducted in accordance with the 115-24 criteria included in the utility's preliminary plan; 115-25 (3) the final plan is cost-effective; 115-26 (4) the final plan is equitable among customer classes 115-27 and provides demand-side programs to each customer class, including 116-1 tenants and low-income ratepayers; 116-2 (5) the commission should certify each contract and 116-3 electric utility bid submitted under Section 34.053 that resulted 116-4 from the solicitations; and 116-5 (6) the commission should grant a requested 116-6 certificate of convenience and necessity for an electric 116-7 utility-owned resource addition. 116-8 (b) Not later than the 180th day after the date an electric 116-9 utility submits a proposed final integrated resource plan, the 116-10 commission shall issue a final order approving the plan, approving 116-11 the plan as modified by the commission, or remanding the plan for 116-12 additional proceedings. (V.A.C.S. Art. 1446c-0, Secs. 2.051(q), 116-13 (t).) 116-14 Sec. 34.104. CERTIFICATION OF CONTRACTS. (a) In 116-15 determining whether to certify a supply-side or demand-side 116-16 contract that results from a solicitation, the commission shall 116-17 consider: 116-18 (1) the reliability, financial condition, and safety 116-19 of the resource contract; and 116-20 (2) whether the solicitation, evaluation, and 116-21 selection of the resource contract was conducted in accordance with 116-22 the criteria included in the electric utility's preliminary 116-23 integrated resource plan. 116-24 (b) In addition to the considerations in Subsection (a), if 116-25 a contract proposed for certification is between an electric 116-26 utility and its affiliate, the commission shall determine whether: 116-27 (1) the utility treated and considered the affiliate's 117-1 bid in the same manner it treated and considered each other bid 117-2 intended to meet the same resource needs; 117-3 (2) the transaction will benefit consumers; 117-4 (3) the transaction violates any state law, including 117-5 least-cost planning; 117-6 (4) the transaction provides the affiliate with an 117-7 unfair competitive advantage by virtue of its affiliation or 117-8 association with the utility; 117-9 (5) the transaction is in the public interest; and 117-10 (6) the commission has sufficient regulatory 117-11 authority, resources, and access to the books and records of the 117-12 utility and its affiliate to make the determination required by 117-13 this subsection. 117-14 (c) The commission may not certify a contract for a new 117-15 purchase of power by an electric utility unless the utility has 117-16 determined, after giving consideration to consistently applied 117-17 regional or national reliability standards, guidelines, or 117-18 criteria, that: 117-19 (1) the contract would not unreasonably impair the 117-20 continued reliability of electric systems affected by the purchase; 117-21 and 117-22 (2) the purchase can reasonably be expected to produce 117-23 benefits to customers of the purchasing utility. 117-24 (d) Commission certification of a resource contract under 117-25 this section does not negate the necessity of the resource to 117-26 comply with all applicable environmental and siting regulations. 117-27 (e) In establishing an electric utility's rates, a 118-1 regulatory authority shall consider a payment made under a 118-2 certified contract to be a reasonable and necessary operating 118-3 expense of the utility during the period for which the certified 118-4 contract is effective. A regulatory authority may provide for 118-5 monthly recovery of approved costs of the contract as those costs 118-6 are incurred, including any markup allowed by the commission. 118-7 (V.A.C.S. Art. 1446c-0, Sec. 2.051(r).) 118-8 Sec. 34.105. CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) 118-9 In determining whether to grant a certificate of convenience and 118-10 necessity requested by an electric utility in the utility's 118-11 proposed final integrated resource plan, the commission shall 118-12 consider: 118-13 (1) the effect of granting the certificate on the 118-14 recipient of the certificate and on any electric utility serving 118-15 the proximate area; and 118-16 (2) other factors, such as: 118-17 (A) community values; 118-18 (B) recreational and park areas; 118-19 (C) historical and aesthetic values; 118-20 (D) environmental integrity; and 118-21 (E) the probable improvement of service or 118-22 lowering of cost to consumers in the area if the certificate is 118-23 granted. 118-24 (b) The commission shall grant a requested certificate of 118-25 convenience and necessity as part of the commission's approval of a 118-26 final integrated resource plan if the commission finds that: 118-27 (1) the proposed resource addition is necessary under 119-1 the plan; 119-2 (2) the proposed resource addition is the best and 119-3 most economical choice of technology for the service area; and 119-4 (3) cost-effective conservation and other 119-5 cost-effective alternative energy sources cannot reasonably meet 119-6 the need. (V.A.C.S. Art. 1446c-0, Sec. 2.051(s).) 119-7 (Sections 34.106-34.150 reserved for expansion) 119-8 SUBCHAPTER E. ACQUISITION OF RESOURCES OUTSIDE THE 119-9 INTEGRATED RESOURCE PLANNING PROCESS 119-10 Sec. 34.151. EXEMPTIONS FROM SOLICITATION PROCESS. (a) The 119-11 commission shall adopt rules allowing an electric utility to add 119-12 new or incremental resources outside the solicitation process, 119-13 consistent with the utility's last approved integrated resource 119-14 planning goals, including resources listed in Subsection (b). 119-15 (b) Consistent with an electric utility's last approved 119-16 integrated resource planning goals, if any, an electric utility, 119-17 including a nongenerating electric utility, may add new or 119-18 incremental resources outside the solicitation process, including: 119-19 (1) contract renegotiation for existing capacity from 119-20 an electric cooperative or nonaffiliated power generating facility; 119-21 (2) electric cooperative or nonaffiliated demand-side 119-22 management programs or renewable resources; 119-23 (3) capacity purchases with two-year or shorter terms 119-24 from an electric cooperative or nonaffiliated power supplier; 119-25 (4) capacity purchases necessary to satisfy 119-26 unanticipated emergency conditions; 119-27 (5) the exercise of an option in a purchased power 120-1 contract with an electric cooperative or nonaffiliated supplier; 120-2 and 120-3 (6) renewable distributed resources, located at or 120-4 near the point of consumption, if the resources are less costly 120-5 than transmission extensions or upgrades. 120-6 (c) The addition of new or incremental resources by an 120-7 electric utility under Subsection (b) does not require an amendment 120-8 to the utility's integrated resource plan. (V.A.C.S. Art. 1446c-0, 120-9 Secs. 2.051(u), (x), (y).) 120-10 Sec. 34.152. NONGENERATING ELECTRIC UTILITY SOLICITATIONS. 120-11 (a) A nongenerating electric utility not planning to construct 120-12 generating facilities shall conduct a solicitation of resources if 120-13 the utility seeks to purchase from a wholesale power supplier other 120-14 than the utility's existing power supplier more than 25 percent of 120-15 the utility's peak demand or more than 70 megawatts. A 120-16 nongenerating electric utility is not required to conduct a 120-17 solicitation for a purchase from an existing power supplier and the 120-18 utility may add new or incremental resources outside the 120-19 solicitation process as provided by Section 34.151. 120-20 (b) The commission, on request by the nongenerating electric 120-21 utility, may review a proposed contract for resources resulting 120-22 from a solicitation to determine the contract's reasonableness. 120-23 The commission shall certify the proposed contract if the 120-24 commission finds that the contract is reasonable. The commission 120-25 shall make its determination not later than the 90th day after the 120-26 date the proposed contract is submitted. 120-27 (c) This section does not alter or amend a wholesale power 121-1 supply contract executed before September 1, 1995. (V.A.C.S. 121-2 Art. 1446c-0, Sec. 2.051(bb) (part).) 121-3 Sec. 34.153. EXEMPTION FOR CERTAIN FACILITIES. (a) To 121-4 provide for the orderly transition to an integrated resource 121-5 planning process and to avoid delays in the construction of 121-6 resources necessary to provide electric service, an integrated 121-7 resource plan is not required for issuance of a certificate of 121-8 convenience and necessity for the construction of a generating 121-9 facility if: 121-10 (1) the commission approved the electric utility's 121-11 notice of intent relating to the facility before September 1, 1995; 121-12 (2) the electric utility has conducted a solicitation 121-13 for resources to meet the need identified by the utility's notice 121-14 of intent in accordance with commission rules in effect at the time 121-15 of the solicitation; and 121-16 (3) the electric utility has submitted to the 121-17 commission the results of the solicitation and an application for 121-18 certification of the facility to meet the need identified by the 121-19 utility's notice of intent. 121-20 (b) The commission shall grant a certificate of convenience 121-21 and necessity for a generating facility to which this section 121-22 applies if: 121-23 (1) the facility is needed to meet future demand; 121-24 (2) the facility is the best and most economical 121-25 choice of technology for the service area; and 121-26 (3) cost-effective conservation and cost-effective 121-27 alternative energy sources cannot reasonably meet the need. 122-1 (V.A.C.S. Art. 1446c-0, Sec. 2.051(dd).) 122-2 (Sections 34.154-34.170 reserved for expansion) 122-3 SUBCHAPTER F. MISCELLANEOUS PROVISIONS 122-4 Sec. 34.171. COST RECOVERY AND INCENTIVES. In carrying out 122-5 its duties related to the integrated resource planning process, the 122-6 commission may: 122-7 (1) allow timely recovery of the reasonable costs of 122-8 conservation, load management, and purchased power, notwithstanding 122-9 Section 36.201; and 122-10 (2) authorize additional incentives for conservation, 122-11 load management, purchased power, and renewable resources. 122-12 (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) (part).) 122-13 Sec. 34.172. RECONCILIATION OF RECOVERED COSTS. (a) To the 122-14 extent that the commission authorizes an electric utility to 122-15 recover the costs of demand-side management programs, conservation, 122-16 load management, or purchased power through cost recovery factors, 122-17 the commission shall make a final reconciliation of the costs 122-18 recovered through the cost recovery factors. 122-19 (b) The commission shall adopt rules regarding: 122-20 (1) the timing of reconciliations for each cost 122-21 recovery factor; 122-22 (2) the information an electric utility must file in 122-23 support of each reconciliation; and 122-24 (3) other matters necessary to accomplish the 122-25 reconciliation. 122-26 (c) Each reconciliation must: 122-27 (1) review the reasonableness of the electric 123-1 utility's administration of the contracts and programs the costs of 123-2 which are being reconciled; and 123-3 (2) reconcile the revenue collected under each cost 123-4 recovery factor and the costs that the utility incurred on 123-5 purchased power, demand-side management, conservation, or load 123-6 management, as applicable, during the reconciliation period. 123-7 (V.A.C.S. Art. 1446c-0, Sec. 2.051(cc).) 123-8 Sec. 34.173. RESOURCE PLANNING EXPENSES. (a) To the extent 123-9 that an electric utility is required by the commission to reimburse 123-10 a municipality for expenses incurred while participating in a 123-11 proceeding under this chapter, the commission shall, as part of the 123-12 commission's approval of the utility's integrated resource plan, 123-13 authorize a surcharge to be included in the utility's rates to 123-14 allow the utility to recover the amount paid to the municipality 123-15 before the utility's next preliminary integrated resource plan is 123-16 filed. 123-17 (b) An electric utility may recover its reasonable expenses 123-18 arising from planning, preparing, and participating in a proceeding 123-19 under this chapter only after commission review is conducted in 123-20 accordance with Subchapter C or D, Chapter 36. (V.A.C.S. 123-21 Art. 1446c-0, Sec. 2.051(ee).) 123-22 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 123-23 SUBCHAPTER A. COMPETITION AND TRANSMISSION ACCESS 123-24 IN THE WHOLESALE MARKET 123-25 Sec. 35.001. DEFINITION 123-26 Sec. 35.002. RIGHT TO COMPETE AT WHOLESALE 123-27 Sec. 35.003. PURCHASE FROM AFFILIATE; UNDUE PREFERENCE 124-1 PROHIBITED 124-2 Sec. 35.004. PROVISION OF TRANSMISSION SERVICE 124-3 Sec. 35.005. AUTHORITY TO ORDER TRANSMISSION SERVICE 124-4 Sec. 35.006. RULES RELATED TO WHOLESALE TRANSMISSION SERVICE, 124-5 RATES, AND ACCESS 124-6 Sec. 35.007. TARIFFS REQUIRED 124-7 Sec. 35.008. ALTERNATIVE DISPUTE RESOLUTION 124-8 Sec. 35.0081. REPORT TO LEGISLATURE CONCERNING STRANDED 124-9 COST 124-10 (Sections 35.009-35.030 reserved for expansion) 124-11 SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS 124-12 Sec. 35.031. AUTHORITY TO OPERATE 124-13 Sec. 35.032. COMMISSION REGISTRATION AND REQUIRED REPORTS 124-14 Sec. 35.033. AFFILIATE WHOLESALE PROVIDER 124-15 Sec. 35.034. TRANSFER OF ASSETS 124-16 Sec. 35.035. VALUATION AND ACCOUNTING OF TRANSFERRED ASSETS 124-17 (Sections 35.036-35.060 reserved for expansion) 124-18 SUBCHAPTER C. QUALIFYING FACILITIES 124-19 Sec. 35.061. ENCOURAGEMENT OF ECONOMICAL PRODUCTION 124-20 Sec. 35.062. APPLICATION FOR CERTIFICATION 124-21 Sec. 35.063. HEARING 124-22 Sec. 35.064. CERTIFICATION STANDARDS 124-23 Sec. 35.065. DEADLINES FOR COMMISSION ACTION 124-24 Sec. 35.066. TERM OF CERTIFICATION 124-25 CHAPTER 35. ALTERNATIVE ENERGY PROVIDERS 124-26 SUBCHAPTER A. COMPETITION AND TRANSMISSION ACCESS 124-27 IN THE WHOLESALE MARKET 125-1 Sec. 35.001. DEFINITION. In this subchapter, "electric 125-2 utility" includes a municipally owned utility. (V.A.C.S. 125-3 Art. 1446c-0, Sec. 2.057(g).) 125-4 Sec. 35.002. RIGHT TO COMPETE AT WHOLESALE. A provider of 125-5 generation, including an electric utility affiliate, exempt 125-6 wholesale generator, and qualifying facility, may compete for the 125-7 business of selling power. (V.A.C.S. Art. 1446c-0, Sec. 2.057(f) 125-8 (part).) 125-9 Sec. 35.003. PURCHASE FROM AFFILIATE; UNDUE PREFERENCE 125-10 PROHIBITED. (a) An electric utility may purchase power from an 125-11 affiliate in accordance with this title. 125-12 (b) An electric utility may not grant an undue preference to 125-13 a person in connection with the utility's purchase or sale of 125-14 electric energy at wholesale or other utility service. (V.A.C.S. 125-15 Art. 1446c-0, Sec. 2.057(f) (part).) 125-16 Sec. 35.004. PROVISION OF TRANSMISSION SERVICE. (a) An 125-17 electric utility that owns or operates transmission facilities 125-18 shall provide wholesale transmission service at rates and terms, 125-19 including terms of access, that are comparable to the rates and 125-20 terms of the utility's use of its system. 125-21 (b) The commission shall ensure that an electric utility 125-22 provides nondiscriminatory access to transmission service for 125-23 qualifying facilities, exempt wholesale generators, power 125-24 marketers, and other electric utilities. 125-25 (c) When an electric utility provides transmission service 125-26 at the request of a third party, the commission shall ensure that 125-27 the utility recovers the utility's reasonable costs in providing 126-1 transmission services necessary for the transaction from the entity 126-2 for which the transmission is provided so that the utility's other 126-3 customers do not bear the costs of the service. (V.A.C.S. 126-4 Art. 1446c-0, Secs. 2.057(a) (part), (c).) 126-5 Sec. 35.005. AUTHORITY TO ORDER TRANSMISSION SERVICE. (a) 126-6 The commission may require an electric utility to provide 126-7 transmission service at wholesale to another electric utility, a 126-8 qualifying facility, an exempt wholesale generator, or a power 126-9 marketer and may determine whether terms for the transmission 126-10 service are reasonable. 126-11 (b) The commission may require transmission service at 126-12 wholesale, including the construction or enlargement of a facility, 126-13 in a proceeding not related to approval of an integrated resource 126-14 plan. 126-15 (c) The commission may not issue a decision or rule relating 126-16 to transmission service that is contrary to an applicable decision, 126-17 rule, or policy statement of a federal regulatory agency having 126-18 jurisdiction. (V.A.C.S. Art. 1446c-0, Sec. 2.056(a).) 126-19 Sec. 35.006. RULES RELATED TO WHOLESALE TRANSMISSION 126-20 SERVICE, RATES, AND ACCESS. (a) The commission shall adopt rules 126-21 relating to wholesale transmission service, rates, and access. The 126-22 rules: 126-23 (1) must be consistent with the standards in this 126-24 subchapter; 126-25 (2) may not be contrary to federal law, including any 126-26 applicable decision, rule, or policy statement of a federal 126-27 regulatory agency having jurisdiction; 127-1 (3) must require transmission services that are not 127-2 less than the transmission services the Federal Energy Regulatory 127-3 Commission may require in similar circumstances; 127-4 (4) must require that an electric utility provide all 127-5 ancillary services associated with the utility's discounted 127-6 wholesale sales at the same prices and under the same terms as the 127-7 services are provided to a third person; and 127-8 (5) must require that an electric utility provide all 127-9 ancillary services associated with the utility's discounted 127-10 wholesale sales to a third person on request. 127-11 (b) The commission shall adopt rules relating to the 127-12 registration and reporting requirements of a qualifying facility, 127-13 exempt wholesale generator, and power marketer. (V.A.C.S. 127-14 Art. 1446c-0, Secs. 2.057(a) (part), (b).) 127-15 Sec. 35.007. TARIFFS REQUIRED. (a) Except as provided by 127-16 Subsection (b), an electric utility that owns or operates a 127-17 transmission facility shall file a tariff in compliance with 127-18 commission rules adopted under Section 35.006. 127-19 (b) An electric utility is not required to file a tariff 127-20 under this section if the utility's terms for access and pricing 127-21 for wholesale transmission service are included in another electric 127-22 utility's tariff. 127-23 (c) An electric utility shall file a tariff required by this 127-24 section with the appropriate state or federal regulatory agency 127-25 having jurisdiction over the utility's transmission service. 127-26 (V.A.C.S. Art. 1446c-0, Sec. 2.057(a) (part).) 127-27 Sec. 35.008. ALTERNATIVE DISPUTE RESOLUTION. The commission 128-1 may require that each party to a dispute concerning prices or terms 128-2 of wholesale transmission service engage in a nonbinding 128-3 alternative dispute resolution process before seeking resolution of 128-4 the dispute by the commission. (V.A.C.S. Art. 1446c-0, Sec. 128-5 2.057(d).) 128-6 Sec. 35.0081. REPORT TO LEGISLATURE CONCERNING STRANDED 128-7 COST. (a) The commission shall report to the 75th Legislature on 128-8 methods or procedures to quantify the magnitude of stranded 128-9 investment, procedures for allocating costs, and acceptable methods 128-10 of recovering stranded costs. 128-11 (b) This section expires January 12, 1999. (V.A.C.S. 128-12 Art. 1446c-0, Sec. 2.057(e).) 128-13 (Sections 35.009-35.030 reserved for expansion) 128-14 SUBCHAPTER B. EXEMPT WHOLESALE GENERATORS AND POWER MARKETERS 128-15 Sec. 35.031. AUTHORITY TO OPERATE. An exempt wholesale 128-16 generator or power marketer may sell electric energy only at 128-17 wholesale. (V.A.C.S. Art. 1446c-0, Sec. 2.053(a).) 128-18 Sec. 35.032. COMMISSION REGISTRATION AND REQUIRED REPORTS. 128-19 (a) An exempt wholesale generator or power marketer that sells 128-20 electric energy in this state shall, not later than the 30th day 128-21 after the date it becomes subject to this section: 128-22 (1) register with the commission; or 128-23 (2) provide to the commission proof that it has 128-24 registered with the Federal Energy Regulatory Commission or has 128-25 been authorized by the Federal Energy Regulatory Commission to sell 128-26 electric energy at market-based rates. 128-27 (b) The exempt wholesale generator or power marketer may 129-1 register by filing with the commission: 129-2 (1) a description of the location of any facility used 129-3 to provide service; 129-4 (2) a description of the type of service provided; 129-5 (3) a copy of any information filed with the Federal 129-6 Energy Regulatory Commission in connection with registration with 129-7 that commission; and 129-8 (4) other information required by commission rule. 129-9 (c) An exempt wholesale generator or power marketer required 129-10 to register under Subsection (a) shall file any report required by 129-11 commission rule. (V.A.C.S. Art. 1446c-0, Secs. 2.053(b), (c).) 129-12 Sec. 35.033. AFFILIATE WHOLESALE PROVIDER. An affiliate of 129-13 an electric utility may be an exempt wholesale generator or power 129-14 marketer and may sell electric energy to its affiliated electric 129-15 utility in accordance with Chapter 34 and other laws governing 129-16 wholesale sales of electric energy. (V.A.C.S. Art. 1446c-0, Sec. 129-17 2.054(a).) 129-18 Sec. 35.034. TRANSFER OF ASSETS. (a) Unless an electric 129-19 utility receives commission approval under Subsection (b), the 129-20 utility may not sell or transfer a facility to an affiliate or 129-21 otherwise consider the facility to be an eligible facility as 129-22 defined by federal law if on May 27, 1995, the utility had a rate 129-23 or charge in effect: 129-24 (1) for or in connection with the construction of the 129-25 facility; 129-26 (2) for electric energy produced by the construction 129-27 of the facility; or 130-1 (3) for electric energy produced by the facility other 130-2 than a portion of a rate or charge that represents recovery of the 130-3 cost of a wholesale rate or charge. 130-4 (b) The commission, after notice and hearing, may allow an 130-5 electric utility to sell or transfer a facility governed by 130-6 Subsection (a) to an affiliate or otherwise allow the facility to 130-7 become an eligible facility only if the transaction: 130-8 (1) will benefit ratepayers of the utility making the 130-9 sale or transfer; 130-10 (2) is in the public interest; and 130-11 (3) otherwise complies with state law. (V.A.C.S. 130-12 Art. 1446c-0, Sec. 2.054(b).) 130-13 Sec. 35.035. VALUATION AND ACCOUNTING OF TRANSFERRED ASSETS. 130-14 (a) A transfer of assets from an electric utility to an affiliated 130-15 exempt wholesale generator or power marketer shall be valued at the 130-16 greater of net book cost or fair market value. 130-17 (b) A transfer of assets from an exempt wholesale generator 130-18 or power marketer to an affiliated electric utility shall be valued 130-19 at the lesser of net book cost or fair market value. 130-20 (c) At the time that a transfer of assets between an 130-21 electric utility and an affiliated exempt wholesale generator or 130-22 power marketer is approved, the commission shall order the utility 130-23 to adjust its rates so that the utility's tariffs reflect benefits 130-24 from the proceeds of the sale and exclude any costs associated with 130-25 the transferred facility. (V.A.C.S. Art. 1446c-0, Sec. 2.054(c).) 130-26 (Sections 35.036-35.060 reserved for expansion) 131-1 SUBCHAPTER C. QUALIFYING FACILITIES 131-2 Sec. 35.061. ENCOURAGEMENT OF ECONOMICAL PRODUCTION. The 131-3 commission shall adopt and enforce rules to encourage the 131-4 economical production of electric energy by qualifying facilities. 131-5 (V.A.C.S. Art. 1446c-0, Sec. 2.052(a).) 131-6 Sec. 35.062. APPLICATION FOR CERTIFICATION. (a) An 131-7 electric utility or a qualifying facility may submit to the 131-8 commission for certification a copy of an agreement between the 131-9 utility and facility for the purchase of capacity. 131-10 (b) An agreement submitted for certification under this 131-11 section may provide that the agreement is contingent on 131-12 certification by the commission. (V.A.C.S. Art. 1446c-0, Sec. 131-13 2.209(b) (part).) 131-14 Sec. 35.063. HEARING. (a) The commission, on its own 131-15 motion or on the request of a party to the agreement or another 131-16 affected person, may conduct a hearing on an agreement for which 131-17 certification is sought under Section 35.062. 131-18 (b) A request for a hearing or a commission decision to hold 131-19 a hearing must be made not later than the 90th day after the date 131-20 the agreement is submitted to the commission. (V.A.C.S. 131-21 Art. 1446c-0, Sec. 2.209(d) (part).) 131-22 Sec. 35.064. CERTIFICATION STANDARDS. The commission shall 131-23 certify an agreement submitted under Section 35.062 if the 131-24 agreement: 131-25 (1) provides for payments over the contract term that 131-26 are equal to or less than the electric utility's avoided costs, as 131-27 established by the commission and in effect at the time the 132-1 agreement was signed; and 132-2 (2) provides the electric utility the opportunity to 132-3 acquire the cogeneration or small-power production installation 132-4 before the installation is offered to another purchaser or provides 132-5 other sufficient assurance that the electric utility will be 132-6 provided with a comparable supply of electricity, if the qualifying 132-7 facility ceases to operate the installation. (V.A.C.S. 132-8 Art. 1446c-0, Secs. 2.209(b) (part), (c) (part).) 132-9 Sec. 35.065. DEADLINES FOR COMMISSION ACTION. (a) Except 132-10 as provided by Subsection (b), the commission shall make its 132-11 determination regarding whether a certification should be granted 132-12 under Section 35.064 not later than the 90th day after the date the 132-13 agreement is submitted. 132-14 (b) If a hearing is held under Section 35.063, the 132-15 commission shall make its determination regarding whether a 132-16 certification should be granted not later than the 120th day after 132-17 the date the agreement is submitted, except that this deadline is 132-18 extended by two days for each day in excess of five days on which 132-19 the commission conducts a hearing on the merits of the 132-20 certification. 132-21 (c) If the commission does not make a determination by the 132-22 date provided by Subsection (a) or (b), as applicable, the 132-23 agreement is considered to meet the requirements of Section 35.064 132-24 and the certification is considered granted. (V.A.C.S. 132-25 Art. 1446c-0, Secs. 2.209(c) (part), (d) (part).) 132-26 Sec. 35.066. TERM OF CERTIFICATION. A certification of an 132-27 agreement granted under this subchapter is effective until the 133-1 earlier of: 133-2 (1) the expiration date of the agreement; or 133-3 (2) the 15th anniversary of the date of the 133-4 certification. (V.A.C.S. Art. 1446c-0, Sec. 2.209(c) (part).) 133-5 CHAPTER 36. RATES 133-6 SUBCHAPTER A. GENERAL PROVISIONS 133-7 Sec. 36.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES 133-8 Sec. 36.002. COMPLIANCE WITH TITLE 133-9 Sec. 36.003. JUST AND REASONABLE RATES 133-10 Sec. 36.004. EQUALITY OF RATES AND SERVICES 133-11 Sec. 36.005. RATES FOR AREA NOT IN MUNICIPALITY 133-12 Sec. 36.006. BURDEN OF PROOF 133-13 Sec. 36.007. DISCOUNTED WHOLESALE OR RETAIL RATES 133-14 Sec. 36.008. STATE TRANSMISSION SYSTEM 133-15 (Sections 36.009-36.050 reserved for expansion) 133-16 SUBCHAPTER B. COMPUTATION OF RATES 133-17 Sec. 36.051. ESTABLISHING OVERALL REVENUES 133-18 Sec. 36.052. ESTABLISHING REASONABLE RETURN 133-19 Sec. 36.053. COMPONENTS OF INVESTED CAPITAL 133-20 Sec. 36.054. CONSTRUCTION WORK IN PROGRESS 133-21 Sec. 36.055. SEPARATIONS AND ALLOCATIONS 133-22 Sec. 36.056. DEPRECIATION, AMORTIZATION, AND DEPLETION 133-23 Sec. 36.057. NET INCOME; DETERMINATION OF REVENUES 133-24 AND EXPENSES 133-25 Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE 133-26 Sec. 36.059. TREATMENT OF CERTAIN TAX BENEFITS 133-27 Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS 134-1 Sec. 36.061. ALLOWANCE OF CERTAIN EXPENSES 134-2 Sec. 36.062. CONSIDERATION OF CERTAIN EXPENSES 134-3 Sec. 36.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 134-4 LEASE OF MERCHANDISE 134-5 Sec. 36.064. SELF-INSURANCE 134-6 (Sections 36.065-36.100 reserved for expansion) 134-7 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGES 134-8 PROPOSED BY UTILITY 134-9 Sec. 36.101. DEFINITION 134-10 Sec. 36.102. STATEMENT OF INTENT TO CHANGE RATES 134-11 Sec. 36.103. NOTICE OF INTENT TO CHANGE RATES 134-12 Sec. 36.104. EARLY EFFECTIVE DATE OF RATE CHANGE 134-13 Sec. 36.105. DETERMINATION OF PROPRIETY OF RATE 134-14 CHANGE; HEARING 134-15 Sec. 36.106. REGIONAL HEARING 134-16 Sec. 36.107. PREFERENCE TO HEARING 134-17 Sec. 36.108. RATE SUSPENSION; DEADLINE 134-18 Sec. 36.109. TEMPORARY RATES 134-19 Sec. 36.110. BONDED RATES 134-20 Sec. 36.111. ESTABLISHMENT OF FINAL RATES 134-21 (Sections 36.112-36.150 reserved for expansion) 134-22 SUBCHAPTER D. RATE CHANGES PROPOSED BY REGULATORY AUTHORITY 134-23 Sec. 36.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 134-24 Sec. 36.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 134-25 ANOTHER SOURCE 134-26 Sec. 36.153. RATE-FILING PACKAGE 134-27 Sec. 36.154. DEADLINE 135-1 Sec. 36.155. INTERIM ORDER ESTABLISHING TEMPORARY RATES 135-2 Sec. 36.156. AUTOMATIC TEMPORARY RATES 135-3 (Sections 36.157-36.200 reserved for expansion) 135-4 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENT 135-5 Sec. 36.201. AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS 135-6 Sec. 36.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY 135-7 Sec. 36.203. FUEL COST RECOVERY; ADJUSTMENT OF FUEL 135-8 FACTOR 135-9 Sec. 36.204. COST RECOVERY AND INCENTIVES 135-10 Sec. 36.205. PURCHASED POWER COST RECOVERY 135-11 Sec. 36.206. MARK-UPS 135-12 Sec. 36.207. USE OF MARK-UPS 135-13 Sec. 36.208. PAYMENT TO QUALIFYING FACILITY 135-14 (Sections 36.209-36.250 reserved for expansion) 135-15 SUBCHAPTER F. PARTIAL RATE DEREGULATION AVAILABLE 135-16 TO CERTAIN COOPERATIVES 135-17 Sec. 36.251. ELECTRIC COOPERATIVE EXEMPTION 135-18 Sec. 36.252. ELECTION ON EXEMPTION 135-19 Sec. 36.253. EFFECT OF ELECTION 135-20 Sec. 36.254. APPLICATION OF OTHER PROVISIONS 135-21 Sec. 36.255. SUBSEQUENT ELECTION; REVOCATION 135-22 (Sections 36.256-36.300 reserved for expansion) 135-23 SUBCHAPTER G. RATE CHANGES BY CERTAIN 135-24 ELECTRIC COOPERATIVES 135-25 Sec. 36.301. APPLICATION OF SUBCHAPTER 135-26 Sec. 36.302. METHODS OF CHANGING RATES 135-27 Sec. 36.303. CONTENTS OF NOTICE 136-1 Sec. 36.304. ACCESS TO WRITTEN OPPOSITION 136-2 Sec. 36.305. TARIFFS; EFFECTIVE DATE OF RATE CHANGES 136-3 Sec. 36.306. DISCOUNTED RATES 136-4 Sec. 36.307. COMMISSION REVIEW 136-5 Sec. 36.308. REVIEW REQUESTED BY COOPERATIVE MEMBER OR 136-6 COMMISSION 136-7 Sec. 36.309. REVIEW REQUESTED BY AFFECTED ELECTRIC UTILITY 136-8 (Sections 36.310-36.350 reserved for expansion) 136-9 SUBCHAPTER H. RATES FOR GOVERNMENTAL ENTITIES 136-10 Sec. 36.351. DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF 136-11 HIGHER EDUCATION 136-12 Sec. 36.352. SPECIAL RATE CLASS 136-13 Sec. 36.353. PAYMENT IN LIEU OF TAX 136-14 CHAPTER 36. RATES 136-15 SUBCHAPTER A. GENERAL PROVISIONS 136-16 Sec. 36.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 136-17 (a) The regulatory authority may establish and regulate rates of 136-18 an electric utility and may adopt rules for determining: 136-19 (1) the classification of customers and services; and 136-20 (2) the applicability of rates. 136-21 (b) A rule or order of the regulatory authority may not 136-22 conflict with a ruling of a federal regulatory body. (V.A.C.S. 136-23 Art. 1446c-0, Sec. 2.201.) 136-24 Sec. 36.002. COMPLIANCE WITH TITLE. An electric utility may 136-25 not charge or receive a rate for utility service except as provided 136-26 by this title. (V.A.C.S. Art. 1446c-0, Sec. 2.153 (part).) 136-27 Sec. 36.003. JUST AND REASONABLE RATES. (a) The regulatory 137-1 authority shall ensure that each rate an electric utility or two or 137-2 more electric utilities jointly make, demand, or receive is just 137-3 and reasonable. 137-4 (b) A rate may not be unreasonably preferential, 137-5 prejudicial, or discriminatory but must be sufficient, equitable, 137-6 and consistent in application to each class of consumer. 137-7 (c) An electric utility may not: 137-8 (1) grant an unreasonable preference or advantage 137-9 concerning rates to a person in a classification; 137-10 (2) subject a person in a classification to an 137-11 unreasonable prejudice or disadvantage concerning rates; or 137-12 (3) establish or maintain an unreasonable difference 137-13 concerning rates between localities or between classes of service. 137-14 (d) In establishing an electric utility's rates, the 137-15 commission may treat as a single class two or more municipalities 137-16 that an electric utility serves if the commission considers that 137-17 treatment to be appropriate. 137-18 (e) A charge to an individual customer for retail or 137-19 wholesale electric service that is less than the rate approved by 137-20 the regulatory authority does not constitute an impermissible 137-21 difference, preference, or advantage. (V.A.C.S. Art. 1446c-0, 137-22 Secs. 2.202, 2.214 (part).) 137-23 Sec. 36.004. EQUALITY OF RATES AND SERVICES. (a) An 137-24 electric utility may not directly or indirectly charge, demand, or 137-25 receive from a person a greater or lesser compensation for a 137-26 service provided or to be provided by the utility than the 137-27 compensation prescribed by the applicable tariff filed under 138-1 Section 32.101. 138-2 (b) A person may not knowingly receive or accept a service 138-3 from an electric utility for a compensation greater or less than 138-4 the compensation prescribed by the tariff. 138-5 (c) Notwithstanding Subsections (a) and (b), an electric 138-6 utility may charge an individual customer for wholesale or retail 138-7 electric service in accordance with Section 36.007. 138-8 (d) This title does not prevent a cooperative corporation 138-9 from returning to its members net earnings resulting from its 138-10 operations in proportion to the members' purchases from or through 138-11 the corporation. (V.A.C.S. Art. 1446c-0, Secs. 2.215(a), (b).) 138-12 Sec. 36.005. RATES FOR AREA NOT IN MUNICIPALITY. Without 138-13 the approval of the commission, an electric utility's rates for an 138-14 area not in a municipality may not exceed 115 percent of the 138-15 average of all rates for similar services for all municipalities 138-16 served by the same utility in the same county as that area. 138-17 (V.A.C.S. Art. 1446c-0, Sec. 2.213.) 138-18 Sec. 36.006. BURDEN OF PROOF. In a proceeding involving a 138-19 proposed rate change, the electric utility has the burden of 138-20 proving that: 138-21 (1) the rate change is just and reasonable, if the 138-22 utility proposes the change; or 138-23 (2) an existing rate is just and reasonable, if the 138-24 proposal is to reduce the rate. (V.A.C.S. Art. 1446c-0, Sec. 138-25 2.204.) 138-26 Sec. 36.007. DISCOUNTED WHOLESALE OR RETAIL RATES. (a) On 138-27 application by an electric utility, a regulatory authority may 139-1 approve wholesale or retail tariffs or contracts containing charges 139-2 that are less than rates approved by the regulatory authority but 139-3 not less than the utility's marginal cost. The charges must be in 139-4 accordance with the principles of this title and may not be 139-5 unreasonably preferential, prejudicial, discriminatory, predatory, 139-6 or anticompetitive. 139-7 (b) The method for computing the marginal cost of the 139-8 electric utility consists of energy and capacity components. The 139-9 energy component includes variable operation and maintenance 139-10 expense and marginal fuel or the energy component of purchased 139-11 power. The capacity component is based on the annual economic 139-12 value of deferring, accelerating, or avoiding the next increment of 139-13 needed capacity, without regard to whether the capacity is 139-14 purchased or built. 139-15 (c) The commission shall ensure that the method for 139-16 determining marginal cost is consistently applied among utilities 139-17 but may recognize the individual load and resource requirements of 139-18 the electric utility. 139-19 (d) Notwithstanding any other provision of this title, the 139-20 commission shall ensure that the electric utility's allocable costs 139-21 of serving customers paying discounted rates under this section are 139-22 not borne by the utility's other customers. (V.A.C.S. 139-23 Art. 1446c-0, Secs. 2.001(b), (c), (d) (part), 2.052(b), (c).) 139-24 Sec. 36.008. STATE TRANSMISSION SYSTEM. In establishing 139-25 rates for an electric utility not required to file an integrated 139-26 resource plan, the commission may review the state's transmission 139-27 system and make recommendations to the utility on the need to build 140-1 new power lines, upgrade power lines, and make other necessary 140-2 improvements and additions. (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) 140-3 (part).) 140-4 (Sections 36.009-36.050 reserved for expansion) 140-5 SUBCHAPTER B. COMPUTATION OF RATES 140-6 Sec. 36.051. ESTABLISHING OVERALL REVENUES. In establishing 140-7 an electric utility's rates, the regulatory authority shall 140-8 establish the utility's overall revenues at an amount that will 140-9 permit the utility a reasonable opportunity to earn a reasonable 140-10 return on the utility's invested capital used and useful in 140-11 providing service to the public in excess of the utility's 140-12 reasonable and necessary operating expenses. (V.A.C.S. 140-13 Art. 1446c-0, Sec. 2.203(a).) 140-14 Sec. 36.052. ESTABLISHING REASONABLE RETURN. In 140-15 establishing a reasonable return on invested capital, the 140-16 regulatory authority shall consider applicable factors, including: 140-17 (1) the efforts of the electric utility to comply with 140-18 its most recently approved integrated resource plan; 140-19 (2) the efforts and achievements of the utility in 140-20 conserving resources; 140-21 (3) the quality of the utility's services; 140-22 (4) the efficiency of the utility's operations; and 140-23 (5) the quality of the utility's management. 140-24 (V.A.C.S. Art. 1446c-0, Sec. 2.203(b).) 140-25 Sec. 36.053. COMPONENTS OF INVESTED CAPITAL. (a) Electric 140-26 utility rates shall be based on the original cost, less 140-27 depreciation, of property used by and useful to the utility in 141-1 providing service. 141-2 (b) The original cost of property shall be determined at the 141-3 time the property is dedicated to public use, whether by the 141-4 utility that is the present owner or by a predecessor. 141-5 (c) In this section, the term "original cost" means the 141-6 actual money cost or the actual money value of consideration paid 141-7 other than money. (V.A.C.S. Art. 1446c-0, Secs. 2.206(a) (part), 141-8 (c).) 141-9 Sec. 36.054. CONSTRUCTION WORK IN PROGRESS. (a) 141-10 Construction work in progress, at cost as recorded on the electric 141-11 utility's books, may be included in the utility's rate base. The 141-12 inclusion of construction work in progress is an exceptional form 141-13 of rate relief that the regulatory authority may grant only if the 141-14 utility demonstrates that inclusion is necessary to the utility's 141-15 financial integrity. 141-16 (b) Construction work in progress may not be included in the 141-17 rate base for a major project under construction to the extent that 141-18 the project has been inefficiently or imprudently planned or 141-19 managed. (V.A.C.S. Art. 1446c-0, Secs. 2.206(a) (part), (b).) 141-20 Sec. 36.055. SEPARATIONS AND ALLOCATIONS. Costs of 141-21 facilities, revenues, expenses, taxes, and reserves shall be 141-22 separated or allocated as prescribed by the regulatory authority. 141-23 (V.A.C.S. Art. 1446c-0, Sec. 2.207.) 141-24 Sec. 36.056. DEPRECIATION, AMORTIZATION, AND DEPLETION. (a) 141-25 The commission shall establish proper and adequate rates and 141-26 methods of depreciation, amortization, or depletion for each class 141-27 of property of an electric or municipally owned utility. 142-1 (b) The rates and methods established under this section and 142-2 the depreciation account required by Section 32.102 shall be used 142-3 uniformly and consistently throughout rate-setting and appeal 142-4 proceedings. (V.A.C.S. Art. 1446c-0, Secs. 2.151(a) (part), (d).) 142-5 Sec. 36.057. NET INCOME; DETERMINATION OF REVENUES AND 142-6 EXPENSES. (a) An electric utility's net income is the total 142-7 revenues of the utility less all reasonable and necessary expenses 142-8 as determined by the regulatory authority. 142-9 (b) The regulatory authority shall determine revenues and 142-10 expenses in a manner consistent with this subchapter. 142-11 (c) The regulatory authority may adopt reasonable rules with 142-12 respect to whether an expense is allowed for ratemaking purposes. 142-13 (V.A.C.S. Art. 1446c-0, Secs. 2.208(a), (e).) 142-14 Sec. 36.058. CONSIDERATION OF PAYMENT TO AFFILIATE. (a) 142-15 Except as provided by Subsection (b), the regulatory authority may 142-16 not allow as capital cost or as expense a payment to an affiliate 142-17 for: 142-18 (1) the cost of a service, property, right, or other 142-19 item; or 142-20 (2) interest expense. 142-21 (b) The regulatory authority may allow a payment described 142-22 by Subsection (a) only to the extent that the regulatory authority 142-23 finds the payment is reasonable and necessary for each item or 142-24 class of items as determined by the commission. 142-25 (c) A finding under Subsection (b) must include: 142-26 (1) a specific finding of the reasonableness and 142-27 necessity of each item or class of items allowed; and 143-1 (2) a finding that the price to the electric utility 143-2 is not higher than the prices charged by the supplying affiliate to 143-3 its other affiliates or divisions or to a nonaffiliated person for 143-4 the same item or class of items. 143-5 (d) In making a finding regarding an affiliate transaction, 143-6 including an affiliate transaction subject to Chapter 34, the 143-7 regulatory authority shall: 143-8 (1) determine the extent to which the conditions and 143-9 circumstances of that transaction are reasonably comparable 143-10 relative to quantity, terms, date of contract, and place of 143-11 delivery; and 143-12 (2) allow for appropriate differences based on that 143-13 determination. 143-14 (e) This section does not require a finding to be made 143-15 before payments made by an electric utility to an affiliate are 143-16 included in the utility's charges to consumers if there is a 143-17 mechanism for making the charges subject to refund pending the 143-18 making of the finding. (V.A.C.S. Art. 1446c-0, Sec. 2.208(b).) 143-19 Sec. 36.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 143-20 determining the allocation of tax savings derived from liberalized 143-21 depreciation and amortization, the investment tax credit, and the 143-22 application of similar methods, the regulatory authority shall: 143-23 (1) balance equitably the interests of present and 143-24 future customers; and 143-25 (2) apportion accordingly the benefits between 143-26 consumers and the electric or municipally owned utility. 143-27 (b) If an electric utility or a municipally owned utility 144-1 retains a portion of the investment tax credit, that portion shall 144-2 be deducted from the original cost of the facilities or other 144-3 addition to the rate base to which the credit applied to the extent 144-4 allowed by the Internal Revenue Code. (V.A.C.S. Art. 1446c-0, 144-5 Secs. 2.151(c), (d).) 144-6 Sec. 36.060. CONSOLIDATED INCOME TAX RETURNS. (a) Unless 144-7 it is shown to the satisfaction of the regulatory authority that it 144-8 was reasonable to choose not to consolidate returns, an electric 144-9 utility's income taxes shall be computed as though a consolidated 144-10 return had been filed and the utility had realized its fair share 144-11 of the savings resulting from that return, if: 144-12 (1) the utility is a member of an affiliated group 144-13 eligible to file a consolidated income tax return; and 144-14 (2) it is advantageous to the utility to do so. 144-15 (b) The amount of income tax that a consolidated group of 144-16 which an electric utility is a member saves, because the 144-17 consolidated return eliminates the intercompany profit on purchases 144-18 by the utility from an affiliate, shall be applied to reduce the 144-19 cost of the property or service purchased from the affiliate. 144-20 (c) The investment tax credit allowed against federal income 144-21 taxes, to the extent retained by the electric utility, shall be 144-22 applied as a reduction in the rate-based contribution of the assets 144-23 to which the credit applies, to the extent and at the rate allowed 144-24 by the Internal Revenue Code. (V.A.C.S. Art. 1446c-0, Sec. 144-25 2.208(c).) 144-26 Sec. 36.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The 144-27 regulatory authority may not allow as a cost or expense for 145-1 ratemaking purposes: 145-2 (1) an expenditure for legislative advocacy; or 145-3 (2) an expenditure described by Section 32.104 that 145-4 the regulatory authority determines to be not in the public 145-5 interest. 145-6 (b) The regulatory authority may allow as a cost or expense: 145-7 (1) reasonable charitable or civic contributions not 145-8 to exceed the amount approved by the regulatory authority; and 145-9 (2) reasonable costs of participating in a proceeding 145-10 under this title not to exceed the amount approved by the 145-11 regulatory authority. (V.A.C.S. Art. 1446c-0, Secs. 2.152(b), 145-12 (c), (d), (e).) 145-13 Sec. 36.062. CONSIDERATION OF CERTAIN EXPENSES. The 145-14 regulatory authority may not consider for ratemaking purposes: 145-15 (1) an expenditure for legislative advocacy, made 145-16 directly or indirectly, including legislative advocacy expenses 145-17 included in trade association dues; 145-18 (2) a payment made to cover costs of an accident, 145-19 equipment failure, or negligence at a utility facility owned by a 145-20 person or governmental entity not selling power in this state, 145-21 other than a payment made under an insurance or risk-sharing 145-22 arrangement executed before the date of loss; 145-23 (3) an expenditure for costs of processing a refund or 145-24 credit under Section 36.110; or 145-25 (4) any other expenditure, including an executive 145-26 salary, advertising expense, legal expense, or civil penalty or 145-27 fine, the regulatory authority finds to be unreasonable, 146-1 unnecessary, or not in the public interest. (V.A.C.S. 146-2 Art. 1446c-0, Sec. 2.208(d).) 146-3 Sec. 36.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 146-4 LEASE OF MERCHANDISE. In establishing an electric or municipally 146-5 owned utility's rates, the regulatory authority may not consider 146-6 any profit or loss that results from the sale or lease of 146-7 merchandise, including appliances, fixtures, or equipment, to the 146-8 extent that merchandise is not integral to providing utility 146-9 service. (V.A.C.S. Art. 1446c-0, Secs. 2.151(b) (part), (d).) 146-10 Sec. 36.064. SELF-INSURANCE. (a) An electric utility may 146-11 self-insure all or part of the utility's potential liability or 146-12 catastrophic property loss, including windstorm, fire, and 146-13 explosion losses, that could not have been reasonably anticipated 146-14 and included under operating and maintenance expenses. 146-15 (b) The commission shall approve a self-insurance plan under 146-16 this section if the commission finds that: 146-17 (1) the coverage is in the public interest; 146-18 (2) the plan, considering all costs, is a lower cost 146-19 alternative to purchasing commercial insurance; and 146-20 (3) ratepayers will receive the benefits of the 146-21 savings. 146-22 (c) In computing an electric utility's reasonable and 146-23 necessary expenses under this subchapter, the regulatory authority, 146-24 to the extent the regulatory authority finds is in the public 146-25 interest, shall allow as a necessary expense the money credited to 146-26 a reserve account for self-insurance. The regulatory authority 146-27 shall determine reasonableness under this subsection: 147-1 (1) from information provided at the time the 147-2 self-insurance plan and reserve account are established; and 147-3 (2) on the filing of a rate case by an electric 147-4 utility that has a reserve account. 147-5 (d) After a reserve account for self-insurance is 147-6 established, the regulatory authority shall: 147-7 (1) determine whether the reserve account has a 147-8 surplus or shortage under Subsection (e); and 147-9 (2) subtract any surplus from or add any shortage to 147-10 the utility's rate base. 147-11 (e) A surplus in the reserve account exists if the charges 147-12 against the account are less than the money credited to the 147-13 account. A shortage in the reserve account exists if the charges 147-14 against the account are greater than the money credited to the 147-15 account. 147-16 (f) The allowance for self-insurance under this title for 147-17 ratemaking purposes is not applicable to nuclear plant investment. 147-18 (g) The commission shall adopt rules governing 147-19 self-insurance under this section. (V.A.C.S. Art. 1446c-0, Sec. 147-20 2.210.) 147-21 (Sections 36.065-36.100 reserved for expansion) 147-22 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE CHANGES 147-23 PROPOSED BY UTILITY 147-24 Sec. 36.101. DEFINITION. In this subchapter, "major change" 147-25 means an increase in rates that would increase the aggregate 147-26 revenues of the applicant more than the greater of $100,000 or 147-27 2-1/2 percent. The term does not include an increase in rates that 148-1 the regulatory authority allows to go into effect or the electric 148-2 utility makes under an order of the regulatory authority after 148-3 hearings held with public notice. (V.A.C.S. Art. 1446c-0, Sec. 148-4 2.212(b) (part).) 148-5 Sec. 36.102. STATEMENT OF INTENT TO CHANGE RATES. (a) 148-6 Except as provided by Section 33.024, an electric utility may not 148-7 change its rates unless the utility files a statement of its intent 148-8 with the regulatory authority that has original jurisdiction over 148-9 those rates at least 35 days before the effective date of the 148-10 proposed change. 148-11 (b) The electric utility shall also mail or deliver a copy 148-12 of the statement of intent to the appropriate officer of each 148-13 affected municipality. 148-14 (c) The statement of intent must include: 148-15 (1) proposed revisions of tariffs; and 148-16 (2) a detailed statement of: 148-17 (A) each proposed change; 148-18 (B) the effect the proposed change is expected 148-19 to have on the revenues of the utility; 148-20 (C) each class and number of utility consumers 148-21 affected; and 148-22 (D) any other information required by the 148-23 regulatory authority's rules. (V.A.C.S. Art. 1446c-0, Sec. 148-24 2.212(a) (part).) 148-25 Sec. 36.103. NOTICE OF INTENT TO CHANGE RATES. (a) The 148-26 electric utility shall: 148-27 (1) publish, in conspicuous form and place, notice to 149-1 the public of the proposed change once each week for four 149-2 successive weeks before the effective date of the proposed change 149-3 in a newspaper having general circulation in each county containing 149-4 territory affected by the proposed change; and 149-5 (2) mail notice of the proposed change to any other 149-6 affected person as required by the regulatory authority's rules. 149-7 (b) The regulatory authority may waive the publication of 149-8 notice requirement prescribed by Subsection (a) in a proceeding 149-9 that involves only a rate reduction for each affected ratepayer. 149-10 The applicant shall give notice of the proposed rate change by mail 149-11 to each affected utility customer. 149-12 (c) The regulatory authority by rule shall define other 149-13 proceedings for which the publication of notice requirement 149-14 prescribed by Subsection (a) may be waived on a showing of good 149-15 cause. A waiver may not be granted in a proceeding involving a 149-16 rate increase to any class or category of ratepayer. (V.A.C.S. 149-17 Art. 1446c-0, Sec. 2.212(a) (part).) 149-18 Sec. 36.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For 149-19 good cause shown, the regulatory authority may allow a rate change, 149-20 other than a major change, to take effect: 149-21 (1) before the end of the 35-day period prescribed by 149-22 Section 36.102; and 149-23 (2) under conditions the regulatory authority 149-24 prescribes, subject to suspension as provided by this subchapter. 149-25 (b) The electric utility shall immediately revise its 149-26 tariffs to include the change. (V.A.C.S. Art. 1446c-0, Sec. 149-27 2.212(b) (part).) 150-1 Sec. 36.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 150-2 HEARING. (a) If a tariff changing rates is filed with a 150-3 regulatory authority, the regulatory authority shall, on complaint 150-4 by an affected person, or may, on its own motion, not later than 150-5 the 30th day after the effective date of the change, enter on a 150-6 hearing to determine the propriety of the change. 150-7 (b) The regulatory authority shall hold a hearing in every 150-8 case in which the change constitutes a major change. The 150-9 regulatory authority may, however, use an informal proceeding if 150-10 the regulatory authority does not receive a complaint before the 150-11 46th day after the date notice of the change is filed. 150-12 (c) The regulatory authority shall give reasonable notice of 150-13 the hearing, including notice to the governing body of each 150-14 affected municipality and county. The electric utility is not 150-15 required to provide a formal answer or file any other formal 150-16 pleading in response to the notice, and the absence of an answer 150-17 does not affect an order for a hearing. (V.A.C.S. Art. 1446c-0, 150-18 Sec. 2.212(c) (part).) 150-19 Sec. 36.106. REGIONAL HEARING. The commission shall hold a 150-20 regional hearing at an appropriate location in a case in which the 150-21 commission determines it is in the public interest to hear 150-22 testimony at a regional hearing for inclusion in the record. 150-23 (V.A.C.S. Art. 1446c-0, Sec. 2.212(c) (part).) 150-24 Sec. 36.107. PREFERENCE TO HEARING. The regulatory 150-25 authority shall: 150-26 (1) give preference to a hearing under this subchapter 150-27 and to deciding questions arising under this subchapter and 151-1 Subchapter E over any other question pending before it; and 151-2 (2) decide the questions as quickly as possible. 151-3 (V.A.C.S. Art. 1446c-0, Sec. 2.212(d) (part).) 151-4 Sec. 36.108. RATE SUSPENSION; DEADLINE. (a) Pending the 151-5 hearing and a decision: 151-6 (1) the local regulatory authority, after delivering 151-7 to the electric utility a written statement of the regulatory 151-8 authority's reasons, may suspend the rate change for not longer 151-9 than 90 days after the date the rate change would otherwise be 151-10 effective; and 151-11 (2) the commission may suspend the rate change for not 151-12 longer than 150 days after the date the rate change would otherwise 151-13 be effective. 151-14 (b) The 150-day period prescribed by Subsection (a)(2) shall 151-15 be extended two days for each day the actual hearing on the merits 151-16 of the case exceeds 15 days. 151-17 (c) If the regulatory authority does not make a final 151-18 determination concerning a rate change before expiration of the 151-19 applicable suspension period, the regulatory authority is 151-20 considered to have approved the change. This approval is subject 151-21 to the authority of the regulatory authority thereafter to continue 151-22 a hearing in progress. (V.A.C.S. Art. 1446c-0, Sec. 2.212(d) 151-23 (part).) 151-24 Sec. 36.109. TEMPORARY RATES. (a) The regulatory authority 151-25 may establish temporary rates to be in effect during the applicable 151-26 suspension period under Section 36.108. 151-27 (b) If the regulatory authority does not establish temporary 152-1 rates, the rates in effect when the suspended tariff was filed 152-2 continue in effect during the suspension period. (V.A.C.S. 152-3 Art. 1446c-0, Sec. 2.212(d) (part).) 152-4 Sec. 36.110. BONDED RATES. (a) An electric utility may put 152-5 a changed rate into effect throughout the area in which the utility 152-6 sought to change its rates, including an area over which the 152-7 commission is exercising appellate or original jurisdiction, by 152-8 filing a bond with the commission if: 152-9 (1) the 150-day suspension period has been extended 152-10 under Section 36.108(b); and 152-11 (2) the commission fails to make a final determination 152-12 before the 151st day after the date the rate change would otherwise 152-13 be effective. 152-14 (b) The bonded rate may not exceed the proposed rate. 152-15 (c) The bond must be: 152-16 (1) payable to the commission in an amount, in a form, 152-17 and with a surety approved by the commission; and 152-18 (2) conditioned on refund. 152-19 (d) The electric utility shall refund or credit against 152-20 future bills: 152-21 (1) money collected under the bonded rates in excess 152-22 of the rate finally ordered; and 152-23 (2) interest on that money, at the current interest 152-24 rate as determined by the commission. (V.A.C.S. Art. 1446c-0, Sec. 152-25 2.212(e).) 152-26 Sec. 36.111. ESTABLISHMENT OF FINAL RATES. (a) If, after 152-27 hearing, the regulatory authority finds the rates are unreasonable 153-1 or in violation of law, the regulatory authority shall: 153-2 (1) enter an order establishing the rates the electric 153-3 utility shall charge or apply for the service in question; and 153-4 (2) serve a copy of the order on the electric utility. 153-5 (b) The rates established in the order shall be observed 153-6 thereafter until changed as provided by this title. (V.A.C.S. 153-7 Art. 1446c-0, Sec. 2.212(f).) 153-8 (Sections 36.112-36.150 reserved for expansion) 153-9 SUBCHAPTER D. RATE CHANGES PROPOSED BY REGULATORY AUTHORITY 153-10 Sec. 36.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. (a) 153-11 If the regulatory authority, on its own motion or on complaint by 153-12 an affected person, after reasonable notice and hearing, finds that 153-13 the existing rates of an electric utility for a service are 153-14 unreasonable or in violation of law, the regulatory authority 153-15 shall: 153-16 (1) enter an order establishing the just and 153-17 reasonable rates to be observed thereafter, including maximum or 153-18 minimum rates; and 153-19 (2) serve a copy of the order on the electric utility. 153-20 (b) The rates established under Subsection (a) constitute 153-21 the legal rates of the electric utility until changed as provided 153-22 by this title. (V.A.C.S. Art. 1446c-0, Sec. 2.211(a).) 153-23 Sec. 36.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 153-24 ANOTHER SOURCE. If an electric utility does not produce or 153-25 generate the service that it distributes, transmits, or furnishes 153-26 to the public for compensation but obtains the service from another 153-27 source, the regulatory authority may investigate the cost of that 154-1 production or generation in an investigation of the reasonableness 154-2 of the electric utility's rates. (V.A.C.S. Art. 1446c-0, Sec. 154-3 2.211(b).) 154-4 Sec. 36.153. RATE-FILING PACKAGE. (a) An electric utility 154-5 shall file a rate-filing package with the regulatory authority not 154-6 later than the 120th day after the date the authority notifies the 154-7 utility that the authority will proceed with an inquiry under 154-8 Section 36.151. 154-9 (b) The regulatory authority may grant an extension of the 154-10 120-day period prescribed by Subsection (a) or waive the 154-11 rate-filing package requirement on agreement of the parties. 154-12 (V.A.C.S. Art. 1446c-0, Sec. 2.211(c) (part).) 154-13 Sec. 36.154. DEADLINE. (a) The regulatory authority shall 154-14 make a final determination not later than the 185th day after the 154-15 date the electric utility files the rate-filing package required by 154-16 Section 36.153. 154-17 (b) The deadline prescribed by Subsection (a) is extended 154-18 two days for each day the actual hearing on the merits of the case 154-19 exceeds 15 days. (V.A.C.S. Art. 1446c-0, Sec. 2.211(c) (part).) 154-20 Sec. 36.155. INTERIM ORDER ESTABLISHING TEMPORARY RATES. 154-21 (a) At any time after an initial complaint is filed under Section 154-22 36.151, the regulatory authority may issue an interim order 154-23 establishing temporary rates for the electric utility to be in 154-24 effect until a final determination is made. 154-25 (b) On issuance of a final order, the regulatory authority: 154-26 (1) may require the electric utility to refund to 154-27 customers or to credit against future bills: 155-1 (A) money collected under the temporary rates in 155-2 excess of the rate finally ordered; and 155-3 (B) interest on that money, at the current 155-4 interest rate as determined by the commission; or 155-5 (2) shall authorize the electric utility to surcharge 155-6 bills to recover: 155-7 (A) the amount by which the money collected 155-8 under the temporary rates is less than the money that would have 155-9 been collected under the rate finally ordered; and 155-10 (B) interest on that amount, at the current 155-11 interest rate as determined by the commission. (V.A.C.S. 155-12 Art. 1446c-0, Sec. 2.211(d).) 155-13 Sec. 36.156. AUTOMATIC TEMPORARY RATES. (a) The rates 155-14 charged by the electric utility on the 185th day after the date the 155-15 utility files the rate-filing package required by Section 36.153 155-16 automatically become temporary rates if: 155-17 (1) the 185-day period has been extended under Section 155-18 36.154(b); and 155-19 (2) the regulatory authority has not issued a final 155-20 order or established temporary rates for the electric utility on or 155-21 before the 185th day. 155-22 (b) On issuance of a final order, the regulatory authority: 155-23 (1) shall require the electric utility to refund to 155-24 customers or to credit against future bills: 155-25 (A) money collected under the temporary rates in 155-26 excess of the rate finally ordered; and 155-27 (B) interest on that money, at the current 156-1 interest rate as determined by the commission; or 156-2 (2) shall authorize the electric utility to surcharge 156-3 bills to recover: 156-4 (A) the amount by which the money collected 156-5 under the temporary rates is less than the money that would have 156-6 been collected under the rate finally ordered; and 156-7 (B) interest on that amount, at the current 156-8 interest rate as determined by the commission. (V.A.C.S. 156-9 Art. 1446c-0, Sec. 2.211(e).) 156-10 (Sections 36.157-36.200 reserved for expansion) 156-11 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENT 156-12 Sec. 36.201. AUTOMATIC ADJUSTMENT FOR CHANGES IN COSTS. 156-13 Except as permitted by Chapter 34 or Section 36.204, the commission 156-14 may not establish a rate or tariff that authorizes an electric 156-15 utility to automatically adjust and pass through to the utility's 156-16 customers a change in the utility's fuel or other costs. (V.A.C.S. 156-17 Art. 1446c-0, Sec. 2.212(g)(1).) 156-18 Sec. 36.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY. (a) 156-19 The commission, on its own motion or on the petition of an electric 156-20 utility, shall provide for the adjustment of the utility's billing 156-21 to reflect an increase or decrease in the utility's tax liability 156-22 to this state if the increase or decrease: 156-23 (1) results from Chapter 5, Acts of the 72nd 156-24 Legislature, 1st Called Session, 1991; and 156-25 (2) is attributable to an activity subject to the 156-26 commission's jurisdiction. 156-27 (b) The commission shall apportion pro rata to each type and 157-1 class of service provided by the utility any billing adjustment 157-2 under this section. The adjustment: 157-3 (1) shall be made effective at the same time as the 157-4 increase or decrease of tax liability described by Subsection 157-5 (a)(1) or as soon after that increase or decrease as is reasonably 157-6 practical; and 157-7 (2) remains effective only until the commission alters 157-8 the adjustment as provided by this section or enters an order for 157-9 the utility under Subchapter C or D. 157-10 (c) Each year after an original adjustment, the commission 157-11 shall: 157-12 (1) review the utility's increase or decrease of tax 157-13 liability described by Subsection (a)(1); and 157-14 (2) alter the adjustment as necessary to reflect the 157-15 increase or decrease. 157-16 (d) A proceeding under this section is not a rate case under 157-17 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.212(h).) 157-18 Sec. 36.203. FUEL COST RECOVERY; ADJUSTMENT OF FUEL FACTOR. 157-19 (a) Section 36.201 does not prohibit the commission from reviewing 157-20 and providing for adjustments of a utility's fuel factor. 157-21 (b) The commission by rule shall implement procedures that 157-22 provide for the timely adjustment of a utility's fuel factor, with 157-23 or without a hearing. The procedures must require that: 157-24 (1) the findings required by Section 36.058 regarding 157-25 fuel transactions with affiliated interests are made in a fuel 157-26 reconciliation proceeding or in a rate case filed under Subchapter 157-27 C or D; and 158-1 (2) an affected party receive notice and have the 158-2 opportunity to request a hearing before the commission. 158-3 (c) The commission may adjust a utility's fuel factor 158-4 without a hearing if the commission determines that a hearing is 158-5 not necessary. If the commission holds a hearing, the commission 158-6 may consider at the hearing any evidence that is appropriate and in 158-7 the public interest. 158-8 (d) The commission shall render a timely decision approving, 158-9 disapproving, or modifying the adjustment to the utility's fuel 158-10 factor. 158-11 (e) The commission by rule shall provide for the 158-12 reconciliation of a utility's fuel costs on a timely basis. 158-13 (f) A proceeding under this section is not a rate case under 158-14 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.212(g)(2).) 158-15 Sec. 36.204. COST RECOVERY AND INCENTIVES. In establishing 158-16 rates for an electric utility not required to file an integrated 158-17 resource plan, the commission may: 158-18 (1) allow timely recovery of the reasonable costs of 158-19 conservation, load management, and purchased power, notwithstanding 158-20 Section 36.201; and 158-21 (2) authorize additional incentives for conservation, 158-22 load management, purchased power, and renewable resources. 158-23 (V.A.C.S. Art. 1446c-0, Sec. 2.051(w) (part).) 158-24 Sec. 36.205. PURCHASED POWER COST RECOVERY. (a) This 158-25 section applies only to an increase or decrease in the cost of 158-26 purchased electricity that has been: 158-27 (1) accepted by a federal regulatory authority; or 159-1 (2) approved after a hearing by the commission. 159-2 (b) The commission may use any appropriate method to provide 159-3 for the adjustment of the cost of purchased electricity on terms 159-4 determined by the commission. 159-5 (c) Purchased electricity costs may be recovered: 159-6 (1) concurrently with the effective date of the 159-7 changed costs to the purchasing electric utility; or 159-8 (2) as soon after the effective date as reasonably 159-9 practical. 159-10 (d) The commission may provide a mechanism to allow an 159-11 electric utility that has a noncontiguous geographical service area 159-12 and that purchases power for resale for that noncontiguous service 159-13 area from electric utilities that are not members of the Electric 159-14 Reliability Council of Texas to recover purchased power costs for 159-15 the area in a manner that reflects the purchased power cost for 159-16 that specific geographical noncontiguous area. The commission may 159-17 not require an electric cooperative corporation to use the 159-18 mechanism provided under this section unless the electric 159-19 cooperative corporation requests its use. (V.A.C.S. Art. 1446c-0, 159-20 Sec. 2.212(g)(3).) 159-21 Sec. 36.206. MARK-UPS. (a) A cost recovery factor 159-22 established for the recovery of purchased power costs may include: 159-23 (1) the cost the electric utility incurs in purchasing 159-24 capacity and energy; 159-25 (2) a mark-up added to the cost or another mechanism 159-26 the commission determines will reasonably compensate the utility 159-27 for any financial risk associated with purchased power obligations; 160-1 and 160-2 (3) the value added by the utility in making the 160-3 purchased power available to customers. 160-4 (b) The mark-ups and cost recovery factors, if allowed, may 160-5 be those necessary to encourage the electric utility to include 160-6 economical purchased power as part of the utility's energy and 160-7 capacity resource supply plan. (V.A.C.S. Art. 1446c-0, Sec. 160-8 2.1511.) 160-9 Sec. 36.207. USE OF MARK-UPS. Any mark-ups approved under 160-10 Chapter 34 or Section 36.206 are an exceptional form of rate relief 160-11 that the electric utility may recover from ratepayers only on a 160-12 finding by the commission that the relief is necessary to maintain 160-13 the utility's financial integrity. (V.A.C.S. Art. 1446c-0, Sec. 160-14 2.001(d) (part).) 160-15 Sec. 36.208. PAYMENT TO QUALIFYING FACILITY. In 160-16 establishing an electric utility's rates, the regulatory authority 160-17 shall: 160-18 (1) consider a payment made to a qualifying facility 160-19 under an agreement certified under Subchapter C, Chapter 35, to be 160-20 a reasonable and necessary operating expense of the electric 160-21 utility during the period for which the certification is effective; 160-22 and 160-23 (2) allow full, concurrent, and monthly recovery of 160-24 the amount of the payment. (V.A.C.S. Art. 1446c-0, Sec. 160-25 2.209(e).) 160-26 (Sections 36.209-36.250 reserved for expansion) 161-1 SUBCHAPTER F. PARTIAL RATE DEREGULATION AVAILABLE 161-2 TO CERTAIN COOPERATIVES 161-3 Sec. 36.251. ELECTRIC COOPERATIVE EXEMPTION. An electric 161-4 cooperative corporation providing retail electric utility service 161-5 at distribution voltage is exempt from rate regulation if: 161-6 (1) a majority of the members voting in an election on 161-7 the deregulation of the electric cooperative approve the exemption; 161-8 and 161-9 (2) the electric cooperative sends notice of the 161-10 action to each applicable regulatory authority. (V.A.C.S. 161-11 Art. 1446c-0, Sec. 2.2011(a) (part).) 161-12 Sec. 36.252. ELECTION ON EXEMPTION. (a) An electric 161-13 cooperative holding an election under Section 36.251 shall mail a 161-14 ballot to each electric cooperative member. The cooperative may 161-15 include the ballot in a monthly billing. 161-16 (b) The ballot shall be printed to permit voting for or 161-17 against rate deregulation of the electric cooperative. 161-18 (c) If the proposition is approved, the electric cooperative 161-19 shall send the ballots to the commission not later than the 10th 161-20 day after the date the electric cooperative counts the ballots. 161-21 (d) The commission shall administratively certify whether 161-22 the electric cooperative is deregulated for ratemaking purposes 161-23 based on the ballots received under Subsection (c). (V.A.C.S. 161-24 Art. 1446c-0, Sec. 2.2011(a) (part).) 161-25 Sec. 36.253. EFFECT OF ELECTION. (a) Except as provided by 161-26 Section 36.307, a regulatory authority may not establish or 161-27 regulate an electric cooperative's rates if the cooperative elects 162-1 under Section 36.252 to be exempt from rate regulation. 162-2 (b) Notwithstanding Section 33.001, the commission has 162-3 exclusive original jurisdiction in the electric cooperative's 162-4 service area in a proceeding initiated under Section 36.307. 162-5 (V.A.C.S. Art. 1446c-0, Sec. 2.2011(b).) 162-6 Sec. 36.254. APPLICATION OF OTHER PROVISIONS. (a) This 162-7 subchapter does not affect the application of a provision of this 162-8 title not directly related to: 162-9 (1) rates; or 162-10 (2) the authority of the commission to require an 162-11 electric cooperative to file a report required under this title or 162-12 under the commission's rules. 162-13 (b) A service fee or a service rule set by an electric 162-14 cooperative under this subchapter must comply with commission rules 162-15 that apply to all electric utilities. 162-16 (c) The commission may determine if an electric cooperative 162-17 has unlawfully charged or received a rate for electric utility 162-18 service. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(n).) 162-19 Sec. 36.255. SUBSEQUENT ELECTION; REVOCATION. (a) An 162-20 electric cooperative may not hold an election on the issue of its 162-21 exemption from rate regulation before the first anniversary of the 162-22 most recent election on the issue. 162-23 (b) Except as provided by Subsection (a), the members of an 162-24 electric cooperative may, by a majority vote of the members voting, 162-25 at any time: 162-26 (1) revoke the electric cooperative's election to be 162-27 exempt from rate regulation; or 163-1 (2) elect to be exempt from rate regulation. 163-2 (V.A.C.S. Art. 1446c-0, Secs. 2.2011(a) (part), (m).) 163-3 (Sections 36.256-36.300 reserved for expansion) 163-4 SUBCHAPTER G. RATE CHANGES BY CERTAIN 163-5 ELECTRIC COOPERATIVES 163-6 Sec. 36.301. APPLICATION OF SUBCHAPTER. This subchapter 163-7 applies to an electric cooperative that has elected to be exempt 163-8 from rate regulation under Subchapter F. (V.A.C.S. Art. 1446c-0, 163-9 Secs. 2.2011(a) (part), (p) (part).) 163-10 Sec. 36.302. METHODS OF CHANGING RATES. (a) An electric 163-11 cooperative may change its rates by: 163-12 (1) adopting a resolution approving the proposed 163-13 change; 163-14 (2) mailing notice of the proposed change to: 163-15 (A) the commission; 163-16 (B) each affected municipality and customer; and 163-17 (C) each electric utility providing retail 163-18 service in the electric cooperative's service area or in an 163-19 adjoining service area; and 163-20 (3) making available for review by any person at each 163-21 of the electric cooperative's business offices, a cost-of-service 163-22 study that: 163-23 (A) was prepared not earlier than the fifth 163-24 anniversary before the date the electric cooperative adopts rates 163-25 under this subchapter; and 163-26 (B) is certified by a professional engineer or 163-27 certified public accountant. 164-1 (b) The electric cooperative may satisfy the customer 164-2 notification requirement by including the notice in a monthly 164-3 billing. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(c).) 164-4 Sec. 36.303. CONTENTS OF NOTICE. (a) The notice required 164-5 by Section 36.302 must include: 164-6 (1) information concerning the increase or decrease in 164-7 total operating revenues over actual test year revenues or over 164-8 test year revenues adjusted to annualize the recovery of changes in 164-9 the cost of purchased electricity, stated as a dollar amount and as 164-10 a percentage; 164-11 (2) information concerning the classes of utility 164-12 customers affected; 164-13 (3) information concerning the creation and 164-14 application of any new rate classes; 164-15 (4) information concerning the increase or decrease 164-16 for each class stated as a percentage of actual test year revenues 164-17 for the class or of test year revenues for the class adjusted to 164-18 annualize the recovery of changes in the cost of purchased 164-19 electricity; 164-20 (5) a statement that the commission may review the 164-21 rate change if the commission receives, not later than the 60th day 164-22 after the date the notice is received, a petition that complies 164-23 with Section 36.307; 164-24 (6) the address and telephone number of the 164-25 commission; 164-26 (7) a statement that a customer opposed to the rate 164-27 change should notify the electric cooperative in writing of the 165-1 person's opposition and provide a return address; and 165-2 (8) a statement that a member may review a copy of any 165-3 written opposition the electric cooperative receives. 165-4 (b) The electric cooperative may not be required to provide 165-5 additional information in the notice. (V.A.C.S. Art. 1446c-0, Sec. 165-6 2.2011(d).) 165-7 Sec. 36.304. ACCESS TO WRITTEN OPPOSITION. An electric 165-8 cooperative shall make available for review by a member of the 165-9 cooperative at each of the electric cooperative's business offices 165-10 a copy of written opposition to a rate change received by the 165-11 cooperative. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(e).) 165-12 Sec. 36.305. TARIFFS; EFFECTIVE DATE OF RATE CHANGES. (a) 165-13 An electric cooperative shall file tariffs with the commission. 165-14 (b) If the electric cooperative complies with Section 165-15 36.302, the commission shall approve the tariffs not later than the 165-16 10th day after the 60-day period prescribed by Section 36.307(a) 165-17 unless a review is required under that section. 165-18 (c) If the tariffs are approved or if a review is not 165-19 required and the commission fails to act on or before the deadline 165-20 prescribed by Subsection (b), the change in rates is effective on: 165-21 (1) the 70th day after the date the electric 165-22 cooperative first complies with each requirement prescribed by 165-23 Section 36.302; or 165-24 (2) a later date determined by the electric 165-25 cooperative. 165-26 (d) Except as provided by Section 36.307, the rates of the 165-27 electric cooperative are not subject to review. (V.A.C.S. 166-1 Art. 1446c-0, Sec. 2.2011(f).) 166-2 Sec. 36.306. DISCOUNTED RATES. (a) An electric cooperative 166-3 may, by resolution, adopt retail tariffs or contracts containing 166-4 charges that are less than the average embedded cost retail rates 166-5 but that are not less than the electric cooperative's marginal 166-6 cost. 166-7 (b) The standards described in Section 36.007 apply to the 166-8 review of rates adopted under Subsection (a). In a review of the 166-9 rates, the electric cooperative's marginal cost shall be the lowest 166-10 marginal cost of any of the cooperative's wholesale power 166-11 suppliers. (V.A.C.S. Art. 1446c-0, Sec. 2.2011(p) (part).) 166-12 Sec. 36.307. COMMISSION REVIEW. (a) The commission shall 166-13 review a change in rates under this subchapter if, not later than 166-14 the 60th day after the date the electric cooperative first complies 166-15 with each requirement prescribed by Section 36.302, the commission 166-16 receives a petition requesting review signed by: 166-17 (1) at least 10 percent of the members of the electric 166-18 cooperative; 166-19 (2) members of the electric cooperative who purchased 166-20 more than 50 percent of the electric cooperative's annual energy 166-21 sales to a customer class in the test year, if the petition 166-22 contains a certification of the purchases; or 166-23 (3) an executive officer of an affected electric 166-24 utility, if the petition describes each particular class for which 166-25 a review is requested. 166-26 (b) A person who files a petition under Subsection (a) shall 166-27 notify the electric cooperative in writing of the action. 167-1 (c) The commission, on its own motion, may review the rates 167-2 of an electric cooperative if the commission finds that there is 167-3 good cause to believe that the electric cooperative is earning more 167-4 than a reasonable return on overall system revenues or on revenue 167-5 from a rate class. 167-6 (d) A single customer may seek a review of the rates of an 167-7 electric cooperative under Subchapter D if, in any period of 12 167-8 consecutive months during the 36 months preceding the date the 167-9 customer initiates a proceeding under Subchapter D, the customer: 167-10 (1) consumes more than 250,000,000 kwh; and 167-11 (2) purchases from the cooperative electric energy 167-12 equal to more than: 167-13 (A) 10 percent of the total energy sales of the 167-14 electric cooperative; or 167-15 (B) 7-1/2 percent of the total revenues of the 167-16 electric cooperative. 167-17 (e) A right conferred by Subsection (d) is in addition to 167-18 the rights of a customer under Subsection (a). (V.A.C.S. 167-19 Art. 1446c-0, Secs. 2.2011(g), (h), (i), (o), as added Acts 74th 167-20 Leg., R.S., Chs. 765 and 1013.) 167-21 Sec. 36.308. REVIEW REQUESTED BY COOPERATIVE MEMBER OR 167-22 COMMISSION. (a) The commission shall conduct a review under 167-23 Section 36.307(a)(1) or (2) or Section 36.307(c) in accordance with 167-24 Subchapter C and other applicable rate-setting principles of this 167-25 title, except that: 167-26 (1) the period for review does not begin until the 167-27 electric cooperative files the rate-filing package as required by 168-1 commission rules; 168-2 (2) a proposed change may not be suspended during the 168-3 pendency of the review; and 168-4 (3) the electric cooperative shall observe the rates 168-5 established by the commission until the rates are changed as 168-6 provided by this subchapter or another section of this title. 168-7 (b) Notwithstanding Subsection (a)(2), if ordered by the 168-8 commission, the electric cooperative shall refund or credit against 168-9 future bills money collected in excess of the rate finally 168-10 established by the commission. (V.A.C.S. Art. 1446c-0, Sec. 168-11 2.2011(j).) 168-12 Sec. 36.309. REVIEW REQUESTED BY AFFECTED ELECTRIC UTILITY. 168-13 (a) In a review conducted under Section 36.307(a)(3), an electric 168-14 cooperative shall file with the commission a copy of the 168-15 cost-of-service study required under Section 36.302 not later than 168-16 the 10th day after the date the electric cooperative receives 168-17 notice from an affected electric utility that a petition has been 168-18 filed. 168-19 (b) The commission shall determine for each class for which 168-20 review has been requested: 168-21 (1) the annual cost of providing service to the class, 168-22 as stated in the electric cooperative's cost-of-service study; and 168-23 (2) the revenues for the class that would be produced 168-24 by multiplying the rate established by the electric cooperative by 168-25 the annual billing units for the class, as stated in the 168-26 cost-of-service study. 168-27 (c) If the electric cooperative proposes a rate class solely 169-1 for a new customer, the electric cooperative shall: 169-2 (1) estimate the reasonable annual cost of providing 169-3 service to the class; and 169-4 (2) base class revenues on a reasonable estimate of 169-5 billing units. 169-6 (d) The rate for a class for which a review is requested 169-7 under Section 36.307(a)(3) is suspended during the pendency of the 169-8 review. 169-9 (e) The commission shall dismiss a petition for review and 169-10 approve the rates if the revenues for the class are not less than 169-11 the cost of providing service to the class. 169-12 (f) The commission shall disapprove a rate under review if 169-13 the revenues for the class are less than the cost of providing 169-14 service to the class. This action does not affect reconsideration 169-15 of the rate as a part of any subsequent ratemaking proceeding. 169-16 (g) A rate adopted by an electric cooperative is approved 169-17 and may be placed into effect if the commission fails to make its 169-18 final determination administratively not later than the 45th day 169-19 after the date the electric cooperative files its cost-of-service 169-20 study. (V.A.C.S. Art. 1446c-0, Secs. 2.2011(k), (l).) 169-21 (Sections 36.310-36.350 reserved for expansion) 169-22 SUBCHAPTER H. RATES FOR GOVERNMENTAL ENTITIES 169-23 Sec. 36.351. DISCOUNTED RATES FOR CERTAIN INSTITUTIONS OF 169-24 HIGHER EDUCATION. (a) Notwithstanding any other provision of this 169-25 title, each electric utility and municipally owned utility shall 169-26 discount charges for electric service provided to a facility of a 169-27 four-year state university, upper-level institution, Texas State 170-1 Technical College, or college. 170-2 (b) The discount is a 20-percent reduction of the utility's 170-3 base rates that would otherwise be paid under the applicable 170-4 tariffed rate. 170-5 (c) An electric or municipally owned utility is exempt from 170-6 this section if the 20-percent discount results in a reduction 170-7 equal to more than one percent of the utility's total annual 170-8 revenues. 170-9 (d) A municipally owned utility is exempt from this section 170-10 if the municipally owned utility, on September 1, 1995, discounted 170-11 base commercial rates for electric service provided to all 170-12 four-year state universities or colleges in its service area by 20 170-13 percent or more. 170-14 (e) This section does not apply to a rate charged to an 170-15 institution of higher education by a municipally owned utility that 170-16 provides a discounted rate to the state for electric services below 170-17 rates in effect on January 1, 1995, if the discounted rate provides 170-18 a greater financial discount to the state than is provided to the 170-19 institution of higher education through the discount provided by 170-20 this section. 170-21 (f) An investor-owned electric utility may not recover from 170-22 residential customers or any other customer class the assigned and 170-23 allocated costs of serving a state university or college that 170-24 receives a discount under this section. 170-25 (g) Each electric utility shall file tariffs with the 170-26 commission reflecting the discount required under this section. 170-27 The initial tariff filing is not a rate change for purposes of 171-1 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 2.2141.) 171-2 Sec. 36.352. SPECIAL RATE CLASS. Notwithstanding any other 171-3 provision of this title, if the commission, on or before September 171-4 1, 1995, approved the establishment of a separate rate class for 171-5 electric service for a university and grouped public schools in a 171-6 separate rate class, the commission shall include community 171-7 colleges in the rate class with public school customers. (V.A.C.S. 171-8 Art. 1446c-0, Sec. 2.215(c).) 171-9 Sec. 36.353. PAYMENT IN LIEU OF TAX. (a) A payment made in 171-10 lieu of a tax by a municipally owned utility to the municipality by 171-11 which the utility is owned may not be considered an expense of 171-12 operation in establishing the utility's rate for providing utility 171-13 service to a school district or hospital district. 171-14 (b) A rate a municipally owned utility receives from a 171-15 school district or hospital district may not be used to make or to 171-16 cover the cost of making payments in lieu of taxes to the 171-17 municipality that owns the utility. (V.A.C.S. Art. 1446c-0, Sec. 171-18 2.217.) 171-19 CHAPTER 37. CERTIFICATES OF CONVENIENCE 171-20 AND NECESSITY 171-21 SUBCHAPTER A. DEFINITIONS 171-22 Sec. 37.001. DEFINITIONS 171-23 (Sections 37.002-37.050 reserved for expansion) 171-24 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 171-25 Sec. 37.051. CERTIFICATE REQUIRED 171-26 Sec. 37.052. EXCEPTIONS TO CERTIFICATE REQUIREMENT 171-27 FOR SERVICE EXTENSION 172-1 Sec. 37.053. APPLICATION FOR CERTIFICATE 172-2 Sec. 37.054. NOTICE AND HEARING ON APPLICATION 172-3 Sec. 37.055. REQUEST FOR PRELIMINARY ORDER 172-4 Sec. 37.056. GRANT OR DENIAL OF CERTIFICATE 172-5 Sec. 37.057. DEADLINE FOR APPLICATION FOR NEW TRANSMISSION 172-6 FACILITY 172-7 Sec. 37.058. CERTIFICATE FOR ELECTRIC GENERATING PLANT 172-8 Sec. 37.059. REVOCATION OR AMENDMENT OF CERTIFICATE 172-9 (Sections 37.060-37.100 reserved for expansion) 172-10 SUBCHAPTER C. MUNICIPALITIES 172-11 Sec. 37.101. SERVICE IN ANNEXED OR INCORPORATED AREA 172-12 Sec. 37.102. GRANT OF CERTIFICATE FOR CERTAIN 172-13 MUNICIPALITIES 172-14 (Sections 37.103-37.150 reserved for expansion) 172-15 SUBCHAPTER D. REGULATION OF SERVICES, AREAS, AND FACILITIES 172-16 Sec. 37.151. PROVISION OF SERVICE 172-17 Sec. 37.152. GROUNDS FOR REDUCTION OF SERVICE 172-18 Sec. 37.153. REQUIRED REFUSAL OF SERVICE 172-19 Sec. 37.154. TRANSFER OF CERTIFICATE 172-20 Sec. 37.155. APPLICATION OF CONTRACTS 172-21 Sec. 37.156. INTERFERENCE WITH ANOTHER UTILITY 172-22 Sec. 37.157. MAPS 172-23 CHAPTER 37. CERTIFICATES OF CONVENIENCE 172-24 AND NECESSITY 172-25 SUBCHAPTER A. DEFINITIONS 172-26 Sec. 37.001. DEFINITIONS. In this chapter: 172-27 (1) "Certificate" means a certificate of convenience 173-1 and necessity. 173-2 (2) "Retail electric utility" means a person, 173-3 political subdivision, or agency that operates, maintains, or 173-4 controls in this state a facility to provide retail electric 173-5 utility service. The term does not include a corporation described 173-6 by Section 32.053 to the extent that the corporation sells 173-7 electricity exclusively at wholesale and not to the ultimate 173-8 consumer. A qualifying cogenerator that sells electric energy at 173-9 retail to the sole purchaser of the cogenerator's thermal output 173-10 under Sections 35.061 and 36.007 is not for that reason considered 173-11 to be a retail electric utility. (V.A.C.S. Art. 1446c-0, Secs. 173-12 2.0012(a) (part), 2.251; New.) 173-13 (Sections 37.002-37.050 reserved for expansion) 173-14 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 173-15 Sec. 37.051. CERTIFICATE REQUIRED. (a) An electric utility 173-16 may not directly or indirectly provide service to the public under 173-17 a franchise or permit unless the utility obtains from the 173-18 commission a certificate that states that the public convenience 173-19 and necessity requires or will require the installation, operation, 173-20 or extension of the service. 173-21 (b) Except as otherwise provided by this chapter, a retail 173-22 electric utility may not furnish or make available retail electric 173-23 utility service to an area in which retail electric utility service 173-24 is being lawfully furnished by another retail electric utility 173-25 unless the utility obtains a certificate that includes the area in 173-26 which the facility that receives the service is located. (V.A.C.S. 173-27 Art. 1446c-0, Sec. 2.252.) 174-1 Sec. 37.052. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 174-2 SERVICE EXTENSION. (a) An electric utility is not required to 174-3 obtain a certificate for an: 174-4 (1) extension into territory that is: 174-5 (A) contiguous to the territory the electric 174-6 utility serves; 174-7 (B) not receiving similar service from another 174-8 electric utility; and 174-9 (C) not in another electric utility's 174-10 certificated area; 174-11 (2) extension in or to territory the utility serves or 174-12 is authorized to serve under a certificate; or 174-13 (3) operation, extension, or service in progress on 174-14 September 1, 1975. 174-15 (b) An extension allowed under Subsection (a) is limited to 174-16 a device used: 174-17 (1) to interconnect existing facilities; or 174-18 (2) solely to transmit electric utility services from 174-19 an existing facility to a customer of retail electric utility 174-20 service. (V.A.C.S. Art. 1446c-0, Sec. 2.253.) 174-21 Sec. 37.053. APPLICATION FOR CERTIFICATE. (a) An electric 174-22 utility that wants to obtain or amend a certificate must submit an 174-23 application to the commission. 174-24 (b) The applicant shall file with the commission evidence 174-25 the commission requires to show the applicant has received the 174-26 consent, franchise, or permit required by the proper municipal or 174-27 other public authority. (V.A.C.S. Art. 1446c-0, Secs. 2.254(a), 175-1 (c).) 175-2 Sec. 37.054. NOTICE AND HEARING ON APPLICATION. (a) When 175-3 an application for a certificate is filed, the commission shall: 175-4 (1) give notice of the application to interested 175-5 parties; and 175-6 (2) if requested: 175-7 (A) set a time and place for a hearing; and 175-8 (B) give notice of the hearing. 175-9 (b) A person interested in the application may intervene at 175-10 the hearing. (V.A.C.S. Art. 1446c-0, Sec. 2.255(a).) 175-11 Sec. 37.055. REQUEST FOR PRELIMINARY ORDER. (a) An 175-12 electric utility that wants to exercise a right or privilege under 175-13 a franchise or permit that the utility anticipates obtaining but 175-14 has not been granted may apply to the commission for a preliminary 175-15 order under this section. 175-16 (b) The commission may issue a preliminary order declaring 175-17 that the commission, on application and under commission rules, 175-18 will grant the requested certificate on terms the commission 175-19 designates, after the electric utility obtains the franchise or 175-20 permit. 175-21 (c) The commission shall grant the certificate on 175-22 presentation of evidence satisfactory to the commission that the 175-23 electric utility has obtained the franchise or permit. (V.A.C.S. 175-24 Art. 1446c-0, Sec. 2.258.) 175-25 Sec. 37.056. GRANT OR DENIAL OF CERTIFICATE. (a) The 175-26 commission may approve an application and grant a certificate only 175-27 if the commission finds that the certificate is necessary for the 176-1 service, accommodation, convenience, or safety of the public. 176-2 (b) The commission may: 176-3 (1) grant the certificate as requested; 176-4 (2) grant the certificate for the construction of a 176-5 portion of the requested system, facility, or extension or the 176-6 partial exercise of the requested right or privilege; or 176-7 (3) refuse to grant the certificate. 176-8 (c) The commission shall grant each certificate on a 176-9 nondiscriminatory basis after considering: 176-10 (1) the adequacy of existing service; 176-11 (2) the need for additional service; 176-12 (3) the effect of granting the certificate on the 176-13 recipient of the certificate and any electric utility serving the 176-14 proximate area; and 176-15 (4) other factors, such as: 176-16 (A) community values; 176-17 (B) recreational and park areas; 176-18 (C) historical and aesthetic values; 176-19 (D) environmental integrity; and 176-20 (E) the probable improvement of service or 176-21 lowering of cost to consumers in the area if the certificate is 176-22 granted. (V.A.C.S. Art. 1446c-0, Secs. 2.255(b), (c).) 176-23 Sec. 37.057. DEADLINE FOR APPLICATION FOR NEW TRANSMISSION 176-24 FACILITY. The commission must approve or deny an application for a 176-25 certificate for a new transmission facility not later than the 176-26 first anniversary of the date the application is filed. If the 176-27 commission does not approve or deny the application on or before 177-1 that date, a party may seek a writ of mandamus in a district court 177-2 of Travis County to compel the commission to decide on the 177-3 application. (V.A.C.S. Art. 1446c-0, Sec. 2.255(e).) 177-4 Sec. 37.058. CERTIFICATE FOR ELECTRIC GENERATING PLANT. (a) 177-5 Sections 37.054, 37.056, and 37.057 do not apply to a certificate 177-6 for an electric generating plant that is requested under Chapter 177-7 34. 177-8 (b) The commission may grant a certificate for an electric 177-9 generating plant only in accordance with Chapter 34. (V.A.C.S. 177-10 Art. 1446c-0, Sec. 2.255(d).) 177-11 Sec. 37.059. REVOCATION OR AMENDMENT OF CERTIFICATE. (a) 177-12 The commission may revoke or amend a certificate after notice and 177-13 hearing if the commission finds that the certificate holder has 177-14 never provided or is no longer providing service in all or any part 177-15 of the certificated area. 177-16 (b) The commission may require one or more electric 177-17 utilities to provide service in an area affected by the revocation 177-18 or amendment of a certificate. (V.A.C.S. Art. 1446c-0, Sec. 177-19 2.264.) 177-20 (Sections 37.060-37.100 reserved for expansion) 177-21 SUBCHAPTER C. MUNICIPALITIES 177-22 Sec. 37.101. SERVICE IN ANNEXED OR INCORPORATED AREA. (a) 177-23 If an area is or will be included within a municipality as the 177-24 result of annexation, incorporation, or another reason, each 177-25 electric utility that holds or is entitled to hold a certificate 177-26 under this title to provide service or operate a facility in the 177-27 area before the inclusion has the right to continue to provide the 178-1 service or operate the facility and extend service within the 178-2 utility's certificated area in the annexed or incorporated area 178-3 under the rights granted by the certificate and this title. 178-4 (b) Notwithstanding any other law, an electric utility has 178-5 the right to: 178-6 (1) continue and extend service within the utility's 178-7 certificated area; and 178-8 (2) use roads, streets, highways, alleys, and public 178-9 property to furnish retail electric utility service. 178-10 (c) The governing body of a municipality may require an 178-11 electric utility to relocate the utility's facility at the 178-12 utility's expense to permit the widening or straightening of a 178-13 street by: 178-14 (1) giving the electric utility 30 days' notice; and 178-15 (2) specifying the new location for the facility along 178-16 the right-of-way of the street. 178-17 (d) This section does not: 178-18 (1) limit the power of a city, town, or village to 178-19 incorporate or of a municipality to extend its boundaries by 178-20 annexation; or 178-21 (2) prohibit a municipality from levying a tax or 178-22 other special charge for the use of the streets as authorized by 178-23 Section 182.025, Tax Code. (V.A.C.S. Art. 1446c-0, Secs. 2.256(a), 178-24 (b), (c).) 178-25 Sec. 37.102. GRANT OF CERTIFICATE FOR CERTAIN 178-26 MUNICIPALITIES. (a) If a municipal corporation offers retail 178-27 electric utility service in a municipality having a population of 179-1 more than 135,000 that is located in a county having a population 179-2 of more than 1,500,000, the commission shall singly certificate 179-3 areas in the municipality's boundaries in which more than one 179-4 electric utility provides electric utility service. 179-5 (b) In singly certificating an area under Subsection (a), 179-6 the commission shall preserve the right of an electric utility to 179-7 serve the customers the electric utility was serving on June 17, 179-8 1983. This subsection does not apply to a customer at least 179-9 partially served by a nominal 69,000 volts system who gave notice 179-10 of termination to the utility servicing that customer before June 179-11 17, 1983. (V.A.C.S. Art. 1446c-0, Sec. 2.256(d).) 179-12 (Sections 37.103-37.150 reserved for expansion) 179-13 SUBCHAPTER D. REGULATION OF SERVICES, AREAS, AND FACILITIES 179-14 Sec. 37.151. PROVISION OF SERVICE. Except as provided by 179-15 this section, Section 37.152, and Section 37.153, a certificate 179-16 holder shall: 179-17 (1) serve every consumer in the utility's certificated 179-18 area; and 179-19 (2) provide continuous and adequate service in that 179-20 area. (V.A.C.S. Art. 1446c-0, Sec. 2.259(a).) 179-21 Sec. 37.152. GROUNDS FOR REDUCTION OF SERVICE. (a) Unless 179-22 the commission issues a certificate that the present and future 179-23 convenience and necessity will not be adversely affected, a 179-24 certificate holder may not discontinue, reduce, or impair service 179-25 to any part of the holder's certificated service area except for: 179-26 (1) nonpayment of charges; 179-27 (2) nonuse; or 180-1 (3) another similar reason that occurs in the usual 180-2 course of business. 180-3 (b) A discontinuance, reduction, or impairment of service 180-4 must be in compliance with and subject to any condition or 180-5 restriction the commission prescribes. (V.A.C.S. Art. 1446c-0, 180-6 Secs. 2.259(b), (c).) 180-7 Sec. 37.153. REQUIRED REFUSAL OF SERVICE. A certificate 180-8 holder shall refuse to serve a customer in the holder's 180-9 certificated area if the holder is prohibited from providing the 180-10 service under Section 212.012 or 232.029, Local Government Code. 180-11 (V.A.C.S. Art. 1446c-0, Sec. 2.260.) 180-12 Sec. 37.154. TRANSFER OF CERTIFICATE. (a) An electric 180-13 utility may sell, assign, or lease a certificate or a right 180-14 obtained under a certificate if the commission determines that the 180-15 purchaser, assignee, or lessee can provide adequate service. 180-16 (b) A sale, assignment, or lease of a certificate or a right 180-17 is subject to conditions the commission prescribes. (V.A.C.S. 180-18 Art. 1446c-0, Sec. 2.261.) 180-19 Sec. 37.155. APPLICATION OF CONTRACTS. A contract approved 180-20 by the commission between retail electric utilities that designates 180-21 areas and customers to be served by the utilities: 180-22 (1) is valid and enforceable; and 180-23 (2) shall be incorporated into the appropriate areas 180-24 of certification. (V.A.C.S. Art. 1446c-0, Sec. 2.257.) 180-25 Sec. 37.156. INTERFERENCE WITH ANOTHER UTILITY. If an 180-26 electric utility constructing or extending the utility's lines, 180-27 plant, or system interferes or attempts to interfere with the 181-1 operation of a line, plant, or system of another utility, the 181-2 commission by order may: 181-3 (1) prohibit the construction or extension; or 181-4 (2) prescribe terms for locating the affected lines, 181-5 plants, or systems. (V.A.C.S. Art. 1446c-0, Sec. 2.262.) 181-6 Sec. 37.157. MAPS. An electric utility shall file with the 181-7 commission one or more maps that show each utility facility and 181-8 that separately illustrate each utility facility for the 181-9 generation, transmission, or distribution of the utility's services 181-10 on a date the commission orders. (V.A.C.S. Art. 1446c-0, Sec. 181-11 2.254(b).) 181-12 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 181-13 SUBCHAPTER A. STANDARDS 181-14 Sec. 38.001. GENERAL STANDARD 181-15 Sec. 38.002. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 181-16 STANDARDS 181-17 Sec. 38.003. RULE OR STANDARD 181-18 Sec. 38.004. MINIMUM CLEARANCE STANDARD 181-19 (Sections 38.005-38.020 reserved for expansion) 181-20 SUBCHAPTER B. PROHIBITIONS ON 181-21 PREFERENCES AND DISCRIMINATION 181-22 Sec. 38.021. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 181-23 SERVICE PROHIBITED 181-24 Sec. 38.022. DISCRIMINATION AND RESTRICTION ON COMPETITION 181-25 (Sections 38.023-38.050 reserved for expansion) 181-26 SUBCHAPTER C. EXAMINATIONS, TESTS, AND INSPECTIONS 181-27 Sec. 38.051. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; 182-1 INSPECTION 182-2 Sec. 38.052. INSPECTION FOR CONSUMER 182-3 (Sections 38.053-38.070 reserved for expansion) 182-4 SUBCHAPTER D. IMPROVEMENTS IN SERVICE 182-5 Sec. 38.071. IMPROVEMENTS IN SERVICE; INTERCONNECTING SERVICE 182-6 CHAPTER 38. REGULATION OF ELECTRIC SERVICES 182-7 SUBCHAPTER A. STANDARDS 182-8 Sec. 38.001. GENERAL STANDARD. An electric utility shall 182-9 furnish service, instrumentalities, and facilities that are safe, 182-10 adequate, efficient, and reasonable. (V.A.C.S. Art. 1446c-0, Sec. 182-11 2.155(a).) 182-12 Sec. 38.002. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 182-13 STANDARDS. A regulatory authority, on its own motion or on 182-14 complaint and after reasonable notice and hearing, may: 182-15 (1) adopt just and reasonable standards, 182-16 classifications, rules, or practices an electric utility must 182-17 follow in furnishing a service; 182-18 (2) adopt adequate and reasonable standards for 182-19 measuring a condition, including quantity, quality, pressure, and 182-20 initial voltage, relating to the furnishing of a service; 182-21 (3) adopt reasonable rules for examining, testing, and 182-22 measuring a service; and 182-23 (4) adopt or approve reasonable rules, specifications, 182-24 and standards to ensure the accuracy of equipment, including meters 182-25 and instruments, used to measure a service. (V.A.C.S. 182-26 Art. 1446c-0, Sec. 2.155(b).) 182-27 Sec. 38.003. RULE OR STANDARD. (a) An electric utility may 183-1 not impose a rule except as provided by this title. 183-2 (b) An electric utility may file with the regulatory 183-3 authority a standard, classification, rule, or practice the utility 183-4 follows. 183-5 (c) The standard, classification, rule, or practice 183-6 continues in force until: 183-7 (1) amended by the utility; or 183-8 (2) changed by the regulatory authority as provided by 183-9 this title. (V.A.C.S. Art. 1446c-0, Secs. 2.153 (part), 183-10 2.155(c).) 183-11 Sec. 38.004. MINIMUM CLEARANCE STANDARD. Notwithstanding 183-12 any other law, a transmission or distribution line owned by an 183-13 electric utility must be constructed, operated, and maintained, as 183-14 to clearances, in the manner described by the National Electrical 183-15 Safety Code Standard ANSI (c)(2), as adopted by the American 183-16 National Safety Institute and in effect at the time of 183-17 construction. (V.A.C.S. Art. 1446c-0, Sec. 2.155(d).) 183-18 (Sections 38.005-38.020 reserved for expansion) 183-19 SUBCHAPTER B. PROHIBITIONS ON 183-20 PREFERENCES AND DISCRIMINATION 183-21 Sec. 38.021. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 183-22 SERVICE PROHIBITED. In providing a service to persons in a 183-23 classification, an electric utility may not: 183-24 (1) grant an unreasonable preference or advantage to a 183-25 person in the classification; or 183-26 (2) subject a person in the classification to an 183-27 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 184-1 Sec. 2.214 (part).) 184-2 Sec. 38.022. DISCRIMINATION AND RESTRICTION ON COMPETITION. 184-3 An electric utility may not: 184-4 (1) discriminate against a person who sells or leases 184-5 equipment or performs services in competition with the electric 184-6 utility; or 184-7 (2) engage in a practice that tends to restrict or 184-8 impair that competition. (V.A.C.S. Art. 1446c-0, Sec. 2.216.) 184-9 (Sections 38.023-38.050 reserved for expansion) 184-10 SUBCHAPTER C. EXAMINATIONS, TESTS, AND INSPECTIONS 184-11 Sec. 38.051. EXAMINATION AND TEST OF INSTRUMENT OR 184-12 EQUIPMENT; INSPECTION. (a) A regulatory authority may: 184-13 (1) examine and test equipment, including meters and 184-14 instruments, used to measure service of an electric utility; and 184-15 (2) set up and use on the premises occupied by an 184-16 electric utility an apparatus or appliance necessary for the 184-17 examination or test. 184-18 (b) The electric utility is entitled to be represented at an 184-19 examination, test, or inspection made under this section. 184-20 (c) The electric utility and its officers and employees 184-21 shall facilitate the examination, test, or inspection by giving 184-22 reasonable aid to the regulatory authority and to any person 184-23 designated by the regulatory authority for the performance of those 184-24 duties. (V.A.C.S. Art. 1446c-0, Sec. 2.156(a) (part).) 184-25 Sec. 38.052. INSPECTION FOR CONSUMER. (a) A consumer may 184-26 have a meter or other measuring device tested by an electric 184-27 utility: 185-1 (1) once without charge, after a reasonable period of 185-2 presumed accuracy the regulatory authority establishes by rule; and 185-3 (2) at a shorter interval on payment of a reasonable 185-4 fee established by the regulatory authority. 185-5 (b) The regulatory authority shall establish reasonable fees 185-6 to be paid for other examining or testing of a measuring device on 185-7 the request of a consumer. 185-8 (c) If the consumer requests the test under Subsection 185-9 (a)(2) and the measuring device is found unreasonably defective or 185-10 incorrect to the substantial disadvantage of the consumer, the fee 185-11 the consumer paid at the time of the request shall be refunded. 185-12 (V.A.C.S. Art. 1446c-0, Sec. 2.156(b).) 185-13 (Sections 38.053-38.070 reserved for expansion) 185-14 SUBCHAPTER D. IMPROVEMENTS IN SERVICE 185-15 Sec. 38.071. IMPROVEMENTS IN SERVICE; INTERCONNECTING 185-16 SERVICE. The commission, after notice and hearing, may: 185-17 (1) order an electric utility to provide specified 185-18 improvements in its service in a specified area if: 185-19 (A) service in the area is inadequate or 185-20 substantially inferior to service in a comparable area; and 185-21 (B) requiring the company to provide the 185-22 improved service is reasonable; or 185-23 (2) order two or more electric utilities to establish 185-24 specified facilities for interconnecting service. (V.A.C.S. 185-25 Art. 1446c-0, Sec. 2.263.) 185-26 (Chapters 39-50 reserved for expansion) 185-27 SUBTITLE C. TELECOMMUNICATIONS UTILITIES 186-1 CHAPTER 51. GENERAL PROVISIONS 186-2 Sec. 51.001. POLICY 186-3 Sec. 51.002. DEFINITIONS 186-4 Sec. 51.003. APPLICABILITY 186-5 Sec. 51.004. PRICING FLEXIBILITY 186-6 Sec. 51.005. ASSISTANCE TO MUNICIPALITY 186-7 Sec. 51.006. MUNICIPAL PARTICIPATION IN RATEMAKING 186-8 PROCEEDINGS 186-9 Sec. 51.007. MUNICIPAL STANDING IN CERTAIN CASES 186-10 Sec. 51.008. JUDICIAL REVIEW 186-11 Sec. 51.009. MUNICIPAL FEES 186-12 Sec. 51.010. COMMISSION INVESTIGATION OF SALE, MERGER, OR 186-13 CERTAIN OTHER ACTIONS 186-14 CHAPTER 51. GENERAL PROVISIONS 186-15 Sec. 51.001. POLICY. (a) Significant changes have occurred 186-16 in telecommunications since the law from which this title is 186-17 derived was originally adopted. To encourage and accelerate the 186-18 development of a competitive and advanced telecommunications 186-19 environment and infrastructure, new rules, policies, and principles 186-20 must be formulated and applied to protect the public interest. 186-21 (b) It is the policy of this state to: 186-22 (1) promote diversity of telecommunications providers 186-23 and interconnectivity; 186-24 (2) encourage a fully competitive telecommunications 186-25 marketplace; and 186-26 (3) maintain a wide availability of high quality, 186-27 interoperable, standards-based telecommunications services at 187-1 affordable rates. 187-2 (c) The policy goals described by Subsection (b) are best 187-3 achieved by legislation that modernizes telecommunications 187-4 regulation by: 187-5 (1) guaranteeing the affordability of basic telephone 187-6 service in a competitively neutral manner; and 187-7 (2) fostering free market competition in the 187-8 telecommunications industry. 187-9 (d) The technological advancements, advanced 187-10 telecommunications infrastructure, and increased customer choices 187-11 for telecommunications services generated by a truly competitive 187-12 market play a critical role in Texas' economic future by raising 187-13 living standards for Texans through: 187-14 (1) enhanced economic development; and 187-15 (2) improved delivery of education, health, and other 187-16 public and private services. 187-17 (e) The strength of competitive forces varies widely between 187-18 markets, products, and services. It is the policy of this state to 187-19 require the commission to take action necessary to enhance 187-20 competition by adjusting regulation to match the degree of 187-21 competition in the marketplace to: 187-22 (1) reduce the cost and burden of regulation; and 187-23 (2) protect markets that are not competitive. 187-24 (f) It is the policy of this state to ensure that high 187-25 quality telecommunications services are available, accessible, and 187-26 usable by an individual with a disability, unless making the 187-27 services available, accessible, or usable would: 188-1 (1) result in an undue burden, including unreasonable 188-2 cost or technical infeasibility; or 188-3 (2) have an adverse competitive effect. (V.A.C.S. 188-4 Art. 1446c-0, Sec. 3.001.) 188-5 Sec. 51.002. DEFINITIONS. In this subtitle: 188-6 (1) "Basic local telecommunications service" means: 188-7 (A) flat rate residential and business local 188-8 exchange telephone service, including primary directory listings; 188-9 (B) tone dialing service; 188-10 (C) access to operator services; 188-11 (D) access to directory assistance services; 188-12 (E) access to 911 service provided by a local 188-13 authority or dual party relay service; 188-14 (F) the ability to report service problems seven 188-15 days a week; 188-16 (G) lifeline and tel-assistance services; and 188-17 (H) any other service the commission determines 188-18 after a hearing is a basic local telecommunications service. 188-19 (2) "Dominant carrier" means a provider of a 188-20 communication service provided wholly or partly over a telephone 188-21 system who the commission determines has sufficient market power in 188-22 a telecommunications market to control prices for that service in 188-23 that market in a manner adverse to the public interest. The term 188-24 includes a provider who provided local exchange telephone service 188-25 within a certificated exchange area on September 1, 1995, as to 188-26 that service and as to any other service for which a competitive 188-27 alternative is not available in a particular geographic market. In 189-1 addition, with respect to: 189-2 (A) intraLATA long distance message 189-3 telecommunications service originated by dialing the access code 189-4 "1-plus," the term includes a provider of local exchange telephone 189-5 service in a certificated exchange area for whom the use of that 189-6 access code for the origination of "1-plus" intraLATA calls in the 189-7 exchange area is exclusive; and 189-8 (B) interexchange services, the term does not 189-9 include an interexchange carrier that is not a certificated local 189-10 exchange company. 189-11 (3) "Incumbent local exchange company" means a local 189-12 exchange company that has a certificate of convenience and 189-13 necessity on September 1, 1995. 189-14 (4) "Local exchange company" means a 189-15 telecommunications utility that has a certificate of convenience 189-16 and necessity or a certificate of operating authority to provide in 189-17 this state: 189-18 (A) local exchange telephone service; 189-19 (B) basic local telecommunications service; or 189-20 (C) switched access service. 189-21 (5) "Local exchange telephone service" means 189-22 telecommunications service provided within an exchange to establish 189-23 connections between customer premises within the exchange, 189-24 including connections between a customer premises and a long 189-25 distance provider serving the exchange. The term includes tone 189-26 dialing service, service connection charges, and directory 189-27 assistance services offered in connection with basic local 190-1 telecommunications service and interconnection with other service 190-2 providers. The term does not include the following services, 190-3 whether offered on an intraexchange or interexchange basis: 190-4 (A) central office based PBX-type services for 190-5 systems of 75 stations or more; 190-6 (B) billing and collection services; 190-7 (C) high-speed private line services of 1.544 190-8 megabits or greater; 190-9 (D) customized services; 190-10 (E) private line or virtual private line 190-11 services; 190-12 (F) resold or shared local exchange telephone 190-13 services if permitted by tariff; 190-14 (G) dark fiber services; 190-15 (H) non-voice data transmission service offered 190-16 as a separate service and not as a component of basic local 190-17 telecommunications service; 190-18 (I) dedicated or virtually dedicated access 190-19 services; or 190-20 (J) any other service the commission determines 190-21 is not a "local exchange telephone service." 190-22 (6) "Long run incremental cost" has the meaning 190-23 assigned by 16 T.A.C. Section 23.91. 190-24 (7) "Pricing flexibility" includes: 190-25 (A) customer specific contracts; 190-26 (B) packaging of services; 190-27 (C) volume, term, and discount pricing; 191-1 (D) zone density pricing; and 191-2 (E) other promotional pricing. 191-3 (8) "Public utility" or "utility" means a person or 191-4 river authority that owns or operates for compensation in this 191-5 state equipment or facilities to convey, transmit, or receive 191-6 communications over a telephone system as a dominant carrier. The 191-7 term includes a lessee, trustee, or receiver of any of those 191-8 entities, or a combination of those entities. The term does not 191-9 include a municipal corporation. A person is not a public utility 191-10 solely because the person: 191-11 (A) furnishes or furnishes and maintains a 191-12 private system; 191-13 (B) manufactures, distributes, installs, or 191-14 maintains customer premise communications equipment and 191-15 accessories; or 191-16 (C) furnishes a telecommunications service or 191-17 commodity only to itself, its employees, or its tenants as an 191-18 incident of employment or tenancy, if that service or commodity is 191-19 not resold to or used by others. 191-20 (9) "Separation" means the division of plant, 191-21 revenues, expenses, taxes, and reserves applicable to exchange or 191-22 local service if these items are used in common to provide public 191-23 utility service to both local exchange telephone service and other 191-24 service, such as interstate or intrastate toll service. 191-25 (10) "Telecommunications provider": 191-26 (A) means: 191-27 (i) a certificated telecommunications 192-1 utility; 192-2 (ii) a shared tenant service provider; 192-3 (iii) a nondominant carrier of 192-4 telecommunications services; 192-5 (iv) a provider of commercial mobile 192-6 service as defined by Section 332(d), Communications Act of 1934 192-7 (47 U.S.C. Section 151 et seq.), Federal Communications Commission 192-8 rules, and the Omnibus Budget Reconciliation Act of 1993 (Public 192-9 Law 103-66); 192-10 (v) a telecommunications entity that 192-11 provides central office based PBX-type sharing or resale 192-12 arrangements; 192-13 (vi) an interexchange telecommunications 192-14 carrier; 192-15 (vii) a specialized common carrier; 192-16 (viii) a reseller of communications; 192-17 (ix) a provider of operator services; 192-18 (x) a provider of customer-owned pay 192-19 telephone service; or 192-20 (xi) another person or entity determined 192-21 by the commission to provide telecommunications services to 192-22 customers in this state; and 192-23 (B) does not mean: 192-24 (i) a provider of enhanced or information 192-25 services, or another user of telecommunications services, who does 192-26 not also provide telecommunications services; or 192-27 (ii) a state agency or state institution 193-1 of higher education, or a service provided by a state agency or 193-2 state institution of higher education. 193-3 (11) "Telecommunications utility" means: 193-4 (A) a public utility; 193-5 (B) an interexchange telecommunications carrier, 193-6 including a reseller of interexchange telecommunications services; 193-7 (C) a specialized communications common carrier; 193-8 (D) a reseller of communications; 193-9 (E) a communications carrier who conveys, 193-10 transmits, or receives communications wholly or partly over a 193-11 telephone system; 193-12 (F) a provider of operator services as defined 193-13 by Section 55.081, unless the provider is a subscriber to 193-14 customer-owned pay telephone service; and 193-15 (G) a separated affiliate or an electronic 193-16 publishing joint venture as defined in Chapter 63. 193-17 (12) "Tier 1 local exchange company" has the meaning 193-18 assigned by the Federal Communications Commission. (V.A.C.S. 193-19 Art. 1446c-0, Secs. 3.002(1), (2) (part), (3), (5), (6), (7), (8) 193-20 (part), (9) (part), (10), (11), (12); New.) 193-21 Sec. 51.003. APPLICABILITY. Except as otherwise expressly 193-22 provided by this title, this title does not apply to: 193-23 (1) a company that as its only form of business: 193-24 (A) is a telecommunications manager; or 193-25 (B) administers central office based or customer 193-26 based PBX-type sharing/resale arrangements; 193-27 (2) telegraph services; 194-1 (3) television or radio stations; 194-2 (4) community antenna television services; or 194-3 (5) a provider of commercial mobile service as defined 194-4 by Section 332(d), Communications Act of 1934 (47 U.S.C. Section 194-5 151 et seq.), Federal Communications Commission rules, and the 194-6 Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66), 194-7 other than conventional rural radio-telephone services provided by 194-8 a wire-line telephone company under the Public Mobile Service rules 194-9 of the Federal Communications Commission (47 C.F.R. Part 22). 194-10 (V.A.C.S. Art. 1446c-0, Sec. 3.002(9) (part).) 194-11 Sec. 51.004. PRICING FLEXIBILITY. (a) A discount or other 194-12 form of pricing flexibility may not be preferential, prejudicial, 194-13 or discriminatory. 194-14 (b) This title does not prohibit a volume discount or other 194-15 discount based on a reasonable business purpose. (V.A.C.S. 194-16 Art. 1446c-0, Secs. 3.002(8) (part), 3.051(m) (part).) 194-17 Sec. 51.005. ASSISTANCE TO MUNICIPALITY. On request of a 194-18 municipality, the commission may advise and assist the municipality 194-19 with respect to a question or proceeding arising under this title. 194-20 Assistance provided by the commission may include aid to a 194-21 municipality on a matter pending before the commission or a court, 194-22 such as making a staff member available as a witness or otherwise 194-23 providing evidence to the municipality. (V.A.C.S. Art. 1446c-0, 194-24 Sec. 3.102.) 194-25 Sec. 51.006. MUNICIPAL PARTICIPATION IN RATEMAKING 194-26 PROCEEDINGS. (a) The governing body of a municipality 194-27 participating in a ratemaking proceeding may engage rate 195-1 consultants, accountants, auditors, attorneys, and engineers to: 195-2 (1) conduct investigations, present evidence, and 195-3 advise and represent the governing body; and 195-4 (2) assist the governing body with litigation before 195-5 the commission or a court. 195-6 (b) The public utility in the ratemaking proceeding shall 195-7 reimburse the governing body of the municipality for the reasonable 195-8 cost of the services of a person engaged under Subsection (a) to 195-9 the extent the commission determines is reasonable. (V.A.C.S. 195-10 Art. 1446c-0, Sec. 3.101(a).) 195-11 Sec. 51.007. MUNICIPAL STANDING IN CERTAIN CASES. (a) A 195-12 municipality has standing in each case before the commission that 195-13 relates to a utility providing service in the municipality. 195-14 (b) A municipality's standing is subject to the right of the 195-15 commission to: 195-16 (1) determine standing in a case involving a retail 195-17 service area dispute that involves two or more utilities; and 195-18 (2) consolidate municipalities on an issue of common 195-19 interest. (V.A.C.S. Art. 1446c-0, Sec. 3.101(b) (part).) 195-20 Sec. 51.008. JUDICIAL REVIEW. A municipality is entitled to 195-21 judicial review of a commission order relating to a utility 195-22 providing services in the municipality as provided by Section 195-23 15.001. (V.A.C.S. Art. 1446c-0, Sec. 3.101(b) (part).) 195-24 Sec. 51.009. MUNICIPAL FEES. (a) Nothing in this title, 195-25 including Section 53.201, may be construed as in any way limiting 195-26 the right of a public utility to pass through a municipal fee, 195-27 including an increase in a municipal fee. 196-1 (b) A public utility that traditionally passes through 196-2 municipal fees shall promptly pass through any municipal fee 196-3 reduction. (V.A.C.S. Art. 1446c-0, Secs. 3.1015, 3.211(g) (part).) 196-4 Sec. 51.010. COMMISSION INVESTIGATION OF SALE, MERGER, OR 196-5 CERTAIN OTHER ACTIONS. (a) The commission, not later than the 196-6 180th day after the date a public utility reports to the commission 196-7 under Section 14.101, shall complete an investigation under that 196-8 section and enter a final order. 196-9 (b) If a final order is not entered as required by 196-10 Subsection (a), the commission is considered to have determined 196-11 that the action taken by the public utility is consistent with the 196-12 public interest. 196-13 (c) Section 14.101 does not apply to: 196-14 (1) a company that receives a certificate of operating 196-15 authority or a service provider certificate of operating authority 196-16 under Chapter 54; or 196-17 (2) a company electing under Chapter 58. (V.A.C.S. 196-18 Art. 1446c-0, Sec. 3.053.) 196-19 CHAPTER 52. COMMISSION JURISDICTION 196-20 SUBCHAPTER A. GENERAL POWERS AND DUTIES OF COMMISSION 196-21 Sec. 52.001. POLICY 196-22 Sec. 52.002. AUTHORITY TO REGULATE 196-23 Sec. 52.003. COOPERATION WITH OTHER REGULATORY 196-24 AUTHORITIES 196-25 Sec. 52.004. COMMISSION MAY ESTABLISH SEPARATE MARKETS 196-26 Sec. 52.005. MINIMUM REQUIREMENTS FOR DOMINANT CARRIERS 196-27 Sec. 52.006. COMMISSION TO REPORT TO LEGISLATURE 197-1 (Sections 52.007-52.050 reserved for expansion) 197-2 SUBCHAPTER B. INCUMBENT LOCAL EXCHANGE COMPANIES 197-3 Sec. 52.051. POLICY 197-4 Sec. 52.052. APPLICABILITY 197-5 Sec. 52.053. CERTAIN RATES PROHIBITED 197-6 Sec. 52.054. RULES AND PROCEDURES FOR INCUMBENT LOCAL 197-7 EXCHANGE COMPANIES 197-8 Sec. 52.055. HEARING TO DETERMINE LEVEL OF COMPETITION 197-9 Sec. 52.056. SPECIFICALLY AUTHORIZED REGULATORY 197-10 TREATMENTS 197-11 Sec. 52.057. CUSTOMER-SPECIFIC CONTRACTS 197-12 Sec. 52.058. NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL 197-13 RATES 197-14 Sec. 52.059. RATES TO COVER APPROPRIATE COSTS 197-15 Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT 197-16 (Sections 52.061-52.100 reserved for expansion) 197-17 SUBCHAPTER C. TELECOMMUNICATIONS UTILITIES 197-18 THAT ARE NOT DOMINANT CARRIERS 197-19 Sec. 52.101. APPLICABILITY 197-20 Sec. 52.102. LIMITED REGULATORY AUTHORITY 197-21 Sec. 52.103. REGISTRATION REQUIRED 197-22 Sec. 52.104. COMMISSION MAY INVESTIGATE 197-23 Sec. 52.105. ACCESS TO CERTAIN SERVICES REQUIRED 197-24 Sec. 52.106. QUALITY OF SERVICE REQUIRED 197-25 Sec. 52.107. PREDATORY PRICING 197-26 Sec. 52.108. OTHER PROHIBITED PRACTICES 197-27 Sec. 52.109. AVAILABILITY OF SERVICE 198-1 Sec. 52.110. BURDEN OF PROOF 198-2 Sec. 52.111. COMMISSION MAY EXEMPT 198-3 (Sections 52.112-52.150 reserved for expansion) 198-4 SUBCHAPTER D. CERTIFICATE HOLDERS 198-5 Sec. 52.151. APPLICABILITY 198-6 Sec. 52.152. LIMITED REGULATORY AUTHORITY 198-7 Sec. 52.153. BOOKS AND RECORDS 198-8 Sec. 52.154. COMMISSION MAY NOT OVERBURDEN 198-9 (Sections 52.155-52.200 reserved for expansion) 198-10 SUBCHAPTER E. DEREGULATION OF SERVICE 198-11 Sec. 52.201. DEREGULATION OF SERVICE 198-12 Sec. 52.202. DETERMINATION OF GEOGRAPHIC MARKET 198-13 Sec. 52.203. MARKET POWER TEST 198-14 Sec. 52.204. RATE FOR DEREGULATED SERVICE 198-15 Sec. 52.205. INVESTIGATION OF COMPETITION 198-16 Sec. 52.206. REREGULATION OF MARKET 198-17 Sec. 52.207. REPORTS; CONFIDENTIAL INFORMATION 198-18 (Sections 52.208-52.250 reserved for expansion) 198-19 SUBCHAPTER F. REQUIRED REPORTS AND FILINGS; RECORDS 198-20 Sec. 52.251. TARIFF FILINGS 198-21 Sec. 52.252. DEPRECIATION ACCOUNT 198-22 Sec. 52.253. ACCOUNTS OF PROFITS AND LOSSES 198-23 Sec. 52.254. REPORT OF CERTAIN EXPENSES 198-24 Sec. 52.255. AVAILABILITY OF RECORDS 198-25 CHAPTER 52. COMMISSION JURISDICTION 198-26 SUBCHAPTER A. GENERAL POWERS AND DUTIES OF COMMISSION 198-27 Sec. 52.001. POLICY. (a) It is the policy of this state to 199-1 protect the public interest in having adequate and efficient 199-2 telecommunications service available to each resident of this state 199-3 at just, fair, and reasonable rates. 199-4 (b) The telecommunications industry, through technical 199-5 advancements, federal legislative, judicial, and administrative 199-6 actions, and the formulation of new telecommunications enterprises, 199-7 has become and will continue to be in many and growing areas a 199-8 competitive industry that does not lend itself to traditional 199-9 public utility regulatory rules, policies, and principles. As a 199-10 result, the public interest requires that rules, policies, and 199-11 principles be formulated and applied to: 199-12 (1) protect the public interest; and 199-13 (2) provide equal opportunity to each 199-14 telecommunications utility in a competitive marketplace. (V.A.C.S. 199-15 Art. 1446c-0, Sec. 3.051(a).) 199-16 Sec. 52.002. AUTHORITY TO REGULATE. (a) To carry out the 199-17 public policy stated by Section 52.001 and to regulate rates, 199-18 operations, and services so that the rates are just, fair, and 199-19 reasonable and the services are adequate and efficient, the 199-20 commission has exclusive original jurisdiction over the business 199-21 and property of a telecommunications utility in this state subject 199-22 to the limitations imposed by this title. 199-23 (b) The commission's regulatory authority as to a 199-24 telecommunications utility other than a public utility is only as 199-25 prescribed by this title. (V.A.C.S. Art. 1446c-0, Secs. 3.002(9) 199-26 (part), 3.051(b) (part).) 199-27 Sec. 52.003. COOPERATION WITH OTHER REGULATORY AUTHORITIES. 200-1 In regulating the rates, operations, and services of a 200-2 telecommunications utility providing service in a municipality 200-3 located on the state line adjacent to a municipality in an 200-4 adjoining state, the commission may cooperate with the utility 200-5 regulatory commission of the adjoining state or of the federal 200-6 government and may hold a joint hearing or make a joint 200-7 investigation with that commission. (V.A.C.S. Art. 1446c-0, Sec. 200-8 3.051(b) (part).) 200-9 Sec. 52.004. COMMISSION MAY ESTABLISH SEPARATE MARKETS. (a) 200-10 The commission may establish separate telecommunications markets in 200-11 this state if the commission determines that the public interest 200-12 will be served. The commission shall hold hearings and require 200-13 evidence as necessary to: 200-14 (1) carry out the public purpose of this chapter; and 200-15 (2) determine the need and effect of establishing 200-16 separate markets. 200-17 (b) A provider determined to be a dominant carrier as to a 200-18 particular telecommunications service in a market may not be 200-19 presumed to be a dominant carrier of a different telecommunications 200-20 service in that market. (V.A.C.S. Art. 1446c-0, Sec. 3.002(2) 200-21 (part).) 200-22 Sec. 52.005. MINIMUM REQUIREMENTS FOR DOMINANT CARRIERS. 200-23 The commission shall impose as minimum requirements for a dominant 200-24 carrier the same requirements imposed by Subchapter C, except 200-25 Section 52.107. (V.A.C.S. Art. 1446c-0, Sec. 3.051(q) (part).) 200-26 Sec. 52.006. COMMISSION TO REPORT TO LEGISLATURE. (a) 200-27 Before January 15 of each odd-numbered year, the commission shall 201-1 report to the legislature on: 201-2 (1) the scope of competition in regulated 201-3 telecommunications markets; and 201-4 (2) the effect of competition on customers in both 201-5 competitive and noncompetitive markets, with a specific focus on 201-6 rural markets. 201-7 (b) The report shall include: 201-8 (1) an assessment of the effect of competition on the 201-9 rates and availability of telecommunications services for 201-10 residential and business customers; 201-11 (2) a summary of commission action over the preceding 201-12 two years that reflects changes in the scope of competition in 201-13 regulated telecommunications markets; and 201-14 (3) recommendations for legislation the commission 201-15 determines is appropriate to promote the public interest in the 201-16 context of a partially competitive telecommunications market. 201-17 (c) The commission, in its assessment under Subsection 201-18 (b)(1), shall specifically address any effects on universal 201-19 service. 201-20 (d) A telecommunications utility shall cooperate with the 201-21 commission as necessary for the commission to satisfy the 201-22 requirements of this section. (V.A.C.S. Art. 1446c-0, Secs. 201-23 3.051(k), (q) (part).) 201-24 (Sections 52.007-52.050 reserved for expansion) 201-25 SUBCHAPTER B. INCUMBENT LOCAL EXCHANGE COMPANIES 201-26 Sec. 52.051. POLICY. In adopting rules and establishing 201-27 procedures under this subchapter, the commission shall: 202-1 (1) attempt to balance the public interest in a 202-2 technologically advanced telecommunications system providing a wide 202-3 range of new and innovative services with traditional regulatory 202-4 concerns for: 202-5 (A) preserving universal service; 202-6 (B) prohibiting anticompetitive practices; and 202-7 (C) preventing the subsidization of competitive 202-8 services with revenues from regulated monopoly services; and 202-9 (2) incorporate an appropriate mix of regulatory and 202-10 market mechanisms reflecting the level and nature of competition in 202-11 the marketplace. (V.A.C.S. Art. 1446c-0, Sec. 3.051(g) (part).) 202-12 Sec. 52.052. APPLICABILITY. This subchapter does not apply 202-13 to basic local telecommunications service, including local measured 202-14 service. (V.A.C.S. Art. 1446c-0, Sec. 3.051(j) (part).) 202-15 Sec. 52.053. CERTAIN RATES PROHIBITED. A rate established 202-16 under this subchapter may not be: 202-17 (1) unreasonably preferential, prejudicial, or 202-18 discriminatory; 202-19 (2) subsidized either directly or indirectly by a 202-20 regulated monopoly service; or 202-21 (3) predatory or anticompetitive. (V.A.C.S. 202-22 Art. 1446c-0, Sec. 3.051(g) (part).) 202-23 Sec. 52.054. RULES AND PROCEDURES FOR INCUMBENT LOCAL 202-24 EXCHANGE COMPANIES. (a) To carry out the public policy stated in 202-25 Section 52.001, notwithstanding any other provision of this title, 202-26 the commission may adopt rules and establish procedures applicable 202-27 to incumbent local exchange companies to: 203-1 (1) determine the level of competition in a specific 203-2 telecommunications market or submarket; and 203-3 (2) provide appropriate regulatory treatment to allow 203-4 an incumbent local exchange company to respond to significant 203-5 competitive challenges. 203-6 (b) This section does not change the burden of proof on an 203-7 incumbent local exchange company under Sections 53.003, 53.006, 203-8 53.051, 53.052, 53.053, 53.054, 53.055, 53.057, 53.058, 53.060, and 203-9 53.062. (V.A.C.S. Art. 1446c-0, Sec. 3.051(e)(1).) 203-10 Sec. 52.055. HEARING TO DETERMINE LEVEL OF COMPETITION. In 203-11 determining the level of competition in a specific market or 203-12 submarket, the commission shall hold an evidentiary hearing to 203-13 consider: 203-14 (1) the number and size of telecommunications 203-15 utilities or other persons providing the same, equivalent, or 203-16 substitutable service; 203-17 (2) the extent to which the same, equivalent, or 203-18 substitutable service is available; 203-19 (3) the ability of a customer to obtain the same, 203-20 equivalent, or substitutable service at comparable rates and terms; 203-21 (4) the ability of a telecommunications utility or 203-22 other person to make the same, equivalent, or substitutable service 203-23 readily available at comparable rates and terms; 203-24 (5) the existence of a significant barrier to the 203-25 entry or exit of a provider of the service; and 203-26 (6) other relevant information the commission 203-27 determines is appropriate. (V.A.C.S. Art. 1446c-0, Sec. 204-1 3.051(e)(2).) 204-2 Sec. 52.056. SPECIFICALLY AUTHORIZED REGULATORY TREATMENTS. 204-3 The regulatory treatments the commission may implement under 204-4 Section 52.054 include: 204-5 (1) approval of a range of rates for a specific 204-6 service; 204-7 (2) approval of a customer-specific contract for a 204-8 specific service; and 204-9 (3) the detariffing of rates. (V.A.C.S. Art. 1446c-0, 204-10 Sec. 3.051(e)(3) (part).) 204-11 Sec. 52.057. CUSTOMER-SPECIFIC CONTRACTS. (a) The 204-12 commission shall approve a customer-specific contract that meets 204-13 the requirements of Subsection (b) to provide: 204-14 (1) central office based PBX-type services for a 204-15 system of 200 stations or more; 204-16 (2) billing and collection services; 204-17 (3) high-speed private line services of 1.544 megabits 204-18 or greater; or 204-19 (4) customized services. 204-20 (b) The commission shall approve a contract for a service 204-21 described by Subsection (a) if: 204-22 (1) the contract is filed before the 30th day before 204-23 the date the service contracted for is initiated; 204-24 (2) the contract is accompanied by an affidavit from 204-25 the person or entity contracting for the service stating that the 204-26 person or entity considered acquiring the same, equivalent, or 204-27 substitutable service by bid or quotation from a source other than 205-1 the incumbent local exchange company; 205-2 (3) the incumbent local exchange company recovers the 205-3 appropriate costs of providing the service; and 205-4 (4) approval of the contract is in the public 205-5 interest. 205-6 (c) The commission shall approve or deny a contract under 205-7 this section not later than the 30th day after the date the 205-8 contract is filed, unless the commission for good cause extends the 205-9 effective date for an additional 35 days. 205-10 (d) An incumbent local exchange company may not price 205-11 similar services provided under contracts governed by this section 205-12 in an unreasonably discriminatory manner. 205-13 (e) This section and Section 52.056(2) do not apply to: 205-14 (1) message telecommunications service; 205-15 (2) switched access service for an interexchange 205-16 carrier; or 205-17 (3) wide area telecommunications service. 205-18 (f) In this section, "similar services" means services that: 205-19 (1) are provided at or near the same point in time; 205-20 (2) have the same characteristics; and 205-21 (3) are provided under the same or similar 205-22 circumstances. (V.A.C.S. Art. 1446c-0, Secs. 3.051(e)(3) (part), 205-23 (j) (part).) 205-24 Sec. 52.058. NEW OR EXPERIMENTAL SERVICES OR PROMOTIONAL 205-25 RATES. (a) To encourage the rapid introduction of new or 205-26 experimental services or promotional rates, the commission shall 205-27 adopt rules and establish procedures that allow: 206-1 (1) the expedited introduction of new or experimental 206-2 services or promotional rates; 206-3 (2) the establishment and adjustment of rates; and 206-4 (3) the withdrawal of those services or promotional 206-5 rates. 206-6 (b) The rules and procedures described by Subsection (a) 206-7 must include rules and procedures to allow the governing body of a 206-8 municipality served by an incumbent local exchange company having 206-9 more than 500,000 access lines in this state to make requests to 206-10 the commission for new or experimental services or promotional 206-11 rates. 206-12 (c) A rate established or adjusted at the request of a 206-13 municipality may not: 206-14 (1) result in higher rates for ratepayers outside the 206-15 municipal boundaries; or 206-16 (2) include a rate for incumbent local exchange 206-17 company interexchange service or interexchange carrier access 206-18 service. (V.A.C.S. Art. 1446c-0, Sec. 3.051(f).) 206-19 Sec. 52.059. RATES TO COVER APPROPRIATE COSTS. (a) The 206-20 commission by rule shall adopt standards necessary to ensure that a 206-21 rate established under this subchapter covers appropriate costs as 206-22 determined by the commission. 206-23 (b) Until standards are set under Subsection (a), the 206-24 commission shall use a costing methodology that is in the public 206-25 interest to determine whether a rate established under this 206-26 subchapter covers appropriate costs. (V.A.C.S. Art. 1446c-0, Sec. 206-27 3.051(h).) 207-1 Sec. 52.060. ADMINISTRATIVE FEE OR ASSESSMENT. The 207-2 commission may prescribe and collect a fee or assessment from local 207-3 exchange companies necessary to recover the cost to the commission 207-4 and to the office of activities carried out and services provided 207-5 under this subchapter and Section 52.006. (V.A.C.S. Art. 1446c-0, 207-6 Sec. 3.051(i).) 207-7 (Sections 52.061-52.100 reserved for expansion) 207-8 SUBCHAPTER C. TELECOMMUNICATIONS UTILITIES 207-9 THAT ARE NOT DOMINANT CARRIERS 207-10 Sec. 52.101. APPLICABILITY. This subchapter applies only to 207-11 a telecommunications utility that is not: 207-12 (1) a dominant carrier; or 207-13 (2) the holder of a certificate of operating authority 207-14 or a service provider certificate of operating authority. 207-15 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 207-16 Sec. 52.102. LIMITED REGULATORY AUTHORITY. Except as 207-17 otherwise provided by this subchapter and Subchapter D, Chapter 55, 207-18 the commission has only the following jurisdiction over a 207-19 telecommunications utility subject to this subchapter: 207-20 (1) to require registration under Section 52.103; 207-21 (2) to conduct an investigation under Section 52.104; 207-22 (3) to require the filing of reports as the commission 207-23 periodically directs; 207-24 (4) to require the maintenance of statewide average 207-25 rates or prices of telecommunications service; 207-26 (5) to require access to telecommunications service 207-27 under Section 52.105; and 208-1 (6) to require the quality of telecommunications 208-2 service provided to be adequate under Section 52.106. (V.A.C.S. 208-3 Art. 1446c-0, Sec. 3.051(c) (part).) 208-4 Sec. 52.103. REGISTRATION REQUIRED. (a) A 208-5 telecommunications utility shall register with the commission not 208-6 later than the 30th day after the date the utility commences 208-7 service to the public. 208-8 (b) A telecommunications utility that registers under 208-9 Subsection (a) shall file with the commission a description of: 208-10 (1) the location and type of service provided; 208-11 (2) the price to the public of that service; and 208-12 (3) other registration information the commission 208-13 directs. 208-14 (c) An interexchange telecommunications utility doing 208-15 business in this state shall maintain on file with the commission 208-16 tariffs or lists governing the terms of providing its services. 208-17 (V.A.C.S. Art. 1446c-0, Sec. 3.051(d).) 208-18 Sec. 52.104. COMMISSION MAY INVESTIGATE. (a) The 208-19 commission may investigate as necessary to determine the effect and 208-20 scope of competition in the telecommunications industry. The 208-21 investigation may include: 208-22 (1) identifying dominant carriers in the local 208-23 telecommunications and intraLATA interexchange telecommunications 208-24 industry; and 208-25 (2) defining the telecommunications market or markets. 208-26 (b) In conducting an investigation under this section, the 208-27 commission may: 209-1 (1) hold a hearing; 209-2 (2) issue a subpoena to compel the attendance of a 209-3 witness or the production of a document; and 209-4 (3) make findings of fact and decisions to administer 209-5 this title or a rule, order, or other action of the commission. 209-6 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 209-7 Sec. 52.105. ACCESS TO CERTAIN SERVICES REQUIRED. (a) The 209-8 commission may require that each local exchange area have access to 209-9 local and interexchange telecommunications service, except as 209-10 otherwise provided by this section. 209-11 (b) The commission shall allow a telecommunications utility 209-12 to discontinue service to a local exchange area if: 209-13 (1) comparable service is available in the area; and 209-14 (2) discontinuing the service is not contrary to the 209-15 public interest. 209-16 (c) This section does not authorize the commission to 209-17 require a telecommunications utility to initiate service to a local 209-18 exchange area to which the telecommunications utility: 209-19 (1) did not provide service during the preceding 209-20 12-month period; and 209-21 (2) has not provided service previously for a 209-22 cumulative period of at least one year. (V.A.C.S. Art. 1446c-0, 209-23 Sec. 3.051(c) (part).) 209-24 Sec. 52.106. QUALITY OF SERVICE REQUIRED. The commission 209-25 may require the quality of telecommunications service provided in a 209-26 local exchange in which the commission determines that service has 209-27 deteriorated and become unreliable to be adequate to protect the 210-1 public interest and the interests of customers of that exchange. 210-2 (V.A.C.S. Art. 1446c-0, Sec. 3.051(c) (part).) 210-3 Sec. 52.107. PREDATORY PRICING. (a) The commission may 210-4 enter an order necessary to protect the public interest if the 210-5 commission finds by a preponderance of the evidence after notice 210-6 and hearing that an interexchange telecommunications utility has: 210-7 (1) engaged in predatory pricing; or 210-8 (2) attempted to engage in predatory pricing. 210-9 (b) A hearing held by the commission under Subsection (a) 210-10 must be based on a complaint from another interexchange 210-11 telecommunications utility. 210-12 (c) An order entered under Subsection (a) may include the 210-13 imposition on a specific service of the commission's full 210-14 regulatory authority under: 210-15 (1) this chapter; 210-16 (2) Chapters 14, 15, 51, 53, and 54; and 210-17 (3) Subchapters A, D, and H, Chapter 55. 210-18 (d) This section applies only to an interexchange 210-19 telecommunications utility. (V.A.C.S. Art. 1446c-0, Sec. 210-20 3.051(l).) 210-21 Sec. 52.108. OTHER PROHIBITED PRACTICES. The commission may 210-22 enter any order necessary to protect the public interest if the 210-23 commission finds after notice and hearing that a telecommunications 210-24 utility has: 210-25 (1) failed to maintain statewide average rates; 210-26 (2) abandoned interexchange message telecommunications 210-27 service to a local exchange area in a manner contrary to the public 211-1 interest; or 211-2 (3) engaged in a pattern of preferential or 211-3 discriminatory activities prohibited by Section 53.003(5), 55.005, 211-4 or 55.006. (V.A.C.S. Art. 1446c-0, Secs. 3.051(m) (part), (q) 211-5 (part).) 211-6 Sec. 52.109. AVAILABILITY OF SERVICE. (a) The commission 211-7 may require a telecommunications utility that provides a service to 211-8 make that service available in an exchange served by the 211-9 telecommunications utility within a reasonable time after receipt 211-10 of a bona fide request for the service in that exchange. 211-11 (b) A telecommunications utility may not be required to 211-12 extend a service to an area if: 211-13 (1) the local exchange company is unable to provide 211-14 the required access or other service; or 211-15 (2) extending the service would, after consideration 211-16 of the public interest to be served, impose unreasonable costs on 211-17 or require unreasonable investments by the telecommunications 211-18 utility. 211-19 (c) The commission may require from a telecommunications 211-20 utility or a local exchange company information necessary to 211-21 enforce this section. (V.A.C.S. Art. 1446c-0, Secs. 3.051(o), (q) 211-22 (part).) 211-23 Sec. 52.110. BURDEN OF PROOF. (a) In a proceeding before 211-24 the commission in which it is alleged that a telecommunications 211-25 utility engaged in conduct in violation of Section 52.107, 52.108, 211-26 or 52.109, the burden of proof is on: 211-27 (1) a telecommunications utility complaining of 212-1 conduct committed against it in violation of this subchapter; or 212-2 (2) except as provided by Subsection (b), the 212-3 responding telecommunications utility if the proceedings are: 212-4 (A) brought by a customer or customer 212-5 representative who is not a telecommunications utility; or 212-6 (B) initiated by the commission. 212-7 (b) The commission may impose the burden of proof on the 212-8 complaining party in a proceeding described by Subsection (a)(2) if 212-9 the commission determines that placing the burden of proof on the 212-10 complaining party is in the public interest. (V.A.C.S. 212-11 Art. 1446c-0, Secs. 3.051(n), (q) (part).) 212-12 Sec. 52.111. COMMISSION MAY EXEMPT. The commission may 212-13 exempt from a requirement of this subchapter a telecommunications 212-14 utility that: 212-15 (1) does not have a significant effect on the public 212-16 interest, as determined by the commission; or 212-17 (2) relies solely on the facilities of others to 212-18 complete long distance calls, if the commission determines that the 212-19 exemption is in the public interest. (V.A.C.S. Art. 1446c-0, Secs. 212-20 3.051(p), (q) (part).) 212-21 (Sections 52.112-52.150 reserved for expansion) 212-22 SUBCHAPTER D. CERTIFICATE HOLDERS 212-23 Sec. 52.151. APPLICABILITY. This subchapter applies only to 212-24 a telecommunications utility that holds a certificate of operating 212-25 authority or a service provider certificate of operating authority. 212-26 (V.A.C.S. Art. 1446c-0, Secs. 3.051(r) (part), (s)(1) (part), 212-27 (s)(2) (part).) 213-1 Sec. 52.152. LIMITED REGULATORY AUTHORITY. Except as 213-2 otherwise specifically provided by this title, the commission has 213-3 only the following authority over a telecommunications utility 213-4 subject to this subchapter: 213-5 (1) to enforce this title under Subchapter B, Chapter 213-6 15; 213-7 (2) to assert jurisdiction over a specific service 213-8 under Subchapter E; 213-9 (3) to require co-carriage reciprocity; and 213-10 (4) to regulate condemnation and building access. 213-11 (V.A.C.S. Art. 1446c-0, Sec. 3.051(s)(1).) 213-12 Sec. 52.153. BOOKS AND RECORDS. The commission may 213-13 prescribe forms of books, accounts, records, and memoranda to be 213-14 kept by a telecommunications utility, but only as necessary to 213-15 enforce the limited jurisdiction over those companies that this 213-16 title provides to the commission. (V.A.C.S. Art. 1446c-0, Sec. 213-17 3.051(r).) 213-18 Sec. 52.154. COMMISSION MAY NOT OVERBURDEN. The commission 213-19 may not, by a rule or regulatory practice adopted under this 213-20 chapter, impose on a telecommunications utility a greater 213-21 regulatory burden than is imposed on a holder of a certificate of 213-22 convenience and necessity serving the same area. (V.A.C.S. 213-23 Art. 1446c-0, Sec. 3.051(s)(2).) 213-24 (Sections 52.155-52.200 reserved for expansion) 213-25 SUBCHAPTER E. DEREGULATION OF SERVICE 213-26 Sec. 52.201. DEREGULATION OF SERVICE. Notwithstanding any 213-27 other provision of this title, the commission may deregulate the 214-1 price of a service in a geographic market if, after notice and 214-2 hearing, the commission determines that: 214-3 (1) the incumbent local exchange company is not 214-4 dominant for the service in that geographic market; or 214-5 (2) the holder of a certificate of operating authority 214-6 who is a dominant carrier is no longer dominant for the service in 214-7 that geographic market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) 214-8 (part).) 214-9 Sec. 52.202. DETERMINATION OF GEOGRAPHIC MARKET. In 214-10 determining the geographic market under Section 52.201, the 214-11 commission shall consider the economic and technical conditions of 214-12 the market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) (part).) 214-13 Sec. 52.203. MARKET POWER TEST. (a) To determine whether an 214-14 incumbent local exchange company or holder of a certificate of 214-15 operating authority who is a dominant carrier is no longer dominant 214-16 for a service in a geographic market, the commission must find 214-17 that: 214-18 (1) there is an effective competitive alternative; and 214-19 (2) the incumbent local exchange company or 214-20 certificate holder does not have market power sufficient to 214-21 control, in a manner that is adverse to the public interest, the 214-22 price of the service in the geographic area. 214-23 (b) To determine whether the incumbent local exchange 214-24 company or certificate holder is dominant for a service in the 214-25 geographic area, the commission shall consider: 214-26 (1) the number and size of telecommunications 214-27 utilities or other persons who provide the same, equivalent, or 215-1 substitutable service in the relevant market; 215-2 (2) the extent to which the service is available in 215-3 the relevant market; 215-4 (3) the ability of customers in the relevant market to 215-5 obtain the same, equivalent, or substitutable service at comparable 215-6 rates and on comparable terms; 215-7 (4) the ability of a telecommunications utility or 215-8 other person to make the same, equivalent, or substitutable service 215-9 readily available in the relevant market at comparable rates and on 215-10 comparable terms; 215-11 (5) the proportion of the relevant market that is 215-12 being provided the service by a telecommunications utility other 215-13 than the incumbent local exchange company or holder of a 215-14 certificate of operating authority who is a dominant carrier; and 215-15 (6) other relevant information the commission 215-16 considers necessary. (V.A.C.S. Art. 1446c-0, Secs. 3.2572(b), 215-17 (c).) 215-18 Sec. 52.204. RATE FOR DEREGULATED SERVICE. If the price of 215-19 a service in a geographic market is deregulated under this 215-20 subchapter, the incumbent local exchange company or holder of a 215-21 certificate of operating authority may set the rate for the service 215-22 at any level higher than the service's long run incremental cost. 215-23 (V.A.C.S. Art. 1446c-0, Sec. 3.2572(a) (part).) 215-24 Sec. 52.205. INVESTIGATION OF COMPETITION. (a) On request 215-25 of an incumbent local exchange company or holder of a certificate 215-26 of operating authority who is a dominant carrier made in 215-27 conjunction with an application under this subchapter, the 216-1 commission shall investigate to determine the effect and scope of 216-2 competition in the geographic and service markets at issue. 216-3 (b) The commission has the power necessary and convenient to 216-4 conduct the investigation. In conducting an investigation, the 216-5 commission may: 216-6 (1) hold a hearing; 216-7 (2) issue a subpoena to compel the attendance of a 216-8 witness and the production of a document; and 216-9 (3) make findings of fact and decisions with respect 216-10 to the markets. 216-11 (c) A party to a proceeding may use, in an application for 216-12 pricing flexibility, the results of an investigation conducted 216-13 under this section. (V.A.C.S. Art. 1446c-0, Secs. 3.2572(e), (f).) 216-14 Sec. 52.206. REREGULATION OF MARKET. The commission, on its 216-15 own motion or on a complaint that the commission considers to have 216-16 merit, may assert regulation over a service in a geographic market 216-17 if: 216-18 (1) the incumbent local exchange company or holder of 216-19 a certificate of operating authority who was previously a dominant 216-20 carrier is found to again be dominant for the service in that 216-21 geographic market; or 216-22 (2) the provider of services under a certificate of 216-23 operating authority or service provider certificate of operating 216-24 authority is found to be dominant for the service in that 216-25 geographic market. (V.A.C.S. Art. 1446c-0, Sec. 3.2572(d).) 216-26 Sec. 52.207. REPORTS; CONFIDENTIAL INFORMATION. (a) In 216-27 conjunction with the commission's authority to collect and compile 217-1 information, the commission may collect a report from a holder of 217-2 a: 217-3 (1) certificate of operating authority; or 217-4 (2) service provider certificate of operating 217-5 authority. 217-6 (b) The commission shall maintain the confidentiality of 217-7 information contained in a report collected under this section that 217-8 is claimed to be confidential for competitive purposes. The 217-9 confidential information is exempt from disclosure under Chapter 217-10 552, Government Code. 217-11 (c) To protect the confidential information, the commission 217-12 shall aggregate the information to the maximum extent possible 217-13 considering the purpose of the proceeding. (V.A.C.S. Art. 1446c-0, 217-14 Sec. 3.2572(g).) 217-15 (Sections 52.208-52.250 reserved for expansion) 217-16 SUBCHAPTER F. REQUIRED REPORTS AND FILINGS; RECORDS 217-17 Sec. 52.251. TARIFF FILINGS. (a) A public utility shall 217-18 file with the commission a tariff showing each rate that is: 217-19 (1) subject to the commission's jurisdiction; and 217-20 (2) in effect for a utility service, product, or 217-21 commodity offered by the utility. 217-22 (b) The public utility shall file as a part of the tariff 217-23 required under Subsection (a) each rule that relates to or affects: 217-24 (1) a rate of the utility; or 217-25 (2) a utility service, product, or commodity furnished 217-26 by the utility. (V.A.C.S. Art. 1446c-0, Sec. 3.154.) 217-27 Sec. 52.252. DEPRECIATION ACCOUNT. The commission shall 218-1 require each public utility to carry a proper and adequate 218-2 depreciation account in accordance with: 218-3 (1) the rates and methods prescribed by the commission 218-4 under Section 53.056; and 218-5 (2) any other rule the commission adopts. (V.A.C.S. 218-6 Art. 1446c-0, Sec. 3.151(a) (part).) 218-7 Sec. 52.253. ACCOUNTS OF PROFITS AND LOSSES. A public 218-8 utility shall keep separate accounts showing profits or losses from 218-9 the sale or lease of merchandise, including an appliance, a 218-10 fixture, or equipment. (V.A.C.S. Art. 1446c-0, Sec. 3.151(b) 218-11 (part).) 218-12 Sec. 52.254. REPORT OF CERTAIN EXPENSES. The commission may 218-13 require a public utility to annually report the utility's 218-14 expenditures for: 218-15 (1) business gifts and entertainment; and 218-16 (2) advertising or public relations, including 218-17 expenditures for institutional and consumption-inducing purposes. 218-18 (V.A.C.S. Art. 1446c-0, Sec. 3.152(a).) 218-19 Sec. 52.255. AVAILABILITY OF RECORDS. Notwithstanding 218-20 Section 14.152, a book, account, record, or memorandum of a public 218-21 utility may be removed from this state if the book, account, 218-22 record, or memorandum is returned to this state for any commission 218-23 inspection authorized by this title. (V.A.C.S. Art. 1446c-0, Sec. 218-24 3.1545.) 218-25 CHAPTER 53. RATES 218-26 SUBCHAPTER A. GENERAL PROVISIONS 218-27 Sec. 53.001. AUTHORIZATION TO ESTABLISH AND REGULATE 219-1 RATES 219-2 Sec. 53.002. COMPLIANCE WITH TITLE 219-3 Sec. 53.003. JUST AND REASONABLE RATES 219-4 Sec. 53.004. EQUALITY OF RATES AND SERVICES 219-5 Sec. 53.005. RATES FOR AREA NOT IN MUNICIPALITY 219-6 Sec. 53.006. BURDEN OF PROOF 219-7 Sec. 53.007. LIMIT ON RECONNECTION FEE 219-8 (Sections 53.008-53.050 reserved for expansion) 219-9 SUBCHAPTER B. COMPUTATION OF RATES 219-10 Sec. 53.051. ESTABLISHING OVERALL REVENUES 219-11 Sec. 53.052. ESTABLISHING REASONABLE RETURN 219-12 Sec. 53.053. COMPONENTS OF INVESTED CAPITAL 219-13 Sec. 53.054. CONSTRUCTION WORK IN PROGRESS 219-14 Sec. 53.055. SEPARATIONS AND ALLOCATIONS 219-15 Sec. 53.056. DEPRECIATION, AMORTIZATION, AND DEPLETION 219-16 Sec. 53.057. NET INCOME; DETERMINATION OF REVENUES AND 219-17 EXPENSES 219-18 Sec. 53.058. CONSIDERATION OF PAYMENT TO AFFILIATE 219-19 Sec. 53.059. TREATMENT OF CERTAIN TAX BENEFITS 219-20 Sec. 53.060. COMPUTATION OF INCOME TAX; CONSOLIDATED RETURN 219-21 Sec. 53.061. ALLOWANCE OF CERTAIN 219-22 EXPENSES 219-23 Sec. 53.062. CONSIDERATION OF CERTAIN EXPENSES 219-24 Sec. 53.063. CONSIDERATION OF PROFIT OR LOSS FROM 219-25 SALE OR LEASE OF MERCHANDISE 219-26 Sec. 53.064. SELF-INSURANCE 219-27 Sec. 53.065. INTEREXCHANGE SERVICES; RATES OF 220-1 INCUMBENT LOCAL EXCHANGE COMPANY 220-2 (Sections 53.066-53.100 reserved for expansion) 220-3 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE 220-4 CHANGE PROPOSED BY UTILITY 220-5 Sec. 53.101. DEFINITION 220-6 Sec. 53.102. STATEMENT OF INTENT TO CHANGE RATES 220-7 Sec. 53.103. NOTICE OF INTENT TO CHANGE RATES 220-8 Sec. 53.104. EARLY EFFECTIVE DATE OF RATE CHANGE 220-9 Sec. 53.105. DETERMINATION OF PROPRIETY OF CHANGE; HEARING 220-10 Sec. 53.106. REGIONAL HEARING 220-11 Sec. 53.107. PREFERENCE TO HEARING 220-12 Sec. 53.108. RATE SUSPENSION; DEADLINE 220-13 Sec. 53.109. TEMPORARY RATES 220-14 Sec. 53.110. BONDED RATES 220-15 Sec. 53.111. ESTABLISHMENT OF FINAL RATES 220-16 Sec. 53.112. EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN 220-17 RATES 220-18 Sec. 53.113. FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS 220-19 SERVICE 220-20 (Sections 53.114-53.150 reserved for expansion) 220-21 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 220-22 Sec. 53.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 220-23 Sec. 53.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 220-24 ANOTHER SOURCE 220-25 (Sections 53.153-53.200 reserved for expansion) 220-26 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENTS 220-27 Sec. 53.201. AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS 221-1 PROHIBITED 221-2 Sec. 53.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY 221-3 (Sections 53.203-53.250 reserved for expansion) 221-4 SUBCHAPTER F. REGULATORY POLICY FOR SMALL INCUMBENT LOCAL 221-5 EXCHANGE COMPANIES AND COOPERATIVES 221-6 Sec. 53.251. GENERAL POLICY 221-7 Sec. 53.252. ADOPTION OF CERTAIN POLICIES 221-8 (Sections 53.253-53.300 reserved for expansion) 221-9 SUBCHAPTER G. SPECIAL PROCEDURES FOR SMALL 221-10 LOCAL EXCHANGE COMPANIES AND COOPERATIVES 221-11 Sec. 53.301. DEFINITION 221-12 Sec. 53.302. APPLICABILITY 221-13 Sec. 53.303. PROVISIONS NOT EXCLUSIVE 221-14 Sec. 53.304. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE MINOR 221-15 CHANGES 221-16 Sec. 53.305. NOTICE TO AFFECTED CUSTOMERS 221-17 Sec. 53.306. COMMISSION REVIEW OF PROPOSED CHANGE 221-18 Sec. 53.307. COMPLIANCE WITH PRINCIPLES; REDUCED RATES 221-19 Sec. 53.308. FEES AND ASSESSMENTS 221-20 (Sections 53.309-53.350 reserved for expansion) 221-21 SUBCHAPTER H. PARTIAL DEREGULATION AVAILABLE TO 221-22 CERTAIN COOPERATIVE CORPORATIONS 221-23 Sec. 53.351. PROVISIONS NOT EXCLUSIVE 221-24 Sec. 53.352. PARTIAL DEREGULATION BY BALLOT 221-25 Sec. 53.353. VOTING PROCEDURES 221-26 Sec. 53.354. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE CERTAIN 221-27 CHANGES 222-1 Sec. 53.355. STATEMENT OF INTENT 222-2 Sec. 53.356. NOTICE TO AFFECTED PERSONS 222-3 Sec. 53.357. FILING OF AFFIDAVITS VERIFYING NOTICE 222-4 Sec. 53.358. COMMISSION REVIEW OF PROPOSED ACTION 222-5 Sec. 53.359. REVERSAL OF DEREGULATION BY BALLOT 222-6 CHAPTER 53. RATES 222-7 SUBCHAPTER A. GENERAL PROVISIONS 222-8 Sec. 53.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 222-9 (a) Except as otherwise provided by this title, the commission may 222-10 establish and regulate rates of a public utility and may adopt 222-11 rules for determining: 222-12 (1) the classification of customers and services; and 222-13 (2) the applicability of rates. 222-14 (b) A rule or order of the commission may not conflict with 222-15 a ruling of a federal regulatory body. (V.A.C.S. Art. 1446c-0, 222-16 Sec. 3.201.) 222-17 Sec. 53.002. COMPLIANCE WITH TITLE. A utility may not 222-18 charge or receive a rate for utility service except as provided by 222-19 this title. (V.A.C.S. Art. 1446c-0, Sec. 3.153 (part).) 222-20 Sec. 53.003. JUST AND REASONABLE RATES. (a) The commission 222-21 shall ensure that each rate a public utility or two or more public 222-22 utilities jointly make, demand, or receive is just and reasonable. 222-23 (b) A rate may not be unreasonably preferential, 222-24 prejudicial, or discriminatory but must be sufficient, equitable, 222-25 and consistent in application to each class of consumer. 222-26 (c) A public utility may not: 222-27 (1) grant an unreasonable preference or advantage 223-1 concerning rates to a person in a classification; 223-2 (2) subject a person in a classification to an 223-3 unreasonable prejudice or disadvantage concerning rates; or 223-4 (3) establish or maintain an unreasonable difference 223-5 concerning rates between localities or between classes of service. 223-6 (d) In establishing a public utility's rates, the commission 223-7 may treat as a single class two or more municipalities that a 223-8 public utility serves if the commission considers that treatment to 223-9 be appropriate. (V.A.C.S. Art. 1446c-0, Secs. 3.202 (part), 3.215 223-10 (part).) 223-11 Sec. 53.004. EQUALITY OF RATES AND SERVICES. (a) A public 223-12 utility may not directly or indirectly charge, demand, or receive 223-13 from a person a greater or lesser compensation for a service 223-14 provided or to be provided by the utility than the compensation 223-15 prescribed by the applicable tariff filed under Section 52.251. 223-16 (b) A person may not knowingly receive or accept a service 223-17 from a public utility for a compensation greater or less than the 223-18 compensation prescribed by the tariff. 223-19 (c) This title does not prevent a cooperative corporation 223-20 from returning to its members net earnings resulting from its 223-21 operations in proportion to the members' purchases from or through 223-22 the corporation. (V.A.C.S. Art. 1446c-0, Sec. 3.216.) 223-23 Sec. 53.005. RATES FOR AREA NOT IN MUNICIPALITY. Without 223-24 the approval of the commission, a public utility's rates for an 223-25 area not in a municipality may not exceed 115 percent of the 223-26 average of all rates for similar services for all municipalities 223-27 served by the same utility in the same county as that area. 224-1 (V.A.C.S. Art. 1446c-0, Sec. 3.214.) 224-2 Sec. 53.006. BURDEN OF PROOF. (a) In a proceeding 224-3 involving a proposed rate change, the public utility has the burden 224-4 of proving that: 224-5 (1) the rate change is just and reasonable, if the 224-6 utility proposes the change; or 224-7 (2) an existing rate is just and reasonable, if the 224-8 proposal is to reduce the rate. 224-9 (b) In a proceeding in which the rate of an incumbent local 224-10 exchange company is in issue, the incumbent local exchange company 224-11 has the burden of proving that the rate is just and reasonable. 224-12 (V.A.C.S. Art. 1446c-0, Sec. 3.204.) 224-13 Sec. 53.007. LIMIT ON RECONNECTION FEE. The commission 224-14 shall establish a reasonable limit on the amount that a local 224-15 exchange company may charge a customer for changing the location at 224-16 which the customer receives service. (V.A.C.S. Art. 1446c-0, Sec. 224-17 3.1556.) 224-18 (Sections 53.008-53.050 reserved for expansion) 224-19 SUBCHAPTER B. COMPUTATION OF RATES 224-20 Sec. 53.051. ESTABLISHING OVERALL REVENUES. In establishing 224-21 a public utility's rates, the commission shall establish the 224-22 utility's overall revenues at an amount that will permit the 224-23 utility a reasonable opportunity to earn a reasonable return on the 224-24 utility's invested capital used and useful in providing service to 224-25 the public in excess of the utility's reasonable and necessary 224-26 operating expenses. (V.A.C.S. Art. 1446c-0, Sec. 3.203(a).) 224-27 Sec. 53.052. ESTABLISHING REASONABLE RETURN. In 225-1 establishing a reasonable return on invested capital, the 225-2 commission shall consider applicable factors, including: 225-3 (1) the quality of the utility's services; 225-4 (2) the efficiency of the utility's operations; and 225-5 (3) the quality of the utility's management. 225-6 (V.A.C.S. Art. 1446c-0, Sec. 3.203(b).) 225-7 Sec. 53.053. COMPONENTS OF INVESTED CAPITAL. (a) Public 225-8 utility rates shall be based on the original cost, less 225-9 depreciation, of property used by and useful to the utility in 225-10 providing service. 225-11 (b) The original cost of property shall be determined at the 225-12 time the property is dedicated to public use, whether by the 225-13 utility that is the present owner or by a predecessor. 225-14 (c) In this section, "original cost" means the actual money 225-15 cost or the actual money value of consideration paid other than 225-16 money. (V.A.C.S. Art. 1446c-0, Secs. 3.206(a) (part), (c).) 225-17 Sec. 53.054. CONSTRUCTION WORK IN PROGRESS. (a) 225-18 Construction work in progress, at cost as recorded on the public 225-19 utility's books, may be included in the utility's rate base. The 225-20 inclusion of construction work in progress is an exceptional form 225-21 of rate relief that the commission may grant only if the utility 225-22 demonstrates that inclusion is necessary to the utility's financial 225-23 integrity. 225-24 (b) Construction work in progress may not be included in the 225-25 rate base for a major project under construction to the extent that 225-26 the project has been inefficiently or imprudently planned or 225-27 managed. (V.A.C.S. Art. 1446c-0, Secs. 3.206(a) (part), (b).) 226-1 Sec. 53.055. SEPARATIONS AND ALLOCATIONS. Costs of 226-2 facilities, revenues, expenses, taxes, and reserves shall be 226-3 separated or allocated as prescribed by the commission. (V.A.C.S. 226-4 Art. 1446c-0, Sec. 3.207.) 226-5 Sec. 53.056. DEPRECIATION, AMORTIZATION, AND DEPLETION. (a) 226-6 The commission shall establish proper and adequate rates and 226-7 methods of depreciation, amortization, or depletion for each class 226-8 of property of a public utility. 226-9 (b) On application of a utility, the commission shall 226-10 establish depreciation rates that promote the use of new technology 226-11 and infrastructure. In establishing rates under this subsection, 226-12 the commission shall consider depreciation practices of 226-13 nonregulated telecommunications providers. 226-14 (c) The rates and methods established under this section and 226-15 the depreciation account required by Section 52.252 shall be used 226-16 uniformly and consistently throughout rate-setting and appeal 226-17 proceedings. 226-18 (d) Notwithstanding this section, a company electing under 226-19 Chapter 58 may determine its own depreciation rates and 226-20 amortizations. The company shall notify the commission of any 226-21 change in those rates or amortizations. (V.A.C.S. Art. 1446c-0, 226-22 Sec. 3.151(a) (part).) 226-23 Sec. 53.057. NET INCOME; DETERMINATION OF REVENUES AND 226-24 EXPENSES. (a) A public utility's net income is the total revenues 226-25 of the utility less all reasonable and necessary expenses as 226-26 determined by the commission. 226-27 (b) The commission shall determine revenues and expenses in 227-1 a manner consistent with this subchapter. 227-2 (c) The commission may adopt reasonable rules with respect 227-3 to whether an expense is allowed for ratemaking purposes. 227-4 (V.A.C.S. Art. 1446c-0, Secs. 3.208(a), (e).) 227-5 Sec. 53.058. CONSIDERATION OF PAYMENT TO AFFILIATE. (a) 227-6 Except as provided by Subsection (b), the commission may not allow 227-7 as capital cost or as expense a payment to an affiliate for: 227-8 (1) cost of a service, property, right, or other item; 227-9 or 227-10 (2) interest expense. 227-11 (b) The commission may allow a payment described by 227-12 Subsection (a) only to the extent that the commission finds the 227-13 payment is reasonable and necessary for each item or class of items 227-14 as determined by the commission. 227-15 (c) A finding under Subsection (b) must include: 227-16 (1) a specific finding of the reasonableness and 227-17 necessity of each item or class of items allowed; and 227-18 (2) except as provided by Subsection (d), a finding 227-19 that the price to the utility is not higher than the prices charged 227-20 by the supplying affiliate to: 227-21 (A) its other affiliates or divisions for the 227-22 same item or class of items; or 227-23 (B) a nonaffiliated person within the same 227-24 market area or having the same market conditions. 227-25 (d) A finding under this section is not required as to the 227-26 prices charged by the supplying affiliate to its other affiliates 227-27 or divisions if the supplying affiliate computed its charges to the 228-1 utility in a manner consistent with Federal Communications 228-2 Commission rules. 228-3 (e) If the commission finds that the affiliate expense for 228-4 the test period is unreasonable, the commission shall: 228-5 (1) determine the reasonable level of the expense; and 228-6 (2) include that expense in determining the utility's 228-7 cost of service. (V.A.C.S. Art. 1446c-0, Sec. 3.208(b).) 228-8 Sec. 53.059. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 228-9 determining the allocation of tax savings derived from liberalized 228-10 depreciation and amortization, the investment tax credit, and the 228-11 application of similar methods, the commission shall: 228-12 (1) balance equitably the interests of present and 228-13 future customers; and 228-14 (2) apportion accordingly the benefits between 228-15 consumers and the public utility. 228-16 (b) If a public utility retains a portion of the investment 228-17 tax credit, that portion shall be deducted from the original cost 228-18 of the facilities or other addition to the rate base to which the 228-19 credit applied to the extent allowed by the Internal Revenue Code. 228-20 (V.A.C.S. Art. 1446c-0, Sec. 3.151(c).) 228-21 Sec. 53.060. COMPUTATION OF INCOME TAX; CONSOLIDATED RETURN. 228-22 (a) Unless it is shown to the satisfaction of the commission that 228-23 it was reasonable to choose not to consolidate returns, a public 228-24 utility's income taxes shall be computed as though a consolidated 228-25 return had been filed and the utility had realized its fair share 228-26 of the savings resulting from that return, if: 228-27 (1) the utility is a member of an affiliated group 229-1 eligible to file a consolidated income tax return; and 229-2 (2) it is advantageous to the utility to do so. 229-3 (b) The amount of income tax that a consolidated group of 229-4 which a public utility is a member saves, because the consolidated 229-5 return eliminates the intercompany profit on purchases by the 229-6 utility from an affiliate, shall be applied to reduce the cost of 229-7 the property or service purchased from the affiliate. 229-8 (c) The investment tax credit allowed against federal income 229-9 taxes, to the extent retained by the utility, shall be applied as a 229-10 reduction in the rate-based contribution of the assets to which the 229-11 credit applies, to the extent and at the rate allowed by the 229-12 Internal Revenue Code. (V.A.C.S. Art. 1446c-0, Sec. 3.208(c).) 229-13 Sec. 53.061. ALLOWANCE OF CERTAIN EXPENSES. (a) The 229-14 commission may not allow as a cost or expense for ratemaking 229-15 purposes: 229-16 (1) an expenditure for legislative advocacy; or 229-17 (2) an expenditure described by Section 52.254 that 229-18 the commission determines to be not in the public interest. 229-19 (b) The commission may allow as a cost or expense reasonable 229-20 charitable or civic contributions not to exceed the amount approved 229-21 by the commission. (V.A.C.S. Art. 1446c-0, Secs. 3.152(b), (c), 229-22 (d).) 229-23 Sec. 53.062. CONSIDERATION OF CERTAIN EXPENSES. The 229-24 commission may not consider for ratemaking purposes: 229-25 (1) an expenditure for legislative advocacy, made 229-26 directly or indirectly, including legislative advocacy expenses 229-27 included in trade association dues; 230-1 (2) an expenditure for costs of processing a refund or 230-2 credit under Section 53.110; or 230-3 (3) any other expenditure, including an executive 230-4 salary, advertising expense, legal expense, or civil penalty or 230-5 fine the commission finds to be unreasonable, unnecessary, or not 230-6 in the public interest. (V.A.C.S. Art. 1446c-0, Sec. 3.208(d).) 230-7 Sec. 53.063. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 230-8 LEASE OF MERCHANDISE. In establishing a public utility's rates, 230-9 the commission may not consider a profit or loss that results from 230-10 the sale or lease of merchandise, including appliances, fixtures, 230-11 or equipment, to the extent that merchandise is not integral to 230-12 providing utility service. (V.A.C.S. Art. 1446c-0, Sec. 3.151(b) 230-13 (part).) 230-14 Sec. 53.064. SELF-INSURANCE. (a) A public utility may 230-15 self-insure all or part of the utility's potential liability or 230-16 catastrophic property loss, including windstorm, fire, and 230-17 explosion losses, that could not have been reasonably anticipated 230-18 and included under operating and maintenance expenses. 230-19 (b) The commission shall approve a self-insurance plan under 230-20 this section if the commission finds that: 230-21 (1) the coverage is in the public interest; 230-22 (2) the plan, considering all costs, is a lower cost 230-23 alternative to purchasing commercial insurance; and 230-24 (3) ratepayers will receive the benefits of the 230-25 savings. 230-26 (c) In computing a utility's reasonable and necessary 230-27 expenses under this subchapter, the commission, to the extent the 231-1 commission finds is in the public interest, shall allow as a 231-2 necessary expense money credited to a reserve account for 231-3 self-insurance. The commission shall determine reasonableness 231-4 under this subsection: 231-5 (1) from information provided at the time the 231-6 self-insurance plan and reserve account are established; and 231-7 (2) on the filing of a rate case by a utility that has 231-8 a reserve account. 231-9 (d) After a reserve account for self-insurance is 231-10 established, the commission shall: 231-11 (1) determine whether the account has a surplus or 231-12 shortage under Subsection (e); and 231-13 (2) subtract any surplus from or add any shortage to 231-14 the utility's rate base. 231-15 (e) A surplus in the reserve account exists if the charges 231-16 against the account are less than the money credited to the 231-17 account. A shortage in the reserve account exists if the charges 231-18 against the account are greater than the money credited to the 231-19 account. 231-20 (f) The commission shall adopt rules governing 231-21 self-insurance under this section. (V.A.C.S. Art. 1446c-0, Sec. 231-22 3.209.) 231-23 Sec. 53.065. INTEREXCHANGE SERVICES; RATES OF INCUMBENT 231-24 LOCAL EXCHANGE COMPANY. (a) An incumbent local exchange company's 231-25 rates for interexchange telecommunications services must be 231-26 statewide average rates except as ordered by the commission after 231-27 application and hearing. 232-1 (b) This section does not limit the ability of an incumbent 232-2 local exchange company to contract for high-speed private line 232-3 services of 1.544 megabits or greater under Section 52.057. 232-4 (V.A.C.S. Art. 1446c-0, Sec. 3.303.) 232-5 (Sections 53.066-53.100 reserved for expansion) 232-6 SUBCHAPTER C. GENERAL PROCEDURES FOR RATE 232-7 CHANGE PROPOSED BY UTILITY 232-8 Sec. 53.101. DEFINITION. In this subchapter, "major change" 232-9 means an increase in rates that would increase the aggregate 232-10 revenues of the applicant more than the greater of $100,000 or 232-11 2-1/2 percent. The term does not include an increase in rates that 232-12 the commission allows to go into effect or the utility makes under 232-13 an order of the commission after hearings held with public notice. 232-14 (V.A.C.S. Art. 1446c-0, Sec. 3.211(b) (part).) 232-15 Sec. 53.102. STATEMENT OF INTENT TO CHANGE RATES. (a) A 232-16 utility may not change its rates unless the utility files a 232-17 statement of its intent with the commission at least 35 days before 232-18 the effective date of the proposed change. 232-19 (b) The utility shall also mail or deliver a copy of the 232-20 statement of intent to the appropriate officer of each affected 232-21 municipality. 232-22 (c) The statement of intent must include: 232-23 (1) proposed revisions of tariffs; and 232-24 (2) a detailed statement of: 232-25 (A) each proposed change; 232-26 (B) the effect the proposed change is expected 232-27 to have on the revenues of the utility; 233-1 (C) each class and number of utility consumers 233-2 affected; and 233-3 (D) any other information required by the 233-4 commission's rules. (V.A.C.S. Art. 1446c-0, Sec. 3.211(a) (part).) 233-5 Sec. 53.103. NOTICE OF INTENT TO CHANGE RATES. (a) The 233-6 utility shall: 233-7 (1) publish, in conspicuous form and place, notice to 233-8 the public of the proposed change once each week for four 233-9 successive weeks before the effective date of the proposed change 233-10 in a newspaper having general circulation in each county containing 233-11 territory affected by the proposed change; and 233-12 (2) mail notice of the proposed change to any other 233-13 affected person as required by the commission's rules. 233-14 (b) The commission may waive the publication of notice 233-15 requirement prescribed by Subsection (a) in a proceeding that 233-16 involves only a rate reduction for each affected ratepayer. The 233-17 applicant shall give notice of the proposed rate change by mail to 233-18 each affected utility customer. 233-19 (c) The commission by rule shall define other proceedings 233-20 for which the publication of notice requirement prescribed by 233-21 Subsection (a) may be waived on a showing of good cause. A waiver 233-22 may not be granted in a proceeding involving a rate increase to any 233-23 class or category of ratepayer. (V.A.C.S. Art. 1446c-0, Sec. 233-24 3.211(a) (part).) 233-25 Sec. 53.104. EARLY EFFECTIVE DATE OF RATE CHANGE. (a) For 233-26 good cause shown, the commission may allow a rate change, other 233-27 than a major change, to take effect: 234-1 (1) before the end of the 35-day period prescribed by 234-2 Section 53.102; and 234-3 (2) under conditions the commission prescribes, 234-4 subject to suspension as provided by this subchapter. 234-5 (b) The utility shall immediately revise its tariffs to 234-6 include the change. (V.A.C.S. Art. 1446c-0, Sec. 3.211(b) (part).) 234-7 Sec. 53.105. DETERMINATION OF PROPRIETY OF CHANGE; HEARING. 234-8 (a) If a tariff changing rates is filed with the commission, the 234-9 commission shall, on complaint by an affected person, or may, on 234-10 its own motion, not later than the 30th day after the effective 234-11 date of the change, enter on a hearing to determine the propriety 234-12 of the change. 234-13 (b) The commission shall hold a hearing in every case in 234-14 which the change constitutes a major change. The commission may, 234-15 however, use an informal proceeding if the commission does not 234-16 receive a complaint before the 46th day after the date notice of 234-17 the change is filed. 234-18 (c) The commission shall give reasonable notice of the 234-19 hearing, including notice to the governing body of each affected 234-20 municipality and county. The utility is not required to provide a 234-21 formal answer or file any other formal pleading in response to the 234-22 notice, and the absence of an answer does not affect an order for a 234-23 hearing. (V.A.C.S. Art. 1446c-0, Sec. 3.211(c) (part).) 234-24 Sec. 53.106. REGIONAL HEARING. The commission shall hold a 234-25 regional hearing at an appropriate location in a case in which the 234-26 commission determines it is in the public interest to hear 234-27 testimony at a regional hearing for inclusion in the record. 235-1 (V.A.C.S. Art. 1446c-0, Sec. 3.211(c) (part).) 235-2 Sec. 53.107. PREFERENCE TO HEARING. The commission shall: 235-3 (1) give preference to a hearing under this subchapter 235-4 and to deciding questions arising under this subchapter and 235-5 Subchapter E over any other question pending before it; and 235-6 (2) decide the questions as quickly as possible. 235-7 (V.A.C.S. Art. 1446c-0, Sec. 3.211(d) (part).) 235-8 Sec. 53.108. RATE SUSPENSION; DEADLINE. (a) Pending the 235-9 hearing and a decision, the commission, after delivering to the 235-10 utility a written statement of the commission's reasons, may 235-11 suspend the rate change for not longer than 150 days after the date 235-12 the rate change would otherwise be effective. 235-13 (b) The 150-day period prescribed by Subsection (a) shall be 235-14 extended two days for each day the actual hearing on the merits of 235-15 the case exceeds 15 days. 235-16 (c) If the commission does not make a final determination 235-17 concerning a rate change before expiration of the suspension 235-18 period, the commission is considered to have approved the change. 235-19 This approval is subject to the authority of the commission 235-20 thereafter to continue a hearing in progress. (V.A.C.S. 235-21 Art. 1446c-0, Sec. 3.211(d) (part).) 235-22 Sec. 53.109. TEMPORARY RATES. (a) The commission may 235-23 establish temporary rates to be in effect during the suspension 235-24 period under Section 53.108. 235-25 (b) If the commission does not establish temporary rates, 235-26 the rates in effect when the suspended tariff was filed continue in 235-27 effect during the suspension period. (V.A.C.S. Art. 1446c-0, Sec. 236-1 3.211(d) (part).) 236-2 Sec. 53.110. BONDED RATES. (a) A utility may put a changed 236-3 rate into effect by filing a bond with the commission if: 236-4 (1) the 150-day suspension period has been extended 236-5 under Section 53.108(b); and 236-6 (2) the commission fails to make a final determination 236-7 before the 151st day after the date the rate change would otherwise 236-8 be effective. 236-9 (b) The bonded rate may not exceed the proposed rate. 236-10 (c) The bond must be: 236-11 (1) payable to the commission in an amount, in a form, 236-12 and with a surety approved by the commission; and 236-13 (2) conditioned on refund. 236-14 (d) The utility shall refund or credit against future bills: 236-15 (1) money collected under the bonded rates in excess 236-16 of the rate finally ordered; and 236-17 (2) interest on that money, at the current interest 236-18 rate as determined by the commission. (V.A.C.S. Art. 1446c-0, Sec. 236-19 3.211(e).) 236-20 Sec. 53.111. ESTABLISHMENT OF FINAL RATES. (a) If, after 236-21 hearing, the commission finds the rates are unreasonable or in 236-22 violation of law, the commission shall: 236-23 (1) enter an order establishing the rates the utility 236-24 shall charge or apply for the service in question; and 236-25 (2) serve a copy of the order on the utility. 236-26 (b) The rates established in the order shall be observed 236-27 thereafter until changed as provided by this title. 237-1 (c) This section does not apply to a company electing under 237-2 Chapter 58 or 59 except as otherwise provided by those chapters or 237-3 by Chapter 60. (V.A.C.S. Art. 1446c-0, Sec. 3.211(f).) 237-4 Sec. 53.112. EXPIRATION OF SUSPENSION; EFFECT ON CERTAIN 237-5 RATES. (a) Notwithstanding Section 53.111(a), if the commission 237-6 does not make a final determination concerning an incumbent local 237-7 exchange company's rate change before expiration of the 150-day 237-8 suspension period, the rates finally approved by the commission 237-9 take effect on and the incumbent local exchange company is entitled 237-10 to collect those rates from the date the 150-day suspension period 237-11 expired. 237-12 (b) A surcharge or other charge necessary to effectuate this 237-13 section may not be recovered over a period of less than 90 days 237-14 from the date of the commission's final order. (V.A.C.S. 237-15 Art. 1446c-0, Sec. 3.211(h).) 237-16 Sec. 53.113. FCC-APPROVED TARIFFS FOR SWITCHED-ACCESS 237-17 SERVICE. (a) An incumbent local exchange company may file with 237-18 the commission tariffs for switched-access service that have been 237-19 approved by the Federal Communications Commission. The tariffs 237-20 must include all rate elements in the company's interstate access 237-21 tariff other than end-user charges. 237-22 (b) Not later than the 60th day after the date a company 237-23 files tariffs under Subsection (a), the commission shall order the 237-24 rates and terms to be the incumbent local exchange company's 237-25 intrastate switched-access rates and terms if, on review, the 237-26 tariffs contain the same rates and terms, excluding end-user 237-27 charges, as approved by the Federal Communications Commission. 238-1 (V.A.C.S. Art. 1446c-0, Sec. 3.211(j).) 238-2 (Sections 53.114-53.150 reserved for expansion) 238-3 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 238-4 Sec. 53.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. (a) 238-5 If the commission, on its own motion or on complaint by an affected 238-6 person, after reasonable notice and hearing, finds that the 238-7 existing rates of a public utility for a service are unreasonable 238-8 or in violation of law, the commission shall: 238-9 (1) enter an order establishing the just and 238-10 reasonable rates to be observed thereafter, including maximum or 238-11 minimum rates; and 238-12 (2) serve a copy of the order on the utility. 238-13 (b) The rates established under Subsection (a) constitute 238-14 the legal rates of the public utility until changed as provided by 238-15 this title. 238-16 (c) This section does not apply to a company electing under 238-17 Chapter 58 or Chapter 59 except as otherwise provided by those 238-18 chapters. (V.A.C.S. Art. 1446c-0, Secs. 3.210(a), (c) (part).) 238-19 Sec. 53.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 238-20 ANOTHER SOURCE. If a public utility does not produce or generate 238-21 the service that it distributes, transmits, or furnishes to the 238-22 public for compensation but obtains the service from another 238-23 source, the commission may investigate the cost of that production 238-24 or generation in an investigation of the reasonableness of the 238-25 utility's rates. (V.A.C.S. Art. 1446c-0, Sec. 3.210(b).) 238-26 (Sections 53.153-53.200 reserved for expansion) 239-1 SUBCHAPTER E. COST RECOVERY AND RATE ADJUSTMENTS 239-2 Sec. 53.201. AUTOMATIC ADJUSTMENT FOR CHANGE IN COSTS 239-3 PROHIBITED. The commission may not establish a rate or tariff that 239-4 authorizes a utility to automatically adjust and pass through to 239-5 the utility's customers a change in the utility's costs. (V.A.C.S. 239-6 Art. 1446c-0, Sec 3.211(g) (part).) 239-7 Sec. 53.202. ADJUSTMENT FOR CHANGE IN TAX LIABILITY. (a) 239-8 The commission, on its own motion or on the petition of a utility, 239-9 shall provide for the adjustment of the utility's billing to 239-10 reflect an increase or decrease in the utility's tax liability to 239-11 this state if the increase or decrease: 239-12 (1) results from Chapter 5, Acts of the 72nd 239-13 Legislature, 1st Called Session, 1991; and 239-14 (2) is attributable to an activity subject to the 239-15 commission's jurisdiction. 239-16 (b) The commission shall apportion pro rata to each type and 239-17 class of service provided by the utility any billing adjustment 239-18 under this section. The adjustment: 239-19 (1) shall be made effective at the same time as the 239-20 increase or decrease of tax liability described by Subsection 239-21 (a)(1), or as soon after that increase or decrease as is reasonably 239-22 practical; and 239-23 (2) remains effective only until the commission alters 239-24 the adjustment as provided by this section or enters an order for 239-25 the utility under Subchapter C or Subchapter D. 239-26 (c) Each year after an original adjustment, the commission 239-27 shall: 240-1 (1) review the utility's increase or decrease of tax 240-2 liability described by Subsection (a)(1); and 240-3 (2) alter the adjustment as necessary to reflect the 240-4 increase or decrease. 240-5 (d) A proceeding under this section is not a rate case under 240-6 Subchapter C. (V.A.C.S. Art. 1446c-0, Sec. 3.211(i).) 240-7 (Sections 53.203-53.250 reserved for expansion) 240-8 SUBCHAPTER F. REGULATORY POLICY FOR SMALL INCUMBENT LOCAL 240-9 EXCHANGE COMPANIES AND COOPERATIVES 240-10 Sec. 53.251. GENERAL POLICY. Regulatory policy should 240-11 recognize that: 240-12 (1) there are differences between small and large 240-13 incumbent local exchange companies; 240-14 (2) there are a large number of customer-owned 240-15 telephone cooperatives and small, locally owned investor companies; 240-16 and 240-17 (3) it is appropriate to provide incentives and 240-18 flexibility to allow an incumbent local exchange company that 240-19 serves a rural area to: 240-20 (A) provide existing services; and 240-21 (B) introduce new technology and new services in 240-22 a prompt, efficient, and economical manner. (V.A.C.S. 240-23 Art. 1446c-0, Sec. 3.213(a).) 240-24 Sec. 53.252. ADOPTION OF CERTAIN POLICIES. Notwithstanding 240-25 any other provision of this title, the commission shall consider 240-26 and may adopt policies to: 240-27 (1) provide for evaluation of the overall 241-1 reasonableness of the rates of a rural or small incumbent local 241-2 exchange company or cooperative not more frequently than once every 241-3 three years; 241-4 (2) permit consideration of future construction plans 241-5 and operational changes in evaluating the reasonableness of the 241-6 rates of a rural or small incumbent local exchange company or 241-7 cooperative; or 241-8 (3) allow a rural or small incumbent local exchange 241-9 company or cooperative to: 241-10 (A) provide required information by report or by 241-11 other means, as necessary, including a required rate filing 241-12 package, in substantially less burdensome and complex form than is 241-13 required of a larger incumbent local exchange company; 241-14 (B) change depreciation and amortization rates, 241-15 if customer rates are not affected, after notice to the commission, 241-16 subject to commission review in a proceeding under Subchapter C or 241-17 Subchapter D; 241-18 (C) adopt for a new service the rates for the 241-19 same or a substantially similar service offered by a larger 241-20 incumbent local exchange company, without additional cost 241-21 justification; and 241-22 (D) submit to the commission, instead of a 241-23 management audit otherwise required by law, policy, or rule, 241-24 financial audits regularly performed by an independent auditor or 241-25 required and performed as a result of the company's or 241-26 cooperative's participation in a federal or state financing or 241-27 revenue-sharing program. (V.A.C.S. Art. 1446c-0, Sec. 3.213(j) 242-1 (part).) 242-2 (Sections 53.253-53.300 reserved for expansion) 242-3 SUBCHAPTER G. SPECIAL PROCEDURES FOR SMALL 242-4 LOCAL EXCHANGE COMPANIES AND COOPERATIVES 242-5 Sec. 53.301. DEFINITION. (a) In this subchapter, "minor 242-6 change" means a change, including the restructuring of rates of 242-7 existing services, that: 242-8 (1) decreases the rates or revenues of an incumbent 242-9 local exchange company; or 242-10 (2) together with any other rate or proposed or 242-11 approved tariff changes in the 12 months preceding the effective 242-12 date of the proposed change, increases the company's total 242-13 regulated intrastate gross annual revenues by not more than five 242-14 percent. 242-15 (b) With regard to a change to a basic local access line 242-16 rate, a "minor change" does not include a change that, together 242-17 with any other change to the basic local access line rate that took 242-18 effect during the 12 months preceding the effective date of the 242-19 proposed change, results in an increase of more than 10 percent. 242-20 (V.A.C.S. Art. 1446c-0, Sec. 3.213(h).) 242-21 Sec. 53.302. APPLICABILITY. This subchapter does not apply 242-22 to an incumbent local exchange company that is a cooperative 242-23 corporation partially deregulated under Subchapter H. (V.A.C.S. 242-24 Art. 1446c-0, Sec. 3.213(l).) 242-25 Sec. 53.303. PROVISIONS NOT EXCLUSIVE. This subchapter does 242-26 not prohibit: 242-27 (1) an incumbent local exchange company from filing 243-1 for a new service or rate change under another section of this 243-2 title; or 243-3 (2) the commission from conducting a review under 243-4 Subchapter D. (V.A.C.S. Art. 1446c-0, Sec. 3.213(g).) 243-5 Sec. 53.304. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE 243-6 MINOR CHANGES. (a) An incumbent local exchange company may 243-7 offer an extended local calling service or a new service on an 243-8 optional basis or make a minor change in its rates or tariffs if 243-9 the company: 243-10 (1) is a cooperative corporation or has, together with 243-11 all affiliated incumbent local exchange companies, fewer than 243-12 31,000 access lines in service in this state; 243-13 (2) files with the commission and the office a 243-14 statement of intent, as prescribed by Subsection (b), not later 243-15 than the 91st day before the effective date of the proposed change; 243-16 (3) provides notice as prescribed by Section 53.305; 243-17 and 243-18 (4) files with the commission affidavits verifying 243-19 that notice as prescribed by Section 53.305 was provided. 243-20 (b) The statement of intent must include: 243-21 (1) a copy of a resolution adopted by the incumbent 243-22 local exchange company's board of directors approving the proposed 243-23 change; 243-24 (2) a description of the services affected by the 243-25 proposed change; 243-26 (3) a copy of the proposed tariff for the affected 243-27 service; 244-1 (4) a copy of the customer notice required by 244-2 Subsection (a)(3); 244-3 (5) the number of access lines the company and each 244-4 affiliate have in service in this state; and 244-5 (6) the amount by which the company's total regulated 244-6 intrastate gross annual revenues will increase or decrease as a 244-7 result of the proposed change. (V.A.C.S. Art. 1446c-0, Secs. 244-8 3.213(b), (c).) 244-9 Sec. 53.305. NOTICE TO AFFECTED CUSTOMERS. (a) A company 244-10 shall provide notice of a proposed change to affected customers in 244-11 the manner prescribed by the commission. 244-12 (b) Notice must: 244-13 (1) be provided not later than the 61st day before the 244-14 effective date of the proposed change; and 244-15 (2) include: 244-16 (A) a description of the services affected by 244-17 the proposed change; 244-18 (B) the effective date of the proposed change; 244-19 (C) an explanation of the customer's right to 244-20 petition the commission for a review under Section 53.306, 244-21 including the number of persons required to petition before a 244-22 commission review will occur; 244-23 (D) an explanation of the customer's right to 244-24 information concerning how to obtain a copy of the proposed tariff 244-25 from the company; 244-26 (E) the amount by which the company's total 244-27 regulated intrastate gross annual revenues will increase or 245-1 decrease as a result of the proposed change; and 245-2 (F) a list of rates that are affected by the 245-3 proposed rate change. (V.A.C.S. Art. 1446c-0, Sec. 3.213(d).) 245-4 Sec. 53.306. COMMISSION REVIEW OF PROPOSED CHANGE. (a) The 245-5 commission shall review a proposed change filed under this 245-6 subchapter if: 245-7 (1) the commission receives complaints relating to the 245-8 proposed change signed by a number of affected local service 245-9 customers equal at least to the lesser of 1,500 or five percent of 245-10 those customers; 245-11 (2) the commission receives a complaint relating to 245-12 the proposed change from an affected intrastate access customer, or 245-13 a group of affected intrastate access customers, that in the 245-14 preceding 12 months accounted for more than 10 percent of the 245-15 company's total intrastate gross access revenues; 245-16 (3) the proposed change is not a minor change; 245-17 (4) the company does not comply with the procedural 245-18 requirements of this subchapter; or 245-19 (5) the proposed change is inconsistent with the 245-20 commission's substantive policies as expressed in its rules. 245-21 (b) The commission may suspend a tariff proposed under this 245-22 subchapter during the review. (V.A.C.S. Art. 1446c-0, Secs. 245-23 3.213(e), (f).) 245-24 Sec. 53.307. COMPLIANCE WITH PRINCIPLES; REDUCED RATES. A 245-25 rate established under this subchapter must be in accordance with 245-26 the rate-setting principles of this chapter, except that a company 245-27 may provide to its board members, officers, employees, or agents 246-1 free or reduced rates for services. (V.A.C.S. Art. 1446c-0, Sec. 246-2 3.213(i).) 246-3 Sec. 53.308. FEES AND ASSESSMENTS. The commission may 246-4 prescribe and collect a fee or assessment from incumbent local 246-5 exchange companies necessary to recover the cost to the commission 246-6 and to the office of activities carried out and services provided 246-7 under: 246-8 (1) this subchapter; 246-9 (2) Section 53.112; 246-10 (3) Subchapter H; and 246-11 (4) Section 55.004. (V.A.C.S. Art. 1446c-0, Sec. 246-12 3.213(k).) 246-13 (Sections 53.309-53.350 reserved for expansion) 246-14 SUBCHAPTER H. PARTIAL DEREGULATION AVAILABLE TO 246-15 CERTAIN COOPERATIVE CORPORATIONS 246-16 Sec. 53.351. PROVISIONS NOT EXCLUSIVE. (a) This subchapter 246-17 does not: 246-18 (1) prohibit a cooperative from filing for a new 246-19 service or a rate change under another applicable provision of this 246-20 title; or 246-21 (2) affect the application of a provision of this 246-22 title not directly related to: 246-23 (A) establishing rates; or 246-24 (B) the authority of the commission to require a 246-25 cooperative to file a report required under this title or the 246-26 commission's rules. 246-27 (b) Notwithstanding any other provision of this subchapter, 247-1 the commission may conduct a review under Subchapter D. (V.A.C.S. 247-2 Art. 1446c-0, Secs. 3.2135(j), (k).) 247-3 Sec. 53.352. PARTIAL DEREGULATION BY BALLOT. (a) An 247-4 incumbent local exchange company that is a cooperative corporation 247-5 may vote to partially deregulate the cooperative by sending a 247-6 ballot to each cooperative member. The incumbent local exchange 247-7 company may include the ballot in a bill or send the ballot 247-8 separately. The ballot shall be printed to permit voting for or 247-9 against the proposition: "Authorizing the partial deregulation of 247-10 the (name of the cooperative)." 247-11 (b) The cooperative is partially deregulated if a majority 247-12 of the ballots returned to the cooperative not later than the 45th 247-13 day after the date the ballots are mailed favor deregulation. 247-14 (V.A.C.S. Art. 1446c-0, Secs. 3.2135(a), (b).) 247-15 Sec. 53.353. VOTING PROCEDURES. The commission by rule 247-16 shall prescribe the voting procedures a cooperative must use under 247-17 this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(i).) 247-18 Sec. 53.354. PROCEDURE TO OFFER CERTAIN SERVICES OR MAKE 247-19 CERTAIN CHANGES. (a) After the initial balloting, a cooperative 247-20 may offer extended local calling services, offer new services on an 247-21 optional basis, or make changes in its rates or tariffs if the 247-22 cooperative: 247-23 (1) files a statement of intent under Section 53.355; 247-24 (2) provides notice of the proposed action to each 247-25 customer and municipality as prescribed by Section 53.356; and 247-26 (3) files with the commission affidavits verifying 247-27 that notice was provided as prescribed by Section 53.357. 248-1 (V.A.C.S. Art. 1446c-0, Sec. 3.2135(c).) 248-2 Sec. 53.355. STATEMENT OF INTENT. (a) A cooperative must 248-3 file a statement of intent to use this subchapter with the 248-4 commission and the office not later than the 61st day before the 248-5 effective date of the proposed change. 248-6 (b) The statement must include: 248-7 (1) a copy of a resolution, signed by a majority of 248-8 the members of the cooperative's board of directors, approving the 248-9 proposed action and authorizing the filing of the statement of 248-10 intent; 248-11 (2) a description of the services affected by the 248-12 proposed action; 248-13 (3) a copy of the proposed tariff for the affected 248-14 service; and 248-15 (4) a copy of the customer notice required by Section 248-16 53.356. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(d).) 248-17 Sec. 53.356. NOTICE TO AFFECTED PERSONS. (a) The 248-18 cooperative shall provide to each affected customer or party, 248-19 including a municipality, at least two notices of the proposed 248-20 action by bill insert or by individual notice. 248-21 (b) The cooperative shall provide: 248-22 (1) the first notice not later than the 61st day 248-23 before the effective date of the proposed action; and 248-24 (2) the last notice not later than the 31st day before 248-25 the effective date of the proposed action. 248-26 (c) A notice prescribed by this section must include: 248-27 (1) a description of the services affected by the 249-1 proposed action; 249-2 (2) the effective date of the proposed action; 249-3 (3) an explanation of the customer's right to: 249-4 (A) obtain a copy of the proposed tariff from 249-5 the cooperative; and 249-6 (B) petition the commission for a review under 249-7 Section 53.358; 249-8 (4) a statement of the amount by which the 249-9 cooperative's total gross annual revenues will increase or decrease 249-10 and a statement explaining the effect on the cooperative revenues 249-11 as a result of the proposed action; and 249-12 (5) a list of rates that are affected by the proposed 249-13 rate action, showing the effect of the proposed action on each of 249-14 those rates. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(e).) 249-15 Sec. 53.357. FILING OF AFFIDAVITS VERIFYING NOTICE. Not 249-16 later than the 15th day before the effective date of a proposed 249-17 action, the cooperative shall file with the commission affidavits 249-18 that verify that the cooperative provided each notice required by 249-19 Section 53.356. (V.A.C.S. Art. 1446c-0, Sec. 3.2135(f).) 249-20 Sec. 53.358. COMMISSION REVIEW OF PROPOSED ACTION. (a) The 249-21 commission shall review a proposed action filed under this 249-22 subchapter if: 249-23 (1) the commission receives, not later than the 45th 249-24 day after the date the first notice is provided under Section 249-25 53.356, complaints relating to the proposed action: 249-26 (A) signed by at least five percent of the 249-27 affected local service customers; or 250-1 (B) from an affected intrastate access customer, 250-2 or group of affected intrastate access customers, that in the 250-3 preceding 12 months accounted for more than 10 percent of the 250-4 cooperative's total intrastate access revenues; 250-5 (2) the cooperative does not comply with the 250-6 procedural requirements of this subchapter; or 250-7 (3) the proposed action is inconsistent with the 250-8 commission's substantive policies as expressed in its rules. 250-9 (b) If the commission conducts a review of the proposed 250-10 action under this section before the action's effective date, the 250-11 commission may suspend the proposed action during the review. 250-12 (V.A.C.S. Art. 1446c-0, Sec. 3.2135(g).) 250-13 Sec. 53.359. REVERSAL OF DEREGULATION BY BALLOT. (a) A 250-14 cooperative that is partially deregulated under this subchapter may 250-15 vote to reverse the deregulation by sending a ballot to each 250-16 cooperative member. 250-17 (b) The cooperative's board of directors may order 250-18 reballoting on its own motion. If the board receives a written 250-19 request for that action from at least 10 percent of its members, 250-20 the board shall reballot not later than the 60th day after the date 250-21 the board receives that request. 250-22 (c) The cooperative may include the ballot in a bill or send 250-23 the ballot separately. The ballot shall be printed to permit 250-24 voting for or against the proposition: "Reversing the partial 250-25 deregulation of the (name of the cooperative)." 250-26 (d) The partial deregulation is reversed if a majority of 250-27 the ballots returned to the cooperative not later than the 45th day 251-1 after the date the ballots are mailed favor reversal. (V.A.C.S. 251-2 Art. 1446c-0, Sec. 3.2135(h).) 251-3 CHAPTER 54. CERTIFICATES 251-4 SUBCHAPTER A. GENERAL PROVISIONS 251-5 Sec. 54.001. CERTIFICATE REQUIRED 251-6 Sec. 54.002. EXCEPTIONS TO CERTIFICATE REQUIREMENT 251-7 FOR SERVICE EXTENSION 251-8 Sec. 54.003. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 251-9 CERTAIN SERVICES 251-10 Sec. 54.004. RELINQUISHMENT PLAN 251-11 Sec. 54.005. NOTICE OF AND HEARING ON APPLICATION 251-12 Sec. 54.006. REQUEST FOR PRELIMINARY ORDER 251-13 Sec. 54.007. FLEXIBILITY PLAN 251-14 Sec. 54.008. REVOCATION OR AMENDMENT OF CERTIFICATE 251-15 (Sections 54.009-54.050 reserved for expansion) 251-16 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 251-17 Sec. 54.051. DEFINITION 251-18 Sec. 54.052. CERTIFICATE REQUIRED FOR PUBLIC UTILITY 251-19 Sec. 54.053. APPLICATION FOR CERTIFICATE 251-20 Sec. 54.054. GRANT OR DENIAL OF CERTIFICATE 251-21 (Sections 54.055-54.100 reserved for expansion) 251-22 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY 251-23 Sec. 54.101. DEFINITION 251-24 Sec. 54.102. APPLICATION FOR CERTIFICATE 251-25 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE 251-26 Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS 251-27 Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES 252-1 Sec. 54.106. TIME OF SERVICE REQUIREMENTS 252-2 Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES 252-3 Sec. 54.108. BUILD-OUT PLAN COMPLIANCE 252-4 Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR 252-5 CERTAIN PROVIDERS 252-6 Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS 252-7 Sec. 54.111. PENALTY FOR VIOLATION OF TITLE 252-8 (Sections 54.112-54.150 reserved for expansion) 252-9 SUBCHAPTER D. SERVICE PROVIDER CERTIFICATE 252-10 OF OPERATING AUTHORITY 252-11 Sec. 54.151. DEFINITION 252-12 Sec. 54.152. LIMITATION ON GRANT OF CERTIFICATE 252-13 Sec. 54.153. ELIGIBILITY FOR CERTIFICATE 252-14 Sec. 54.154. APPLICATION FOR CERTIFICATE 252-15 Sec. 54.155. GRANT OR DENIAL OF CERTIFICATE 252-16 Sec. 54.156. RESALE OF SERVICES 252-17 Sec. 54.157. OPTIONAL EXTENDED AREA SERVICE OR EXPANDED 252-18 LOCAL CALLING SERVICE 252-19 Sec. 54.158. INTERFERENCE WITH RESOLD SERVICES PROHIBITED 252-20 Sec. 54.159. RETENTION OF ACCESS SERVICE AND INTRALATA 252-21 TOLL SERVICE 252-22 (Sections 54.160-54.200 reserved for expansion) 252-23 SUBCHAPTER E. MUNICIPALITIES 252-24 Sec. 54.201. CERTIFICATION PROHIBITED 252-25 Sec. 54.202. PROHIBITED MUNICIPAL SERVICES 252-26 Sec. 54.203. SERVICE IN ANNEXED OR INCORPORATED AREA 252-27 Sec. 54.204. DISCRIMINATION BY MUNICIPALITY PROHIBITED 253-1 Sec. 54.205. MUNICIPALITY'S RIGHT TO CONTROL ACCESS 253-2 Sec. 54.206. RECOVERY OF MUNICIPAL FEE 253-3 (Sections 54.207-54.250 reserved for expansion) 253-4 SUBCHAPTER F. REGULATION OF SERVICES, AREAS, AND FACILITIES 253-5 Sec. 54.251. PROVISION OF SERVICE 253-6 Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER 253-7 OF CERTIFICATE OF CONVENIENCE 253-8 AND NECESSITY 253-9 Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN 253-10 CERTIFICATE HOLDERS 253-11 Sec. 54.254. REQUIRED REFUSAL OF SERVICE 253-12 Sec. 54.255. TRANSFER OF CERTAIN CERTIFICATES 253-13 Sec. 54.256. APPLICATION OF CONTRACTS 253-14 Sec. 54.257. INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS 253-15 UTILITY 253-16 Sec. 54.258. MAPS 253-17 Sec. 54.259. DISCRIMINATION BY PROPERTY OWNER 253-18 PROHIBITED 253-19 Sec. 54.260. PROPERTY OWNER'S CONDITIONS 253-20 Sec. 54.261. SHARED TENANT SERVICES CONTRACT 253-21 CHAPTER 54. CERTIFICATES 253-22 SUBCHAPTER A. GENERAL PROVISIONS 253-23 Sec. 54.001. CERTIFICATE REQUIRED. A person may not provide 253-24 local exchange telephone service, basic local telecommunications 253-25 service, or switched access service unless the person obtains a: 253-26 (1) certificate of convenience and necessity; 253-27 (2) certificate of operating authority; or 254-1 (3) service provider certificate of operating 254-2 authority. (V.A.C.S. Art. 1446c-0, Sec. 3.251(c).) 254-3 Sec. 54.002. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 254-4 SERVICE EXTENSION. (a) A telecommunications utility is not 254-5 required to obtain a certificate of convenience and necessity, a 254-6 certificate of operating authority, or a service provider 254-7 certificate of operating authority for an: 254-8 (1) extension into territory that is: 254-9 (A) contiguous to the territory the 254-10 telecommunications utility serves; 254-11 (B) not receiving similar service from another 254-12 telecommunications utility; and 254-13 (C) not in another telecommunications utility's 254-14 certificated area; 254-15 (2) extension in or to territory the 254-16 telecommunications utility serves or is authorized to serve under a 254-17 certificate of public convenience and necessity, a certificate of 254-18 operating authority, or a service provider certificate of operating 254-19 authority; or 254-20 (3) operation, extension, or service in progress on 254-21 September 1, 1975. 254-22 (b) An extension allowed by Subsection (a) is limited to a 254-23 device used: 254-24 (1) to interconnect existing facilities; or 254-25 (2) solely to transmit telecommunications utility 254-26 services from an existing facility to a customer of retail utility 254-27 service. (V.A.C.S. Art. 1446c-0, Secs. 3.252(a) (part), (b).) 255-1 Sec. 54.003. EXCEPTIONS TO CERTIFICATE REQUIREMENT FOR 255-2 CERTAIN SERVICES. A telecommunications utility is not required to 255-3 obtain a certificate of convenience and necessity, a certificate of 255-4 operating authority, or a service provider certificate of operating 255-5 authority for: 255-6 (1) an interexchange telecommunications service; 255-7 (2) a nonswitched private line service; 255-8 (3) a shared tenant service; 255-9 (4) a specialized communications common carrier 255-10 service; 255-11 (5) a commercial mobile service; or 255-12 (6) an operator service as defined by Section 55.081. 255-13 (V.A.C.S. Art. 1446c-0, Sec. 3.252(a) (part).) 255-14 Sec. 54.004. RELINQUISHMENT PLAN. A holder of a service 255-15 provider certificate of operating authority who applies for a 255-16 certificate of operating authority or a certificate of convenience 255-17 and necessity for the same territory must include with the 255-18 application a plan to relinquish the service provider certificate 255-19 of operating authority. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(e) 255-20 (part).) 255-21 Sec. 54.005. NOTICE OF AND HEARING ON APPLICATION. (a) 255-22 When an application for a certificate of convenience and necessity, 255-23 a certificate of operating authority, or a service provider 255-24 certificate of operating authority is filed, the commission shall: 255-25 (1) give notice of the application to interested 255-26 parties; and 255-27 (2) if requested: 256-1 (A) set a time and place for a hearing; and 256-2 (B) give notice of the hearing. 256-3 (b) A person interested in the application may intervene at 256-4 the hearing. (V.A.C.S. Art. 1446c-0, Secs. 3.2531(b) (part), 256-5 3.254(a).) 256-6 Sec. 54.006. REQUEST FOR PRELIMINARY ORDER. (a) A 256-7 telecommunications utility that wants to exercise a right or 256-8 privilege under a franchise or permit that the utility anticipates 256-9 obtaining but has not been granted may apply to the commission for 256-10 a preliminary order under this section. 256-11 (b) The commission may issue a preliminary order declaring 256-12 that the commission, on application and under commission rules, 256-13 will grant the requested certificate of convenience and necessity, 256-14 certificate of operating authority, or service provider certificate 256-15 of operating authority, on terms the commission designates, after 256-16 the telecommunications utility obtains the franchise or permit. 256-17 (c) The commission shall grant the certificate on 256-18 presentation of evidence satisfactory to the commission that the 256-19 telecommunications utility has obtained the franchise or permit. 256-20 (V.A.C.S. Art. 1446c-0, Sec. 3.257.) 256-21 Sec. 54.007. FLEXIBILITY PLAN. (a) After the commission 256-22 grants an application for a certificate of convenience and 256-23 necessity, a certificate of operating authority, or a service 256-24 provider certificate of operating authority or determines that a 256-25 certificate is not needed for the applicant to provide the relevant 256-26 services, the commission shall conduct appropriate proceedings to 256-27 establish a transitional flexibility plan for the incumbent local 257-1 exchange company in the same area or areas as the new certificate 257-2 holder. 257-3 (b) A basic local telecommunications service price of the 257-4 incumbent local exchange company may not be increased before the 257-5 fourth anniversary of the date the certificate is granted to the 257-6 applicant except that the price may be increased: 257-7 (1) as provided by this title; 257-8 (2) when the new certificate holder has completed the 257-9 build-out plan required by Subchapter C, if applicable; or 257-10 (3) when a competitor for basic local 257-11 telecommunications service provides the service in an area in which 257-12 the build-out requirements have been eliminated. (V.A.C.S. 257-13 Art. 1446c-0, Sec. 3.2571.) 257-14 Sec. 54.008. REVOCATION OR AMENDMENT OF CERTIFICATE. (a) 257-15 The commission may revoke or amend a certificate of convenience and 257-16 necessity, a certificate of operating authority or a service 257-17 provider certificate of operating authority after notice and 257-18 hearing if the commission finds that the certificate holder has 257-19 never provided or is no longer providing service in all or any part 257-20 of the certificated area. 257-21 (b) The commission may require one or more public utilities 257-22 to provide service in an area affected by the revocation or 257-23 amendment of a certificate held by a public utility. (V.A.C.S. 257-24 Art. 1446c-0, Sec. 3.263.) 257-25 (Sections 54.009-54.050 reserved for expansion) 257-26 SUBCHAPTER B. CERTIFICATE OF CONVENIENCE AND NECESSITY 257-27 Sec. 54.051. DEFINITION. In this subchapter, "certificate" 258-1 means a certificate of convenience and necessity. (New.) 258-2 Sec. 54.052. CERTIFICATE REQUIRED FOR PUBLIC UTILITY. (a) 258-3 A public utility may not directly or indirectly provide service to 258-4 the public under a franchise or permit unless the utility obtains 258-5 from the commission a certificate that states that the public 258-6 convenience and necessity requires or will require the 258-7 installation, operation, or extension of the service. 258-8 (b) Except as otherwise provided by this chapter, a public 258-9 utility may not furnish or make available retail public utility 258-10 service to an area in which retail utility service is being 258-11 lawfully furnished by another public utility unless the utility 258-12 obtains a certificate that includes the area in which the facility 258-13 that receives the service is located. (V.A.C.S. Art. 1446c-0, 258-14 Secs. 3.251(a), (b).) 258-15 Sec. 54.053. APPLICATION FOR CERTIFICATE. (a) A public 258-16 utility that wants to obtain or amend a certificate must submit an 258-17 application to the commission. 258-18 (b) The applicant shall file with the commission evidence 258-19 the commission requires to show the applicant has received the 258-20 consent, franchise, or permit required by the proper municipal or 258-21 other public authority. (V.A.C.S. Art. 1446c-0, Secs. 3.253(a), 258-22 (c).) 258-23 Sec. 54.054. GRANT OR DENIAL OF CERTIFICATE. (a) The 258-24 commission may approve an application and grant a certificate only 258-25 if the commission finds that the certificate is necessary for the 258-26 service, accommodation, convenience, or safety of the public. 258-27 (b) The commission may: 259-1 (1) grant the certificate as requested; 259-2 (2) grant the certificate for the construction of a 259-3 portion of the requested system, facility, or extension or the 259-4 partial exercise of the requested right or privilege; or 259-5 (3) refuse to grant the certificate. 259-6 (c) The commission shall grant each certificate on a 259-7 nondiscriminatory basis after considering: 259-8 (1) the adequacy of existing service; 259-9 (2) the need for additional service; 259-10 (3) the effect of granting the certificate on the 259-11 recipient of the certificate and any public utility of the same 259-12 kind serving the proximate area; and 259-13 (4) other factors, such as: 259-14 (A) community values; 259-15 (B) recreational and park areas; 259-16 (C) historical and aesthetic values; 259-17 (D) environmental integrity; and 259-18 (E) the probable improvement of service or 259-19 lowering of cost to consumers in the area if the certificate is 259-20 granted. (V.A.C.S. Art. 1446c-0, Secs. 3.254(b), (c).) 259-21 (Sections 54.055-54.100 reserved for expansion) 259-22 SUBCHAPTER C. CERTIFICATE OF OPERATING AUTHORITY 259-23 Sec. 54.101. DEFINITION. In this subchapter, "certificate" 259-24 means a certificate of operating authority. (New.) 259-25 Sec. 54.102. APPLICATION FOR CERTIFICATE. (a) In lieu of 259-26 applying for a certificate of convenience and necessity, a person 259-27 may apply for a certificate of operating authority. 260-1 (b) An applicant for a facilities-based certificate of 260-2 operating authority must include with the application a proposed 260-3 build-out plan in compliance with this subchapter that demonstrates 260-4 how the applicant will, over a six-year period, deploy facilities 260-5 throughout the geographic area of the certificated service area. 260-6 (c) The applicant must file with the application a sworn 260-7 statement that the applicant has applied for each municipal 260-8 consent, franchise, or permit required for the type of services and 260-9 facilities for which the applicant has applied. (V.A.C.S. 260-10 Art. 1446c-0, Secs. 3.2531(a), (c) (part), 3.2555(a) (part).) 260-11 Sec. 54.103. GRANT OR DENIAL OF CERTIFICATE. (a) The 260-12 commission must grant or deny a certificate not later than the 60th 260-13 day after the date the application for the certificate is filed. 260-14 The commission may extend the deadline on good cause shown. 260-15 (b) The commission shall grant each certificate on a 260-16 nondiscriminatory basis after considering factors such as: 260-17 (1) the adequacy of the applicant's build-out plan; 260-18 (2) the technical and financial qualifications of the 260-19 applicant; and 260-20 (3) the applicant's ability to meet the commission's 260-21 quality of service requirements. 260-22 (c) In an exchange of an incumbent local exchange company 260-23 that serves fewer than 31,000 access lines, in addition to the 260-24 factors described by Subsection (b), the commission shall consider: 260-25 (1) the effect of granting the certificate on a public 260-26 utility serving the area and on that utility's customers; 260-27 (2) the ability of that public utility to provide 261-1 adequate service at reasonable rates; 261-2 (3) the effect of granting the certificate on the 261-3 ability of that public utility to act as the provider of last 261-4 resort; and 261-5 (4) the ability of the exchange, not the company, to 261-6 support more than one provider of service. 261-7 (d) Except as provided by Subsections (e) and (f), the 261-8 commission may grant an application for a certificate only for an 261-9 area or areas that are contiguous and reasonably compact and cover 261-10 an area of at least 27 square miles. 261-11 (e) In an exchange in a county that has a population of less 261-12 than 500,000 and that is served by an incumbent local exchange 261-13 company that has more than 31,000 access lines, an area covering 261-14 less than 27 square miles may be approved if the area is contiguous 261-15 and reasonably compact and has at least 20,000 access lines. 261-16 (f) In an exchange of a company that serves fewer than 261-17 31,000 access lines in this state, the commission may grant an 261-18 application only for an area that has boundaries similar to the 261-19 boundaries of the serving central office that is served by the 261-20 incumbent local exchange company that holds the certificate of 261-21 convenience and necessity for the area. 261-22 (g) The commission may not grant a certificate in an 261-23 exchange of an incumbent local exchange company that serves fewer 261-24 than 31,000 access lines. The commission shall require an 261-25 applicant to meet the other appropriate certification provisions of 261-26 this chapter. This subsection expires September 1, 1998. 261-27 (V.A.C.S. Art. 1446c-0, Secs. 3.2531(e), (f) (part), (g), (h).) 262-1 Sec. 54.104. BUILD-OUT PLAN REQUIREMENTS. (a) The 262-2 build-out plan required by Section 54.102 must provide that, by the 262-3 end of the: 262-4 (1) first year, 10 percent of the area to be served 262-5 must be served with facilities that are not facilities of the 262-6 incumbent local exchange company; 262-7 (2) third year, 50 percent of the area to be served 262-8 must be served with facilities that are not facilities of the 262-9 incumbent local exchange company; and 262-10 (3) sixth year, 100 percent of the area to be served 262-11 must be served with facilities that are not facilities of the 262-12 incumbent local exchange company. 262-13 (b) The build-out plan may permit the certificate holder to 262-14 serve not more than 40 percent of the certificate holder's service 262-15 area by reselling the incumbent local exchange company's 262-16 facilities. The resale must be in accordance with: 262-17 (1) Section 54.105; and 262-18 (2) the resale tariff approved by the commission under 262-19 Subchapter C, Chapter 60. 262-20 (c) The resale limitation applies to an incumbent local 262-21 exchange facility that a certificate holder resells in providing 262-22 local exchange telephone service, regardless of whether: 262-23 (1) the certificate holder purchases the facility 262-24 directly from the incumbent local exchange company; or 262-25 (2) an intermediary carrier purchases the facility 262-26 from the incumbent local exchange company and then provides the 262-27 facility to the certificate holder for resale. 263-1 (d) To meet the build-out requirement prescribed by this 263-2 subchapter, a certificate holder: 263-3 (1) may not use commercial mobile service; and 263-4 (2) may use personal communication services (PCS) or 263-5 other wireless technology licensed or allocated by the Federal 263-6 Communications Commission after January 1, 1995. (V.A.C.S. 263-7 Art. 1446c-0, Secs. 3.2531(c) (part), (d) (part).) 263-8 Sec. 54.105. SIX-YEAR LIMITATION ON RESALE OF SERVICES. 263-9 Before the sixth anniversary of the date a certificate is granted, 263-10 the certificate holder may extend service by resale only: 263-11 (1) in the area it is obligated to serve under the 263-12 approved build-out plan; and 263-13 (2) to the distant premises of one of its 263-14 multi-premises customers beyond the approved build-out area but in 263-15 its certificated service area. (V.A.C.S. Art. 1446c-0, Sec. 263-16 3.2531(d) (part).) 263-17 Sec. 54.106. TIME OF SERVICE REQUIREMENTS. (a) The 263-18 commission by rule may prescribe the period within which a 263-19 certificate holder must be able to serve customers. 263-20 (b) Notwithstanding Subsection (a), a certificate holder 263-21 must serve a customer in the build-out area not later than the 30th 263-22 day after the date the customer requests service. (V.A.C.S. 263-23 Art. 1446c-0, Sec. 3.2531(c) (part).) 263-24 Sec. 54.107. REQUIREMENTS RELATING TO CERTAIN FACILITIES. 263-25 As part of the build-out requirements, the commission may not 263-26 require a certificate holder to: 263-27 (1) place a drop facility on each customer's premises; 264-1 or 264-2 (2) activate a fiber optic facility in advance of a 264-3 customer request. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(c) (part).) 264-4 Sec. 54.108. BUILD-OUT PLAN COMPLIANCE. (a) A certificate 264-5 holder shall file periodic reports with the commission 264-6 demonstrating compliance with: 264-7 (1) the plan approved by the commission; and 264-8 (2) the resale limitation prescribed by Section 264-9 54.104(b). 264-10 (b) The commission may administratively and temporarily 264-11 waive compliance with the six-year build-out plan on a showing of 264-12 good cause. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(f) (part).) 264-13 Sec. 54.109. ELIMINATION OF BUILD-OUT REQUIREMENTS FOR 264-14 CERTAIN PROVIDERS. (a) The commission may waive the build-out 264-15 requirements of this subchapter for an additional applicant in a 264-16 particular area: 264-17 (1) on or after the sixth anniversary of the date a 264-18 certificate is granted for that area; or 264-19 (2) on or after the date a certificate holder 264-20 completes the holder's build-out plan in that area. 264-21 (b) The build-out requirements of this subchapter do not 264-22 apply to a service area: 264-23 (1) that is served by an incumbent local exchange 264-24 company that: 264-25 (A) has more than one million access lines; and 264-26 (B) on September 1, 1995, was subject to a 264-27 prohibition under federal law on the provision of interLATA 265-1 service; and 265-2 (2) for which all prohibitions on the incumbent local 265-3 exchange company's provision of interLATA services are removed so 265-4 the company can offer interLATA service together with local and 265-5 intraLATA toll service. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(i).) 265-6 Sec. 54.110. HEARING ON BUILD-OUT AND RESALE REQUIREMENTS. 265-7 (a) The commission on application may conduct a hearing to 265-8 determine: 265-9 (1) whether the build-out requirements of Sections 265-10 54.102(b), 54.103(e) and (f), 54.104, 54.105, 54.106, and 54.107 265-11 have created a barrier to the entry of facilities-based local 265-12 exchange telephone service competition in an exchange in a county 265-13 that has a population of more than 500,000 and that is served by a 265-14 company that has more than 31,000 access lines; and 265-15 (2) the effect of the resale provisions on the 265-16 development of competition, other than the development of 265-17 competition in the certificated areas of companies that serve fewer 265-18 than 31,000 access lines as provided by Section 54.156(a). 265-19 (b) In making a determination under Subsection (a), the 265-20 commission shall consider: 265-21 (1) this title's policy to encourage construction of 265-22 local exchange networks; 265-23 (2) the number and type of competitors that have 265-24 sought to provide local exchange competition under the existing 265-25 rules prescribed by this title; and 265-26 (3) whether adopting new build-out and resale rules 265-27 would make innovative and competitive local exchange telephone 266-1 services more likely to be provided. 266-2 (c) The commission may change a requirement described by 266-3 Subsection (a)(1) or prescribed by Subchapter D if: 266-4 (1) the commission determines that the build-out 266-5 requirements have created a barrier to facilities-based local 266-6 exchange competition in an exchange described by Subsection (a)(1); 266-7 and 266-8 (2) the changes will encourage additional 266-9 facilities-based competition. 266-10 (d) Notwithstanding Subsection (c), the commission may not 266-11 reduce an exchange size to below 12 square miles or increase the 266-12 resale percentage prescribed by Section 54.104(b) to more than 50 266-13 percent. 266-14 (e) A rule adopted under Subsection (c) may apply only to a 266-15 person who files an application for a certificate after the date 266-16 the rule is adopted. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(j).) 266-17 Sec. 54.111. PENALTY FOR VIOLATION OF TITLE. If a 266-18 certificate holder fails to comply with a requirement of this 266-19 title, the commission may: 266-20 (1) revoke the holder's certificate; 266-21 (2) impose against the holder administrative penalties 266-22 under Subchapter B, Chapter 15; or 266-23 (3) take another action under Subchapter B, Chapter 266-24 15. (V.A.C.S. Art. 1446c-0, Sec. 3.2531(k).) 266-25 (Sections 54.112-54.150 reserved for expansion) 267-1 SUBCHAPTER D. SERVICE PROVIDER CERTIFICATE 267-2 OF OPERATING AUTHORITY 267-3 Sec. 54.151. DEFINITION. In this subchapter, "certificate" 267-4 means a service provider certificate of operating authority. 267-5 (New.) 267-6 Sec. 54.152. LIMITATION ON GRANT OF CERTIFICATE. 267-7 The commission may not grant a certificate to a 267-8 holder of a: 267-9 (1) certificate of convenience and necessity for the 267-10 same territory; or 267-11 (2) certificate of operating authority for the same 267-12 territory. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(e) (part).) 267-13 Sec. 54.153. ELIGIBILITY FOR CERTIFICATE. (a) A company is 267-14 not eligible to obtain a certificate under this subchapter if the 267-15 company, together with affiliates, had more than six percent of the 267-16 total intrastate switched access minutes of use as measured for the 267-17 most recent 12-month period: 267-18 (1) that precedes the date the application is filed; 267-19 and 267-20 (2) for which the access information is available. 267-21 (b) The commission shall obtain information necessary to 267-22 determine eligibility from the incumbent local exchange telephone 267-23 companies and the applicant. 267-24 (c) The commission shall certify eligibility not later than 267-25 the 10th day after the date the application is filed. 267-26 (d) In this section: 267-27 (1) "Affiliate" means an entity that, directly or 268-1 indirectly, owns or controls, is owned or controlled by, or is 268-2 under common ownership or control with a company that applies for a 268-3 certificate under this subchapter. 268-4 (2) "Control" means to exercise substantial influence 268-5 over the policies and actions of another. (V.A.C.S. Art. 1446c-0, 268-6 Secs. 3.2532(b) (part), (h).) 268-7 Sec. 54.154. APPLICATION FOR CERTIFICATE. (a) The 268-8 commission may grant a certificate to encourage an innovative, 268-9 competitive, and entrepreneurial business to provide 268-10 telecommunications services. 268-11 (b) An applicant for a certificate must: 268-12 (1) file with the application: 268-13 (A) a sworn statement that the applicant has 268-14 applied for each municipal consent, franchise, or permit required 268-15 for the type of services and facilities for which the applicant has 268-16 applied; and 268-17 (B) a description of the services the applicant 268-18 will provide; 268-19 (2) show the areas in which the applicant will provide 268-20 the services; 268-21 (3) demonstrate that the applicant has the financial 268-22 and technical ability to provide services; and 268-23 (4) demonstrate that the services will meet the 268-24 requirements of this subchapter. (V.A.C.S. Art. 1446c-0, Secs. 268-25 3.2532(a), (c); 3.2555(a) (part).) 268-26 Sec. 54.155. GRANT OR DENIAL OF CERTIFICATE. (a) The 268-27 commission must grant or deny a certificate not later than the 60th 269-1 day after the date the application for the certificate is filed. 269-2 The commission may extend the deadline on good cause shown. 269-3 (b) The commission shall grant each certificate on a 269-4 nondiscriminatory basis after considering factors such as: 269-5 (1) the technical and financial qualifications of the 269-6 applicant; and 269-7 (2) the applicant's ability to meet the commission's 269-8 quality of service requirements. (V.A.C.S. Art. 1446c-0, Sec. 269-9 3.2532(b) (part).) 269-10 Sec. 54.156. RESALE OF SERVICES. (a) A certificate holder 269-11 may obtain services under the resale tariffs approved by the 269-12 commission under Subchapter C, Chapter 60, except in a certificated 269-13 area of a company that serves fewer than 31,000 access lines. 269-14 (b) A certificate holder may obtain for resale the monthly 269-15 recurring flat rate local exchange telephone service and associated 269-16 nonrecurring charges, including any mandatory extended area 269-17 service, of an incumbent local exchange company at a five percent 269-18 discount to the tariffed rate. 269-19 (c) The incumbent local exchange company shall sell a 269-20 feature service that may be provided to a customer in conjunction 269-21 with local exchange service at a five percent discount to the 269-22 tariffed rate, including any associated nonrecurring charge for 269-23 those services, provided that the incumbent local exchange company 269-24 shall make available to a certificate holder, at an additional five 269-25 percent discount, any discounts made available to customers of the 269-26 incumbent local exchange company who are similarly situated to the 269-27 customers of the certificate holder. In this subsection "feature 270-1 service" includes: 270-2 (1) toll restriction; 270-3 (2) call control options; 270-4 (3) tone dialing; 270-5 (4) custom calling; and 270-6 (5) caller identification. 270-7 (d) A certificate holder and an incumbent local exchange 270-8 company may agree to a rate lower than the tariffed rate or 270-9 discounted rate. 270-10 (e) The five percent discounts provided by this section do 270-11 not apply in an exchange of a company that has fewer than 31,000 270-12 access lines in this state. 270-13 (f) If the tariffed rate for a resold service changes, the 270-14 five percent discount prescribed by this section applies to the 270-15 changed rate. The commission may not, for certificate holders, 270-16 create a special class for purposes of resold services. 270-17 (g) A certificate holder: 270-18 (1) may not use a resold flat rate local exchange 270-19 telephone service to avoid the rates and terms of an incumbent 270-20 local exchange company's tariffs; 270-21 (2) may not terminate both flat rate local exchange 270-22 telephone service and services obtained under the resale tariff 270-23 approved under Section 60.041 on the same end user customer's 270-24 premises; 270-25 (3) may not use resold flat rate local exchange 270-26 telephone services to provide access services to another 270-27 interexchange carrier, cellular carrier, competitive access 271-1 provider, or retail telecommunications provider, but may permit 271-2 customers to use resold local exchange telephone services to access 271-3 such a carrier or provider; 271-4 (4) may sell the flat rate local exchange telephone 271-5 service only to the same class of customers to which the incumbent 271-6 local exchange company sells that service; 271-7 (5) may obtain services offered by or negotiated with 271-8 a holder of a certificate of convenience and necessity or a 271-9 certificate of operating authority; and 271-10 (6) may obtain for resale single or multiple line flat 271-11 rate intraLATA calling service when provided by the local exchange 271-12 company at the tariffed rate for online digital communications. 271-13 (V.A.C.S. Art. 1446c-0, Sec. 3.2532(d) (part).) 271-14 Sec. 54.157. OPTIONAL EXTENDED AREA SERVICE OR EXPANDED 271-15 LOCAL CALLING SERVICE. (a) A certificate holder may purchase for 271-16 resale: 271-17 (1) optional extended area service; and 271-18 (2) expanded local calling service. 271-19 (b) The purchase of optional extended area service and 271-20 expanded local calling service may not be discounted. (V.A.C.S. 271-21 Art. 1446c-0, Sec. 3.2532(d) (part).) 271-22 Sec. 54.158. INTERFERENCE WITH RESOLD SERVICES PROHIBITED. 271-23 An incumbent local exchange company may not: 271-24 (1) delay providing or maintaining a service provided 271-25 under this subchapter; 271-26 (2) degrade the quality of access the company provides 271-27 to another provider; 272-1 (3) impair the speed, quality, or efficiency of a line 272-2 used by another provider; 272-3 (4) fail to fully disclose in a timely manner after a 272-4 request all available information necessary for a certificate 272-5 holder to provide resale services; or 272-6 (5) refuse to take a reasonable action to allow a 272-7 certificate holder efficient access to the company's ordering, 272-8 billing, or repair management system. (V.A.C.S. Art. 1446c-0, Sec. 272-9 3.2532(g).) 272-10 Sec. 54.159. RETENTION OF ACCESS SERVICE AND INTRALATA TOLL 272-11 SERVICE. An incumbent local exchange company that sells flat rate 272-12 local exchange telephone service to a certificate holder may retain 272-13 all access service and "1-plus" intraLATA toll service that 272-14 originates over the resold flat rate local exchange telephone 272-15 service. (V.A.C.S. Art. 1446c-0, Sec. 3.2532(f).) 272-16 (Sections 54.160-54.200 reserved for expansion) 272-17 SUBCHAPTER E. MUNICIPALITIES 272-18 Sec. 54.201. CERTIFICATION PROHIBITED. The commission may 272-19 not grant to a municipality a: 272-20 (1) certificate of convenience and necessity; 272-21 (2) certificate of operating authority; or 272-22 (3) service provider certificate of operating 272-23 authority. (V.A.C.S. Art. 1446c-0, Sec. 3.251(d) (part).) 272-24 Sec. 54.202. PROHIBITED MUNICIPAL SERVICES. (a) A 272-25 municipality or municipal electric system may not offer for sale to 272-26 the public: 272-27 (1) a service for which a certificate of convenience 273-1 and necessity, a certificate of operating authority, or a service 273-2 provider certificate of operating authority is required; or 273-3 (2) a nonswitched telecommunications service used to 273-4 connect a customer's premises with: 273-5 (A) another customer's premises within the 273-6 exchange; or 273-7 (B) a long distance provider that serves the 273-8 exchange. 273-9 (b) Subsection (a) applies to a service offered either 273-10 directly or indirectly through a telecommunications provider. 273-11 (V.A.C.S. Art. 1446c-0, Sec. 3.251(d) (part).) 273-12 Sec. 54.203. SERVICE IN ANNEXED OR INCORPORATED AREA. (a) 273-13 If an area is or will be included within a municipality as the 273-14 result of annexation, incorporation, or another reason, each 273-15 telecommunications utility that holds or is entitled to hold a 273-16 certificate under this title to provide service or operate a 273-17 facility in the area before the inclusion has the right to continue 273-18 to provide the service or operate the facility and extend service 273-19 in the utility's certificated area within the annexed or 273-20 incorporated area under the rights granted by the certificate and 273-21 this title. 273-22 (b) Notwithstanding any other law, a certificated 273-23 telecommunications utility has the right to: 273-24 (1) continue and extend service within the utility's 273-25 certificated area; and 273-26 (2) use roads, streets, highways, alleys, and public 273-27 property to furnish retail utility service. 274-1 (c) The governing body of a municipality may require a 274-2 certificated telecommunications utility to relocate the utility's 274-3 facility at the utility's expense to permit the widening or 274-4 straightening of a street by: 274-5 (1) giving the utility 30 days' notice; and 274-6 (2) specifying the new location for the facility along 274-7 the right-of-way of the street. 274-8 (d) This section does not limit the power of a city, town, 274-9 or village to incorporate or of a municipality to extend its 274-10 boundaries by annexation. (V.A.C.S. Art. 1446c-0, Sec. 3.255.) 274-11 Sec. 54.204. DISCRIMINATION BY MUNICIPALITY PROHIBITED. (a) 274-12 Notwithstanding Section 14.008, a municipality may not discriminate 274-13 against a telecommunications utility regarding: 274-14 (1) the authorization or placement of a 274-15 telecommunications facility in a public right-of-way; 274-16 (2) access to a building; or 274-17 (3) a municipal utility pole attachment rate or term, 274-18 to the extent not addressed by federal law. 274-19 (b) In granting consent, a franchise, or a permit for the 274-20 use of a public street, alley, or right-of-way within its municipal 274-21 boundaries, a municipality may not discriminate in favor of or 274-22 against a telecommunications utility that holds or has applied for 274-23 a certificate of convenience and necessity, a certificate of 274-24 operating authority, or a service provider certificate of operating 274-25 authority regarding: 274-26 (1) municipal utility pole attachment or underground 274-27 conduit rates or terms, to the extent not addressed by federal law; 275-1 or 275-2 (2) the authorization, placement, replacement, or 275-3 removal of a telecommunications facility in a public right-of-way 275-4 and the reasonable compensation for the authorization, placement, 275-5 replacement, or removal regardless of whether the compensation is 275-6 in the form of: 275-7 (A) money; 275-8 (B) services; 275-9 (C) use of facilities; or 275-10 (D) another kind of consideration. 275-11 (c) Notwithstanding Subsection (b)(1), a municipal utility 275-12 may not charge a pole attachment rate or underground conduit rate 275-13 that exceeds the fee the utility would be permitted to charge if 275-14 the utility's rates were regulated under federal law and the rules 275-15 of the Federal Communications Commission. 275-16 (d) Notwithstanding any other law, the commission has the 275-17 jurisdiction necessary to enforce this section. (V.A.C.S. 275-18 Art. 1446c-0, Secs. 3.2555(a) (part), (b), (e).) 275-19 Sec. 54.205. MUNICIPALITY'S RIGHT TO CONTROL ACCESS. This 275-20 title does not restrict a municipality's historical right to 275-21 control and receive reasonable compensation for access to the 275-22 municipality's public streets, alleys, or rights-of-way or to other 275-23 public property. (V.A.C.S. Art. 1446c-0, Sec. 3.2555(f).) 275-24 Sec. 54.206. RECOVERY OF MUNICIPAL FEE. (a) A holder of a 275-25 certificate of convenience and necessity, a certificate of 275-26 operating authority, or a service provider certificate of operating 275-27 authority has the right to collect a fee that a municipality 276-1 imposes under Section 54.204 or 54.205 through a pro rata charge to 276-2 the customers in the boundaries of the municipality. 276-3 (b) The charge may be shown on the customer's bill as a 276-4 separate line item. (V.A.C.S. Art. 1446c-0, Sec. 3.2555(h).) 276-5 (Sections 54.207-54.250 reserved for expansion) 276-6 SUBCHAPTER F. REGULATION OF SERVICES, AREAS, AND FACILITIES 276-7 Sec. 54.251. PROVISION OF SERVICE. (a) Except as provided 276-8 by this section, Section 54.252, Section 54.253, and Section 276-9 54.254, a telecommunications utility that holds a certificate of 276-10 convenience and necessity or a certificate of operating authority 276-11 shall: 276-12 (1) offer all basic local telecommunications services 276-13 to each customer in the utility's certificated area; and 276-14 (2) provide continuous and adequate service in that 276-15 area. 276-16 (b) The holder of a certificate of convenience and necessity 276-17 for an area has the obligations of a provider of last resort 276-18 regardless of whether another provider has a certificate of 276-19 operating authority for that area. (V.A.C.S. Art. 1446c-0, Sec. 276-20 3.258(a).) 276-21 Sec. 54.252. GROUNDS FOR REDUCTION OF SERVICE BY HOLDER OF 276-22 CERTIFICATE OF CONVENIENCE AND NECESSITY. (a) Unless the 276-23 commission issues a certificate that the present and future 276-24 convenience and necessity will not be adversely affected, the 276-25 holder of a certificate of convenience and necessity may not 276-26 discontinue, reduce, or impair service to any part of the holder's 276-27 certificated service area except for: 277-1 (1) nonpayment of charges; 277-2 (2) nonuse; or 277-3 (3) another similar reason that occurs in the usual 277-4 course of business. 277-5 (b) A discontinuance, reduction, or impairment of service 277-6 must be in compliance with and is subject to any condition or 277-7 restriction the commission prescribes. (V.A.C.S. Art. 1446c-0, 277-8 Secs. 3.258(b), (c).) 277-9 Sec. 54.253. DISCONTINUATION OF SERVICE BY CERTAIN 277-10 CERTIFICATE HOLDERS. (a) A telecommunications utility that holds 277-11 a certificate of operating authority or a service provider 277-12 certificate of operating authority may: 277-13 (1) cease operations in the utility's certificated 277-14 area; or 277-15 (2) discontinue an optional service that is not 277-16 essential to providing basic local telecommunications service. 277-17 (b) Before the telecommunications utility ceases operations 277-18 or discontinues an optional service, the utility, in the manner 277-19 required by the commission, must give notice of the intended action 277-20 to: 277-21 (1) the commission; and 277-22 (2) each affected customer. 277-23 (c) The telecommunications utility is entitled to 277-24 discontinue an optional service on or after the 61st day after the 277-25 date the utility gives the notice. 277-26 (d) The telecommunications utility may not cease operations 277-27 in its certificated area unless: 278-1 (1) another provider of basic local telecommunications 278-2 services has adequate facilities and capacity to serve the 278-3 customers in the certificated area; and 278-4 (2) the commission authorizes the utility to cease 278-5 operations. 278-6 (e) The commission may not authorize the telecommunications 278-7 utility to cease operations under Subsection (d) before the 61st 278-8 day after the date the utility gives the notice required by 278-9 Subsection (b). Unless the commission receives a complaint from an 278-10 affected person, the commission may enter an order under this 278-11 subsection administratively. (V.A.C.S. Art. 1446c-0, Sec. 3.2595.) 278-12 Sec. 54.254. REQUIRED REFUSAL OF SERVICE. A holder of a 278-13 certificate of convenience and necessity, a certificate of 278-14 operating authority, or a service provider certificate of operating 278-15 authority shall refuse to serve a customer in the holder's 278-16 certificated area if the holder is prohibited from providing the 278-17 service under Section 212.012 or 232.029, Local Government Code. 278-18 (V.A.C.S. Art. 1446c-0, Sec. 3.259.) 278-19 Sec. 54.255. TRANSFER OF CERTAIN CERTIFICATES. (a) A 278-20 telecommunications utility may sell, assign, or lease a certificate 278-21 of convenience and necessity or a certificate of operating 278-22 authority or a right obtained under such a certificate if the 278-23 commission determines that the purchaser, assignee, or lessee can 278-24 provide adequate service. 278-25 (b) The sale, assignment, or lease of a certificate or a 278-26 right is subject to conditions the commission prescribes. 278-27 (V.A.C.S. Art. 1446c-0, Sec. 3.260.) 279-1 Sec. 54.256. APPLICATION OF CONTRACTS. A contract approved 279-2 by the commission between telecommunications utilities that 279-3 designates areas and customers to be served by the utilities: 279-4 (1) is valid and enforceable; and 279-5 (2) shall be incorporated into the appropriate areas 279-6 of certification. (V.A.C.S. Art. 1446c-0, Sec. 3.256.) 279-7 Sec. 54.257. INTERFERENCE WITH ANOTHER TELECOMMUNICATIONS 279-8 UTILITY. If a telecommunications utility constructing or extending 279-9 the utility's lines, plant, or system interferes or attempts to 279-10 interfere with the operation of a line, plant, or system of another 279-11 utility, the commission by order may: 279-12 (1) prohibit the construction or extension; or 279-13 (2) prescribe terms for locating the affected lines, 279-14 plants, or systems. (V.A.C.S. Art. 1446c-0, Sec. 3.261.) 279-15 Sec. 54.258. MAPS. A public utility shall file with the 279-16 commission one or more maps that show each utility facility and 279-17 that separately illustrate each utility facility for transmission 279-18 or distribution of the utility's services on a date the commission 279-19 orders. (V.A.C.S. Art. 1446c-0, Sec. 3.253(b).) 279-20 Sec. 54.259. DISCRIMINATION BY PROPERTY OWNER PROHIBITED. 279-21 (a) If a telecommunications utility holds a consent, franchise, or 279-22 permit as determined to be the appropriate grants of authority by 279-23 the municipality and holds a certificate if required by this title, 279-24 a public or private property owner may not: 279-25 (1) prevent the utility from installing on the owner's 279-26 property a telecommunications service facility a tenant requests; 279-27 (2) interfere with the utility's installation on the 280-1 owner's property of a telecommunications service facility a tenant 280-2 requests; 280-3 (3) discriminate against such a utility regarding 280-4 installation, terms, or compensation of a telecommunications 280-5 service facility to a tenant on the owner's property; 280-6 (4) demand or accept an unreasonable payment of any 280-7 kind from a tenant or the utility for allowing the utility on or in 280-8 the owner's property; or 280-9 (5) discriminate in favor of or against a tenant in 280-10 any manner, including rental charge discrimination, because of the 280-11 utility from which the tenant receives a telecommunications 280-12 service. 280-13 (b) Subsection (a) does not apply to an institution of 280-14 higher education. In this subsection, "institution of higher 280-15 education" means: 280-16 (1) an institution of higher education as defined by 280-17 Section 61.003, Education Code; or 280-18 (2) a private or independent institution of higher 280-19 education as defined by Section 61.003, Education Code. 280-20 (c) Notwithstanding any other law, the commission has the 280-21 jurisdiction to enforce this section. (V.A.C.S. Art. 1446c-0, 280-22 Secs. 3.2555(c), (e), (g).) 280-23 Sec. 54.260. PROPERTY OWNER'S CONDITIONS. (a) 280-24 Notwithstanding Section 54.259, if a telecommunications utility 280-25 holds a municipal consent, franchise, or permit as determined to be 280-26 the appropriate grant of authority by the municipality and holds a 280-27 certificate if required by this title, a public or private property 281-1 owner may: 281-2 (1) impose a condition on the utility that is 281-3 reasonably necessary to protect: 281-4 (A) the safety, security, appearance, and 281-5 condition of the property; and 281-6 (B) the safety and convenience of other persons; 281-7 (2) impose a reasonable limitation on the time at 281-8 which the utility may have access to the property to install a 281-9 telecommunications service facility; 281-10 (3) impose a reasonable limitation on the number of 281-11 such utilities that have access to the owner's property, if the 281-12 owner can demonstrate a space constraint that requires the 281-13 limitation; 281-14 (4) require the utility to agree to indemnify the 281-15 owner for damage caused installing, operating, or removing a 281-16 facility; 281-17 (5) require the tenant or the utility to bear the 281-18 entire cost of installing, operating, or removing a facility; and 281-19 (6) require the utility to pay compensation that is 281-20 reasonable and nondiscriminatory among such telecommunications 281-21 utilities. 281-22 (b) Notwithstanding any other law, the commission has the 281-23 jurisdiction to enforce this section. (V.A.C.S. Art. 1446c-0, 281-24 Secs. 3.2555(d), (e).) 281-25 Sec. 54.261. SHARED TENANT SERVICES CONTRACT. Sections 281-26 54.259 and 54.260 do not require a public or private property owner 281-27 to enter into a contract with a telecommunications utility to 282-1 provide shared tenant services on a property. (V.A.C.S. 282-2 Art. 1446c-0, Sec. 3.2555(i).) 282-3 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 282-4 SUBCHAPTER A. GENERAL PROVISIONS 282-5 Sec. 55.001. GENERAL STANDARD 282-6 Sec. 55.002. COMMISSION AUTHORITY CONCERNING STANDARDS 282-7 Sec. 55.003. RULE OR STANDARD 282-8 Sec. 55.004. LOCAL EXCHANGE COMPANY RULE OR PRACTICE 282-9 CHANGE 282-10 Sec. 55.005. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 282-11 SERVICE PROHIBITED 282-12 Sec. 55.006. DISCRIMINATION AND RESTRICTION ON COMPETITION 282-13 Sec. 55.007. MINIMUM SERVICES 282-14 Sec. 55.008. IMPROVEMENTS IN SERVICE; INTERCONNECTING 282-15 SERVICE 282-16 Sec. 55.009. INTRALATA CALLS 282-17 Sec. 55.010. BILLING FOR SERVICE TO THE STATE 282-18 (Sections 55.011-55.020 reserved for expansion) 282-19 SUBCHAPTER B. EXTENDED AREA SERVICE 282-20 Sec. 55.021. EXTENDED AREA SERVICE 282-21 Sec. 55.022. MANDATORY SERVICE 282-22 Sec. 55.023. OPTIONAL EXTENDED AREA SERVICE 282-23 Sec. 55.024. CHARGE FOR EXTENDED AREA SERVICE 282-24 Sec. 55.025. HUNTING SERVICE 282-25 (Sections 55.026-55.040 reserved for expansion) 282-26 SUBCHAPTER C. EXPANDED TOLL-FREE LOCAL CALLING AREAS 282-27 Sec. 55.041. DEFINITIONS 283-1 Sec. 55.042. CONTIGUOUS EXCHANGE 283-2 Sec. 55.043. SPLITTING EXCHANGES PROHIBITED 283-3 Sec. 55.044. EXEMPTION 283-4 Sec. 55.045. ELIGIBILITY TO PETITION 283-5 Sec. 55.046. PETITION REQUIREMENTS 283-6 Sec. 55.047. BALLOTING AND CONSIDERATION 283-7 Sec. 55.048. CHARGES 283-8 (Sections 55.049-55.080 reserved for expansion) 283-9 SUBCHAPTER D. OPERATOR SERVICE PROVIDERS 283-10 Sec. 55.081. DEFINITION 283-11 Sec. 55.082. APPLICABILITY 283-12 Sec. 55.083. RULES AND PROCEDURES 283-13 Sec. 55.084. INFORMATION DISPLAYED ON PUBLIC USE TELEPHONE 283-14 Sec. 55.085. CONNECTION ANNOUNCEMENT 283-15 Sec. 55.086. INFORMATION REQUIRED ON ACCESS TO LOCAL 283-16 EXCHANGE COMPANY OPERATOR 283-17 Sec. 55.087. ACCESS TO LOCAL EXCHANGE COMPANY AND OTHER 283-18 UTILITIES REQUIRED 283-19 Sec. 55.088. ACCESS TO LIVE OPERATOR REQUIRED 283-20 Sec. 55.089. COMMISSION MAY INVESTIGATE AND ACT ON VIOLATION 283-21 (Sections 55.090-55.100 reserved for expansion) 283-22 SUBCHAPTER E. CALLER IDENTIFICATION SERVICE 283-23 Sec. 55.101. DEFINITIONS 283-24 Sec. 55.102. APPLICABILITY 283-25 Sec. 55.103. PROVISION OF SERVICE 283-26 Sec. 55.104. USE OF INFORMATION 283-27 Sec. 55.105. PER-CALL BLOCKING 284-1 Sec. 55.106. PER-LINE BLOCKING 284-2 Sec. 55.107. LIMITATION ON COMMISSION AUTHORITY 284-3 Sec. 55.108. CALLER ID CONSUMER EDUCATION PANEL 284-4 Sec. 55.109. IMPLEMENTATION OF PANEL RECOMMENDATIONS 284-5 Sec. 55.110. REPORT OF BLOCKING FAILURE 284-6 (Sections 55.111-55.120 reserved for expansion) 284-7 SUBCHAPTER F. AUTOMATIC DIAL ANNOUNCING DEVICES 284-8 Sec. 55.121. DEFINITION 284-9 Sec. 55.122. EXEMPTIONS 284-10 Sec. 55.123. NOTICE OF USE OF DEVICE TO TELECOMMUNICATIONS 284-11 UTILITY 284-12 Sec. 55.124. RANDOM OR SEQUENTIAL NUMBER CALLING 284-13 Sec. 55.125. HOURS WHEN USE PROHIBITED 284-14 Sec. 55.126. DEVICE DISCONNECTION 284-15 Sec. 55.127. CONTENTS OF RECORDED MESSAGE 284-16 Sec. 55.128. DURATION OF RECORDED MESSAGE 284-17 Sec. 55.129. PERMIT REQUIRED 284-18 Sec. 55.130. PERMIT 284-19 Sec. 55.131. PERMIT FEE 284-20 Sec. 55.132. NOTIFICATION OF CHANGE 284-21 Sec. 55.133. NOTIFICATION OF LOCAL EXCHANGE COMPANY 284-22 Sec. 55.134. COMPLAINTS AND ENFORCEMENT 284-23 Sec. 55.135. REVOCATION OF PERMIT 284-24 Sec. 55.136. DISCONNECTION OF SERVICE 284-25 Sec. 55.137. ADMINISTRATIVE PENALTY 284-26 Sec. 55.138. CRIMINAL PENALTY 284-27 (Sections 55.139-55.150 reserved for expansion) 285-1 SUBCHAPTER G. TELEPHONE SOLICITATION 285-2 Sec. 55.151. COMPLIANCE WITH REQUEST NOT TO BE CALLED 285-3 Sec. 55.152. NOTICE TO CONSUMERS 285-4 (Sections 55.153-55.170 reserved for expansion) 285-5 SUBCHAPTER H. PAY TELEPHONES 285-6 Sec. 55.171. DEFINITION 285-7 Sec. 55.172. LIMITATION 285-8 Sec. 55.173. REGISTRATION 285-9 Sec. 55.174. PROHIBITION ON CHARGE FOR CERTAIN CALLS 285-10 Sec. 55.175. CHARGE FOR LOCAL CALLS 285-11 Sec. 55.176. CHARGE FOR 800-TYPE CALLS 285-12 Sec. 55.177. CHARGE FOR CREDIT CARD, CALLING CARD, OR 285-13 OPERATOR-ASSISTED CALLS 285-14 Sec. 55.178. NOTICE OF INABILITY TO RECEIVE CALLS 285-15 Sec. 55.179. INFORMATION REQUIREMENTS 285-16 Sec. 55.180. VIOLATIONS 285-17 (Sections 55.181-55.200 reserved for expansion) 285-18 SUBCHAPTER I. DIRECTORY LISTINGS AND ASSISTANCE 285-19 Sec. 55.201. TERMS OF DIRECTORY LISTINGS AND ASSISTANCE 285-20 Sec. 55.202. DIRECTORY PUBLISHED BY TELECOMMUNICATIONS 285-21 UTILITY 285-22 Sec. 55.203. DIRECTORY PUBLISHED BY PRIVATE PUBLISHER 285-23 (Sections 55.204-55.250 reserved for expansion) 285-24 SUBCHAPTER J. TELECOMMUNICATIONS SERVICE BY CERTAIN PROVIDERS 285-25 Sec. 55.251. CHARGE FOR HOTEL OR MOTEL CALL 285-26 Sec. 55.252. 900 SERVICE USED BY PROBATIONERS OR PAROLEES 285-27 CHAPTER 55. REGULATION OF TELECOMMUNICATIONS SERVICES 286-1 SUBCHAPTER A. GENERAL PROVISIONS 286-2 Sec. 55.001. GENERAL STANDARD. A public utility shall 286-3 furnish service, instrumentalities, and facilities that are safe, 286-4 adequate, efficient, and reasonable. (V.A.C.S. Art. 1446c-0, Sec. 286-5 3.155(a).) 286-6 Sec. 55.002. COMMISSION AUTHORITY CONCERNING STANDARDS. The 286-7 commission, on its own motion or on complaint and after reasonable 286-8 notice and hearing, may: 286-9 (1) adopt just and reasonable standards, 286-10 classifications, rules, or practices a public utility must follow 286-11 in furnishing a service; 286-12 (2) adopt adequate and reasonable standards for 286-13 measuring a condition, including quantity and quality, relating to 286-14 the furnishing of a service; 286-15 (3) adopt reasonable rules for examining, testing, and 286-16 measuring a service; and 286-17 (4) adopt or approve reasonable rules, specifications, 286-18 and standards to ensure the accuracy of equipment, including meters 286-19 and instruments, used to measure a service. (V.A.C.S. 286-20 Art. 1446c-0, Sec. 3.155(b).) 286-21 Sec. 55.003. RULE OR STANDARD. (a) A public utility may 286-22 not impose a rule except as provided by this title. 286-23 (b) A public utility may file with the commission a 286-24 standard, classification, rule, or practice the utility follows. 286-25 (c) The standard, classification, rule, or practice 286-26 continues in force until: 286-27 (1) amended by the utility; or 287-1 (2) changed by the commission as provided by this 287-2 subtitle. (V.A.C.S. Art. 1446c-0, Secs. 3.153 (part), 3.155(c).) 287-3 Sec. 55.004. LOCAL EXCHANGE COMPANY RULE OR PRACTICE CHANGE. 287-4 (a) To make a change in an incumbent local exchange company's 287-5 tariffed rules or practices that does not affect the company's 287-6 charges or rates, the company must file the proposed change with 287-7 the commission at least 35 days before the effective date of the 287-8 change. The commission may require the incumbent local exchange 287-9 company to provide to ratepayers appropriate notice as determined 287-10 by the commission. 287-11 (b) The commission, on complaint by an affected person or on 287-12 its own motion and after reasonable notice, may hold a hearing to 287-13 determine the propriety of a change proposed under this section. 287-14 Pending the hearing and decision, the commission may suspend the 287-15 change for not longer than 120 days after the date the change would 287-16 otherwise be effective. The commission shall approve, deny, or 287-17 modify the change before the period of suspension expires. 287-18 (c) In a proceeding under this section, the incumbent local 287-19 exchange company has the burden of proving the proposed change: 287-20 (1) is in the public interest; and 287-21 (2) complies with this title. (V.A.C.S. Art. 1446c-0, 287-22 Sec. 3.212.) 287-23 Sec. 55.005. UNREASONABLE PREFERENCE OR PREJUDICE CONCERNING 287-24 SERVICE PROHIBITED. In providing a service to persons in a 287-25 classification, a public utility may not: 287-26 (1) grant an unreasonable preference or advantage to a 287-27 person in the classification; or 288-1 (2) subject a person in the classification to an 288-2 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 288-3 Sec. 3.215 (part).) 288-4 Sec. 55.006. DISCRIMINATION AND RESTRICTION ON COMPETITION. 288-5 A public utility may not: 288-6 (1) discriminate against a person who sells or leases 288-7 equipment or performs services in competition with the public 288-8 utility; or 288-9 (2) engage in a practice that tends to restrict or 288-10 impair that competition. (V.A.C.S. Art. 1446c-0, Sec. 3.217.) 288-11 Sec. 55.007. MINIMUM SERVICES. (a) The commission shall 288-12 require a holder of a certificate of convenience and necessity or a 288-13 certificate of operating authority to provide at the applicable 288-14 tariff rate, if any, to each customer, regardless of race, national 288-15 origin, income, or residence in an urban or rural area: 288-16 (1) single-party service; 288-17 (2) tone-dialing service; 288-18 (3) basic custom calling features; 288-19 (4) equal access for an interLATA interexchange 288-20 carrier on a bona fide request; and 288-21 (5) digital switching capability in an exchange on 288-22 customer request, provided by a digital switch in the exchange or 288-23 by connection to a digital switch in another exchange. 288-24 (b) Notwithstanding Subsection (a), an electing incumbent 288-25 local exchange company serving more than 175,000 but fewer than 288-26 1,500,000 access lines on January 1, 1995, shall install a digital 288-27 switch in each central office that serves an exchange of fewer than 289-1 20,000 access lines. 289-2 (c) The commission may temporarily waive a requirement 289-3 imposed by Subsection (a) or (b) on a showing of good cause. 289-4 (d) The commission may not consider the cost of implementing 289-5 this section in determining whether an electing company is entitled 289-6 to: 289-7 (1) a rate increase under Chapter 58 or 59; or 289-8 (2) increased universal service funds under Subchapter 289-9 B, Chapter 56. 289-10 (e) A holder of a certificate of convenience and necessity 289-11 or a certificate of operating authority shall comply with 289-12 Subsection (a) not later than December 31, 2000. This subsection 289-13 expires September 1, 2003. 289-14 (f) An electing incumbent local exchange company subject to 289-15 Subsection (b) shall comply with that subsection not later than 289-16 December 31, 1998. This subsection expires September 1, 2001. 289-17 (V.A.C.S. Art. 1446c-0, Secs. 3.1555(a), (b), (c).) 289-18 Sec. 55.008. IMPROVEMENTS IN SERVICE; INTERCONNECTING 289-19 SERVICE. The commission, after notice and hearing, may: 289-20 (1) order a public utility to provide specified 289-21 improvements in its service in a specified area if: 289-22 (A) service in the area is inadequate or 289-23 substantially inferior to service in a comparable area; and 289-24 (B) requiring the company to provide the 289-25 improved service is reasonable; or 289-26 (2) order two or more utilities to establish specified 289-27 facilities for interconnecting service. (V.A.C.S. Art. 1446c-0, 290-1 Sec. 3.262(a) (part).) 290-2 Sec. 55.009. INTRALATA CALLS. (a) If federal law prohibits 290-3 a local exchange company in this state from providing interLATA 290-4 telecommunications services, the local exchange companies in this 290-5 state designated or de facto authorized to receive a "0-plus" or 290-6 "1-plus" dialed intraLATA call are exclusively designated or 290-7 authorized to receive such a call. 290-8 (b) A telecommunications utility operating under a 290-9 certificate of operating authority or a service provider 290-10 certificate of operating authority is de facto authorized to 290-11 receive a "0-plus" or "1-plus" dialed intraLATA call on the date 290-12 the utility receives its certificate, to the extent the utility is 290-13 not restricted by Section 54.159. 290-14 (c) If federal law allows all local exchange companies to 290-15 provide interLATA telecommunications services, the commission shall 290-16 ensure that: 290-17 (1) a customer may designate a provider of the 290-18 customer's choice to carry the customer's "0-plus" and "1-plus" 290-19 dialed intraLATA calls; and 290-20 (2) equal access in the public network is implemented 290-21 to allow the provider to carry those calls. (V.A.C.S. 290-22 Art. 1446c-0, Sec. 3.219.) 290-23 Sec. 55.010. BILLING FOR SERVICE TO THE STATE. A 290-24 telecommunications utility providing service to the state, 290-25 including service to an agency in any branch of state government, 290-26 may not impose a fee, a penalty, interest, or any other charge for 290-27 delinquent payment of a bill for that service. (V.A.C.S. 291-1 Art. 1446c-0, Sec. 3.218.) 291-2 (Sections 55.011-55.020 reserved for expansion) 291-3 SUBCHAPTER B. EXTENDED AREA SERVICE 291-4 Sec. 55.021. EXTENDED AREA SERVICE. After notice and a 291-5 hearing, the commission may order one or more local exchange 291-6 companies that are dominant carriers to provide: 291-7 (1) mandatory extended area service in accordance with 291-8 Section 55.022; or 291-9 (2) optional extended area service in accordance with 291-10 Section 55.023. (V.A.C.S. Art. 1446c-0, Sec. 3.262(a) (part).) 291-11 Sec. 55.022. MANDATORY SERVICE. The commission may order 291-12 mandatory extended area service in a specified metropolitan area 291-13 if: 291-14 (1) there is a sufficient community of interest in the 291-15 area; and 291-16 (2) the company can reasonably provide the service. 291-17 (V.A.C.S. Art. 1446c-0, Sec. 3.262(a) (part).) 291-18 Sec. 55.023. OPTIONAL EXTENDED AREA SERVICE. (a) The 291-19 commission may order optional extended area service in a specified 291-20 calling area if: 291-21 (1) each affected company and the representatives of 291-22 at least one political subdivision in the proposed calling area 291-23 agree to the service; and 291-24 (2) the proposed common calling area has a single, 291-25 continuous boundary. 291-26 (b) The commission may not adopt rules that diminish in any 291-27 manner the ability of an affected company or a political 292-1 subdivision to enter into joint agreements for optional extended 292-2 area service under this section. 292-3 (c) In this section, "political subdivision" means: 292-4 (1) a county; 292-5 (2) a municipality; or 292-6 (3) an unincorporated town or village that has 275 or 292-7 more access lines. (V.A.C.S. Art. 1446c-0, Secs. 3.262(a) (part), 292-8 (b).) 292-9 Sec. 55.024. CHARGE FOR EXTENDED AREA SERVICE. (a) An 292-10 incumbent local exchange company that provides mandatory two-way 292-11 extended area service to customers shall impose for that service a 292-12 separately stated monthly charge of $3.50 a line for a residential 292-13 customer and $7 a line for a business customer if, on September 1, 292-14 1995, the company: 292-15 (1) served more than 1,000,000 access lines in this 292-16 state; and 292-17 (2) imposed a separately stated monthly charge for 292-18 mandatory two-way extended area service of more than $3.50 a line 292-19 for a residential customer and more than $7 a line for a business 292-20 customer. 292-21 (b) The company shall recover all costs incurred and all 292-22 loss of revenue that results from imposition of the rates 292-23 prescribed by Subsection (a) in the manner prescribed by Section 292-24 55.048(c). 292-25 (c) The rate limitation prescribed by Subsection (a) does 292-26 not apply to a separately stated monthly charge for: 292-27 (1) extended area service in or into a metropolitan 293-1 exchange; or 293-2 (2) extended metropolitan service. (V.A.C.S. 293-3 Art. 1446c-0, Sec. 3.308.) 293-4 Sec. 55.025. HUNTING SERVICE. (a) A local exchange company 293-5 shall make available, at a reasonable tariffed rate, hunting 293-6 service from local exchange lines to extended metropolitan service 293-7 lines. 293-8 (b) The company may not require a customer to purchase 293-9 additional extended metropolitan service to obtain the hunting 293-10 service. (V.A.C.S. Art. 1446c-0, Sec. 3.311.) 293-11 (Sections 55.026-55.040 reserved for expansion) 293-12 SUBCHAPTER C. EXPANDED TOLL-FREE LOCAL CALLING AREAS 293-13 Sec. 55.041. DEFINITIONS. In this subchapter, "metropolitan 293-14 exchange," "local calling area of a metropolitan exchange," and 293-15 "exchange" have the meanings and boundaries assigned by the 293-16 commission on September 1, 1993. (V.A.C.S. Art. 1446c-0, Sec. 293-17 3.304(b)(2) (part).) 293-18 Sec. 55.042. CONTIGUOUS EXCHANGE. The commission may expand 293-19 a toll-free local calling area into an exchange that is not in a 293-20 metropolitan exchange but is in a local calling area that is 293-21 contiguous to a metropolitan exchange that the commission 293-22 determines has a community of interest with the exchange for which 293-23 a petition is filed under this subchapter. (V.A.C.S. Art. 1446c-0, 293-24 Sec. 3.304(b)(2) (part).) 293-25 Sec. 55.043. SPLITTING EXCHANGES PROHIBITED. 293-26 Notwithstanding any other provision of this subchapter, the 293-27 commission may not split a petitioning or requested exchange in 294-1 establishing a toll-free local calling area. (V.A.C.S. 294-2 Art. 1446c-0, Sec. 3.304(b)(2) (part).) 294-3 Sec. 55.044. EXEMPTION. (a) The commission may not require 294-4 an incumbent local exchange company serving the petitioning or 294-5 requested exchange to expand the company's toll-free local calling 294-6 area under this subchapter if: 294-7 (1) the incumbent local exchange company has fewer 294-8 than 10,000 access lines; 294-9 (2) the petitioning or requested exchange is served by 294-10 a telephone cooperative corporation; 294-11 (3) extended area service or extended metropolitan 294-12 service is available between the exchanges; 294-13 (4) the petitioning or requested exchange is a 294-14 metropolitan exchange; or 294-15 (5) the commission determines that the company has 294-16 shown that to serve the area is not geographically or 294-17 technologically feasible. 294-18 (b) To promote the wide dispersion of pay telephones, the 294-19 commission may: 294-20 (1) exempt pay telephones from this subchapter; or 294-21 (2) change the rates charged for calls from pay 294-22 telephones. (V.A.C.S. Art. 1446c-0, Secs. 3.304(b)(1), (c).) 294-23 Sec. 55.045. ELIGIBILITY TO PETITION. The telephone 294-24 subscribers of an incumbent local exchange company exchange that 294-25 serves not more than 10,000 access lines may petition the 294-26 commission for expansion of the company's toll-free local calling 294-27 area if: 295-1 (1) the petitioning exchange's central switching 295-2 office is located within 22 miles, using vertical and horizontal 295-3 geographic coordinates, of the central switching office of the 295-4 exchange requested for expanded local calling service; or 295-5 (2) the petitioning exchange's central office is not 295-6 more than 50 miles from the central office of the exchange 295-7 requested for expanded local calling service and the exchanges 295-8 share a community of interest. (V.A.C.S. Art. 1446c-0, Sec. 295-9 3.304(a) (part).) 295-10 Sec. 55.046. PETITION REQUIREMENTS. (a) A petition under 295-11 this subchapter must be signed by a number of the exchange's 295-12 subscribers equal at least to the lesser of 100 of the exchange's 295-13 subscribers or five percent of the exchange's subscribers. 295-14 (b) An exchange that petitions under Section 55.045(2) must 295-15 demonstrate in the petition that the exchange shares a community of 295-16 interest with the requested exchange. 295-17 (c) For purposes of this section, the relationships between 295-18 exchanges that create a community of interest include: 295-19 (1) a relationship because of schools, hospitals, 295-20 local governments, or business centers; or 295-21 (2) other relationships that would make the 295-22 unavailability of expanded local calling service a hardship for the 295-23 residents of the area. (V.A.C.S. Art. 1446c-0, Sec. 3.304(a) 295-24 (part).) 295-25 Sec. 55.047. BALLOTING AND CONSIDERATION. (a) If the 295-26 commission receives a petition that complies with this subchapter, 295-27 the commission shall order the incumbent local exchange company to 296-1 provide ballots to the subscribers in the petitioning exchange. 296-2 (b) The commission shall consider the request for expansion 296-3 of the toll-free local calling area if at least 70 percent of the 296-4 subscribers who vote do so in favor of the expansion. 296-5 (c) The commission by rule shall provide for an expedited 296-6 hearing on the issue of expansion. (V.A.C.S. Art. 1446c-0, Sec. 296-7 3.304(a) (part).) 296-8 Sec. 55.048. CHARGES. (a) The incumbent local exchange 296-9 company shall recover all costs incurred and all loss of revenue 296-10 from an expansion of a toll-free local calling area under this 296-11 subchapter through a request other than a revenue requirement 296-12 showing by imposing a monthly fee under Subsection (b) or (c), or 296-13 both. 296-14 (b) The company may impose a monthly fee against each 296-15 residential and business customer in the petitioning exchange. The 296-16 fee may not exceed $3.50 a line for a residential customer and $7 a 296-17 line for a business customer unless the customer's toll-free local 296-18 calling area includes more than five exchanges. The company may 296-19 impose an additional monthly fee of $1.50 for each exchange in 296-20 excess of five. This subsection applies regardless of the number 296-21 of petitions required to obtain access to the exchanges. A company 296-22 may impose a fee under this subsection only until the company's 296-23 next general rate case. 296-24 (c) The company may impose a monthly fee against each of the 296-25 company's local exchange service customers in this state. This fee 296-26 is in addition to the company's local exchange rates. 296-27 (d) The company may not recover regulatory case expenses 297-1 under this subchapter by imposing a surcharge on the subscribers of 297-2 the petitioning exchange. (V.A.C.S. Art. 1446c-0, Sec. 3.304(a) 297-3 (part).) 297-4 (Sections 55.049-55.080 reserved for expansion) 297-5 SUBCHAPTER D. OPERATOR SERVICE PROVIDERS 297-6 Sec. 55.081. DEFINITION. In this subchapter, "operator 297-7 service" means a service using live operator or automated operator 297-8 functions to handle telephone service such as toll calling using 297-9 collect, third-number billing, and calling card services. The term 297-10 does not include a call for which the called party has arranged to 297-11 be billed (800 service). (V.A.C.S. Art. 1446c-0, Sec. 3.052(a).) 297-12 Sec. 55.082. APPLICABILITY. Except as provided by Section 297-13 55.088, this subchapter applies only to a telecommunications 297-14 utility that is not a dominant carrier. (V.A.C.S. Art. 1446c-0, 297-15 Sec. 3.052(h) (part).) 297-16 Sec. 55.083. RULES AND PROCEDURES. (a) The commission may 297-17 adopt rules and establish procedures to enforce and implement this 297-18 subchapter. 297-19 (b) A rule adopted under this subchapter must be 297-20 nondiscriminatory and designed to promote competition that 297-21 facilitates consumer choice. (V.A.C.S. Art. 1446c-0, Secs. 3.052(f) 297-22 (part), (h) (part).) 297-23 Sec. 55.084. INFORMATION DISPLAYED ON PUBLIC USE TELEPHONE. 297-24 (a) An operator service provider shall furnish each entity with 297-25 which it contracts to provide operator service a sticker, card, or 297-26 other form of information approved by the commission for each 297-27 telephone that: 298-1 (1) has access to the service; and 298-2 (2) is intended for use by the public. 298-3 (b) The commission may grant the owner of a telephone 298-4 approval for an alternative form of information. 298-5 (c) The information must state: 298-6 (1) the provider's name; 298-7 (2) that the operator service provider will provide 298-8 rate information on a caller's request; 298-9 (3) that a caller, on the caller's request, will be 298-10 informed of the method of access to the local exchange carrier 298-11 operator; and 298-12 (4) that a complaint about the service may be made to 298-13 the provider or to the commission at the designated telephone 298-14 number. 298-15 (d) The operator service provider shall by contract require 298-16 an entity receiving information to display the information on or 298-17 near each telephone for which the operator service provider is 298-18 required to furnish the information. (V.A.C.S. Art. 1446c-0, Sec. 298-19 3.052(c).) 298-20 Sec. 55.085. CONNECTION ANNOUNCEMENT. Before connecting a 298-21 call, the operator service provider shall: 298-22 (1) announce the provider's name; and 298-23 (2) at the caller's request, quote the rate and any 298-24 other fee or surcharge that applies to the call and is charged by 298-25 the provider. (V.A.C.S. Art. 1446c-0, Sec. 3.052(b).) 298-26 Sec. 55.086. INFORMATION REQUIRED ON ACCESS TO LOCAL 298-27 EXCHANGE COMPANY OPERATOR. (a) An operator service provider, on a 299-1 caller's request, shall inform the caller of the method of access 299-2 to the local exchange carrier operator serving the exchange from 299-3 which the call is made. 299-4 (b) A charge may not be made for information provided under 299-5 this section. (V.A.C.S. Art. 1446c-0, Sec. 3.052(d).) 299-6 Sec. 55.087. ACCESS TO LOCAL EXCHANGE COMPANY AND OTHER 299-7 UTILITIES REQUIRED. (a) The commission by rule shall require an 299-8 operator service provider to include in its contract with each 299-9 entity through which it provides operator service a provision that 299-10 requires each telephone subscribed to its service to allow access 299-11 to: 299-12 (1) the local exchange carrier operator serving the 299-13 exchange from which the call is made; and 299-14 (2) other telecommunications utilities. 299-15 (b) To prevent fraudulent use of its service, an operator 299-16 service provider or an entity through which it provides operator 299-17 service may block the access described by Subsection (a) by 299-18 obtaining a waiver for this purpose from the commission or the 299-19 Federal Communications Commission. The commission by rule shall 299-20 establish the procedure and criteria for obtaining a waiver from 299-21 the commission. (V.A.C.S. Art. 1446c-0, Sec. 3.052(e).) 299-22 Sec. 55.088. ACCESS TO LIVE OPERATOR REQUIRED. (a) A 299-23 dominant or nondominant telecommunications utility that provides 299-24 operator service shall ensure that a caller has access to a live 299-25 operator at the beginning of a live or mechanized operator-assisted 299-26 call through a method designed to be easily and clearly 299-27 understandable and accessible to the caller. 300-1 (b) A telecommunications utility described by Subsection (a) 300-2 shall submit to the commission for review the method by which the 300-3 utility will provide access to a live operator. 300-4 (c) This section applies regardless of the method by which 300-5 the telecommunications utility provides operator service. 300-6 (d) This section does not apply to a telephone located in a 300-7 prison or jail facility. (V.A.C.S. Art. 1446c-0, Sec. 3.052(i).) 300-8 Sec. 55.089. COMMISSION MAY INVESTIGATE AND ACT ON 300-9 VIOLATION. (a) If the commission determines that an operator 300-10 service provider has violated or is about to violate this 300-11 subchapter, the commission, after notice and evidentiary hearing, 300-12 may take action to stop, correct, or prevent the violation. 300-13 (b) The commission may investigate a complaint that it 300-14 receives concerning an operator service. (V.A.C.S. Art. 1446c-0, 300-15 Sec. 3.052(g).) 300-16 (Sections 55.090-55.100 reserved for expansion) 300-17 SUBCHAPTER E. CALLER IDENTIFICATION SERVICE 300-18 Sec. 55.101. DEFINITIONS. In this subchapter: 300-19 (1) "Caller identification information" means any 300-20 information that may be used to identify the specific originating 300-21 number or originating location of a wire or electronic 300-22 communication transmitted by a telephone, including the telephone 300-23 listing number or the name of the customer from whose telephone a 300-24 telephone number is dialed. 300-25 (2) "Caller identification service" means a service 300-26 that provides caller identification information to a device that 300-27 can display the information. 301-1 (3) "Per-call blocking" means a telecommunications 301-2 service that prevents caller identification information from being 301-3 transmitted to a called party on an individual call when the 301-4 calling party affirmatively acts to prevent the transmission. 301-5 (4) "Per-line blocking" means a telecommunications 301-6 service that prevents caller identification information from being 301-7 transmitted to a called party on each call unless the calling party 301-8 affirmatively acts to permit the transmission. (V.A.C.S. 301-9 Art. 1446c-0, Secs. 3.302(h)(1), (2) (part), (3), (4).) 301-10 Sec. 55.102. APPLICABILITY. (a) This subchapter applies 301-11 only to the provision of caller identification service. 301-12 (b) This subchapter does not apply to: 301-13 (1) an identification service that is used in a 301-14 limited system, including a central office based PBX-type system; 301-15 (2) information that is used on a public agency's 301-16 emergency telephone line or on a line that receives the primary 301-17 emergency telephone number (911); 301-18 (3) information exchanged between telecommunications 301-19 utilities, enhanced service providers, or other entities that is 301-20 necessary for the setting up, processing, transmission, or billing 301-21 of telecommunications or related services; 301-22 (4) information provided in compliance with applicable 301-23 law or legal process; or 301-24 (5) an identification service provided in connection 301-25 with a 700, 800, or 900 access code telecommunications service. 301-26 (V.A.C.S. Art. 1446c-0, Secs. 3.302(a), (g).) 301-27 Sec. 55.103. PROVISION OF SERVICE. A telecommunications 302-1 utility or commercial mobile service provider may offer caller 302-2 identification services under this subchapter only if the utility 302-3 or provider obtains written authorization from the commission. 302-4 (V.A.C.S. Art. 1446c-0, Sec. 3.302(b), (h)(2) (part), (i).) 302-5 Sec. 55.104. USE OF INFORMATION. (a) A person may not use 302-6 a caller identification service to compile and sell specific local 302-7 call information without the affirmative approval of the 302-8 originating telephone customer. 302-9 (b) This section does not prohibit a provider of caller 302-10 identification service from: 302-11 (1) verifying network performance or testing the 302-12 caller identification service; 302-13 (2) compiling, using, and disclosing aggregate caller 302-14 identification information; or 302-15 (3) complying with applicable law or legal process. 302-16 (V.A.C.S. Art. 1446c-0, Sec. 3.302(f).) 302-17 Sec. 55.105. PER-CALL BLOCKING. The commission shall 302-18 require that a provider of caller identification service offer free 302-19 per-call blocking to each telephone subscriber in the specific area 302-20 in which the service is offered. (V.A.C.S. Art. 1446c-0, Sec. 302-21 3.302(c).) 302-22 Sec. 55.106. PER-LINE BLOCKING. (a) The commission shall 302-23 require that a provider of caller identification service offer free 302-24 per-line blocking to a particular customer if the commission 302-25 receives from the customer written certification that the customer 302-26 has a compelling need for per-line blocking. 302-27 (b) A provider who is ordered to offer per-line blocking 303-1 under this section shall notify the customer by mail of the date 303-2 the blocking will begin. 303-3 (c) If a customer removes and later reinstates the per-line 303-4 block, the provider may assess a service order charge in an amount 303-5 approved by the commission for the provider's administrative 303-6 expenses relating to the reinstatement. 303-7 (d) The commission may impose a fee or assessment on a 303-8 provider in an amount sufficient to cover the additional expenses 303-9 the commission incurs in implementing the customer certification 303-10 provisions of this section. 303-11 (e) Information received under this section by the 303-12 commission or by a provider is confidential and may be used only to 303-13 administer this section. (V.A.C.S. Art. 1446c-0, Secs. 3.302(d), 303-14 3.3025(a) (part).) 303-15 Sec. 55.107. LIMITATION ON COMMISSION AUTHORITY. The 303-16 commission may prescribe in relation to blocking only a requirement 303-17 authorized by Sections 55.105 and 55.106. (V.A.C.S. Art. 1446c-0, 303-18 Sec. 3.302(e).) 303-19 Sec. 55.108. CALLER ID CONSUMER EDUCATION PANEL. (a) The 303-20 Caller ID Consumer Education Panel is composed of: 303-21 (1) one person appointed by the governor; 303-22 (2) one person appointed by the presiding officer of 303-23 the commission after the presiding officer consults with the Texas 303-24 Council on Family Violence; and 303-25 (3) one person appointed by the counsellor. 303-26 (b) The panel shall: 303-27 (1) meet at least quarterly; 304-1 (2) file an annual report with the commission 304-2 regarding: 304-3 (A) the level of effort and effectiveness of 304-4 consumer education materials; and 304-5 (B) the panel's recommendations for: 304-6 (i) increasing the safe use of caller ID 304-7 services and the privacy of the calling customer; and 304-8 (ii) decreasing the likelihood of harm 304-9 resulting from the use of caller ID services; and 304-10 (3) investigate whether educational caller ID 304-11 materials are distributed in as effective a manner as marketing 304-12 caller ID materials. 304-13 (c) A provider of caller ID services shall file with the 304-14 panel all caller ID materials as the materials become available. 304-15 (d) The panel is abolished and this section expires 304-16 September 1, 1999. 304-17 (e) In this section: 304-18 (1) "Caller ID service" has the meaning assigned by 304-19 Section 55.110. 304-20 (2) "Caller ID materials" means any disseminated 304-21 information relating to caller ID services, including 304-22 advertisements, educational material, training material, and audio 304-23 and video marketing devices. (V.A.C.S. Art. 1446c-0, Secs. 304-24 3.3025(b) (part), (c), (d), (e).) 304-25 Sec. 55.109. IMPLEMENTATION OF PANEL RECOMMENDATIONS. The 304-26 commission may implement the recommendations of the Caller ID 304-27 Consumer Education Panel and interested parties to the extent 305-1 consistent with the public interest. (V.A.C.S. Art. 1446c-0, Sec. 305-2 3.3025(b) (part).) 305-3 Sec. 55.110. REPORT OF BLOCKING FAILURE. (a) A provider of 305-4 caller ID services who becomes aware of the failure of per-call or 305-5 per-line blocking to block identification of a customer shall 305-6 report that failure to the commission, the Caller ID Consumer 305-7 Education Panel, and the customer whose identification was not 305-8 blocked. 305-9 (b) The provider shall make a reasonable effort to notify 305-10 the customer within 24 hours after the provider becomes aware of 305-11 the failure. The provider is not required to notify the customer 305-12 if the customer reported the failure. 305-13 (c) In this section, "caller ID service" means a service 305-14 that permits the called party to determine the identity, telephone 305-15 number, or address of the calling party. The term does not include 305-16 911 services. (V.A.C.S. Art. 1446c-0, Secs. 3.3025(a) (part), 305-17 (d).) 305-18 (Sections 55.111-55.120 reserved for expansion) 305-19 SUBCHAPTER F. AUTOMATIC DIAL ANNOUNCING DEVICES 305-20 Sec. 55.121. DEFINITION. In this subchapter, "automated 305-21 dial announcing device" means automated equipment used for 305-22 telephone solicitation or collection that can: 305-23 (1) store telephone numbers to be called or produce 305-24 numbers to be called through use of a random or sequential number 305-25 generator; and 305-26 (2) convey, alone or in conjunction with other 305-27 equipment, a prerecorded or synthesized voice message to the number 306-1 called without the use of a live operator. (V.A.C.S. Art. 1446c-0, 306-2 Sec. 3.651(1).) 306-3 Sec. 55.122. EXEMPTIONS. This subchapter does not apply to 306-4 the use of an automated dial announcing device: 306-5 (1) to make a call relating to an emergency or a 306-6 public service under a program developed or approved by the 306-7 emergency management coordinator of the county in which the call is 306-8 received; or 306-9 (2) by a public or private primary or secondary school 306-10 system to locate or account for a truant student. (V.A.C.S. 306-11 Art. 1446c-0, Sec. 3.652.) 306-12 Sec. 55.123. NOTICE OF USE OF DEVICE TO TELECOMMUNICATIONS 306-13 UTILITY. A person may not use an automated dial announcing device 306-14 to make a telephone call in which the device plays a recorded 306-15 message when the connection is completed unless the person gives to 306-16 each telecommunications utility over whose system the device is to 306-17 be used written notice specifying the type of device to be used. 306-18 (V.A.C.S. Article 1446c-0, Sec. 3.653(a) (part).) 306-19 Sec. 55.124. RANDOM OR SEQUENTIAL NUMBER CALLING. A person 306-20 may not use an automated dial announcing device for random number 306-21 dialing or to dial numbers determined by successively increasing or 306-22 decreasing integers if the person uses the device to make a 306-23 telephone call in which the device plays a recorded message when 306-24 the connection is completed. (V.A.C.S. Art. 1446c-0, Sec. 306-25 3.653(a) (part).) 306-26 Sec. 55.125. HOURS WHEN USE PROHIBITED. (a) A person may 306-27 not use an automated dial announcing device to make a telephone 307-1 solicitation call terminating in this state in which the device 307-2 plays a recorded message when the connection is completed if the 307-3 call is made: 307-4 (1) before noon or after 9 p.m. on a Sunday; or 307-5 (2) before 9 a.m. or after 9 p.m. on a weekday or a 307-6 Saturday. 307-7 (b) A person may not use an automated dial announcing device 307-8 to make a telephone collection call terminating in this state in 307-9 which the device plays a recorded message when the connection is 307-10 completed if the call is made at an hour at which collection calls 307-11 are prohibited under the federal Fair Debt Collection Practices Act 307-12 (15 U.S.C. Section 1692 et seq.). (V.A.C.S. Art. 1446c-0, Sec. 307-13 3.653(a) (part).) 307-14 Sec. 55.126. DEVICE DISCONNECTION. A person may not use an 307-15 automated dial announcing device to make a telephone call in which 307-16 the device plays a recorded message when the connection is 307-17 completed unless the device disconnects from the called person's 307-18 line not later than 30 seconds after the call is terminated by 307-19 either party. If the device cannot disconnect during that period, 307-20 a live operator must introduce the call and receive the called 307-21 person's oral consent before beginning a prerecorded or synthesized 307-22 voice message. (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 307-23 Sec. 55.127. CONTENTS OF RECORDED MESSAGE. (a) A person 307-24 may not use an automated dial announcing device to make a telephone 307-25 call in which the device plays a recorded message when the 307-26 connection is completed unless the recorded message states during 307-27 the first 30 seconds of the call: 308-1 (1) the nature of the call; 308-2 (2) the identity of the person, company, or 308-3 organization making the call; and 308-4 (3) the telephone number from which the call is made. 308-5 (b) In addition to the requirements prescribed by Subsection 308-6 (a), a call during which a cross-promotion or reference to a 308-7 pay-per-call information service is made must include a statement 308-8 of: 308-9 (1) the fact that a caller who makes a call to a 308-10 pay-per-call information service's telephone number will be charged 308-11 for that call; 308-12 (2) the amount of the flat-rate or cost-per-minute 308-13 charge the caller will incur or the amount of both if both charges 308-14 will be incurred; and 308-15 (3) the estimated amount of time required to receive 308-16 all the information offered by the service during a call. 308-17 (c) Subsection (a) does not apply to the use of a device if 308-18 the device is used: 308-19 (1) for debt collection purposes in compliance with 308-20 applicable federal law and regulations; and 308-21 (2) by a live operator for automated dialing or hold 308-22 announcement purposes. 308-23 (d) In this section, "pay-per-call information service" 308-24 means a service that routinely delivers, for a predetermined and 308-25 sometimes time-sensitive fee, a prerecorded or live message or 308-26 interactive program after the caller dials a specified 900 or 976 308-27 number. (V.A.C.S. Art. 1446c-0, Secs. 3.653(a) (part), (b), (c).) 309-1 Sec. 55.128. DURATION OF RECORDED MESSAGE. A person may not 309-2 use an automated dial announcing device to make for solicitation 309-3 purposes a telephone call in which the device plays a recorded 309-4 message when the connection is completed unless: 309-5 (1) the recorded message is shorter than one minute; 309-6 or 309-7 (2) the device has the technical capacity to: 309-8 (A) recognize a telephone answering device on 309-9 the called person's line; and 309-10 (B) terminate the call within one minute. 309-11 (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 309-12 Sec. 55.129. PERMIT REQUIRED. A person may not use an 309-13 automated dial announcing device to make a telephone call in which 309-14 the device plays a recorded message when the connection is 309-15 completed unless the person has a permit under Section 55.130. 309-16 (V.A.C.S. Art. 1446c-0, Sec. 3.653(a) (part).) 309-17 Sec. 55.130. PERMIT. (a) A person may not use an automated 309-18 dial announcing device without a permit issued by the commission. 309-19 (b) An applicant for an original permit must submit to the 309-20 commission an application on a form that: 309-21 (1) is prescribed by the commission; and 309-22 (2) contains: 309-23 (A) the telephone number of each automated dial 309-24 announcing device that the person will use; and 309-25 (B) the physical address from which each 309-26 automated dial announcing device will operate. 309-27 (c) An original permit is valid for one year and may be 310-1 renewed annually by filing with the commission the information 310-2 required by Subsection (b)(2). 310-3 (d) An application for an original permit or a filing 310-4 required for the renewal of the permit must be accompanied by the 310-5 appropriate fee prescribed by Section 55.131. 310-6 (e) In determining whether to deny an application for an 310-7 original permit or renewal of the permit, the commission shall 310-8 consider the compliance record of the owner or operator of the 310-9 automated dial announcing device and may deny the application based 310-10 on that record. (V.A.C.S. Art. 1446c-0, Secs. 3.655(a) (part), (b) 310-11 (part), (c).) 310-12 Sec. 55.131. PERMIT FEE. (a) The commission shall 310-13 prescribe a fee for an original permit or renewal of a permit. 310-14 (b) The amount of the original permit fee must be reasonable 310-15 and cover the enforcement cost to the commission but may not exceed 310-16 $500. 310-17 (c) The fee for renewal of a permit may not exceed $100. 310-18 (V.A.C.S. Art. 1446c-0, Sec. 3.655(a) (part).) 310-19 Sec. 55.132. NOTIFICATION OF CHANGE. (a) The owner or 310-20 operator of an automated dial announcing device shall notify the 310-21 commission if the telephone number of the device or the physical 310-22 address from which the device operates changes. 310-23 (b) The owner or operator shall give the notice by certified 310-24 mail not later than the 48th hour before the hour the device begins 310-25 operating with the new telephone number or at the new address. 310-26 (c) If the owner or operator of a device fails to give 310-27 notice as required by Subsection (b), the person's permit is 311-1 invalid. (V.A.C.S. Art. 1446c-0, Sec. 3.655(b) (part).) 311-2 Sec. 55.133. NOTIFICATION OF LOCAL EXCHANGE COMPANY. The 311-3 commission shall provide to a local exchange company on request a 311-4 copy of a permit issued under this subchapter and of any change 311-5 relating to the permit. (V.A.C.S. Art. 1446c-0, Sec. 3.655(d).) 311-6 Sec. 55.134. COMPLAINTS AND ENFORCEMENT. (a) The 311-7 commission shall: 311-8 (1) investigate complaints relating to the use of an 311-9 automated dial announcing device; and 311-10 (2) enforce this subchapter. 311-11 (b) A local exchange company that receives a complaint 311-12 relating to the use of an automated dial announcing device shall 311-13 send the complaint to the commission. The commission by rule shall 311-14 prescribe the procedures and requirements for sending a complaint 311-15 to the commission. (V.A.C.S. Art. 1446c-0, Secs. 3.654(a), 311-16 3.655(e).) 311-17 Sec. 55.135. REVOCATION OF PERMIT. The commission may 311-18 revoke a person's permit if the person fails to comply with this 311-19 subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.657(a).) 311-20 Sec. 55.136. DISCONNECTION OF SERVICE. (a) If the 311-21 commission or a court determines that a person has violated this 311-22 subchapter, the commission or court shall require a 311-23 telecommunications utility to disconnect service to the person. 311-24 (b) The telecommunications utility may reconnect service to 311-25 the person only on a determination by the commission that the 311-26 person will comply with this subchapter. 311-27 (c) Not later than the third day before the date of the 312-1 disconnection, the telecommunications utility shall give notice to 312-2 the person using the device of its intent to disconnect service. 312-3 However, if the device is causing network congestion or blockage, 312-4 the notice may be given on the day before the date of 312-5 disconnection. 312-6 (d) A telecommunications utility, without an order by the 312-7 commission or a court, may disconnect or refuse to connect service 312-8 to a person using or intending to use an automated dial announcing 312-9 device if the utility determines that the device would cause or is 312-10 causing network harm. (V.A.C.S. Art. 1446c-0, Secs. 3.654(b), 312-11 (c).) 312-12 Sec. 55.137. ADMINISTRATIVE PENALTY. (a) The commission 312-13 may impose an administrative penalty against a person who owns or 312-14 operates an automated dial announcing device in violation of this 312-15 subchapter or a commission rule or order. 312-16 (b) The penalty for a violation may be in an amount not to 312-17 exceed $1,000 for each day or portion of a day during which the 312-18 device operates in violation of this subchapter or a commission 312-19 rule or order. 312-20 (c) The administrative penalty is civil in nature and is in 312-21 addition to any other penalty provided by law. 312-22 (d) The commission by rule shall prescribe the procedures 312-23 for assessing an administrative penalty under this section. The 312-24 procedures must require proper notice and hearing in accordance 312-25 with Chapter 2001, Government Code. 312-26 (e) A person may appeal the final order of the commission 312-27 under Chapter 2001, Government Code. The substantial evidence rule 313-1 applies on appeal. (V.A.C.S. Art. 1446c-0, Secs. 3.656(a), (b), 313-2 (c), (d).) 313-3 Sec. 55.138. CRIMINAL PENALTY. (a) A person commits an 313-4 offense if the person owns or operates an automated dial announcing 313-5 device that the person knows is operating in violation of this 313-6 subchapter. 313-7 (b) An offense under this section is a Class A misdemeanor. 313-8 (V.A.C.S. Art. 1446c-0, Sec. 3.657(b).) 313-9 (Sections 55.139-55.150 reserved for expansion) 313-10 SUBCHAPTER G. TELEPHONE SOLICITATION 313-11 Sec. 55.151. COMPLIANCE WITH REQUEST NOT TO BE CALLED. (a) 313-12 A telephone solicitor operating in this state who makes a consumer 313-13 telephone call subject to Section 37.02, Business & Commerce Code, 313-14 shall implement in-house systems and procedures so that every 313-15 effort is made by the solicitor not to call consumers who ask not 313-16 to be called again by the solicitor. 313-17 (b) The commission may enforce this section. (V.A.C.S. 313-18 Art. 1446c-0, Sec. 3.659.) 313-19 Sec. 55.152. NOTICE TO CONSUMERS. The commission by rule 313-20 shall require a local exchange company or telephone cooperative to: 313-21 (1) notify its customers of the provisions of: 313-22 (A) Chapter 37, Business & Commerce Code; and 313-23 (B) Section 55.151; and 313-24 (2) provide the notice by: 313-25 (A) inserting the notice annually in the billing 313-26 statement mailed to a customer; or 313-27 (B) publishing the notice in the consumer 314-1 information pages of its local telephone directory. (V.A.C.S. 314-2 Art. 1446c-0, Sec. 3.660.) 314-3 (Sections 55.153-55.170 reserved for expansion) 314-4 SUBCHAPTER H. PAY TELEPHONES 314-5 Sec. 55.171. DEFINITION. In this subchapter, "provider" 314-6 means an entity that provides pay telephone service, including: 314-7 (1) an incumbent local exchange company; and 314-8 (2) a subscriber to a customer-owned pay telephone 314-9 service. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(i).) 314-10 Sec. 55.172. LIMITATION. This subchapter prescribes the 314-11 limits of: 314-12 (1) the right of a provider to set the provider's 314-13 rates and charges for pay telephone services; and 314-14 (2) the commission's authority over the pay telephone 314-15 service rates of an incumbent local exchange company. (V.A.C.S. 314-16 Art. 1446c-0, Sec. 3.2625(a).) 314-17 Sec. 55.173. REGISTRATION. (a) A person may not provide 314-18 pay telephone service in this state unless the person is registered 314-19 with the commission. 314-20 (b) This section does not apply to a provider who holds a 314-21 certificate of convenience and necessity. (V.A.C.S. Art. 1446c-0, 314-22 Sec. 3.2625(f).) 314-23 Sec. 55.174. PROHIBITION ON CHARGE FOR CERTAIN CALLS. A 314-24 provider may not charge a person making a call on a pay telephone 314-25 for: 314-26 (1) local directory assistance; or 314-27 (2) a call made under Chapter 771 or 772, Health and 315-1 Safety Code. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(b).) 315-2 Sec. 55.175. CHARGE FOR LOCAL CALLS. (a) The commission 315-3 shall establish the limit on the amount a provider may charge for a 315-4 pay telephone coin sent-paid call in the local exchange company's 315-5 toll-free calling area. 315-6 (b) The commission may establish a statewide ceiling on the 315-7 amount a provider may charge for a local pay telephone call that 315-8 is: 315-9 (1) collect; 315-10 (2) operator assisted; or 315-11 (3) paid by credit card or calling card. 315-12 (c) The commission may not establish the ceiling under 315-13 Subsection (b) at an amount that is less than the applicable local 315-14 rates for such a call imposed by any of the four largest 315-15 interexchange telecommunications carriers operating in this state. 315-16 (V.A.C.S. Art. 1446c-0, Sec. 3.2625(c).) 315-17 Sec. 55.176. CHARGE FOR 800-TYPE CALLS. (a) A provider may 315-18 charge at a pay telephone a fee of not more than 25 cents for 315-19 initiating an 800-type call. 315-20 (b) A provider may impose the fee only if: 315-21 (1) the pay telephone is registered with the 315-22 commission; and 315-23 (2) the provider certifies that the pay telephone 315-24 complies with commission rules regarding the provision of pay 315-25 telephone service. 315-26 (c) Subsection (b) does not apply to a local exchange 315-27 company pay telephone. 316-1 (d) A provider may not impose the fee if imposition is 316-2 inconsistent with federal law. 316-3 (e) A provider may not impose the fee for a: 316-4 (1) local call; 316-5 (2) 911 call; 316-6 (3) local directory assistance call; or 316-7 (4) call that is covered by the Telephone Operator 316-8 Consumer Services Improvement Act of 1990 (47 U.S.C. Section 226). 316-9 (f) A provider who imposes the fee must post on each pay 316-10 telephone notice that the fee will be charged. The provider must 316-11 post the notice: 316-12 (1) in plain sight of the user; and 316-13 (2) in a manner consistent with existing commission 316-14 requirements for posting information. 316-15 (g) The commission may not impose on a local exchange 316-16 company the duty or obligation to: 316-17 (1) record the use of pay telephone service; 316-18 (2) bill or collect for the use of the pay telephone; 316-19 or 316-20 (3) remit to the provider the fee authorized by this 316-21 section. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(d).) 316-22 Sec. 55.177. CHARGE FOR CREDIT CARD, CALLING CARD, OR 316-23 OPERATOR-ASSISTED CALLS. (a) A provider may not impose for a 316-24 credit card, calling card, or live or automated operator-assisted 316-25 call a rate or charge that is greater than the authorized rates and 316-26 charges published on March 18, 1995, in the eight newspapers having 316-27 the largest circulation in this state. 317-1 (b) The published rates may not be changed. 317-2 (c) This section does not apply to a local exchange company. 317-3 Chapter 58 governs the pay telephone rates of an incumbent local 317-4 exchange company that elects incentive regulation under that 317-5 chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.2625(e).) 317-6 Sec. 55.178. NOTICE OF INABILITY TO RECEIVE CALLS. (a) A 317-7 provider may not display the telephone number of a pay telephone 317-8 that cannot receive telephone calls. 317-9 (b) A provider shall place in a conspicuous location on each 317-10 pay telephone that cannot receive telephone calls a notice stating 317-11 in letters one-fourth inch high: "THIS TELEPHONE CANNOT RECEIVE 317-12 TELEPHONE CALLS." 317-13 (c) A provider that violates this section or a rule or order 317-14 adopted by the commission under this section is subject to a civil 317-15 penalty as provided by Section 15.028 unless the provider takes 317-16 corrective action to comply with this section or the rule or order 317-17 not later than the 14th day after the date the provider receives 317-18 written notice of the violation. 317-19 (d) The commission has jurisdiction over a provider to the 317-20 extent necessary to enforce this section regardless of whether a 317-21 provider is a telecommunications utility regulated under this 317-22 title. 317-23 (e) The commission may establish procedures to enforce this 317-24 section. (V.A.C.S. Art. 1446c-0, Sec. 3.305.) 317-25 Sec. 55.179. INFORMATION REQUIREMENTS. (a) The commission 317-26 by rule may prescribe the information that must be posted on a pay 317-27 telephone. 318-1 (b) A commission rule may not require a provider or an 318-2 affiliate of a provider to police compliance by another provider 318-3 with the commission's rules. (V.A.C.S. Art. 1446c-0, Sec. 318-4 3.2625(h).) 318-5 Sec. 55.180. VIOLATIONS. The commission may order the 318-6 disconnection of pay telephone service for not more than one year 318-7 for repeat violations of commission rules. (V.A.C.S. Art. 1446c-0, 318-8 Sec. 3.2625(g).) 318-9 (Sections 55.181-55.200 reserved for expansion) 318-10 SUBCHAPTER I. DIRECTORY LISTINGS AND ASSISTANCE 318-11 Sec. 55.201. TERMS OF DIRECTORY LISTINGS AND ASSISTANCE. 318-12 (a) Each company that provides local exchange telephone service in 318-13 overlapping certificated areas shall negotiate the terms of printed 318-14 directory listings and directory assistance in those areas. 318-15 (b) On complaint by the incumbent local exchange company or 318-16 the holder of a certificate of convenience and necessity, a 318-17 certificate of operating authority, or a service provider 318-18 certificate of operating authority, the commission may: 318-19 (1) resolve a dispute between the parties; and 318-20 (2) issue an order setting the terms of the directory 318-21 listings or directory assistance, if necessary. 318-22 (c) This section does not affect the authority of an 318-23 incumbent local exchange company to voluntarily conduct 318-24 negotiations with an applicant for a certificate of convenience and 318-25 necessity, a certificate of operating authority, or a service 318-26 provider certificate of operating authority. (V.A.C.S. 318-27 Art. 1446c-0, Sec. 3.2615.) 319-1 Sec. 55.202. DIRECTORY PUBLISHED BY TELECOMMUNICATIONS 319-2 UTILITY. A telecommunications utility or an affiliate of that 319-3 utility that publishes a residential or business telephone 319-4 directory that is distributed to the public shall publish in the 319-5 directory the name of each state senator or representative who 319-6 represents all or part of the geographical area for which the 319-7 directory contains listings. (V.A.C.S. Art. 1446c-0, Sec. 3.310.) 319-8 Sec. 55.203. DIRECTORY PUBLISHED BY PRIVATE PUBLISHER. (a) 319-9 A private for-profit publisher of a residential telephone directory 319-10 that is distributed to the public at minimal or no cost shall 319-11 include in the directory a listing of any toll-free and local 319-12 telephone numbers of: 319-13 (1) state agencies; 319-14 (2) state public services; and 319-15 (3) each state elected official who represents all or 319-16 part of the geographical area for which the directory contains 319-17 listings. 319-18 (b) The listing required by this section: 319-19 (1) must be: 319-20 (A) clearly identified; and 319-21 (B) located or clearly referenced at the front 319-22 of the directory before the main listing of residential and 319-23 business telephone numbers; and 319-24 (2) is not required to exceed a length equivalent to 319-25 two 8-1/2-inch by 11-inch pages, single-spaced in eight-point type. 319-26 (c) The commission by rule may specify: 319-27 (1) the format of the listing; and 320-1 (2) criteria for inclusion of agencies, services, and 320-2 officials. 320-3 (d) The commission, with the cooperation of other state 320-4 agencies, shall: 320-5 (1) compile relevant information to ensure accuracy of 320-6 information in the listing; and 320-7 (2) provide the information to a telecommunications 320-8 utility or telephone directory publisher within a reasonable time 320-9 after a request by the utility or publisher. (V.A.C.S. 320-10 Art. 1446c-0, Sec. 3.309.) 320-11 (Sections 55.204-55.250 reserved for expansion) 320-12 SUBCHAPTER J. TELECOMMUNICATIONS SERVICE BY CERTAIN PROVIDERS 320-13 Sec. 55.251. CHARGE FOR HOTEL OR MOTEL CALL. A hotel or 320-14 motel may not charge more than 50 cents for: 320-15 (1) a local telephone call; 320-16 (2) a credit card telephone call; 320-17 (3) a collect telephone call; or 320-18 (4) any other local telephone call for which 320-19 assistance from the hotel or motel operator is not required. 320-20 (V.A.C.S. Art. 1446c-0, Sec. 3.306.) 320-21 Sec. 55.252. 900 SERVICE USED BY PROBATIONERS OR PAROLEES. 320-22 (a) This section applies only to a telecommunications utility that 320-23 transports or provides an intrastate 900 service that is: 320-24 (1) covered by a contract authorized by Chapter 76, 320-25 Government Code, or Section 28, Article 42.18, Code of Criminal 320-26 Procedure; and 320-27 (2) used by a defendant under the supervision of a 321-1 community supervision and corrections department or the pardons and 321-2 paroles division of the Texas Department of Criminal Justice to: 321-3 (A) pay a fee or cost; or 321-4 (B) comply with telephone reporting 321-5 requirements. 321-6 (b) A telecommunications utility may adjust or authorize the 321-7 adjustment of an end-user's bill for 900 service described by 321-8 Subsection (a) only with the consent of the contracting community 321-9 supervision and corrections department or the contracting pardons 321-10 and paroles division of the Texas Department of Criminal Justice. 321-11 (V.A.C.S. Art. 1446c-0, Sec. 3.307.) 321-12 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE 321-13 AND UNIVERSAL SERVICE FUND 321-14 SUBCHAPTER A. GENERAL PROVISIONS 321-15 Sec. 56.001. DEFINITION 321-16 Sec. 56.002. CONFLICT OF PROVISIONS 321-17 (Sections 56.003-56.020 reserved for expansion) 321-18 SUBCHAPTER B. UNIVERSAL SERVICE FUND 321-19 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED 321-20 Sec. 56.022. UNIFORM CHARGE 321-21 Sec. 56.023. COMMISSION POWERS AND DUTIES 321-22 Sec. 56.024. REPORTS; CONFIDENTIALITY 321-23 Sec. 56.025. MAINTENANCE OF RATES AND EXPANSION OF FUND 321-24 FOR CERTAIN COMPANIES 321-25 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS 321-26 (Sections 56.027-56.070 reserved for expansion) 321-27 SUBCHAPTER C. TEL-ASSISTANCE SERVICE PROGRAM 322-1 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS 322-2 Sec. 56.072. CONSUMER ELIGIBILITY AND APPLICATION 322-3 Sec. 56.073. ELIGIBLE CONSUMERS 322-4 Sec. 56.074. PROGRAM BILLING 322-5 Sec. 56.075. SERVICES ELIGIBLE; LIMIT 322-6 Sec. 56.076. SERVICES PROHIBITED 322-7 Sec. 56.077. ADAPTIVE EQUIPMENT 322-8 Sec. 56.078. RECOVERY OF LOST REVENUE 322-9 (Sections 56.079-56.100 reserved for expansion) 322-10 SUBCHAPTER D. STATEWIDE TELECOMMUNICATIONS RELAY 322-11 ACCESS SERVICE 322-12 Sec. 56.101. PURPOSE 322-13 Sec. 56.102. TELECOMMUNICATIONS RELAY ACCESS SERVICE 322-14 Sec. 56.103. TELECOMMUNICATIONS RELAY ACCESS SERVICE 322-15 REQUIREMENTS 322-16 Sec. 56.104. TELECOMMUNICATIONS RELAY ACCESS SERVICE 322-17 CHARGES 322-18 Sec. 56.105. TRIAL SERVICE COSTS AND DESIGN INFORMATION 322-19 Sec. 56.106. TELECOMMUNICATIONS RELAY ACCESS SERVICE 322-20 ASSESSMENTS 322-21 Sec. 56.107. UNIVERSAL SERVICE FUND SURCHARGE 322-22 Sec. 56.108. SELECTION OF TELECOMMUNICATIONS RELAY ACCESS 322-23 SERVICE CARRIER 322-24 Sec. 56.109. COMPENSATION OF CARRIER 322-25 Sec. 56.110. ADVISORY COMMITTEE 322-26 Sec. 56.111. ADVISORY COMMITTEE DUTIES 322-27 Sec. 56.112. ADVISORY COMMITTEE SUPPORT AND COSTS 323-1 CHAPTER 56. TELECOMMUNICATIONS ASSISTANCE 323-2 AND UNIVERSAL SERVICE FUND 323-3 SUBCHAPTER A. GENERAL PROVISIONS 323-4 Sec. 56.001. DEFINITION. In this chapter, "department" 323-5 means the Texas Department of Human Services. (New.) 323-6 Sec. 56.002. CONFLICT OF PROVISIONS. If this chapter 323-7 conflicts with another provision of this title, this chapter 323-8 prevails. (V.A.C.S. Art. 1446c-0, Sec. 3.610.) 323-9 (Sections 56.003-56.020 reserved for expansion) 323-10 SUBCHAPTER B. UNIVERSAL SERVICE FUND 323-11 Sec. 56.021. UNIVERSAL SERVICE FUND ESTABLISHED. The 323-12 commission shall adopt and enforce rules requiring local exchange 323-13 companies to establish a universal service fund to: 323-14 (1) assist local exchange companies in providing basic 323-15 local telecommunications service at reasonable rates in high cost 323-16 rural areas; 323-17 (2) reimburse local exchange companies for revenue 323-18 lost by providing tel-assistance service under Subchapter C; 323-19 (3) reimburse the telecommunications carrier that 323-20 provides the statewide telecommunications relay access service 323-21 under Subchapter D; and 323-22 (4) reimburse the department and the commission for 323-23 costs incurred in implementing this chapter and Chapter 57. 323-24 (V.A.C.S. Art. 1446c-0, Sec. 3.608(a).) 323-25 Sec. 56.022. UNIFORM CHARGE. (a) The universal service 323-26 fund is funded by a statewide uniform charge payable by each 323-27 telecommunications provider that has access to the customer base. 324-1 (b) A telecommunications provider shall pay the charge in 324-2 accordance with procedures approved by the commission. 324-3 (c) The uniform charge is on services and at rates the 324-4 commission determines. In establishing the charge and the services 324-5 to which the charge will apply, the commission may not: 324-6 (1) grant an unreasonable preference or advantage to a 324-7 telecommunications provider; or 324-8 (2) subject a telecommunications provider to 324-9 unreasonable prejudice or disadvantage. (V.A.C.S. Art. 1446c-0, 324-10 Sec. 3.608(c).) 324-11 Sec. 56.023. COMMISSION POWERS AND DUTIES. (a) The 324-12 commission shall: 324-13 (1) in a manner that assures reasonable rates for 324-14 basic local telecommunications service, adopt eligibility criteria 324-15 and review procedures, including a method for administrative 324-16 review, the commission finds necessary to fund the universal 324-17 service fund and make distributions from that fund; 324-18 (2) determine which local exchange companies meet the 324-19 eligibility criteria; 324-20 (3) determine the amount of and approve a procedure 324-21 for reimbursement to local exchange companies of revenue lost in 324-22 providing tel-assistance service under Subchapter C; 324-23 (4) establish and collect fees from the universal 324-24 service fund necessary to recover the costs the department and the 324-25 commission incur in administering this chapter and Chapter 57; and 324-26 (5) approve procedures for the collection and 324-27 disbursal of the revenue of the universal service fund. 325-1 (b) The eligibility criteria must require that a local 325-2 exchange company, in compliance with the commission's quality of 325-3 service requirements: 325-4 (1) offer service to each consumer within the 325-5 company's certificated area; and 325-6 (2) render continuous and adequate service within the 325-7 company's certificated area. 325-8 (c) The commission shall adopt rules for the administration 325-9 of the universal service fund and may act as necessary and 325-10 convenient to administer the fund. (V.A.C.S. Art. 1446c-0, Secs. 325-11 3.608(d), (e), (f) (part).) 325-12 Sec. 56.024. REPORTS; CONFIDENTIALITY. (a) The commission 325-13 may require a local exchange company or another telecommunications 325-14 provider to provide a report or information necessary to assess 325-15 contributions to the universal service fund. 325-16 (b) A report or information is confidential and not subject 325-17 to disclosure under Chapter 552, Government Code. (V.A.C.S. 325-18 Art. 1446c-0, Sec. 3.608(f) (part).) 325-19 Sec. 56.025. MAINTENANCE OF RATES AND EXPANSION OF FUND FOR 325-20 CERTAIN COMPANIES. (a) In addition to the authority provided by 325-21 Section 56.021, for each local exchange company that serves fewer 325-22 than five million access lines, the commission: 325-23 (1) may adopt a mechanism necessary to maintain 325-24 reasonable rates for local exchange telephone service; and 325-25 (2) shall adopt rules to expand the universal service 325-26 fund in the circumstances prescribed by this section. 325-27 (b) The commission shall implement a mechanism through the 326-1 universal service fund to replace the reasonably projected 326-2 reduction in high cost assistance revenue caused by a commission 326-3 order, rule, or policy. This subsection does not apply to an order 326-4 entered in a proceeding related to an individual company's revenue 326-5 requirements. 326-6 (c) The commission shall implement a mechanism to replace 326-7 the reasonably projected change in revenue caused by a Federal 326-8 Communications Commission order, rule, or policy that changes: 326-9 (1) the federal universal service fund revenue of a 326-10 local exchange company; or 326-11 (2) costs or revenue assigned to the intrastate 326-12 jurisdiction. 326-13 (d) The commission shall implement a mechanism to replace 326-14 the reasonably projected reduction in contribution caused by a 326-15 change of commission policy regarding intraLATA "1-plus" dialing 326-16 access. In this subsection, "contribution" means the average 326-17 intraLATA long distance message telecommunications service revenue 326-18 per minute, including intraLATA toll pooling and associated 326-19 impacts, less the average message telecommunications service cost 326-20 per minute less the average contribution from switched access 326-21 multiplied by the projected change in intraLATA "1-plus" minutes of 326-22 use. 326-23 (e) The commission shall implement a mechanism to replace 326-24 the reasonably projected increase in costs or decrease in revenue 326-25 of the intrastate jurisdiction caused by another governmental 326-26 agency's order, rule, or policy. 326-27 (f) A mechanism implemented under Subsection (c), (d), or 327-1 (e) must be through: 327-2 (1) an increase in rates, if the increase would not 327-3 adversely affect universal service; or 327-4 (2) the universal service fund. (V.A.C.S. 327-5 Art. 1446c-0, Secs. 3.608(b)(1), (2), (3), (4), (5).) 327-6 Sec. 56.026. UNIVERSAL SERVICE FUND DISBURSEMENTS. (a) A 327-7 revenue requirement showing is not required for a disbursement from 327-8 the universal service fund under this subchapter. 327-9 (b) The commission shall make each disbursement from the 327-10 universal service fund promptly and efficiently so that a 327-11 telecommunications provider or local exchange company does not 327-12 experience an unnecessary cash-flow change as a result of a change 327-13 in governmental policy. (V.A.C.S. Art. 1446c-0, Sec. 3.608(b)(6).) 327-14 (Sections 56.027-56.070 reserved for expansion) 327-15 SUBCHAPTER C. TEL-ASSISTANCE SERVICE PROGRAM 327-16 Sec. 56.071. TEL-ASSISTANCE SERVICE REQUIREMENTS. (a) The 327-17 commission shall adopt and enforce rules requiring a local exchange 327-18 company to establish a telecommunications service assistance 327-19 program to provide a reduction in the cost of telecommunications 327-20 service to each eligible consumer in the company's certificated 327-21 area. The reduction must be a reduction on the consumer's telephone 327-22 bill. 327-23 (b) Except as provided by Section 56.075(b), the reduction 327-24 allowed by the program is 65 percent of the applicable tariff rate 327-25 for the service provided. 327-26 (c) The program is named "tel-assistance service." 327-27 (V.A.C.S. Art. 1446c-0, Secs. 3.601, 3.603(a) (part), (c).) 328-1 Sec. 56.072. CONSUMER ELIGIBILITY AND APPLICATION. (a) The 328-2 department shall develop procedures for taking an application for 328-3 certification of eligibility for the tel-assistance service program 328-4 and for determining eligibility for that program. 328-5 (b) To be eligible for the tel-assistance service program, 328-6 an applicant must: 328-7 (1) be a head of household and disabled, as determined 328-8 by the department; and 328-9 (2) have a household income at or below the poverty 328-10 level, as determined by the United States Office of Management and 328-11 Budget and reported annually in the Federal Register. 328-12 (c) The burden of proving eligibility for the tel-assistance 328-13 service program is on the consumer applying for the program. 328-14 (V.A.C.S. Art. 1446c-0, Sec. 3.602(a).) 328-15 Sec. 56.073. ELIGIBLE CONSUMERS. (a) Each six months, the 328-16 department shall provide to each local exchange company a list of 328-17 all persons eligible for the tel-assistance service program that 328-18 includes each person's: 328-19 (1) name; 328-20 (2) address; and 328-21 (3) if applicable, telephone number. 328-22 (b) From the list of eligible persons, a local exchange 328-23 company shall identify the consumers to whom the company provides 328-24 service who are eligible for the program. (V.A.C.S. Art. 1446c-0, 328-25 Sec. 3.602(b) (part).) 328-26 Sec. 56.074. PROGRAM BILLING. (a) A local exchange company 328-27 shall begin tel-assistance service program billing for an eligible 329-1 consumer not later than the 60th day after the date the company 329-2 receives the list the department provides under Section 56.073(a). 329-3 (b) The local exchange company shall continue tel-assistance 329-4 service program billing for a consumer until the department 329-5 notifies the company that the consumer is not eligible for the 329-6 program. (V.A.C.S. Art. 1446c-0, Sec. 3.602(b) (part).) 329-7 Sec. 56.075. SERVICES ELIGIBLE; LIMIT. (a) The reduction 329-8 provided under the tel-assistance service program applies only to: 329-9 (1) residential flat rate basic local exchange 329-10 service; 329-11 (2) residential local exchange access service; and 329-12 (3) residential local area calling. 329-13 (b) The reduction for local area calling is limited to an 329-14 amount such that together with the reduction for local exchange 329-15 access service the rate does not exceed the comparable reduced flat 329-16 rate for the service. (V.A.C.S. Art. 1446c-0, Sec. 3.603(a) 329-17 (part).) 329-18 Sec. 56.076. SERVICES PROHIBITED. (a) A local exchange 329-19 company may not provide to the dwelling of a consumer participating 329-20 in the tel-assistance service program a local voice service other 329-21 than a service described by Section 56.075. 329-22 (b) A local exchange company may not provide a consumer 329-23 participating in the tel-assistance service program with: 329-24 (1) single or party line optional extended area 329-25 service; 329-26 (2) optional extended area calling service; 329-27 (3) foreign zone service; or 330-1 (4) foreign exchange service. (V.A.C.S. Art. 1446c-0, 330-2 Sec. 3.603(b) (part).) 330-3 Sec. 56.077. ADAPTIVE EQUIPMENT. This subchapter does not 330-4 prohibit a person who is eligible for the tel-assistance service 330-5 program from obtaining or using telecommunications equipment 330-6 designed to help a person use a telecommunications service. 330-7 (V.A.C.S. Art. 1446c-0, Sec. 3.603(b) (part).) 330-8 Sec. 56.078. RECOVERY OF LOST REVENUE. A local exchange 330-9 company is entitled to recover from the universal service fund any 330-10 loss of revenue that results solely from the provision of 330-11 tel-assistance service. (V.A.C.S. Art. 1446c-0, Sec. 3.607.) 330-12 (Sections 56.079-56.100 reserved for expansion) 330-13 SUBCHAPTER D. STATEWIDE TELECOMMUNICATIONS RELAY 330-14 ACCESS SERVICE 330-15 Sec. 56.101. PURPOSE. The purpose of this subchapter is to 330-16 provide for the uniform and coordinated provision by one 330-17 telecommunications carrier of a statewide telecommunications relay 330-18 access service for persons with an impairment of hearing or speech. 330-19 (V.A.C.S. Art. 1446c-0, Sec. 3.604(a) (part).) 330-20 Sec. 56.102. TELECOMMUNICATIONS RELAY ACCESS SERVICE. (a) 330-21 The commission shall adopt and enforce rules establishing a 330-22 statewide telecommunications relay access service for the use of a 330-23 person with an impairment of hearing or speech. 330-24 (b) The commission rules shall provide that the service 330-25 must: 330-26 (1) use specialized communications equipment, such as 330-27 a telecommunications device for the deaf, and operator 331-1 translations; and 331-2 (2) meet the criteria provided by Sections 56.103, 331-3 56.104, and 56.105. (V.A.C.S. Art. 1446c-0, Secs. 3.604(a) (part), 331-4 (b) (part).) 331-5 Sec. 56.103. TELECOMMUNICATIONS RELAY ACCESS SERVICE 331-6 REQUIREMENTS. (a) The telecommunications relay access service 331-7 shall provide a person with an impairment of hearing or speech with 331-8 access to the telecommunications network in this state equivalent 331-9 to the access provided other customers. 331-10 (b) The service consists of: 331-11 (1) switching and transmission of the call; 331-12 (2) live or automated verbal and print translations of 331-13 communications between a person with an impairment of hearing or 331-14 speech who uses a telecommunications device for the deaf or a 331-15 similar automated device and a person who does not have such 331-16 equipment; and 331-17 (3) other service enhancements proposed by the carrier 331-18 and approved by the commission. (V.A.C.S. Art. 1446c-0, Sec. 331-19 3.604(b) (part).) 331-20 Sec. 56.104. TELECOMMUNICATIONS RELAY ACCESS SERVICE 331-21 CHARGES. (a) For a call made using the telecommunications relay 331-22 access service, the person calling or called: 331-23 (1) may not be charged for a call that originates and 331-24 terminates in the same local calling area; and 331-25 (2) shall pay one-half of the total charges 331-26 established by contract with the commission for intrastate 331-27 interexchange calls. 332-1 (b) Charges related to providing the service that, under 332-2 Subsection (a), are not charged to a person calling or called shall 332-3 be funded from the universal service fund, as specified by the 332-4 service provider's contract with the commission. 332-5 (c) A local exchange company may not impose an interexchange 332-6 carrier access charge on a call using the service that originates 332-7 and terminates in the same local calling area. 332-8 (d) A local exchange company shall provide billing and 332-9 collection services for the service at just and reasonable rates. 332-10 (V.A.C.S. Art. 1446c-0, Sec. 3.604(b) (part).) 332-11 Sec. 56.105. TRIAL SERVICE COSTS AND DESIGN INFORMATION. If 332-12 the commission orders a local exchange company to provide for a 332-13 trial telecommunications relay access service for persons with an 332-14 impairment of hearing or speech, all pertinent costs and design 332-15 information from the trial must be made available to the public. 332-16 (V.A.C.S. Art. 1446c-0, Sec. 3.604(b) (part).) 332-17 Sec. 56.106. TELECOMMUNICATIONS RELAY ACCESS SERVICE 332-18 ASSESSMENTS. (a) The commission shall set appropriate assessments 332-19 for all telecommunications utilities to fund the telecommunications 332-20 relay access service. 332-21 (b) In setting an assessment, the commission shall consider: 332-22 (1) the aggregate calling pattern of service users; 332-23 and 332-24 (2) any other factor the commission finds appropriate 332-25 and in the public interest. 332-26 (c) The commission shall: 332-27 (1) review the assessments annually; and 333-1 (2) adjust the assessments as appropriate. (V.A.C.S. 333-2 Art. 1446c-0, Sec. 3.604(d).) 333-3 Sec. 56.107. UNIVERSAL SERVICE FUND SURCHARGE. (a) A 333-4 telecommunications utility may recover the utility's universal 333-5 service fund assessment for the telecommunications relay access 333-6 service through a surcharge added to the utility customers' bills. 333-7 (b) The commission shall specify how each telecommunications 333-8 utility is to determine the amount of the surcharge. 333-9 (c) If a telecommunications utility imposes the surcharge, 333-10 the bill shall list the surcharge as the "universal service fund 333-11 surcharge." (V.A.C.S. Art. 1446c-0, Sec. 3.604(c).) 333-12 Sec. 56.108. SELECTION OF TELECOMMUNICATIONS RELAY ACCESS 333-13 SERVICE CARRIER. (a) The commission shall select one 333-14 telecommunications carrier to provide the statewide 333-15 telecommunications relay access service. 333-16 (b) The commission shall make a written award of the 333-17 contract to the telecommunications carrier whose proposal is the 333-18 most advantageous to this state, considering: 333-19 (1) price; 333-20 (2) the interests of the community of persons with an 333-21 impairment of hearing or speech in having access to a high quality 333-22 and technologically advanced telecommunications system; and 333-23 (3) any other factor listed in the commission's 333-24 request for proposals. 333-25 (c) The commission shall consider each proposal in a manner 333-26 that does not disclose the contents of the proposal to a 333-27 telecommunications carrier making a competing proposal. 334-1 (d) The commission's evaluation of a telecommunications 334-2 carrier's proposal shall include the: 334-3 (1) charges for the service; 334-4 (2) service enhancements proposed by the carrier; 334-5 (3) technological sophistication of the network 334-6 proposed by the carrier; and 334-7 (4) date proposed for beginning the service. 334-8 (V.A.C.S. Art. 1446c-0, Sec. 3.604(e).) 334-9 Sec. 56.109. COMPENSATION OF CARRIER. (a) The 334-10 telecommunications carrier that provides the telecommunications 334-11 relay access service shall be compensated at rates and on terms 334-12 provided by the carrier's contract with the commission. 334-13 (b) The compensation may include: 334-14 (1) a return on the investment required to provide the 334-15 service; and 334-16 (2) compensation for unbillable or uncollectible calls 334-17 placed through the service. 334-18 (c) Compensation for unbillable or uncollectible calls is 334-19 subject to a reasonable limitation determined by the commission. 334-20 (V.A.C.S. Art. 1446c-0, Sec. 3.604(f).) 334-21 Sec. 56.110. ADVISORY COMMITTEE. (a) An advisory committee 334-22 to assist the commission in administering this subchapter is 334-23 composed of the following persons appointed by the commission: 334-24 (1) two deaf persons recommended by the Texas 334-25 Association of the Deaf; 334-26 (2) one person with a hearing impairment recommended 334-27 by Self-Help for the Hard of Hearing; 335-1 (3) one person with a hearing impairment recommended 335-2 by the American Association of Retired Persons; 335-3 (4) one deaf and blind person recommended by the Texas 335-4 Deaf/Blind Association; 335-5 (5) one person with a speech impairment and one person 335-6 with a speech and hearing impairment recommended by the Coalition 335-7 of Texans with Disabilities; 335-8 (6) two representatives of telecommunications 335-9 utilities, one representing a nonlocal exchange utility and one 335-10 representing a local exchange company, chosen from a list of 335-11 candidates provided by the Texas Telephone Association; 335-12 (7) two persons, at least one of whom is deaf, with 335-13 experience in providing relay services recommended by the Texas 335-14 Commission for the Deaf and Hard of Hearing; and 335-15 (8) two public members recommended by organizations 335-16 representing consumers of telecommunications services. 335-17 (b) Members of the advisory committee serve two-year terms. 335-18 A member whose term has expired shall continue to serve until a 335-19 qualified replacement is appointed. (V.A.C.S. Art. 1446c-0, Secs. 335-20 3.604(g), (h) (part).) 335-21 Sec. 56.111. ADVISORY COMMITTEE DUTIES. The advisory 335-22 committee shall: 335-23 (1) monitor the establishment, administration, and 335-24 promotion of the statewide telecommunications relay access service; 335-25 and 335-26 (2) advise the commission in pursuing a service that 335-27 meets the needs of persons with an impairment of hearing or speech 336-1 in communicating with other telecommunications services users. 336-2 (V.A.C.S. Art. 1446c-0, Sec. 3.604(h) (part).) 336-3 Sec. 56.112. ADVISORY COMMITTEE SUPPORT AND COSTS. (a) The 336-4 commission shall provide to the advisory committee: 336-5 (1) clerical and staff support; and 336-6 (2) a secretary to record committee meetings. 336-7 (b) The commission's costs associated with the advisory 336-8 committee shall be reimbursed from the universal service fund. 336-9 (V.A.C.S. Art. 1446c-0, Sec. 3.604(h) (part).) 336-10 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 336-11 SUBCHAPTER A. GENERAL PROVISIONS 336-12 Sec. 57.001. CONFLICT OF PROVISIONS 336-13 (Sections 57.002-57.020 reserved for expansion) 336-14 SUBCHAPTER B. DISTANCE LEARNING AND INFORMATION SHARING 336-15 Sec. 57.021. DEFINITIONS 336-16 Sec. 57.022. REDUCED RATES FOR DISTANCE LEARNING OR 336-17 INFORMATION SHARING SERVICES 336-18 Sec. 57.023. SERVICE AND RATE REQUIREMENTS 336-19 Sec. 57.024. TARIFF FILINGS 336-20 Sec. 57.025. CHANGES IN RATE PROGRAM 336-21 (Sections 57.026-57.040 reserved for expansion) 336-22 SUBCHAPTER C. TELECOMMUNICATIONS INFRASTRUCTURE FUND 336-23 Sec. 57.041. FINDINGS AND POLICY 336-24 Sec. 57.042. DEFINITIONS 336-25 Sec. 57.043. TELECOMMUNICATIONS INFRASTRUCTURE FUND AND 336-26 ACCOUNTS 336-27 Sec. 57.044. TELECOMMUNICATIONS INFRASTRUCTURE FUND BOARD 337-1 Sec. 57.045. POWERS AND DUTIES OF BOARD 337-2 Sec. 57.046. USE OF ACCOUNTS 337-3 Sec. 57.047. GRANT AND LOAN PROGRAM 337-4 Sec. 57.048. ASSESSMENTS AND COLLECTIONS 337-5 Sec. 57.049. ISSUANCE OF WARRANTS 337-6 Sec. 57.050. ASSISTANCE OF OTHER AGENCIES 337-7 Sec. 57.051. SUNSET PROVISION 337-8 (Sections 57.052-57.070 reserved for expansion) 337-9 SUBCHAPTER D. INTERACTIVE MULTIMEDIA COMMUNICATIONS 337-10 Sec. 57.071. DEFINITION 337-11 Sec. 57.072. RATES FOR INTERACTIVE MULTIMEDIA 337-12 COMMUNICATIONS 337-13 CHAPTER 57. DISTANCE LEARNING AND OTHER ADVANCED SERVICES 337-14 SUBCHAPTER A. GENERAL PROVISIONS 337-15 Sec. 57.001. CONFLICT OF PROVISIONS. If this chapter 337-16 conflicts with another provision of this title, this chapter 337-17 prevails. (V.A.C.S. Art. 1446c-0, Sec. 3.610.) 337-18 (Sections 57.002-57.020 reserved for expansion) 337-19 SUBCHAPTER B. DISTANCE LEARNING AND INFORMATION SHARING 337-20 Sec. 57.021. DEFINITIONS. In this subchapter: 337-21 (1) "Distance learning" means an instruction, 337-22 learning, or training resource, including video, data, voice, or 337-23 electronic information, that is: 337-24 (A) used by an educational institution 337-25 predominantly for instruction, learning, or training; and 337-26 (B) transmitted from a site to one or more other 337-27 sites by a telecommunications service. 338-1 (2) "Educational institution" includes: 338-2 (A) an accredited primary or secondary school; 338-3 (B) an institution of higher education as 338-4 defined by Section 61.003, Education Code; 338-5 (C) a private institution of higher education 338-6 accredited by a recognized accrediting agency as defined by Section 338-7 61.003, Education Code; 338-8 (D) the Texas Education Agency and its 338-9 successors and assigns; 338-10 (E) a regional education service center 338-11 established and operated in accordance with Chapter 8, Education 338-12 Code; or 338-13 (F) the Texas Higher Education Coordinating 338-14 Board and its successors and assigns. 338-15 (3) "Library" means: 338-16 (A) a public library or regional library system 338-17 as defined by Section 441.122, Government Code; or 338-18 (B) a library operated by an institution of 338-19 higher education or a school district. (V.A.C.S. Art. 1446c-0, 338-20 Sec. 3.605(h).) 338-21 Sec. 57.022. REDUCED RATES FOR DISTANCE LEARNING OR 338-22 INFORMATION SHARING SERVICES. (a) The commission by rule shall 338-23 require a dominant carrier to file a tariff that includes a reduced 338-24 rate for a telecommunications service the commission finds is 338-25 directly related to: 338-26 (1) a distance learning activity that is or could be 338-27 conducted by an educational institution in this state; or 339-1 (2) an information sharing program that is or could be 339-2 conducted by a library in this state. 339-3 (b) The commission rules shall specify: 339-4 (1) each telecommunications service to which 339-5 Subsection (a) applies; 339-6 (2) the process for an educational institution or 339-7 library to qualify for a reduced rate; 339-8 (3) the date by which a dominant carrier is required 339-9 to file a tariff; 339-10 (4) guidelines and criteria that require the services 339-11 and reduced rates to further the goals prescribed by Section 339-12 57.023; and 339-13 (5) any other requirement or term that the commission 339-14 determines to be in the public interest. 339-15 (c) The commission is not required to determine the long run 339-16 incremental cost of providing a service before approving a reduced 339-17 rate for the service. 339-18 (d) Until cost determination rules are developed and the 339-19 rates established under this section are changed as necessary to 339-20 ensure proper cost recovery, the reduced rates established by the 339-21 commission shall be equal to 75 percent of the otherwise applicable 339-22 rate. 339-23 (e) After the commission develops cost determination rules 339-24 for telecommunications services generally, the commission shall 339-25 ensure that a reduced rate approved under this section: 339-26 (1) recovers service-specific long run incremental 339-27 costs; and 340-1 (2) avoids subsidizing an educational institution or a 340-2 library. (V.A.C.S. Art. 1446c-0, Secs. 3.605(a), (b), (e).) 340-3 Sec. 57.023. SERVICE AND RATE REQUIREMENTS. The services 340-4 and reduced rates must be designed to: 340-5 (1) encourage the development and offering of: 340-6 (A) distance learning activities by educational 340-7 institutions; and 340-8 (B) information sharing programs of libraries; 340-9 (2) meet the: 340-10 (A) distance learning needs identified by the 340-11 educational community; and 340-12 (B) information sharing needs identified by 340-13 libraries; and 340-14 (3) recover the long run incremental costs of 340-15 providing the services, to the extent those costs can be 340-16 identified, to avoid subsidizing an educational institution or a 340-17 library. (V.A.C.S. Art. 1446c-0, Sec. 3.605(d).) 340-18 Sec. 57.024. TARIFF FILINGS. A tariff filed by a dominant 340-19 carrier under Section 57.022: 340-20 (1) may concern the implementation of this subchapter 340-21 only; 340-22 (2) is not a rate change under Subchapter C, Chapter 340-23 53; and 340-24 (3) does not affect the carrier's other rates or 340-25 services. (V.A.C.S. Art. 1446c-0, Sec. 3.605(c).) 340-26 Sec. 57.025. CHANGES IN RATE PROGRAM. (a) An educational 340-27 institution, library, or dominant carrier may request the 341-1 commission to: 341-2 (1) provide for a reduced rate for a service that: 341-3 (A) is directly related to a distance learning 341-4 activity or an information sharing program; and 341-5 (B) is not covered by commission rules; 341-6 (2) change a rate; 341-7 (3) amend a tariff; or 341-8 (4) amend a commission rule. 341-9 (b) The commission shall take the action requested under 341-10 Subsection (a) if the commission determines the action is 341-11 appropriate. (V.A.C.S. Art. 1446c-0, Secs. 3.605(f), (g).) 341-12 (Sections 57.026-57.040 reserved for expansion) 341-13 SUBCHAPTER C. TELECOMMUNICATIONS INFRASTRUCTURE FUND 341-14 Sec. 57.041. FINDINGS AND POLICY. (a) The legislature 341-15 finds that commercial mobile service providers: 341-16 (1) benefit from the public telecommunications network 341-17 by the ability to originate and terminate calls that traverse the 341-18 mobile and cellular network; and 341-19 (2) will benefit by the advancement of the public 341-20 telecommunications network through projects funded under this 341-21 subchapter. 341-22 (b) It is the policy of this state that commercial mobile 341-23 service providers contribute an appropriate amount to the 341-24 telecommunications infrastructure fund. (V.A.C.S. Art. 1446c-0, 341-25 Sec. 3.606(b).) 341-26 Sec. 57.042. DEFINITIONS. In this subchapter: 341-27 (1) "Board" means the telecommunications 342-1 infrastructure fund board. 342-2 (2) "Commercial mobile service provider" means a 342-3 provider of commercial mobile service as defined by Section 332(d), 342-4 Communications Act of 1934 (47 U.S.C. Section 151 et seq.), 342-5 Federal Communications Commission rules, and the Omnibus Budget 342-6 Reconciliation Act of 1993 (Pub. L. No. 103-66). 342-7 (3) "Fund" means the telecommunications infrastructure 342-8 fund. 342-9 (4) "Institution of higher education" means: 342-10 (A) an institution of higher education as 342-11 defined by Section 61.003, Education Code; or 342-12 (B) a private or independent institution of 342-13 higher education as defined by Section 61.003, Education Code. 342-14 (5) "Library" means: 342-15 (A) a public library or regional library system 342-16 as those terms are defined by Section 441.122, Government Code; or 342-17 (B) a library operated by an institution of 342-18 higher education or a school district. 342-19 (6) "Public not-for-profit health care facility" means 342-20 a rural or regional hospital or other entity such as a rural health 342-21 clinic that: 342-22 (A) is supported by local or regional tax 342-23 revenue; or 342-24 (B) is a certified not-for-profit health 342-25 corporation, under federal law. 342-26 (7) "School district" includes an independent school 342-27 district, a common school district, and a rural high school 343-1 district. 343-2 (8) "Telemedicine": 343-3 (A) means medical services delivered by 343-4 telecommunications technologies to rural or underserved public 343-5 not-for-profit health care facilities or primary health care 343-6 facilities in collaboration with an academic health center and an 343-7 associated teaching hospital or tertiary center; and 343-8 (B) includes consultive services, diagnostic 343-9 services, interactive video consultation, teleradiology, 343-10 telepathology, and distance education for working health care 343-11 professionals. (V.A.C.S. Art. 1446c-0, Secs. 3.606(a)(1), (2), (3), 343-12 (4), (5), (7), (8), (9).) 343-13 Sec. 57.043. TELECOMMUNICATIONS INFRASTRUCTURE FUND AND 343-14 ACCOUNTS. (a) The telecommunications infrastructure fund is 343-15 composed of the telecommunications utilities account and the 343-16 commercial mobile service providers account. 343-17 (b) The telecommunications utilities account is financed by 343-18 an annual assessment on each telecommunications utility doing 343-19 business in this state. A telecommunications utility shall pay the 343-20 annual assessment according to the ratio that the annual taxable 343-21 telecommunications receipts reported by that telecommunications 343-22 utility under Chapter 151, Tax Code, bears to the total annual 343-23 taxable telecommunications receipts reported by all 343-24 telecommunications utilities under that chapter. 343-25 (c) The commercial mobile service providers account is 343-26 financed by an annual assessment on each commercial mobile service 343-27 provider doing business in this state. Each commercial mobile 344-1 service provider shall pay the annual assessment according to the 344-2 ratio that the annual taxable telecommunications receipts reported 344-3 by that provider under Chapter 151, Tax Code, bears to the total 344-4 annual taxable telecommunications receipts reported by all 344-5 commercial mobile service providers under that chapter. 344-6 (d) Money in the fund may be appropriated only for a use 344-7 consistent with the purposes of this subchapter. (V.A.C.S. 344-8 Art. 1446c-0, Secs. 3.606(j), (k), (n) (part).) 344-9 Sec. 57.044. TELECOMMUNICATIONS INFRASTRUCTURE FUND BOARD. 344-10 (a) The telecommunications infrastructure fund board consists of: 344-11 (1) three members appointed by the governor; 344-12 (2) three members appointed by the governor from a 344-13 list of individuals provided by the speaker of the house of 344-14 representatives; and 344-15 (3) three members appointed by the lieutenant 344-16 governor. 344-17 (b) The governor shall designate the presiding officer of 344-18 the board. 344-19 (c) The governor and the lieutenant governor, in making 344-20 appointments to the board, and the speaker of the house of 344-21 representatives, in compiling a list of recommended persons, shall 344-22 attempt to select members who are representative of, but not 344-23 limited to: 344-24 (1) urban and rural school districts; 344-25 (2) institutions of higher education; 344-26 (3) libraries; and 344-27 (4) the public. 345-1 (d) A person may not serve on the board if the person is 345-2 required to register as a lobbyist under Chapter 305, Government 345-3 Code, because of the person's activities for compensation on behalf 345-4 of a profession related to the operation of the board. 345-5 (e) Members of the board: 345-6 (1) serve without pay; and 345-7 (2) are entitled to reimbursement for their actual 345-8 expenses incurred in attending meetings of the board or attending 345-9 to other work of the board if approved by the presiding officer. 345-10 (f) Members of the board serve for staggered, six-year 345-11 terms, with three members' terms expiring on August 31 of each 345-12 odd-numbered year. (V.A.C.S. Art. 1446c-0, Secs. 3.606(c) (part), 345-13 (d), (e).) 345-14 Sec. 57.045. POWERS AND DUTIES OF BOARD. (a) The board 345-15 shall administer the fund and the two accounts in the fund. 345-16 (b) The board shall prepare an annual report that: 345-17 (1) details the revenues deposited to the credit of 345-18 the fund, including each account; and 345-19 (2) summarizes the grants and loans made from each 345-20 account. 345-21 (c) Not later than January 15 of each year, the board shall 345-22 submit the report for the preceding year to the governor and to 345-23 each standing committee in the senate and house of representatives 345-24 that has jurisdiction over public or higher education. 345-25 (d) The board may: 345-26 (1) enter into contracts with state agencies or 345-27 private entities necessary to perform the board's duties; 346-1 (2) employ personnel reasonably necessary to perform 346-2 duties delegated by the board; 346-3 (3) appoint one or more committees to assist the board 346-4 in performing the board's duties; and 346-5 (4) accept a gift or grant and use it for the purposes 346-6 of this subchapter. (V.A.C.S. Art. 1446c-0, Secs. 3.606(c) (part), 346-7 (g), (h), (i), (p).) 346-8 Sec. 57.046. USE OF ACCOUNTS. (a) The board shall use 346-9 money in the telecommunications utilities account to award grants 346-10 and loans in accordance with this subchapter to fund: 346-11 (1) purchases of equipment for public schools, 346-12 including computers, printers, computer labs, and video equipment; 346-13 and 346-14 (2) intracampus and intercampus wiring to enable those 346-15 public schools to use the equipment. 346-16 (b) The board shall use money in the commercial mobile 346-17 service providers account for any purpose authorized by this 346-18 subchapter, including: 346-19 (1) equipment purchases; 346-20 (2) wiring; 346-21 (3) material; 346-22 (4) program development; 346-23 (5) training; 346-24 (6) installation costs; and 346-25 (7) a statewide telecommunications network. (V.A.C.S. 346-26 Art. 1446c-0, Sec. 3.606(q).) 346-27 Sec. 57.047. GRANT AND LOAN PROGRAM. (a) The board may 347-1 award a grant to a project or proposal that: 347-2 (1) provides equipment and infrastructure necessary 347-3 for: 347-4 (A) distance learning; 347-5 (B) an information sharing program of a library; 347-6 or 347-7 (C) telemedicine services; 347-8 (2) develops and implements the initial or 347-9 prototypical delivery of a course or other distance learning 347-10 material; 347-11 (3) trains teachers, faculty, librarians, or 347-12 technicians in the use of distance learning or information sharing 347-13 materials and equipment; 347-14 (4) develops a curriculum or instructional material 347-15 specially suited for telecommunications delivery; 347-16 (5) provides electronic information; or 347-17 (6) establishes or carries out an information sharing 347-18 program. 347-19 (b) The board may award a loan to a project or proposal to 347-20 acquire equipment needed for distance learning and telemedicine 347-21 projects. 347-22 (c) In awarding a grant or loan under this subchapter, the 347-23 board shall give priority to a project or proposal that: 347-24 (1) represents collaborative efforts involving more 347-25 than one school, university, or library; 347-26 (2) contributes matching funds from another source; 347-27 (3) shows promise of becoming self-sustaining; 348-1 (4) helps users of information learn new ways to 348-2 acquire and use information through telecommunications; 348-3 (5) extends specific educational information and 348-4 knowledge services to a group not previously served, especially a 348-5 group in a rural or remote area; 348-6 (6) results in more efficient or effective learning 348-7 than through conventional teaching; 348-8 (7) improves the effectiveness and efficiency of 348-9 health care delivery; or 348-10 (8) takes advantage of distance learning opportunities 348-11 in a rural or urban school district with a: 348-12 (A) disproportionate number of at-risk youths; 348-13 or 348-14 (B) high dropout rate. 348-15 (d) In distributing money to public schools, the board 348-16 shall: 348-17 (1) consider the relative property wealth per student 348-18 of the school districts that receive the money; and 348-19 (2) recognize the unique needs of rural communities. 348-20 (e) A grant or loan awarded under this section is subject to 348-21 the limitations prescribed by Section 57.046. (V.A.C.S. 348-22 Art. 1446c-0, Secs. 3.606(r), (s), (t), (v).) 348-23 Sec. 57.048. ASSESSMENTS AND COLLECTIONS. (a) For each 348-24 fiscal year beginning before September 1, 2005, the comptroller 348-25 shall assess and collect an annual total of $75 million from 348-26 telecommunications utilities and an annual total of $75 million 348-27 from commercial mobile service providers. 349-1 (b) The comptroller shall assess and collect the money each 349-2 year without respect to whether the money previously collected and 349-3 deposited in either account has been disbursed or spent. 349-4 (c) The comptroller may require a telecommunications utility 349-5 or commercial mobile service provider to provide any report or 349-6 information necessary to fulfill the comptroller's duties under 349-7 this section. Information provided to the comptroller under this 349-8 section is confidential and exempt from disclosure under Chapter 349-9 552, Government Code. 349-10 (d) Money collected by the comptroller from a 349-11 telecommunications utility under this section shall be deposited to 349-12 the credit of the telecommunications utilities account in the fund. 349-13 (e) Money collected by the comptroller from a commercial 349-14 mobile service provider under this section shall be deposited to 349-15 the credit of the commercial mobile service providers account in 349-16 the fund. (V.A.C.S. Art. 1446c-0, Secs. 3.606(l), (m), (n) 349-17 (part).) 349-18 Sec. 57.049. ISSUANCE OF WARRANTS. From money appropriated 349-19 to the board, the comptroller shall issue warrants the board 349-20 requests in accordance with the purposes of this subchapter, 349-21 including warrants to grantees of the board in amounts the board 349-22 certifies to the comptroller. (V.A.C.S. Art. 1446c-0, Sec. 349-23 3.606(o).) 349-24 Sec. 57.050. ASSISTANCE OF OTHER AGENCIES. The following 349-25 agencies, in consultation with the board, shall adopt policies and 349-26 procedures that are designed to aid the board in achieving the 349-27 purposes of this subchapter: 350-1 (1) the Texas Higher Education Coordinating Board; 350-2 (2) the Texas Education Agency; and 350-3 (3) the Texas State Library and Archives Commission. 350-4 (V.A.C.S. Art. 1446c-0, Sec. 3.606(u).) 350-5 Sec. 57.051. SUNSET PROVISION. The board is subject to 350-6 Chapter 325, Government Code (Texas Sunset Act). Unless continued 350-7 in existence as provided by that chapter, the board is abolished 350-8 and this subchapter expires September 1, 2006. (V.A.C.S. 350-9 Art. 1446c-0, Sec. 3.606(f) (part).) 350-10 (Sections 57.052-57.070 reserved for expansion) 350-11 SUBCHAPTER D. INTERACTIVE MULTIMEDIA COMMUNICATIONS 350-12 Sec. 57.071. DEFINITION. In this subchapter, "interactive 350-13 multimedia communications" means real-time, two-way, interactive 350-14 voice, video, and data communications conducted over networks that 350-15 link geographically dispersed locations. (V.A.C.S. Art. 1446c-0, 350-16 Sec. 3.609(b).) 350-17 Sec. 57.072. RATES FOR INTERACTIVE MULTIMEDIA 350-18 COMMUNICATIONS. (a) The commission shall permit a local exchange 350-19 company that provides an interactive multimedia communications 350-20 service to establish, using sound ratemaking principles, rates 350-21 necessary to recover costs associated with providing the service. 350-22 (b) A local exchange company may not establish a rate under 350-23 Subsection (a) that is less than the local exchange company's long 350-24 run incremental costs of providing the interactive multimedia 350-25 communications service, unless the commission determines it to be 350-26 in the public interest to do so. (V.A.C.S. Art. 1446c-0, Sec. 350-27 3.609(a).) 351-1 CHAPTER 58. INCENTIVE REGULATION 351-2 SUBCHAPTER A. GENERAL PROVISIONS 351-3 Sec. 58.001. POLICY 351-4 Sec. 58.002. DEFINITION 351-5 (Sections 58.003-58.020 reserved for expansion) 351-6 SUBCHAPTER B. ELECTION OF INCENTIVE REGULATION 351-7 Sec. 58.021. ELECTION 351-8 Sec. 58.022. CHAPTER CONTROLS 351-9 Sec. 58.023. SERVICE CLASSIFICATION 351-10 Sec. 58.024. SERVICE RECLASSIFICATION 351-11 Sec. 58.025. COMPLAINT OR HEARING 351-12 Sec. 58.026. CONSUMER COMPLAINTS REGARDING TARIFFS 351-13 Sec. 58.027. CONSUMER COMPLAINTS REGARDING SERVICES; 351-14 ENFORCEMENT OF STANDARDS 351-15 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION 351-16 (Sections 58.029-58.050 reserved for expansion) 351-17 SUBCHAPTER C. BASIC NETWORK SERVICES 351-18 Sec. 58.051. SERVICES INCLUDED 351-19 Sec. 58.052. REGULATION OF SERVICES 351-20 Sec. 58.053. INVESTMENT LIMITATION ON SERVICE STANDARDS 351-21 Sec. 58.054. RATES CAPPED 351-22 Sec. 58.055. RATE ADJUSTMENT BY COMPANY 351-23 Sec. 58.056. RATE ADJUSTMENT FOR CHANGES IN FCC SEPARATIONS 351-24 Sec. 58.057. RATE ADJUSTMENT FOR CERTAIN COMPANIES 351-25 Sec. 58.058. RATE GROUP RECLASSIFICATION 351-26 Sec. 58.059. COMMISSION RATE ADJUSTMENT PROCEDURE 351-27 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION 352-1 Sec. 58.061. EFFECT ON CERTAIN CHARGES 352-2 Sec. 58.062. SWITCHED ACCESS RATES 352-3 (Sections 58.063-58.100 reserved for expansion) 352-4 SUBCHAPTER D. DISCRETIONARY SERVICES 352-5 Sec. 58.101. SERVICE INCLUDED 352-6 Sec. 58.102. MAXIMUM PRICE 352-7 Sec. 58.103. PRICE FOR SERVICE 352-8 Sec. 58.104. USE OF CERTAIN REGULATORY TREATMENT 352-9 (Sections 58.105-58.150 reserved for expansion) 352-10 SUBCHAPTER E. COMPETITIVE SERVICES 352-11 Sec. 58.151. SERVICES INCLUDED 352-12 Sec. 58.152. PRICES 352-13 (Sections 58.153-58.200 reserved for expansion) 352-14 SUBCHAPTER F. GENERAL INFRASTRUCTURE COMMITMENT 352-15 Sec. 58.201. STATEMENT OF STATE GOAL 352-16 Sec. 58.202. POLICY GOALS FOR IMPLEMENTATION 352-17 Sec. 58.203. INFRASTRUCTURE GOALS OF ALL ELECTING COMPANIES 352-18 Sec. 58.204. ADDITIONAL INFRASTRUCTURE COMMITMENT OF CERTAIN 352-19 COMPANIES 352-20 Sec. 58.205. EXTENSION OR WAIVER OF INFRASTRUCTURE 352-21 REQUIREMENTS 352-22 Sec. 58.206. IMPLEMENTATION COSTS; INCREASE IN RATES AND 352-23 UNIVERSAL SERVICE FUNDS 352-24 (Sections 58.207-58.250 reserved for expansion) 352-25 SUBCHAPTER G. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 352-26 Sec. 58.251. INTENT AND GOAL OF SUBCHAPTER 352-27 Sec. 58.252. DEFINITIONS 353-1 Sec. 58.253. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES 353-2 Sec. 58.254. PRIORITIES 353-3 Sec. 58.255. CONTRACTS FOR PRIVATE NETWORK SERVICES 353-4 Sec. 58.256. PREFERRED RATE TREATMENT WARRANTED 353-5 Sec. 58.257. ELECTION OF RATE TREATMENT 353-6 Sec. 58.258. PRIVATE NETWORK SERVICES RATES AND TARIFFS 353-7 Sec. 58.259. TARIFF RATE FOR CERTAIN INTRALATA SERVICE 353-8 Sec. 58.260. POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA 353-9 SERVICE 353-10 Sec. 58.261. BROADBAND DIGITAL SPECIAL ACCESS SERVICE 353-11 Sec. 58.262. EXPANDED INTERCONNECTION 353-12 Sec. 58.263. INTERNET ACCESS 353-13 Sec. 58.264. COMPLAINTS LIMITED 353-14 Sec. 58.265. INTERCONNECTION OF NETWORK SERVICES 353-15 Sec. 58.266. SHARING OR RESALE OF NETWORK SERVICES 353-16 Sec. 58.267. IMPLEMENTATION COSTS; INCREASE IN RATES AND 353-17 UNIVERSAL SERVICE FUNDS 353-18 CHAPTER 58. INCENTIVE REGULATION 353-19 SUBCHAPTER A. GENERAL PROVISIONS 353-20 Sec. 58.001. POLICY. Considering the status of competition 353-21 in the telecommunications industry, it is the policy of this state 353-22 to: 353-23 (1) provide a framework for an orderly transition from 353-24 the traditional regulation of return on invested capital to a fully 353-25 competitive telecommunications marketplace in which all 353-26 telecommunications providers compete on fair terms; 353-27 (2) preserve and enhance universal telecommunications 354-1 service at affordable rates; 354-2 (3) upgrade the telecommunications infrastructure of 354-3 this state; 354-4 (4) promote network interconnectivity; and 354-5 (5) promote diversity in the supply of 354-6 telecommunications services and innovative products and services 354-7 throughout the entire state, including urban and rural areas. 354-8 (V.A.C.S. Art. 1446c-0, Sec. 3.351.) 354-9 Sec. 58.002. DEFINITION. In this chapter, "electing 354-10 company" means an incumbent local exchange company that elects to 354-11 be subject to incentive regulation and to make the corresponding 354-12 infrastructure commitment under this chapter. (V.A.C.S. 354-13 Art. 1446c-0, Sec. 3.352(b)(1) (part).) 354-14 (Sections 58.003-58.020 reserved for expansion) 354-15 SUBCHAPTER B. ELECTION OF INCENTIVE REGULATION 354-16 Sec. 58.021. ELECTION. (a) An incumbent local exchange 354-17 company may elect to be subject to incentive regulation and to make 354-18 the corresponding infrastructure commitment under this chapter by 354-19 notifying the commission in writing of its election. 354-20 (b) The notice must include a statement that the company 354-21 agrees to: 354-22 (1) limit for four years any increase in a rate the 354-23 company charges for basic network services as prescribed by 354-24 Subchapter C; and 354-25 (2) fulfill the infrastructure commitment prescribed 354-26 by Subchapters F and G. (V.A.C.S. Art. 1446c-0, Sec. 3.352(a).) 354-27 Sec. 58.022. CHAPTER CONTROLS. This chapter governs the 355-1 regulation of an electing company's telecommunications services 355-2 regardless of whether the company is a dominant carrier. (V.A.C.S. 355-3 Art. 1446c-0, Sec. 3.352(c).) 355-4 Sec. 58.023. SERVICE CLASSIFICATION. On election, the 355-5 services provided by an electing company are classified into three 355-6 categories: 355-7 (1) basic network services governed by Subchapter C; 355-8 (2) discretionary services governed by Subchapter D; 355-9 and 355-10 (3) competitive services governed by Subchapter E. 355-11 (V.A.C.S. Art. 1446c-0, Sec. 3.352(b)(1).) 355-12 Sec. 58.024. SERVICE RECLASSIFICATION. (a) The commission 355-13 may reclassify a: 355-14 (1) basic network service as a discretionary or 355-15 competitive service; or 355-16 (2) discretionary service as a competitive service. 355-17 (b) The commission shall establish criteria for determining 355-18 whether a service should be reclassified. The criteria must include 355-19 consideration of the: 355-20 (1) availability of the service from other providers; 355-21 (2) proportion of the market that receives the 355-22 service; 355-23 (3) effect of the reclassification on service 355-24 subscribers; and 355-25 (4) nature of the service. 355-26 (c) The commission may not reclassify a service until each 355-27 competitive safeguard prescribed by Subchapters B-G, Chapter 60, is 356-1 fully implemented. (V.A.C.S. Art. 1446c-0, Secs. 3.352(b)(2), 356-2 3.355(c), 3.356(b), 3.357.) 356-3 Sec. 58.025. COMPLAINT OR HEARING. (a) An electing company 356-4 is not, under any circumstances, subject to a complaint, hearing, 356-5 or determination regarding the reasonableness of the company's: 356-6 (1) rates; 356-7 (2) overall revenues; 356-8 (3) return on invested capital; or 356-9 (4) net income. 356-10 (b) This section does not prohibit a complaint, hearing, or 356-11 determination on an electing company's implementation and 356-12 enforcement of a competitive safeguard required by Chapter 60. 356-13 (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 356-14 Sec. 58.026. CONSUMER COMPLAINTS REGARDING TARIFFS. (a) 356-15 This chapter does not restrict: 356-16 (1) a consumer's right to complain to the commission 356-17 about the application of an ambiguous tariff; or 356-18 (2) the commission's right to determine: 356-19 (A) the proper application of that tariff; or 356-20 (B) the proper rate if that tariff does not 356-21 apply. 356-22 (b) This section does not permit the commission to: 356-23 (1) lower a tariff rate except as specifically 356-24 provided by this title; 356-25 (2) change the commission's interpretation of a 356-26 tariff; or 356-27 (3) extend the application of a tariff to a new class 357-1 of customers. (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 357-2 Sec. 58.027. CONSUMER COMPLAINTS REGARDING SERVICES; 357-3 ENFORCEMENT OF STANDARDS. This chapter does not restrict: 357-4 (1) a consumer's right to complain to the commission 357-5 about quality of service; or 357-6 (2) the commission's right to enforce a quality of 357-7 service standard. (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 357-8 Sec. 58.028. REVIEW AND REPORT OF EFFECTS OF ELECTION. (a) 357-9 Not later than January 1, 2000, the commission shall begin a review 357-10 and evaluation of each company that elects under this chapter or 357-11 Chapter 59. 357-12 (b) The review must include an evaluation of the effects of 357-13 the election, including: 357-14 (1) consumer benefits; 357-15 (2) impact of competition; 357-16 (3) infrastructure investments; and 357-17 (4) quality of service. 357-18 (c) The commission shall file a report with the legislature 357-19 not later than January 1, 2001. The report must include the 357-20 commission's recommendations as to whether the incentive regulation 357-21 provided by this chapter and Chapter 59 should be extended, 357-22 modified, eliminated, or replaced with another form of regulation. 357-23 (d) This section expires September 1, 2001. (V.A.C.S. 357-24 Art. 1446c-0, Sec. 3.356(d) (part).) 357-25 (Sections 58.029-58.050 reserved for expansion) 357-26 SUBCHAPTER C. BASIC NETWORK SERVICES 357-27 Sec. 58.051. SERVICES INCLUDED. Unless reclassified under 358-1 Section 58.024, the following services are basic network services: 358-2 (1) flat rate residential and business local exchange 358-3 telephone service, including primary directory listings and the 358-4 receipt of a directory and any applicable mileage or zone charges; 358-5 (2) tone dialing service; 358-6 (3) lifeline and tel-assistance service; 358-7 (4) service connection for basic services; 358-8 (5) direct inward dialing service for basic services; 358-9 (6) private pay telephone access service; 358-10 (7) call trap and trace service; 358-11 (8) access to 911 service provided by a local 358-12 authority and access to dual party relay service; 358-13 (9) switched access service; 358-14 (10) interconnection to competitive providers; 358-15 (11) mandatory extended area service arrangements; 358-16 (12) mandatory extended metropolitan service or other 358-17 mandatory toll-free calling arrangements; 358-18 (13) interconnection for commercial mobile service 358-19 providers; 358-20 (14) directory assistance; and 358-21 (15) "1-plus" intraLATA message toll service. 358-22 (V.A.C.S. Art. 1446c-0, Sec. 3.353(a).) 358-23 Sec. 58.052. REGULATION OF SERVICES. (a) Except as 358-24 provided by Subchapter E, Chapter 52, basic network services of an 358-25 electing company are regulated: 358-26 (1) in accordance with this chapter; and 358-27 (2) to the extent not inconsistent with this chapter, 359-1 in accordance with: 359-2 (A) Subtitle A; 359-3 (B) Chapters 51, 54, 60, 62, and 63; 359-4 (C) Chapter 52, except for Subchapter F; 359-5 (D) Subchapters C, D, and E, Chapter 53; 359-6 (E) Chapter 55, except for: 359-7 (i) Subchapters F and G; and 359-8 (ii) Sections 55.001, 55.002, 55.003, and 359-9 55.004; 359-10 (F) Sections 53.001, 53.003, 53.004, 53.006, 359-11 53.065, 55.005, 55.006, 55.009, and 55.010; and 359-12 (G) commission rules and procedures. 359-13 (b) The commission must approve a change in the terms of the 359-14 tariff offering of a basic network service. (V.A.C.S. 359-15 Art. 1446c-0, Sec. 3.353(d).) 359-16 Sec. 58.053. INVESTMENT LIMITATION ON SERVICE STANDARDS. 359-17 (a) The commission may not raise a service standard applicable to 359-18 the provision of local exchange telephone service by an electing 359-19 company if the increased investment required to comply with the 359-20 raised standard in any year exceeds 10 percent of the company's 359-21 average annual intrastate additions in capital investment for the 359-22 most recent five-year period. 359-23 (b) In computing the average under Subsection (a), the 359-24 company shall exclude: 359-25 (1) extraordinary investments made during the 359-26 five-year period; and 359-27 (2) investments required by Section 58.203. (V.A.C.S. 360-1 Art. 1446c-0, Secs. 3.353(b) (part), 3.358(b) (part).) 360-2 Sec. 58.054. RATES CAPPED. (a) As a condition of election 360-3 under this chapter, an electing company shall commit to not 360-4 increasing a rate for a basic network service on or before the 360-5 fourth anniversary of its election date. 360-6 (b) The rates an electing company may charge on or before 360-7 that fourth anniversary are the rates charged by the company on 360-8 June 1, 1995, without regard to a proceeding pending under: 360-9 (1) Section 15.001; 360-10 (2) Subchapter D, Chapter 53; or 360-11 (3) Subchapter G, Chapter 2001, Government Code. 360-12 (V.A.C.S. Art. 1446c-0, Secs. 3.352(a) (part), 3.353(e) (part).) 360-13 Sec. 58.055. RATE ADJUSTMENT BY COMPANY. (a) An electing 360-14 company may increase a rate for a basic network service during the 360-15 four-year period prescribed by Section 58.054 only: 360-16 (1) with commission approval that the proposed change 360-17 is included in Section 58.056, 58.057, or 58.058; and 360-18 (2) as provided by Sections 58.056, 58.057, 58.058, 360-19 and 58.059. 360-20 (b) Notwithstanding Subchapter F, Chapter 60, an electing 360-21 company may, on its own initiative, decrease a rate for a basic 360-22 network service during the four-year period. 360-23 (c) The company may decrease the rate for switched access 360-24 service to an amount above the service's long run incremental cost. 360-25 (d) The company may decrease the rate for a basic local 360-26 telecommunications service other than switched access to an amount 360-27 above the service's appropriate cost. If the company has been 361-1 required to perform or has elected to perform a long run 361-2 incremental cost study, the appropriate cost for the service is the 361-3 service's long run incremental cost. (V.A.C.S. Art. 1446c-0, Secs. 361-4 3.353(b) (part), (c)(1).) 361-5 Sec. 58.056. RATE ADJUSTMENT FOR CHANGES IN FCC SEPARATIONS. 361-6 The commission, on motion of the electing company or on its own 361-7 motion, shall proportionally adjust rates for services to reflect 361-8 changes in Federal Communications Commission separations that 361-9 affect intrastate net income by at least 10 percent. (V.A.C.S. 361-10 Art. 1446c-0, Sec. 3.353(c)(2).) 361-11 Sec. 58.057. RATE ADJUSTMENT FOR CERTAIN COMPANIES. (a) An 361-12 electing company, after the 42nd month after the date the company 361-13 elects incentive regulation under this chapter, may file an 361-14 application for a commission review of the company's need for 361-15 changes in the rates of its services if the company: 361-16 (1) has fewer than five million access lines in this 361-17 state; and 361-18 (2) is complying with: 361-19 (A) the company's infrastructure commitment; 361-20 (B) each requirement relating to quality of 361-21 service; and 361-22 (C) each commission rule adopted under Chapter 361-23 60. 361-24 (b) The company's application may request that the 361-25 commission adjust rates, implement new pricing plans, restructure 361-26 rates, or rebalance revenues between services to recognize changed 361-27 market conditions and the effects of competitive entry. 362-1 (c) The commission may use an index and a productivity 362-2 offset in determining the requested changes. 362-3 (d) The commission may not: 362-4 (1) order an increase in the rate for residential 362-5 local exchange telephone service that would cause the rate to 362-6 increase by more than the United States Consumer Price Index in any 362-7 12-month period; or 362-8 (2) set the monthly rate for residential local 362-9 exchange telephone service in an amount that exceeds the nationwide 362-10 average rates for similar local exchange telephone services. 362-11 (V.A.C.S. Art. 1446c-0, Sec. 3.353(c)(3).) 362-12 Sec. 58.058. RATE GROUP RECLASSIFICATION. Notwithstanding 362-13 Subchapter B, the commission, on request of the electing company, 362-14 shall allow a rate group reclassification that results from access 362-15 line growth. (V.A.C.S. Art. 1446c-0, Sec. 3.353(c)(4).) 362-16 Sec. 58.059. COMMISSION RATE ADJUSTMENT PROCEDURE. (a) In 362-17 accordance with this section, an electing company may request and 362-18 the commission may authorize a rate adjustment under Section 362-19 58.056, 58.057, or 58.058. 362-20 (b) The electing company must provide to the commission 362-21 notice of its intent to adjust rates. The notice must be 362-22 accompanied by sufficient documentary evidence to demonstrate that 362-23 the rate adjustment is authorized under Section 58.056, 58.057, or 362-24 58.058. The commission by rule or order shall prescribe the 362-25 documentation required under this subsection. 362-26 (c) The electing company must also provide notice to its 362-27 customers after providing notice to the commission. The notice to 363-1 the customers must: 363-2 (1) within a reasonable period after notice to the 363-3 commission, be published once in a newspaper of general circulation 363-4 in the affected service area; 363-5 (2) be included in or printed on each affected 363-6 consumer's bill in the first billing that occurs after notice is 363-7 filed with the commission; 363-8 (3) have a title that includes the name of the company 363-9 and the words "NOTICE OF POSSIBLE RATE CHANGE"; and 363-10 (4) include: 363-11 (A) a statement that the consumer's rate may 363-12 change; 363-13 (B) an estimate of the amount of the annual 363-14 change for the typical residential, business, or access consumer if 363-15 the commission approves the rate change; 363-16 (C) a statement that a consumer who wants to 363-17 comment on the rate change or who wants additional information 363-18 regarding the rate change may call or write the commission and that 363-19 the information will be provided without cost to the consumer and 363-20 at the expense of the electing company; and 363-21 (D) the commission's telephone number and 363-22 address. 363-23 (d) The estimate of the amount of the annual change required 363-24 by Subsection (c)(4)(B) must be printed in a type style and size 363-25 that is distinct from and larger than the type style and size of 363-26 the body of the notice. 363-27 (e) The commission shall review the proposed rates to 364-1 determine if the rate adjustment is authorized under Section 364-2 58.056, 58.057, or 58.058. 364-3 (f) The rate adjustment takes effect on the 90th day after 364-4 the date the electing company completes the notice required by this 364-5 section unless the commission suspends the effective date under 364-6 Subsection (g). 364-7 (g) At any time before a rate adjustment is scheduled to 364-8 take effect, the commission, on its own motion or on complaint by 364-9 an affected party, may suspend the effective date of the rate 364-10 adjustment and conduct a hearing to review the proposed adjustment. 364-11 After the hearing, the commission may issue an order approving the 364-12 adjustment, or if it finds that the adjustment is not authorized 364-13 under Section 58.056, 58.057, or 58.058, issue an order modifying 364-14 or rejecting the adjustment. An order modifying or rejecting a 364-15 rate adjustment must specify: 364-16 (1) each reason why the proposed adjustment was not 364-17 authorized by Section 58.056, 58.057, or 58.058; and 364-18 (2) how the proposed adjustment may be changed so that 364-19 it is authorized. 364-20 (h) Except as provided by this section, a request for a 364-21 rate restructure must comply with the notice and hearing 364-22 requirements prescribed by Sections 53.101-53.106. 364-23 (i) An electing company that has not more than five percent 364-24 of the total access lines in this state may adopt as the cost for 364-25 a service the cost for the same or substantially similar service 364-26 offered by a larger incumbent local exchange company. The electing 364-27 company may adopt the larger company's cost only if the cost was 365-1 determined based on a long run incremental cost study. An electing 365-2 company that adopts a cost under this subsection is not required to 365-3 present its own long run incremental cost study to support the 365-4 adopted cost. (V.A.C.S. Art. 1446c-0, Sec. 3.354.) 365-5 Sec. 58.060. RATE ADJUSTMENT AFTER CAP EXPIRATION. After 365-6 the four-year period prescribed by Section 58.054 expires, an 365-7 electing company may increase a rate for a basic network service 365-8 only: 365-9 (1) with commission approval subject to this title; 365-10 and 365-11 (2) to the extent consistent with achieving universal 365-12 affordable service. (V.A.C.S. Art. 1446c-0, Sec. 3.353(e) (part).) 365-13 Sec. 58.061. EFFECT ON CERTAIN CHARGES. This subchapter 365-14 does not affect a charge permitted under: 365-15 (1) Section 55.024; 365-16 (2) Subchapter C, Chapter 55; or 365-17 (3) Subchapter B, Chapter 56. (V.A.C.S. Art. 1446c-0, 365-18 Sec. 3.353(b) (part).) 365-19 Sec. 58.062. SWITCHED ACCESS RATES. Notwithstanding any 365-20 other provision of this title, the commission may not reduce an 365-21 electing company's rates for switched access services before the 365-22 expiration of the four-year period prescribed by Section 58.054. 365-23 (V.A.C.S. Art. 1446c-0, Sec. 3.352(d) (part).) 365-24 (Sections 58.063-58.100 reserved for expansion) 365-25 SUBCHAPTER D. DISCRETIONARY SERVICES 365-26 Sec. 58.101. SERVICE INCLUDED. Unless reclassified under 365-27 Section 58.024, the following services are discretionary services: 366-1 (1) "1-plus" intraLATA message toll services, if 366-2 intraLATA equal access is available; 366-3 (2) 0+ and 0- operator services; 366-4 (3) call waiting, call forwarding, and custom calling 366-5 features that are not classified as a competitive service under 366-6 Section 58.151; 366-7 (4) call return, caller identification, and call 366-8 control options that are not classified as a competitive service 366-9 under Section 58.151; 366-10 (5) central office based PBX-type services; 366-11 (6) billing and collection services; 366-12 (7) integrated services digital network (ISDN) 366-13 services; 366-14 (8) new services; and 366-15 (9) each service or function: 366-16 (A) for which pricing flexibility has not been 366-17 granted in a particular geographic market; and 366-18 (B) that is not classified as a basic network 366-19 service under Section 58.051 or a competitive service under Section 366-20 58.151. (V.A.C.S. Art. 1446c-0, Secs. 3.355(a), (b).) 366-21 Sec. 58.102. MAXIMUM PRICE. (a) The commission shall set 366-22 the maximum price an electing company may charge for a 366-23 discretionary service. 366-24 (b) The initial maximum price for a service is the price in 366-25 effect on September 1, 1995, without regard to a proceeding pending 366-26 under: 366-27 (1) Section 15.001; 367-1 (2) Subchapter D, Chapter 53; or 367-2 (3) Subchapter G, Chapter 2001, Government Code. 367-3 (c) The commission may not increase the initial maximum 367-4 price until after the proceedings required by Chapter 60. 367-5 (d) After the proceedings required by Chapter 60, the 367-6 commission, on its own motion or on application by the electing 367-7 company, may change the initial maximum price. However, the 367-8 commission may not increase the price more than 10 percent 367-9 annually. (V.A.C.S. Art. 1446c-0, Sec. 3.355(d) (part).) 367-10 Sec. 58.103. PRICE FOR SERVICE. (a) An electing company 367-11 may set the price for a discretionary service at any price that is: 367-12 (1) above the service's long run incremental cost; and 367-13 (2) at or below the service's maximum price set under 367-14 Section 58.102. 367-15 (b) The electing company may change the price within the 367-16 limits prescribed by Subsection (a). A price change may include 367-17 the use of pricing flexibility. 367-18 (c) The electing company shall notify the commission of each 367-19 change. (V.A.C.S. Art. 1446c-0, Sec. 3.355(d) (part).) 367-20 Sec. 58.104. USE OF CERTAIN REGULATORY TREATMENT. The 367-21 classification of a service as a discretionary service does not 367-22 preclude an electing company from using a regulatory treatment 367-23 authorized by or under Subchapters A-D, Chapter 52. (V.A.C.S. 367-24 Art. 1446c-0, Sec. 3.355(d) (part).) 367-25 (Sections 58.105-58.150 reserved for expansion) 367-26 SUBCHAPTER E. COMPETITIVE SERVICES 367-27 Sec. 58.151. SERVICES INCLUDED. The following services are 368-1 classified as competitive services: 368-2 (1) services described in the WATS tariff as the 368-3 tariff existed on January 1, 1995; 368-4 (2) 800 and foreign exchange services; 368-5 (3) private line service; 368-6 (4) special access service; 368-7 (5) services from public pay telephones; 368-8 (6) paging services and mobile services (IMTS); 368-9 (7) 911 premises equipment; 368-10 (8) speed dialing; and 368-11 (9) three-way calling. (V.A.C.S. Art. 1446c-0, Sec. 368-12 3.356(a) (part).) 368-13 Sec. 58.152. PRICES. (a) An electing company may set the 368-14 price for a competitive service at any level above the service's 368-15 long run incremental cost in accordance with the imputation rules 368-16 prescribed by or under Subchapter D, Chapter 60. 368-17 (b) Subject to the requirements of Sections 60.001 and 368-18 60.002, the company may use pricing flexibility for a competitive 368-19 service. 368-20 (c) Notwithstanding Subsection (a) or (b), the company may 368-21 not increase the price of a competitive service in a geographic 368-22 area in which that service or a functionally equivalent service is 368-23 not readily available from another provider. (V.A.C.S. 368-24 Art. 1446c-0, Secs. 3.356(a) (part), (c) (part).) 368-25 (Sections 58.153-58.200 reserved for expansion) 368-26 SUBCHAPTER F. GENERAL INFRASTRUCTURE COMMITMENT 368-27 Sec. 58.201. STATEMENT OF STATE GOAL. (a) It is the goal 369-1 of this state to facilitate and promote the deployment of an 369-2 advanced telecommunications infrastructure to spur economic 369-3 development throughout this state. This state should be among the 369-4 leaders in achieving this objective. 369-5 (b) The primary means of achieving this goal is through 369-6 encouraging private investment in this state's telecommunications 369-7 infrastructure by creating incentives for that investment and 369-8 promoting the development of competition. 369-9 (c) The best way to bring the benefits of an advanced 369-10 telecommunications network infrastructure to communities in this 369-11 state is through innovation and competition among all the state's 369-12 communications providers. Competition will provide residents of 369-13 this state with a choice of telecommunications providers and will 369-14 drive technology deployment, innovation, service quality, and 369-15 cost-based prices as competing firms try to satisfy customer needs. 369-16 (V.A.C.S. Art. 1446c-0, Sec. 3.358(a).) 369-17 Sec. 58.202. POLICY GOALS FOR IMPLEMENTATION. In 369-18 implementing this subchapter, the commission shall consider this 369-19 state's policy goals to: 369-20 (1) ensure the availability of the widest possible 369-21 range of competitive choices in the provision of telecommunications 369-22 services and facilities; 369-23 (2) foster competition and rely on market forces where 369-24 competition exists to determine the price, terms, and availability 369-25 of service; 369-26 (3) ensure the universal availability of basic local 369-27 telecommunications services at reasonable rates; 370-1 (4) encourage the continued development and deployment 370-2 of advanced and reliable capabilities and services in 370-3 telecommunications networks; 370-4 (5) ensure interconnection and interoperability, based 370-5 on uniform technical standards, among telecommunications carriers; 370-6 (6) eliminate unnecessary administrative procedures 370-7 that impose regulatory barriers to competition and ensure that 370-8 competitive entry is fostered on an economically rational basis; 370-9 (7) ensure consumer protection and protection against 370-10 anticompetitive conduct; 370-11 (8) regulate a provider of services only to the extent 370-12 the provider has market power to control the price of services to 370-13 customers; 370-14 (9) encourage cost-based pricing of telecommunications 370-15 services so that consumers pay a fair price for services they use; 370-16 and 370-17 (10) subject to Subchapter C, develop appropriate 370-18 quality of service standards for local exchange companies so as to 370-19 place this state among the leaders in deployment of an advanced 370-20 telecommunications infrastructure. (V.A.C.S. Art. 1446c-0, 370-21 Sec. 3.358(b) (part).) 370-22 Sec. 58.203. INFRASTRUCTURE GOALS OF ALL ELECTING COMPANIES. 370-23 (a) Recognizing that it will take time for competition to develop 370-24 in the local exchange market, the commission shall, in the absence 370-25 of competition, ensure that each electing company achieves the 370-26 infrastructure goals described by this section. 370-27 (b) Not later than December 31, 1996, an electing company 371-1 shall make available to each customer in the company's territory 371-2 access to end-to-end digital connectivity. 371-3 (c) Each new central office switch installed for an electing 371-4 company after September 1, 1995, must be digital or technically 371-5 equal to or superior to digital. In addition, a switch installed 371-6 after September 1, 1997, must, at a minimum, be capable of 371-7 providing integrated services digital network (ISDN) services in a 371-8 manner consistent with generally accepted national standards. 371-9 (d) Not later than January 1, 2000, 50 percent of the local 371-10 exchange access lines in each electing company's territory must be 371-11 served by a digital central office switch. 371-12 (e) Not later than January 1, 2000, an electing company's 371-13 public switched network backbone interoffice facilities must employ 371-14 broadband facilities capable of 45 or more megabits a second. The 371-15 company may employ facilities at a lower bandwidth if technology 371-16 permits the delivery of video signal at the lower bandwidth at a 371-17 quality level comparable to a television broadcast signal. The 371-18 requirements of this subsection do not apply to local loop 371-19 facilities. (V.A.C.S. Art. 1446c-0, Sec. 3.358(c).) 371-20 Sec. 58.204. ADDITIONAL INFRASTRUCTURE COMMITMENT OF CERTAIN 371-21 COMPANIES. (a) Not later than December 31, 1998, an electing 371-22 company serving more than one million but fewer than five million 371-23 access lines shall provide digital switching central offices in all 371-24 exchanges. 371-25 (b) Not later than January 1, 2000, an electing company 371-26 serving more than five million access lines shall: 371-27 (1) install Common Channel Signaling 7 capability in 372-1 each central office; and 372-2 (2) connect all of the company's serving central 372-3 offices to their respective LATA tandem central offices with 372-4 optical fiber or equivalent facilities. (V.A.C.S. Art. 1446c-0, 372-5 Sec. 3.358(d).) 372-6 Sec. 58.205. EXTENSION OR WAIVER OF INFRASTRUCTURE 372-7 REQUIREMENTS. (a) For an electing company that serves more than 372-8 one million but fewer than two million access lines, the commission 372-9 may temporarily extend a deadline prescribed by Section 58.203 if 372-10 the company demonstrates that the extension is in the public 372-11 interest. 372-12 (b) For an electing company that serves fewer than one 372-13 million access lines, the commission may waive a requirement 372-14 prescribed by Section 58.203 if the company demonstrates that the 372-15 investment is not viable economically. 372-16 (c) Before granting a waiver under Subsection (b), the 372-17 commission must consider the public benefits that would result from 372-18 compliance with the requirement. (V.A.C.S. Art. 1446c-0, Sec. 372-19 3.358(e).) 372-20 Sec. 58.206. IMPLEMENTATION COSTS; INCREASE IN RATES AND 372-21 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 372-22 of implementing Section 58.203 or 58.204 in determining whether an 372-23 electing company is entitled to: 372-24 (1) a rate increase under this chapter; or 372-25 (2) increased universal service funds under Subchapter 372-26 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.358(f).) 372-27 (Sections 58.207-58.250 reserved for expansion) 373-1 SUBCHAPTER G. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 373-2 Sec. 58.251. INTENT AND GOAL OF SUBCHAPTER. (a) It is the 373-3 intent of this subchapter to establish a telecommunications 373-4 infrastructure that interconnects the public entities described in 373-5 this subchapter. The interconnection of these entities requires 373-6 ubiquitous, broadband, digital services for voice, video, and data 373-7 in the local serving area. The ubiquitous nature of these 373-8 connections must allow individual networks of these entities to 373-9 interconnect and interoperate across the broadband digital service 373-10 infrastructure. The delivery of these advanced telecommunications 373-11 services requires collaborations and partnerships of public, 373-12 private, and commercial telecommunications service network 373-13 providers. 373-14 (b) The goal of this subchapter is to interconnect and 373-15 aggregate the connections to every entity described in this 373-16 subchapter, in the local serving area. It is further intended that 373-17 the infrastructure implemented under this subchapter connect each 373-18 entity that requests a service offered under this subchapter. 373-19 (V.A.C.S. Art. 1446c-0, Sec. 3.359(a).) 373-20 Sec. 58.252. DEFINITIONS. In this subchapter: 373-21 (1) "Educational institution" has the meaning assigned 373-22 by Section 57.021. 373-23 (2) "Library" has the meaning assigned by Section 373-24 57.042. 373-25 (3) "Private network services" means: 373-26 (A) broadband digital service that is capable of 373-27 providing transmission speeds of 45 megabits a second or greater 374-1 for customer applications; and 374-2 (B) other customized or packaged network 374-3 services. 374-4 (4) "Telemedicine center" means a facility that is 374-5 equipped to transmit, by video, data, or voice service, medical 374-6 information for the diagnosis or treatment of illness or disease 374-7 and that is: 374-8 (A) owned or operated by a public or 374-9 not-for-profit hospital, including an academic health center; or 374-10 (B) owned by one or more state-licensed health 374-11 care practitioners and operated on a nonprofit basis. (V.A.C.S. 374-12 Art. 1446c-0, Secs. 3.359(b)(1)(A) (part), (e).) 374-13 Sec. 58.253. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES. 374-14 (a) On customer request, an electing company shall provide private 374-15 network services to: 374-16 (1) an educational institution; 374-17 (2) a library; 374-18 (3) a nonprofit telemedicine center; 374-19 (4) a public or not-for-profit hospital; 374-20 (5) a project funded by the telecommunications 374-21 infrastructure fund under Subchapter C, Chapter 57; or 374-22 (6) a legally constituted consortium or group of 374-23 entities listed in this subsection. 374-24 (b) Except as provided by Section 58.266, the electing 374-25 company shall provide the private network services for the private 374-26 and sole use of the receiving entity. (V.A.C.S. Art. 1446c-0, Sec. 374-27 3.359(b)(1)(A) (part).) 375-1 Sec. 58.254. PRIORITIES. An electing company shall give 375-2 priority to serving: 375-3 (1) rural areas; 375-4 (2) areas designated as critically underserved either 375-5 medically or educationally; and 375-6 (3) educational institutions with high percentages of 375-7 economically disadvantaged students. (V.A.C.S. Art. 1446c-0, Sec. 375-8 3.359(b)(6).) 375-9 Sec. 58.255. CONTRACTS FOR PRIVATE NETWORK SERVICES. (a) 375-10 An electing company shall provide a private network service under a 375-11 customer specific contract. 375-12 (b) An electing company shall offer private network service 375-13 contracts under this subchapter at 105 percent of the long run 375-14 incremental cost of providing the private network service, 375-15 including installation. 375-16 (c) Each contract shall be filed with the commission. 375-17 Commission approval of a contract is not required. 375-18 (d) Subtitle D, Title 10, Government Code, does not apply to 375-19 a contract entered into under this subchapter. (V.A.C.S. 375-20 Art. 1446c-0, Secs. 3.359(b)(1)(B), (b)(1)(C), (f).) 375-21 Sec. 58.256. PREFERRED RATE TREATMENT WARRANTED. An entity 375-22 described by Section 58.253(a) warrants preferred rate treatment. 375-23 However, a rate charged for a service must cover the service's long 375-24 run incremental cost. (V.A.C.S. Art. 1446c-0, Sec. 375-25 3.359(b)(1)(H).) 375-26 Sec. 58.257. ELECTION OF RATE TREATMENT. An educational 375-27 institution or a library may elect the rate treatment provided by 376-1 this subchapter or the discount provided by Subchapter B, Chapter 376-2 57. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(3).) 376-3 Sec. 58.258. PRIVATE NETWORK SERVICES RATES AND TARIFFS. 376-4 (a) Notwithstanding the pricing flexibility authorized by this 376-5 subtitle, an electing company's rates for private network services 376-6 may not be increased on or before the sixth anniversary of the 376-7 company's date of election. However, an electing company may 376-8 increase a rate in accordance with the provisions of a customer 376-9 specific contract. 376-10 (b) An electing company may not charge an entity described 376-11 by Section 58.253(a) a special construction or installation 376-12 charge. (V.A.C.S. Art. 1446c-0, Secs. 3.359(b)(2), (4).) 376-13 Sec. 58.259. TARIFF RATE FOR CERTAIN INTRALATA SERVICE. (a) 376-14 An electing company shall file a flat monthly tariff rate for 376-15 point-to-point intraLATA 1.544 megabits a second service for the 376-16 entities described by Section 58.253(a). 376-17 (b) The tariff rate may not be: 376-18 (1) distance sensitive; or 376-19 (2) higher than 105 percent of the service's statewide 376-20 average long run incremental cost, including installation. 376-21 (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(D).) 376-22 Sec. 58.260. POINT-TO-POINT 45 MEGABITS A SECOND INTRALATA 376-23 SERVICE. (a) On request of an entity described by Section 376-24 58.253(a), an electing company shall provide to the entity 376-25 point-to-point 45 megabits a second intraLATA services. 376-26 (b) The service must be provided under a customer specific 376-27 contract except that any interoffice portion of the service must be 377-1 recovered on a statewide average basis that is not distance 377-2 sensitive. 377-3 (c) The rate for the service may not be higher than 105 377-4 percent of the service's long run incremental cost, including 377-5 installation. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(E).) 377-6 Sec. 58.261. BROADBAND DIGITAL SPECIAL ACCESS SERVICE. (a) 377-7 An electing company shall provide to an entity described by Section 377-8 58.253(a) broadband digital special access service to interexchange 377-9 carriers. 377-10 (b) The rate for the service may not be higher than 105 377-11 percent of the service's long run incremental cost, including 377-12 installation. (V.A.C.S. Art. 1446c-0, Sec. 3.359(b)(1)(F).) 377-13 Sec. 58.262. EXPANDED INTERCONNECTION. (a) On request of 377-14 an entity described by Section 58.253(a), an electing company shall 377-15 provide to the entity expanded interconnection (virtual 377-16 colocation). 377-17 (b) The company shall provide expanded interconnection: 377-18 (1) in accordance with commission rules adopted under 377-19 Subchapter H, Chapter 60; and 377-20 (2) at 105 percent of long run incremental cost, 377-21 including installation. 377-22 (c) An entity described by Section 58.253(a) is not required 377-23 to qualify for expanded interconnection if expanded interconnection 377-24 is ordered by the commission. (V.A.C.S. Art. 1446c-0, 377-25 Sec. 3.359(b)(1)(G).) 377-26 Sec. 58.263. INTERNET ACCESS. (a) This section applies 377-27 only to an educational institution or library in an exchange of an 378-1 electing company serving more than five million access lines in 378-2 which toll-free access to the Internet is not available. 378-3 (b) On request of the educational institution or library, 378-4 the electing company shall make available a toll-free connection or 378-5 toll-free dialing arrangement that the institution or library may 378-6 use to obtain access to the Internet in an exchange in which 378-7 toll-free access to the Internet is available. 378-8 (c) The electing company shall provide the connection or 378-9 dialing arrangement at no charge to the educational institution or 378-10 library until Internet access becomes available in the exchange of 378-11 the requesting educational institution or library. 378-12 (d) The electing company is not required to arrange for 378-13 Internet access or to pay Internet charges for the requesting 378-14 educational institution or library. (V.A.C.S. Art. 1446c-0, Sec. 378-15 3.359(b)(5).) 378-16 Sec. 58.264. COMPLAINTS LIMITED. (a) Notwithstanding any 378-17 other provision of this title, an electing company is subject to a 378-18 complaint under this subchapter only by an entity described by 378-19 Section 58.253(a). 378-20 (b) An entity may only complain that the company provided a 378-21 private network service under this subchapter preferentially to a 378-22 similarly situated customer. (V.A.C.S. Art. 1446c-0, Sec. 378-23 3.359(b)(1)(I).) 378-24 Sec. 58.265. INTERCONNECTION OF NETWORK SERVICES. The 378-25 private network services provided under this subchapter may be 378-26 interconnected with other similar networks for distance learning, 378-27 telemedicine, and information-sharing purposes. (V.A.C.S. 379-1 Art. 1446c-0, Sec. 3.359(c).) 379-2 Sec. 58.266. SHARING OR RESALE OF NETWORK SERVICES. (a) A 379-3 private network service may be used by and shared among the 379-4 entities described by Section 58.253(a) but may not be otherwise 379-5 shared or resold to other customers. 379-6 (b) A service provided under this subchapter may not be 379-7 required to be resold to another customer at a rate provided by 379-8 this subchapter. 379-9 (c) This section does not prohibit an otherwise permitted 379-10 resale of another service that an electing company may offer 379-11 through the use of the same facilities used to provide a private 379-12 network service offered under this subchapter. (V.A.C.S. 379-13 Art. 1446c-0, Sec. 3.359(d).) 379-14 Sec. 58.267. IMPLEMENTATION COSTS; INCREASE IN RATES AND 379-15 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 379-16 of implementing this subchapter in determining whether an electing 379-17 company is entitled to: 379-18 (1) a rate increase under this chapter; or 379-19 (2) increased universal service funds under Subchapter 379-20 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.359(g).) 379-21 CHAPTER 59. INFRASTRUCTURE PLAN 379-22 SUBCHAPTER A. GENERAL PROVISIONS 379-23 Sec. 59.001. POLICY 379-24 Sec. 59.002. DEFINITIONS 379-25 (Sections 59.003-59.020 reserved for expansion) 379-26 SUBCHAPTER B. INFRASTRUCTURE INCENTIVES 379-27 Sec. 59.021. ELECTION 380-1 Sec. 59.022. WITHDRAWAL OF ELECTION 380-2 Sec. 59.023. ELECTION UNDER CHAPTER 58 380-3 Sec. 59.024. RATE CHANGES 380-4 Sec. 59.025. SWITCHED ACCESS RATES 380-5 Sec. 59.026. COMPLAINT OR HEARING 380-6 Sec. 59.027. CONSUMER COMPLAINTS REGARDING TARIFFS 380-7 Sec. 59.028. CONSUMER COMPLAINTS REGARDING SERVICES; ENFORCEMENT 380-8 OF STANDARDS 380-9 Sec. 59.029. INVESTMENT LIMITATION ON SERVICE STANDARDS 380-10 (Sections 59.030-59.050 reserved for expansion) 380-11 SUBCHAPTER C. INFRASTRUCTURE COMMITMENT AND GOALS 380-12 Sec. 59.051. INFRASTRUCTURE COMMITMENT 380-13 Sec. 59.052. INFRASTRUCTURE GOALS 380-14 Sec. 59.053. WAIVER OF INFRASTRUCTURE REQUIREMENTS 380-15 Sec. 59.054. PROGRESS REPORT 380-16 Sec. 59.055. IMPLEMENTATION COSTS; INCREASE IN RATES AND 380-17 UNIVERSAL SERVICE FUNDS 380-18 (Sections 59.056-59.070 reserved for expansion) 380-19 SUBCHAPTER D. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 380-20 Sec. 59.071. DEFINITIONS 380-21 Sec. 59.072. PRIVATE NETWORK SERVICES FOR CERTAIN 380-22 ENTITIES 380-23 Sec. 59.073. INVESTMENT PRIORITIES 380-24 Sec. 59.074. CONTRACTS FOR PRIVATE NETWORK SERVICES 380-25 Sec. 59.075. PREFERRED RATE TREATMENT WARRANTED 380-26 Sec. 59.076. ELECTION OF RATE TREATMENT 380-27 Sec. 59.077. PRIVATE NETWORK SERVICES RATES AND TARIFFS 381-1 Sec. 59.078. PRIVATE LINE OR SPECIAL ACCESS RATES 381-2 Sec. 59.079. COMPLAINTS LIMITED 381-3 Sec. 59.080. INTERCONNECTION OF NETWORK SERVICES 381-4 Sec. 59.081. SHARING OR RESALE OF NETWORK SERVICES 381-5 Sec. 59.082. IMPLEMENTATION COSTS; INCREASE IN RATES AND 381-6 UNIVERSAL SERVICE FUNDS 381-7 CHAPTER 59. INFRASTRUCTURE PLAN 381-8 SUBCHAPTER A. GENERAL PROVISIONS 381-9 Sec. 59.001. POLICY. It is the policy of this state that an 381-10 incumbent local exchange company that does not elect to be 381-11 regulated under Chapter 58 should have incentives to deploy 381-12 infrastructure that will benefit the residents of this state while 381-13 maintaining reasonable local rates and universal service. 381-14 (V.A.C.S. Art. 1446c-0, Sec. 3.401.) 381-15 Sec. 59.002. DEFINITIONS. In this chapter: 381-16 (1) "Electing company" means an incumbent local 381-17 exchange company that elects for an infrastructure commitment and 381-18 corresponding regulation under this chapter. 381-19 (2) "Election date" means the date on which the 381-20 commission receives notice of election under Subchapter B. 381-21 (V.A.C.S. Art. 1446c-0, Sec. 3.402(h); New.) 381-22 (Sections 59.003-59.020 reserved for expansion) 381-23 SUBCHAPTER B. INFRASTRUCTURE INCENTIVES 381-24 Sec. 59.021. ELECTION. (a) An incumbent local exchange 381-25 company may elect to make an infrastructure commitment and to be 381-26 subject to corresponding regulation under this chapter if the 381-27 company: 382-1 (1) serves less than five percent of the access lines 382-2 in this state; and 382-3 (2) has not elected incentive regulation under Chapter 382-4 58. 382-5 (b) A company makes the election by notifying the commission 382-6 in writing of the company's election. (V.A.C.S. Art. 1446c-0, Sec. 382-7 3.402(a).) 382-8 Sec. 59.022. WITHDRAWAL OF ELECTION. (a) The commission 382-9 may allow an electing company to withdraw the company's election 382-10 under this chapter: 382-11 (1) on application by the company; and 382-12 (2) only for good cause. 382-13 (b) In this section, "good cause" includes only matters 382-14 beyond the control of the company. (V.A.C.S. Art. 1446c-0, Sec. 382-15 3.402(e).) 382-16 Sec. 59.023. ELECTION UNDER CHAPTER 58. (a) This chapter 382-17 does not prohibit a company electing under this chapter from 382-18 electing incentive regulation under Chapter 58. 382-19 (b) If a company makes an election under Chapter 58, the 382-20 infrastructure commitment made under this chapter offsets the 382-21 infrastructure commitment required in connection with the Chapter 382-22 58 election. (V.A.C.S. Art. 1446c-0, Sec. 3.402(f).) 382-23 Sec. 59.024. RATE CHANGES. (a) Except for the charges 382-24 permitted under Subchapter C, Chapter 55, Subchapter B, Chapter 56, 382-25 and Section 55.024, an electing company may not, on or before the 382-26 sixth anniversary of its election date, increase a rate previously 382-27 established for that company under this title unless the commission 383-1 approves the proposed change as authorized under Subsection (c) or 383-2 (d). 383-3 (b) For purposes of Subsection (a), the company's previously 383-4 established rates are the rates charged by the company on its 383-5 election date without regard to a proceeding pending under: 383-6 (1) Section 15.001; 383-7 (2) Subchapter D, Chapter 53; or 383-8 (3) Subchapter G, Chapter 2001, Government Code. 383-9 (c) The commission, on motion of the electing company or on 383-10 its own motion, shall adjust prices for services to reflect changes 383-11 in Federal Communications Commission separations that affect 383-12 intrastate net income by at least 10 percent. 383-13 (d) The commission, on request of the electing company, 383-14 shall allow a rate group reclassification that results from access 383-15 line growth. 383-16 (e) Section 58.059 applies to a rate change under this 383-17 section. (V.A.C.S. Art. 1446c-0, Secs. 3.402(b), (c), (g) (part).) 383-18 Sec. 59.025. SWITCHED ACCESS RATES. Notwithstanding any 383-19 other provision of this title, the commission may not reduce an 383-20 electing company's rates for switched access services before the 383-21 expiration of the six-year period prescribed by Section 59.024. 383-22 (V.A.C.S. Art. 1446c-0, Sec. 3.402(g) (part).) 383-23 Sec. 59.026. COMPLAINT OR HEARING. (a) On or before the 383-24 sixth anniversary of the company's election date, an electing 383-25 company is not, under any circumstances, subject to: 383-26 (1) a complaint or hearing regarding the 383-27 reasonableness of the company's: 384-1 (A) rates; 384-2 (B) overall revenues; 384-3 (C) return on invested capital; or 384-4 (D) net income; or 384-5 (2) a complaint that a rate is excessive. 384-6 (b) Subsection (a) applies only to a company that is in 384-7 compliance with the company's infrastructure commitment under this 384-8 chapter. 384-9 (c) This section does not prohibit a complaint, hearing, or 384-10 determination on an electing company's implementation of a 384-11 competitive safeguard required by Chapter 60. (V.A.C.S. 384-12 Art. 1446c-0, Sec. 3.402(d) (part).) 384-13 Sec. 59.027. CONSUMER COMPLAINTS REGARDING TARIFFS. (a) 384-14 This chapter does not restrict: 384-15 (1) a consumer's right to complain to the commission 384-16 about the application of an ambiguous tariff; or 384-17 (2) the commission's right to determine: 384-18 (A) the proper application of that tariff; or 384-19 (B) the proper tariff rate if that tariff does 384-20 not apply. 384-21 (b) This section does not permit the commission to: 384-22 (1) lower a tariff rate except as specifically 384-23 provided by this title; 384-24 (2) change the commission's interpretation of a 384-25 tariff; or 384-26 (3) extend the application of a tariff to a new class 384-27 of customers. (V.A.C.S. Art. 1446c-0, Sec. 3.402(d) (part).) 385-1 Sec. 59.028. CONSUMER COMPLAINTS REGARDING SERVICES; 385-2 ENFORCEMENT OF STANDARDS. This chapter does not restrict: 385-3 (1) a consumer's right to complain to the commission 385-4 about quality of service; or 385-5 (2) the commission's right to enforce a quality of 385-6 service standard. (V.A.C.S. Art. 1446c-0, Sec. 3.402(d) (part).) 385-7 Sec. 59.029. INVESTMENT LIMITATION ON SERVICE STANDARDS. 385-8 (a) The commission may not raise a service standard applicable to 385-9 the provision of local exchange telephone service by an electing 385-10 company if the increased investment required to comply with the 385-11 raised standard in any year exceeds 10 percent of the company's 385-12 average annual intrastate additions in capital investment for the 385-13 most recent five-year period. 385-14 (b) In computing the average under Subsection (a), the 385-15 electing company shall exclude: 385-16 (1) extraordinary investments made during the 385-17 five-year period; and 385-18 (2) investments required by Section 59.052. (V.A.C.S. 385-19 Art. 1446c-0, Secs. 3.402(d) (part), 3.403(b)(6).) 385-20 (Sections 59.030-59.050 reserved for expansion) 385-21 SUBCHAPTER C. INFRASTRUCTURE COMMITMENT AND GOALS 385-22 Sec. 59.051. INFRASTRUCTURE COMMITMENT. (a) An electing 385-23 company shall commit to make in this state, during the six years 385-24 after the election date, the telecommunications infrastructure 385-25 investment prescribed by this chapter. 385-26 (b) The company shall make the commitment to the governor 385-27 and the commission in writing. (V.A.C.S. Art. 1446c-0, Sec. 386-1 3.403(a).) 386-2 Sec. 59.052. INFRASTRUCTURE GOALS. (a) The commission 386-3 shall ensure that each electing company achieves the infrastructure 386-4 goals described by this section. 386-5 (b) Each new central office switch installed for an electing 386-6 company in this state after September 1, 1995, must be digital. 386-7 (c) An electing company shall make available to each 386-8 customer in the company's territory access to end-to-end digital 386-9 connectivity. In this subsection, "make available" has the meaning 386-10 assigned by 16 T.A.C. Section 23.69. 386-11 (d) In each electing company's territory, 50 percent of the 386-12 local exchange access lines must be served by a digital central 386-13 office switch. 386-14 (e) An electing company's public switched network backbone 386-15 interoffice facilities must employ broadband facilities that serve 386-16 at least 50 percent of the local exchange access lines and are 386-17 capable of 45 or more megabits a second. The company may employ 386-18 facilities at a lower bandwidth if technology permits the delivery 386-19 of video signal at the lower bandwidth at a quality level 386-20 comparable to a television broadcast signal. The requirements of 386-21 this subsection do not apply to local loop facilities. 386-22 (f) An electing company shall install Common Channel 386-23 Signaling 7 capability in each access tandem office. 386-24 (g) The infrastructure goals specified by Subsections 386-25 (c)-(f) must be achieved not later than January 1, 2000. (V.A.C.S. 386-26 Art. 1446c-0, Secs. 3.403(b)(1), (2), (3), (4), (5).) 386-27 Sec. 59.053. WAIVER OF INFRASTRUCTURE REQUIREMENTS. (a) 387-1 For an electing company that serves fewer than one million lines, 387-2 the commission may waive a requirement prescribed by Section 59.052 387-3 if the company demonstrates that the investment is not viable 387-4 economically. 387-5 (b) Before granting a waiver under Subsection (a), the 387-6 commission must consider the public benefits that would result from 387-7 compliance with the requirement. (V.A.C.S. Art. 1446c-0, Sec. 387-8 3.403(d).) 387-9 Sec. 59.054. PROGRESS REPORT. (a) On each anniversary of 387-10 the company's election date, an electing company shall file with 387-11 the commission a report on the company's progress on its 387-12 infrastructure commitment. 387-13 (b) The report must include a statement of: 387-14 (1) the institutions requesting service under 387-15 Subchapter D; 387-16 (2) the institutions served under Subchapter D; 387-17 (3) the investments and expenses for the previous 387-18 period and the total investments and expenses for all periods; and 387-19 (4) other information the commission considers 387-20 necessary. (V.A.C.S. Art. 1446c-0, Sec. 3.403(g).) 387-21 Sec. 59.055. IMPLEMENTATION COSTS; INCREASE IN RATES AND 387-22 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 387-23 of implementing Section 59.052 in determining whether an electing 387-24 company is entitled to: 387-25 (1) a rate increase under this chapter; or 387-26 (2) increased universal service funds under Subchapter 387-27 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.403(e) (part).) 388-1 (Sections 59.056-59.070 reserved for expansion) 388-2 SUBCHAPTER D. INFRASTRUCTURE COMMITMENT TO CERTAIN ENTITIES 388-3 Sec. 59.071. DEFINITIONS. In this subchapter: 388-4 (1) "Educational institution" has the meaning assigned 388-5 by Section 57.021. 388-6 (2) "Library" has the meaning assigned by Section 388-7 57.042. 388-8 (3) "Private network services" means 388-9 telecommunications services provided to an entity described by 388-10 Section 59.072(a), including broadband services, customized 388-11 services, and packaged network services. 388-12 (4) "Telemedicine center" means a facility that is 388-13 equipped to transmit, by video or data service, medical information 388-14 for the diagnosis or treatment of illness or disease and that is: 388-15 (A) owned or operated by a public or 388-16 not-for-profit hospital; or 388-17 (B) owned by a state-licensed health care 388-18 practitioner and operated on a nonprofit basis. (V.A.C.S. 388-19 Art. 1446c-0, Secs. 3.403(f)(1) (part), (2); New.) 388-20 Sec. 59.072. PRIVATE NETWORK SERVICES FOR CERTAIN ENTITIES. 388-21 (a) On customer request, an electing company shall provide private 388-22 network services to: 388-23 (1) an educational institution; 388-24 (2) a library; 388-25 (3) a telemedicine center; or 388-26 (4) a legally constituted consortium or group of 388-27 entities listed in this subsection. 389-1 (b) Except as provided by Section 59.081, the electing 389-2 company shall provide the private network services for the private 389-3 and sole use of the receiving entity. However, the company may 389-4 provide the services with a facility that is used to provide 389-5 another service to another customer. 389-6 (c) The customers listed in Subsection (a) are a special 389-7 class of customers for purposes of the private network for distance 389-8 learning, telemedicine, and information-sharing purposes. 389-9 (V.A.C.S. Art. 1446c-0, Secs. 3.403(c)(1), (12), (f)(1) (part).) 389-10 Sec. 59.073. INVESTMENT PRIORITIES. An electing company 389-11 shall give investment priority to serving: 389-12 (1) rural areas; 389-13 (2) areas designated as critically underserved 389-14 medically or educationally; and 389-15 (3) educational institutions with high percentages of 389-16 economically disadvantaged students. (V.A.C.S. Art. 1446c-0, Sec. 389-17 3.403(c)(2).) 389-18 Sec. 59.074. CONTRACTS FOR PRIVATE NETWORK SERVICES. (a) 389-19 An electing company shall provide a private network service under a 389-20 customer-specific contract. 389-21 (b) An electing company shall offer private network service 389-22 contracts under this subchapter at 110 percent of the long run 389-23 incremental cost of providing the private network service, 389-24 including installation costs. 389-25 (c) Each contract shall be filed with the commission. 389-26 Commission approval of a contract is not required. (V.A.C.S. 389-27 Art. 1446c-0, Secs. 3.403(c)(3), (4), (5).) 390-1 Sec. 59.075. PREFERRED RATE TREATMENT WARRANTED. The 390-2 classes of customers described by Section 59.072(a) warrant 390-3 preferred rate treatment. However, a rate charged for a service 390-4 must cover the service's long run incremental cost. (V.A.C.S. 390-5 Art. 1446c-0, Sec. 3.403(c)(6).) 390-6 Sec. 59.076. ELECTION OF RATE TREATMENT. An educational 390-7 institution or a library may elect the rate treatment provided by 390-8 this subchapter or the discount provided by Subchapter B, Chapter 390-9 57. (V.A.C.S. Art. 1446c-0, Sec. 3.403(c)(9).) 390-10 Sec. 59.077. PRIVATE NETWORK SERVICES RATES AND TARIFFS. 390-11 (a) Notwithstanding the pricing flexibility authorized by this 390-12 subtitle, an electing company's rates for private network services 390-13 may not be increased on or before the sixth anniversary of the 390-14 company's election date. 390-15 (b) An electing company may not assess an entity described 390-16 by Section 59.072(a) a tariffed special construction or 390-17 installation charge unless the company and the entity agree on the 390-18 assessment. (V.A.C.S. Art. 1446c-0, Secs. 3.403(c)(8), (10).) 390-19 Sec. 59.078. PRIVATE LINE OR SPECIAL ACCESS RATES. (a) On 390-20 request by an educational institution or a library, an electing 390-21 company shall provide 1.544 megabits a second private line or 390-22 special access service at 110 percent of the service's long run 390-23 incremental cost, including installation costs. 390-24 (b) The rate provided by Subsection (a) is in lieu of the 390-25 discount provided by Subchapter B, Chapter 57. (V.A.C.S. 390-26 Art. 1446c-0, Sec. 3.403(c)(11).) 390-27 Sec. 59.079. COMPLAINTS LIMITED. Notwithstanding any other 391-1 provision of this title, an electing company is subject to a 391-2 complaint under Subchapter C or this subchapter only by an entity 391-3 described by Section 59.072(a). (V.A.C.S. Art. 1446c-0, Sec. 391-4 3.403(c)(7).) 391-5 Sec. 59.080. INTERCONNECTION OF NETWORK SERVICES. The 391-6 private network services provided under this subchapter may be 391-7 interconnected with other similar networks for distance learning, 391-8 telemedicine, and information-sharing purposes. (V.A.C.S. 391-9 Art. 1446c-0, Sec. 3.403(c)(13).) 391-10 Sec. 59.081. SHARING OR RESALE OF NETWORK SERVICES. (a) A 391-11 private network service may be used and shared among the entities 391-12 described by Section 59.072(a) but may not be otherwise shared or 391-13 resold to other customers. 391-14 (b) A service provided under this subchapter may not be 391-15 required to be resold to other customers at a rate provided by this 391-16 subchapter. 391-17 (c) This section does not prohibit an otherwise permitted 391-18 resale of another service that an electing company may offer 391-19 through the use of the same facilities used to provide a private 391-20 network service offered under this subchapter. (V.A.C.S. 391-21 Art. 1446c-0, Sec. 3.403(c)(14).) 391-22 Sec. 59.082. IMPLEMENTATION COSTS; INCREASE IN RATES AND 391-23 UNIVERSAL SERVICE FUNDS. The commission may not consider the cost 391-24 of implementing this subchapter in determining whether an electing 391-25 company is entitled to: 391-26 (1) a rate increase under this chapter; or 391-27 (2) increased universal service funds under Subchapter 392-1 B, Chapter 56. (V.A.C.S. Art. 1446c-0, Sec. 3.403(e) (part).) 392-2 CHAPTER 60. COMPETITIVE SAFEGUARDS 392-3 SUBCHAPTER A. GENERAL PROVISIONS 392-4 Sec. 60.001. FAIR COMPETITION 392-5 Sec. 60.002. EXCLUSIVE JURISDICTION; ENFORCEMENT 392-6 Sec. 60.003. COMMISSION AUTHORITY 392-7 Sec. 60.004. APPLICABILITY TO CERTAIN SMALLER INCUMBENT LOCAL 392-8 EXCHANGE COMPANIES; RULES 392-9 Sec. 60.0041. APPLICABILITY TO CERTAIN SMALLER INCUMBENT LOCAL 392-10 EXCHANGE COMPANIES 392-11 Sec. 60.005. APPLICABILITY TO CERTAIN LARGER INCUMBENT LOCAL 392-12 EXCHANGE COMPANIES; RULES 392-13 Sec. 60.006. BULLETIN BOARD SYSTEMS UNAFFECTED 392-14 (Sections 60.007-60.020 reserved for expansion) 392-15 SUBCHAPTER B. UNBUNDLING 392-16 Sec. 60.021. MINIMUM UNBUNDLING REQUIREMENT 392-17 Sec. 60.022. COMMISSION UNBUNDLING ORDERS 392-18 Sec. 60.023. ASSIGNMENT OF UNBUNDLED COMPONENT TO CATEGORY 392-19 OF SERVICE 392-20 (Sections 60.024-60.040 reserved for expansion) 392-21 SUBCHAPTER C. RESALE 392-22 Sec. 60.041. LOOP RESALE TARIFF 392-23 Sec. 60.042. PROHIBITED RESALE OR SHARING 392-24 Sec. 60.043. RESALE OBLIGATION 392-25 Sec. 60.044. ELIMINATION OF RESALE PROHIBITIONS 392-26 Sec. 60.045. RESALE OR SHARING ARRANGEMENTS UNAFFECTED 392-27 (Sections 60.046-60.060 reserved for expansion) 393-1 SUBCHAPTER D. IMPUTATION 393-2 Sec. 60.061. RULES 393-3 Sec. 60.062. EXCEPTION FOR CAPPED PRICE 393-4 Sec. 60.063. IMPUTATION FOR SWITCHED ACCESS 393-5 Sec. 60.064. RECOVERY OF COST OF PROVIDING SERVICE 393-6 Sec. 60.065. WAIVERS 393-7 (Sections 60.066-60.080 reserved for expansion) 393-8 SUBCHAPTER E. TELECOMMUNICATIONS NUMBER PORTABILITY 393-9 Sec. 60.081. DEFINITION 393-10 Sec. 60.082. PORTABILITY GUIDELINES 393-11 Sec. 60.083. INTERIM RETENTION OF CONSUMER NUMBERS 393-12 Sec. 60.084. RATES FOR INTERIM PORTABILITY MEASURES 393-13 (Sections 60.085-60.100 reserved for expansion) 393-14 SUBCHAPTER F. PRICING 393-15 Sec. 60.101. PRICING RULE 393-16 Sec. 60.102. ADOPTION OF COST STUDIES BY CERTAIN COMPANIES 393-17 (Sections 60.103-60.120 reserved for expansion) 393-18 SUBCHAPTER G. INTERCONNECTION 393-19 Sec. 60.121. DEFINITION 393-20 Sec. 60.122. EXCLUSIVE JURISDICTION 393-21 Sec. 60.123. INAPPLICABILITY OF SUBCHAPTER 393-22 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED 393-23 Sec. 60.125. DETERMINATION OF INTERCONNECTION RATES 393-24 Sec. 60.126. INTERCONNECTIVITY NEGOTIATIONS; DISPUTE 393-25 RESOLUTION 393-26 Sec. 60.127. ADOPTION OF APPROVED INTERCONNECTION RATES 393-27 Sec. 60.128. USE OF RATES RESTRICTED 394-1 (Sections 60.129-60.140 reserved for expansion) 394-2 SUBCHAPTER H. EXPANDED INTERCONNECTION 394-3 Sec. 60.141. EXPANDED INTERCONNECTION RULES 394-4 (Sections 60.142-60.160 reserved for expansion) 394-5 SUBCHAPTER I. LOCAL EXCHANGE COMPANY REQUIREMENTS 394-6 Sec. 60.161. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS 394-7 Sec. 60.162. EXPANDED INTERCONNECTION 394-8 Sec. 60.163. INFRASTRUCTURE SHARING 394-9 CHAPTER 60. COMPETITIVE SAFEGUARDS 394-10 SUBCHAPTER A. GENERAL PROVISIONS 394-11 Sec. 60.001. FAIR COMPETITION. To the extent necessary to 394-12 ensure that competition in telecommunications is fair to each 394-13 participant and to accelerate the improvement of telecommunications 394-14 in this state, the commission shall ensure that the rates and rules 394-15 of an incumbent local exchange company: 394-16 (1) are not unreasonably preferential, prejudicial, or 394-17 discriminatory; and 394-18 (2) are applied equitably and consistently. (V.A.C.S. 394-19 Art. 1446c-0, Sec. 3.451(a).) 394-20 Sec. 60.002. EXCLUSIVE JURISDICTION; ENFORCEMENT. (a) The 394-21 commission has exclusive jurisdiction to implement competitive 394-22 safeguards. 394-23 (b) Section 58.025 does not prevent the commission from 394-24 enforcing this chapter. (V.A.C.S. Art. 1446c-0, Secs. 3.451(b), 394-25 (c).) 394-26 Sec. 60.003. COMMISSION AUTHORITY. (a) The commission may: 394-27 (1) establish procedures with respect to a policy 395-1 stated in this subchapter or Subchapters B-H; and 395-2 (2) resolve a dispute that arises under a policy 395-3 described by Subdivision (1). 395-4 (b) The commission shall adopt procedures for a proceeding 395-5 under Subchapters B and C. A procedure may: 395-6 (1) limit discovery; and 395-7 (2) for purposes of cross-examination align any party, 395-8 other than the office, with another party that has a similar 395-9 position. 395-10 (c) In adopting a procedure under this section and in 395-11 resolving a dispute, the commission shall consider the action's 395-12 effect on: 395-13 (1) consumers; 395-14 (2) competitors; and 395-15 (3) the incumbent local exchange company. 395-16 (d) The commission, by order or rule, may not implement a 395-17 requirement that is contrary to a federal law or rule. (V.A.C.S. 395-18 Art. 1446c-0, Sec. 3.460.) 395-19 Sec. 60.004. APPLICABILITY TO CERTAIN SMALLER INCUMBENT 395-20 LOCAL EXCHANGE COMPANIES; RULES. (a) Subchapters B, C, and H may 395-21 be applied to an incumbent local exchange company that serves fewer 395-22 than 31,000 access lines only on a bona fide request from a 395-23 certificated telecommunications utility. 395-24 (b) In applying the rules adopted under Subchapters B, C, 395-25 and H to a company described by Subsection (a), the commission may 395-26 modify the rules in the public interest. 395-27 (c) This section takes effect September 1, 1998. (V.A.C.S. 396-1 Art. 1446c-0, Sec. 3.461 (part).) 396-2 Sec. 60.0041. APPLICABILITY TO CERTAIN SMALLER INCUMBENT 396-3 LOCAL EXCHANGE COMPANIES. (a) Subchapters B, C, E, G, and H do 396-4 not apply to an incumbent local exchange company that serves fewer 396-5 than 31,000 access lines. 396-6 (b) This section expires September 1, 1998. (V.A.C.S. 396-7 Art. 1446c-0, Sec. 3.461 (part).) 396-8 Sec. 60.005. APPLICABILITY TO CERTAIN LARGER INCUMBENT LOCAL 396-9 EXCHANGE COMPANIES; RULES. (a) Subchapters B, D, and F may be 396-10 applied to an incumbent local exchange company that, as of 396-11 September 1, 1995, has 31,000 or more access lines in this state 396-12 but fewer than 1,000,000 access lines in this state only on a bona 396-13 fide request from a holder of a certificate of operating authority 396-14 or a service provider certificate of operating authority. 396-15 (b) In applying the rules adopted under Subchapters B, D, 396-16 and F to a company described by Subsection (a), the commission may 396-17 modify the rules in the public interest. (V.A.C.S. Art. 1446c-0, 396-18 Sec. 3.462.) 396-19 Sec. 60.006. BULLETIN BOARD SYSTEMS UNAFFECTED. This 396-20 subtitle does not: 396-21 (1) require the commission to change the rate 396-22 treatment established by the commission in Docket No. 8387 for a 396-23 bulletin board system in a residence; 396-24 (2) regulate or tax a bulletin board system or 396-25 Internet service provider that provides only enhanced or 396-26 information services and that does not provide a telecommunications 396-27 service; or 397-1 (3) require a change in a rate charged to an entity 397-2 described by Subdivision (2) under a tariff in effect on September 397-3 1, 1995. (V.A.C.S. Art. 1446c-0, Sec. 3.459(c).) 397-4 (Sections 60.007-60.020 reserved for expansion) 397-5 SUBCHAPTER B. UNBUNDLING 397-6 Sec. 60.021. MINIMUM UNBUNDLING REQUIREMENT. At a minimum, 397-7 an incumbent local exchange company shall unbundle its network to 397-8 the extent the Federal Communications Commission orders. (V.A.C.S. 397-9 Art. 1446c-0, Sec. 3.452(a).) 397-10 Sec. 60.022. COMMISSION UNBUNDLING ORDERS. (a) The 397-11 commission may adopt an order relating to the issue of unbundling 397-12 of local exchange company services in addition to the unbundling 397-13 required by Section 60.021. 397-14 (b) Before ordering further unbundling, the commission must 397-15 consider the public interest and competitive merits of further 397-16 unbundling. 397-17 (c) On the request of a party, the commission shall proceed 397-18 by evidentiary hearing. If a request for a hearing is not made, 397-19 the commission may proceed by rulemaking. (V.A.C.S. Art. 1446c-0, 397-20 Secs. 3.452(b), (c).) 397-21 Sec. 60.023. ASSIGNMENT OF UNBUNDLED COMPONENT TO CATEGORY 397-22 OF SERVICE. The commission may assign an unbundled component to 397-23 the appropriate category of services under Chapter 58 according to 397-24 the purposes and intents of the categories. (V.A.C.S. 397-25 Art. 1446c-0, Sec. 3.452(d).) 397-26 (Sections 60.024-60.040 reserved for expansion) 398-1 SUBCHAPTER C. RESALE 398-2 Sec. 60.041. LOOP RESALE TARIFF. (a) An incumbent local 398-3 exchange company that on September 1, 1995, serves 1,000,000 or 398-4 more access lines or that on or before September 1, 1995, elects 398-5 regulation under Chapter 58 shall file a usage sensitive loop 398-6 resale tariff. 398-7 (b) An incumbent local exchange company shall file a usage 398-8 sensitive loop resale tariff not later than the 60th day after the 398-9 date a certificate of operating authority or a service provider 398-10 certificate of operating authority is granted under Chapter 54 if 398-11 the company: 398-12 (1) serves fewer than 1,000,000 access lines; and 398-13 (2) is not an electing company under Chapter 58. 398-14 (c) The commission shall conduct an appropriate proceeding 398-15 to determine the rates and terms of the resale tariff not later 398-16 than the 180th day after the date the tariff is filed. 398-17 (d) The commission may not approve a usage sensitive rate 398-18 unless the rate recovers: 398-19 (1) the total long run incremental cost of the loop on 398-20 an unseparated basis; and 398-21 (2) an appropriate contribution to joint and common 398-22 costs. 398-23 (e) Except as provided by Section 60.044, a person may not 398-24 purchase from the resale tariff unless the person is the holder of: 398-25 (1) a certificate of convenience and necessity; 398-26 (2) a certificate of operating authority; or 398-27 (3) a service provider certificate of operating 399-1 authority. 399-2 (f) In this section, "loop resale" means the purchase of the 399-3 local distribution channel or loop facility from the incumbent 399-4 local exchange company to resell to end user customers. (V.A.C.S. 399-5 Art. 1446c-0, Secs. 3.453(a), (b), (c).) 399-6 Sec. 60.042. PROHIBITED RESALE OR SHARING. A provider of 399-7 telecommunications service may not impose a restriction on the 399-8 resale or sharing of a service: 399-9 (1) for which the provider is not a dominant provider; 399-10 or 399-11 (2) entitled to regulatory treatment as a competitive 399-12 service under Subchapter E, Chapter 58, if the provider is a 399-13 company electing regulation under Chapter 58. (V.A.C.S. 399-14 Art. 1446c-0, Sec. 3.453(d).) 399-15 Sec. 60.043. RESALE OBLIGATION. A holder of a certificate 399-16 of operating authority or a service provider certificate of 399-17 operating authority shall permit a local exchange company to resell 399-18 the holder's loop facilities at the holder's regularly published 399-19 rates if the local exchange company: 399-20 (1) does not have loop facilities; and 399-21 (2) has a request for service. (V.A.C.S. 399-22 Art. 1446c-0, Sec. 3.453(e).) 399-23 Sec. 60.044. ELIMINATION OF RESALE PROHIBITIONS. (a) 399-24 Except as provided by Subsections (c) and (d), the commission shall 399-25 eliminate all resale prohibitions in the tariffs of an electing 399-26 company on the: 399-27 (1) completion of the commission's costing and pricing 400-1 rulemaking; 400-2 (2) completion of rate rebalancing of the incumbent 400-3 local exchange company rates under Subchapter F; and 400-4 (3) removal of all prohibitions on an incumbent local 400-5 exchange company's provision of interLATA services. 400-6 (b) Except as provided by Subsections (c) and (d), the 400-7 commission shall eliminate all resale prohibitions in the tariffs 400-8 of an electing company that has 1,000,000 access lines or more on 400-9 removal of all prohibitions on the company's provision of interLATA 400-10 service. 400-11 (c) After the resale prohibitions are eliminated under this 400-12 section: 400-13 (1) the commission shall continue to prohibit the 400-14 resale of local exchange or directory assistance flat rate services 400-15 as a substitute for usage sensitive services; and 400-16 (2) residence service may not be resold to a business 400-17 customer. 400-18 (d) A service or function may be offered for resale only to 400-19 the same class of customer to which the incumbent local exchange 400-20 company sells the service if the commission finds that: 400-21 (1) as a result of the costing and pricing proceeding 400-22 the rate for the service or function will be less than the cost of 400-23 providing the service or function; and 400-24 (2) the difference in rate and cost will not be 400-25 recovered from the universal service fund. (V.A.C.S. 400-26 Art. 1446c-0, Sec. 3.453(f).) 400-27 Sec. 60.045. RESALE OR SHARING ARRANGEMENTS UNAFFECTED. 401-1 This subchapter does not change a resale or sharing arrangement 401-2 permitted in an incumbent local exchange company tariff that: 401-3 (1) existed on September 1, 1995; or 401-4 (2) was filed on or before May 1, 1995, by an 401-5 incumbent local exchange company that serves more than 5,000,000 401-6 access lines in this state. (V.A.C.S. Art. 1446c-0, Sec. 401-7 3.453(g).) 401-8 (Sections 60.046-60.060 reserved for expansion) 401-9 SUBCHAPTER D. IMPUTATION 401-10 Sec. 60.061. RULES. (a) The commission shall adopt rules 401-11 governing imputation of the price of a service. 401-12 (b) Imputation is a regulatory policy the commission shall 401-13 apply to prevent an incumbent local exchange company from selling a 401-14 service or function to another telecommunications utility at a 401-15 price that is higher than the rate the incumbent local exchange 401-16 company implicitly includes in services it provides to the 401-17 company's retail customers. 401-18 (c) The commission may require imputation only of the price 401-19 of a service that is: 401-20 (1) not generally available from a source other than 401-21 the incumbent local exchange company; and 401-22 (2) necessary for the competitor to provide a 401-23 competing service. 401-24 (d) The commission may require imputation only on a 401-25 service-by-service basis and may not require imputation on a 401-26 rate-element-by-element basis. 401-27 (e) For a service for which the commission may require 402-1 imputation under Subsection (c) and that is provided under a 402-2 customer specific contract, the commission: 402-3 (1) may require imputation only on a 402-4 service-by-service basis within the contract; and 402-5 (2) may not require imputation on a 402-6 rate-element-by-element basis. (V.A.C.S. Art. 1446c-0, Secs. 402-7 3.454(a), (b), (c), (f), (g).) 402-8 Sec. 60.062. EXCEPTION FOR CAPPED PRICE. The commission may 402-9 not require imputation of the price to a local exchange telephone 402-10 service while the price is capped under Chapter 58 or 59. 402-11 (V.A.C.S. Art. 1446c-0, Sec. 3.454(d).) 402-12 Sec. 60.063. IMPUTATION FOR SWITCHED ACCESS. The commission 402-13 shall impute the price of switched access service to the price of 402-14 each service for which switched access service is a component until 402-15 switched access service is competitively available. (V.A.C.S. 402-16 Art. 1446c-0, Sec. 3.454(e).) 402-17 Sec. 60.064. RECOVERY OF COST OF PROVIDING SERVICE. (a) An 402-18 incumbent local exchange company shall demonstrate that the price 402-19 it charges for retail service recovers the cost of providing the 402-20 service. 402-21 (b) For purposes of this section, the cost of providing the 402-22 service is the sum of: 402-23 (1) each specifically tariffed premium rate for each 402-24 noncompetitive service or service function, or each element of a 402-25 noncompetitive service or service function, or the functional 402-26 equivalent, that is used to provide the service; 402-27 (2) the total service long run incremental cost of the 403-1 competitive services or service functions that are used; 403-2 (3) each cost, not reflected in Subdivision (1) or 403-3 (2), that is specifically associated with providing the service or 403-4 group of services; and 403-5 (4) each cost or surcharge associated with an explicit 403-6 subsidy applied to all providers of the service to promote 403-7 universal service. (V.A.C.S. Art. 1446c-0, Sec. 3.454(h).) 403-8 Sec. 60.065. WAIVERS. If the commission determines that a 403-9 waiver is in the public interest, the commission may waive an 403-10 imputation requirement for a public interest service such as: 403-11 (1) 9-1-1 service; or 403-12 (2) dual party relay service. (V.A.C.S. Art. 1446c-0, 403-13 Sec. 3.454(i).) 403-14 (Sections 60.066-60.080 reserved for expansion) 403-15 SUBCHAPTER E. TELECOMMUNICATIONS NUMBER PORTABILITY 403-16 Sec. 60.081. DEFINITION. In this subchapter, 403-17 "telecommunications number portability" means the ability of a 403-18 telecommunications services user who is changing from one 403-19 telecommunications service provider to another provider to retain a 403-20 telephone number, to the extent technically feasible, without 403-21 impairing the quality, reliability, or convenience of service. 403-22 (V.A.C.S. Art. 1446c-0, Sec. 3.455(b).) 403-23 Sec. 60.082. PORTABILITY GUIDELINES. (a) Because a uniform 403-24 national number plan is valuable and necessary to this state, the 403-25 commission by rule shall adopt guidelines governing 403-26 telecommunications number portability and the assignment of 403-27 telephone numbers in a competitively neutral manner. 404-1 (b) The rules may not be inconsistent with the rules and 404-2 regulations of the Federal Communications Commission regarding 404-3 telecommunications number portability. (V.A.C.S. Art. 1446c-0, 404-4 Sec. 3.455(a).) 404-5 Sec. 60.083. INTERIM RETENTION OF CONSUMER NUMBERS. As an 404-6 interim measure, the commission shall adopt reasonable mechanisms, 404-7 including, at minimum, the use of call forwarding and direct inward 404-8 dialing, to allow consumers to retain their telephone numbers. 404-9 (V.A.C.S. Art. 1446c-0, Sec. 3.455(c) (part).) 404-10 Sec. 60.084. RATES FOR INTERIM PORTABILITY MEASURES. (a) 404-11 An incumbent local exchange company with 1,000,000 or more access 404-12 lines shall file tariffs, and the commission shall determine 404-13 reasonable rates to be charged by the company for: 404-14 (1) call forwarding; 404-15 (2) direct inward dialing; and 404-16 (3) any other mechanism the commission determines 404-17 should be used as an interim telecommunications number portability 404-18 measure by a new entrant. 404-19 (b) An incumbent local exchange company with fewer than 404-20 1,000,000 access lines that serves an area in which a certificate 404-21 of operating authority or a service provider certificate of 404-22 operating authority has been granted shall, not later than the 60th 404-23 day after the date of a bona fide request, file tariffs in 404-24 accordance with Subsection (a). 404-25 (c) Not later than the 60th day after the date a company 404-26 files tariffs under Subsection (b), the commission shall determine 404-27 reasonable rates in accordance with Subsection (a). (V.A.C.S. 405-1 Art. 1446c-0, Sec. 3.455(c) (part).) 405-2 (Sections 60.085-60.100 reserved for expansion) 405-3 SUBCHAPTER F. PRICING 405-4 Sec. 60.101. PRICING RULE. (a) The commission shall adopt 405-5 a pricing rule. 405-6 (b) In adopting the pricing rule, the commission shall: 405-7 (1) ensure that each price for a monopoly service 405-8 remains affordable; 405-9 (2) ensure that each price for competitive service is 405-10 not: 405-11 (A) unreasonably preferential, prejudicial, or 405-12 discriminatory; 405-13 (B) directly or indirectly subsidized by a 405-14 noncompetitive service; or 405-15 (C) predatory or anticompetitive; and 405-16 (3) require that each service recover the appropriate 405-17 costs, including joint and common costs, of each facility and 405-18 function used to provide the service. (V.A.C.S. Art. 1446c-0, 405-19 Secs. 3.457(a)(1) (part), (b).) 405-20 Sec. 60.102. ADOPTION OF COST STUDIES BY CERTAIN COMPANIES. 405-21 The commission shall allow an incumbent local exchange company that 405-22 is not a Tier 1 local exchange company on September 1, 1995, to 405-23 adopt, at that company's option, the cost studies approved by the 405-24 commission for a Tier 1 local exchange company. (V.A.C.S. 405-25 Art. 1446c-0, Sec. 3.457(c).) 405-26 (Sections 60.103-60.120 reserved for expansion) 406-1 SUBCHAPTER G. INTERCONNECTION 406-2 Sec. 60.121. DEFINITION. In this subchapter, 406-3 "interconnection" means, for calls that originate and terminate in 406-4 this state, the termination of local intraexchange traffic of 406-5 another local exchange company or holder of a service provider 406-6 certificate of operating authority within the local calling area of 406-7 the terminating local exchange company or certificate holder. 406-8 (V.A.C.S. Art. 1446c-0, Sec. 3.458(a) (part).) 406-9 Sec. 60.122. EXCLUSIVE JURISDICTION. The commission has 406-10 exclusive jurisdiction to determine rates and terms for 406-11 interconnection for a holder of a certificate of convenience and 406-12 necessity, a certificate of operating authority, or a service 406-13 provider certificate of operating authority. (V.A.C.S. 406-14 Art. 1446c-0, Sec. 3.458(h).) 406-15 Sec. 60.123. INAPPLICABILITY OF SUBCHAPTER. This subchapter 406-16 does not apply to a rate for the existing termination of cellular 406-17 or interexchange traffic. (V.A.C.S. Art. 1446c-0, Sec. 3.458(a) 406-18 (part).) 406-19 Sec. 60.124. INTEROPERABLE NETWORKS REQUIRED. (a) The 406-20 commission shall require each telecommunications provider to 406-21 maintain interoperable networks. 406-22 (b) The commission may: 406-23 (1) adopt rules, including generic rules that are 406-24 responsive to changes in federal law or a development in the local 406-25 exchange market; and 406-26 (2) set policies governing interconnection 406-27 arrangements. (V.A.C.S. Art. 1446c-0, Secs. 3.458(b) (part), (f).) 407-1 Sec. 60.125. DETERMINATION OF INTERCONNECTION RATES. (a) 407-2 Telecommunications providers shall negotiate network 407-3 interconnectivity, charges, and terms. 407-4 (b) If interconnectivity, charges, and terms are 407-5 successfully negotiated, the commission shall approve the 407-6 interconnection rates. 407-7 (c) If telecommunications providers do not enter into a 407-8 mutually agreed compensation rate under this section, each provider 407-9 shall reciprocally terminate the other provider's traffic at no 407-10 charge for the first nine months after the date the first call is 407-11 terminated between the providers. 407-12 (d) During the nine-month period prescribed by Subsection 407-13 (c), the commission shall complete a proceeding to establish 407-14 reciprocal interconnection rates and terms. The commission shall 407-15 establish reciprocal interconnection rates and terms based solely 407-16 on the commission proceeding. 407-17 (e) In establishing the initial interconnection rate, the 407-18 commission may not require cost studies from the new entrant. 407-19 (f) On or after the third anniversary of the date the first 407-20 call is terminated between the providers, the commission, on 407-21 receipt of a complaint, may require cost studies by a new entrant 407-22 to establish interconnection rates. (V.A.C.S. Art. 1446c-0, Secs. 407-23 3.458(b) (part), (c), (d).) 407-24 Sec. 60.126. INTERCONNECTIVITY NEGOTIATIONS; DISPUTE 407-25 RESOLUTION. The commission may resolve a dispute filed by a party 407-26 to a negotiation under Section 60.125(a). (V.A.C.S. Art. 1446c-0, 407-27 Sec. 3.458(b) (part).) 408-1 Sec. 60.127. ADOPTION OF APPROVED INTERCONNECTION RATES. 408-2 (a) An incumbent local exchange company may adopt the 408-3 interconnection rates the commission approves for a larger 408-4 incumbent local exchange company without additional cost 408-5 justification. 408-6 (b) If an incumbent local exchange company does not adopt 408-7 the interconnection rates of a larger company or negotiates under 408-8 Section 60.125(a), the company is governed by Sections 408-9 60.125(c)-(f). 408-10 (c) If the incumbent local exchange company adopts the 408-11 interconnection rates of another incumbent local exchange company, 408-12 the new entrant may adopt those rates as the new entrant's 408-13 interconnection rates. 408-14 (d) If the incumbent local exchange company elects to file 408-15 its own tariff, the new entrant must also file its own 408-16 interconnection tariff. (V.A.C.S. Art. 1446c-0, Sec. 3.458(e).) 408-17 Sec. 60.128. USE OF RATES RESTRICTED. The commission may 408-18 not use interconnection rates under this subchapter as a basis to 408-19 alter interconnection rates for other services. (V.A.C.S. 408-20 Art. 1446c-0, Sec. 3.458(g).) 408-21 (Sections 60.129-60.140 reserved for expansion) 408-22 SUBCHAPTER H. EXPANDED INTERCONNECTION 408-23 Sec. 60.141. EXPANDED INTERCONNECTION RULES. The commission 408-24 shall adopt rules for expanded interconnection that: 408-25 (1) are consistent with the rules and regulations of 408-26 the Federal Communications Commission relating to expanded 408-27 interconnection; 409-1 (2) treat intrastate private line services as special 409-2 access service; and 409-3 (3) provide that if an incumbent local exchange 409-4 company is required to provide expanded interconnection to another 409-5 local exchange company, the second local exchange company shall in 409-6 a similar manner provide expanded interconnection to the first 409-7 company. (V.A.C.S. Art. 1446c-0, Sec. 3.456(a).) 409-8 (Sections 60.142-60.160 reserved for expansion) 409-9 SUBCHAPTER I. LOCAL EXCHANGE COMPANY REQUIREMENTS 409-10 Sec. 60.161. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS. 409-11 An incumbent local exchange company may not unreasonably: 409-12 (1) discriminate against another provider by refusing 409-13 access to the local exchange; 409-14 (2) refuse or delay an interconnection to another 409-15 provider; 409-16 (3) degrade the quality of access the company provides 409-17 to another provider; 409-18 (4) impair the speed, quality, or efficiency of a line 409-19 used by another provider; 409-20 (5) fail to fully disclose in a timely manner on 409-21 request all available information necessary to design equipment 409-22 that will meet the specifications of the local exchange network; or 409-23 (6) refuse or delay access by a person to another 409-24 provider. (V.A.C.S. Art. 1446c-0, Sec. 3.459(a).) 409-25 Sec. 60.162. EXPANDED INTERCONNECTION. This subchapter does 409-26 not require an incumbent local exchange company to provide expanded 409-27 interconnection as that term is defined by the Federal 410-1 Communications Commission. (V.A.C.S. Art. 1446c-0, Sec. 3.459(b).) 410-2 Sec. 60.163. INFRASTRUCTURE SHARING. (a) The commission 410-3 shall adopt rules that require a local exchange company to share 410-4 public switched network infrastructure and technology with a 410-5 requesting local exchange company that lacks economies of scale or 410-6 scope, to enable the requesting company to provide 410-7 telecommunications services in each geographic area for which the 410-8 requesting company is designated as the sole carrier of last 410-9 resort. 410-10 (b) The rules governing the sharing: 410-11 (1) may not require a local exchange company to make a 410-12 decision that is uneconomic or adverse to the public; 410-13 (2) shall permit, but may not require, joint ownership 410-14 and operation of public switched network infrastructure and 410-15 services by or among the local exchange companies that share 410-16 infrastructure; and 410-17 (3) shall establish conditions that promote 410-18 cooperation between local exchange companies. (V.A.C.S. 410-19 Art. 1446c-0, Sec. 3.463.) 410-20 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 410-21 SUBCHAPTER A. GENERAL PROVISIONS 410-22 Sec. 61.001. DEFINITIONS 410-23 (Sections 61.002-61.020 reserved for expansion) 410-24 SUBCHAPTER B. PROVISION OF INFORMATION TECHNOLOGY SERVICES 410-25 Sec. 61.021. PROVISION OF CERTAIN SERVICES OR PRODUCTS 410-26 PROHIBITED 410-27 Sec. 61.022. PERMISSIBLE SERVICES AND PRODUCTS 411-1 Sec. 61.023. SEPARATE AFFILIATE REQUIREMENTS 411-2 Sec. 61.024. ARM'S-LENGTH TRANSACTIONS 411-3 Sec. 61.025. CONTRACTS AND RECORDS 411-4 Sec. 61.026. JOINT OWNERSHIP OR USE PROHIBITED 411-5 (Sections 61.027-61.040 reserved for expansion) 411-6 SUBCHAPTER C. ADDITIONAL COMPETITIVE SAFEGUARDS 411-7 Sec. 61.041. PROHIBITED DISCRIMINATION 411-8 Sec. 61.042. SUBSIDIZATION OF SERVICES PROHIBITED 411-9 Sec. 61.043. PERMISSIBLE INVESTMENT 411-10 CHAPTER 61. INFORMATION TECHNOLOGY SERVICES 411-11 SUBCHAPTER A. GENERAL PROVISIONS 411-12 Sec. 61.001. DEFINITIONS. In this chapter: 411-13 (1) "Management consulting" means the development, 411-14 refinement, and coordination of a strategy to support a client's 411-15 business direction, positively affect business performance, and 411-16 improve an operating result, in a field such as business planning, 411-17 operations, information technology, marketing, finance, and human 411-18 resources. 411-19 (2) "Process management" means the ongoing 411-20 responsibility for direction and operation of a business process in 411-21 an enterprise in a field such as administration, finance, human 411-22 resources, operations, sales, or marketing. 411-23 (3) "Systems development" means the creation, 411-24 migration, or improvement of a computer system, including hardware 411-25 and software, to: 411-26 (A) meet a specific business need; or 411-27 (B) take advantage of a change in information 412-1 technology. 412-2 (4) "Systems integration" means the acquisition, 412-3 installation, and integration of hardware, software, 412-4 communications, and related support components or services. 412-5 (5) "Systems management" means the ongoing management 412-6 and operation of information technology components, ranging from 412-7 specialized system applications to an enterprise's entire 412-8 information technology function, including related facilities and 412-9 personnel. (V.A.C.S. Art. 1446c-0, Sec. 3.581.) 412-10 (Sections 61.002-61.020 reserved for expansion) 412-11 SUBCHAPTER B. PROVISION OF INFORMATION 412-12 TECHNOLOGY SERVICES 412-13 Sec. 61.021. PROVISION OF CERTAIN SERVICES OR PRODUCTS 412-14 PROHIBITED. (a) A local exchange company that serves more than 412-15 five million access lines in this state may not provide the 412-16 following customized business services or products to a customer 412-17 who has 50 or more access lines in this state: 412-18 (1) management consulting, except for consulting 412-19 related exclusively to telecommunications; 412-20 (2) information technology process or systems 412-21 development; 412-22 (3) information technology process or systems 412-23 integration; or 412-24 (4) information technology process or systems 412-25 management. 412-26 (b) This section does not apply to a service or product 412-27 provided on September 1, 1995. (V.A.C.S. Art. 1446c-0, Sec. 413-1 3.582(a).) 413-2 Sec. 61.022. PERMISSIBLE SERVICES AND PRODUCTS. Section 413-3 61.021 does not prohibit: 413-4 (1) an affiliate of the local exchange company from 413-5 providing a service or product described by that section in 413-6 accordance with this subchapter and Subchapter C; or 413-7 (2) a local exchange company from: 413-8 (A) providing a service or product described by 413-9 Section 61.021 to an affiliate if: 413-10 (i) the company is not providing a service 413-11 or product described by that section to a nonaffiliated third 413-12 party; and 413-13 (ii) there is not an affiliate of the 413-14 company engaged in providing a service or product described by that 413-15 section to a nonaffiliated third party; 413-16 (B) providing mass market and consumer market 413-17 products and services directly to a customer that: 413-18 (i) has fewer than 50 access lines in this 413-19 state; and 413-20 (ii) uses or relies on the use of 413-21 information services, information systems, or information 413-22 technology or processes; 413-23 (C) selling or leasing billing and collection 413-24 services, local area networks, wide area networks, or other 413-25 telecommunications services; or 413-26 (D) providing to itself a service or product 413-27 described by Section 61.021. (V.A.C.S. Art. 1446c-0, Secs. 414-1 3.582(b), (c) (part).) 414-2 Sec. 61.023. SEPARATE AFFILIATE REQUIREMENTS. (a) A local 414-3 exchange company's affiliate that provides a service or product 414-4 described by Section 61.021: 414-5 (1) shall: 414-6 (A) operate independently from the local 414-7 exchange company in providing the service or product; and 414-8 (B) maintain the affiliate's own books of 414-9 accounts; and 414-10 (2) may not have an officer, director, or employee in 414-11 common with the local exchange company. 414-12 (b) Notwithstanding Subsection (a)(2), an officer of a 414-13 corporate parent or holding company may serve as a director of the 414-14 local exchange company and as a director of another subsidiary of 414-15 the parent if the subsidiary existed on September 1, 1995. 414-16 (V.A.C.S. Art. 1446c-0, Sec. 3.583(a) (part).) 414-17 Sec. 61.024. ARM'S-LENGTH TRANSACTIONS. A local exchange 414-18 company and an affiliate shall conduct at arm's length each 414-19 transaction regarding the acquisition from the affiliate of a 414-20 service or product described by Section 61.021. (V.A.C.S. 414-21 Art. 1446c-0, Sec. 3.583(b).) 414-22 Sec. 61.025. CONTRACTS AND RECORDS. (a) A local exchange 414-23 company shall maintain and keep available for inspection by the 414-24 commission copies of each contract or arrangement between the 414-25 company and an affiliate that relates to the company's acquisition 414-26 from the affiliate of a service or product described by Section 414-27 61.021. 415-1 (b) The local exchange company's records must show each cash 415-2 or noncash transaction with the affiliate for the service or 415-3 product, including each payment for a good, service, or property 415-4 right. (V.A.C.S. Art. 1446c-0, Sec. 3.583(c).) 415-5 Sec. 61.026. JOINT OWNERSHIP OR USE PROHIBITED. A local 415-6 exchange company and an affiliate engaged in providing a service or 415-7 product described by Section 61.021 may not: 415-8 (1) own property jointly; or 415-9 (2) share in the use of property. (V.A.C.S. 415-10 Art. 1446c-0, Sec. 3.583(d).) 415-11 (Sections 61.027-61.040 reserved for expansion) 415-12 SUBCHAPTER C. ADDITIONAL COMPETITIVE SAFEGUARDS 415-13 Sec. 61.041. PROHIBITED DISCRIMINATION. A local exchange 415-14 company may not discriminate between an affiliate that provides a 415-15 service or product described by Section 61.021 and another person 415-16 in: 415-17 (1) providing or procuring a good, a service, a 415-18 facility, or information; or 415-19 (2) establishing a standard. (V.A.C.S. Art. 1446c-0, 415-20 Sec. 3.584(a).) 415-21 Sec. 61.042. SUBSIDIZATION OF SERVICES PROHIBITED. A local 415-22 exchange company or the company's affiliate may not subsidize the 415-23 provision of a service or product described by Section 61.021 with 415-24 revenue from: 415-25 (1) a local exchange telephone service; or 415-26 (2) an access service provided by the local exchange 415-27 company. (V.A.C.S. Art. 1446c-0, Sec. 3.584(b).) 416-1 Sec. 61.043. PERMISSIBLE INVESTMENT. This subchapter does 416-2 not prohibit a local exchange company's affiliate from investing a 416-3 dividend or profit derived from a local exchange company or 416-4 developing a service or product described by Section 61.021 for the 416-5 local exchange company if the investment or development complies 416-6 with Subchapter B. (V.A.C.S. Art. 1446c-0, Sec. 3.584(c).) 416-7 CHAPTER 62. BROADCASTER SAFEGUARDS 416-8 SUBCHAPTER A. GENERAL PROVISIONS 416-9 Sec. 62.001. APPLICABILITY OF CHAPTER 416-10 Sec. 62.002. DEFINITIONS 416-11 (Sections 62.003-62.020 reserved for expansion) 416-12 SUBCHAPTER B. CUSTOMER PROPRIETARY NETWORK INFORMATION 416-13 Sec. 62.021. DEFINITIONS 416-14 Sec. 62.022. USE OF SPECIFIC CUSTOMER PROPRIETARY NETWORK 416-15 INFORMATION 416-16 Sec. 62.023. RULES 416-17 (Sections 62.024-62.040 reserved for expansion) 416-18 SUBCHAPTER C. ADVERTISING 416-19 Sec. 62.041. DEFINITION 416-20 Sec. 62.042. APPLICABILITY OF SUBCHAPTER 416-21 Sec. 62.043. ADVERTISING AGENCY SERVICES PROHIBITED 416-22 Sec. 62.044. ADVERTISING ACTIVITIES OF AFFILIATE 416-23 Sec. 62.045. JOINT MARKETING PROHIBITED 416-24 Sec. 62.046. CHARITABLE TELEPHONE SOLICITATION 416-25 Sec. 62.047. WAIVER 416-26 (Sections 62.048-62.070 reserved for expansion) 416-27 SUBCHAPTER D. AUDIO AND VIDEO PROGRAMMING 417-1 Sec. 62.071. APPLICABILITY OF SUBCHAPTER 417-2 Sec. 62.072. AUDIO OR VIDEO PROGRAMMING PROHIBITED 417-3 Sec. 62.073. RELATIONSHIP BETWEEN EXCHANGE COMPANY AND 417-4 AFFILIATE THAT PROVIDES AUDIO OR VIDEO 417-5 PROGRAMMING 417-6 Sec. 62.074. REGULATION OF EXCHANGE COMPANY DEALINGS WITH 417-7 SEPARATE AFFILIATE 417-8 Sec. 62.075. BILLING OR COLLECTION SERVICES FOR NONAFFILIATED 417-9 PROGRAMMER 417-10 Sec. 62.076. COMPLIANCE AUDIT 417-11 Sec. 62.077. WAIVER 417-12 Sec. 62.078. LIMITATION OF JURISDICTION 417-13 (Sections 62.079-62.100 reserved for expansion) 417-14 SUBCHAPTER E. VIDEO CARRIAGE 417-15 Sec. 62.101. APPLICABILITY OF SUBCHAPTER 417-16 Sec. 62.102. RATE FOR BROADCAST STATION ACCESS TO 417-17 TELECOMMUNICATIONS SERVICES 417-18 Sec. 62.103. DUTIES OF LOCAL EXCHANGE COMPANY 417-19 Sec. 62.104. BROADCAST STATION ACCESS THROUGH 417-20 TELECOMMUNICATIONS SERVICES 417-21 Sec. 62.105. RETRANSMISSION CONSENT 417-22 Sec. 62.106. WAIVER 417-23 Sec. 62.107. LIMITATION OF JURISDICTION 417-24 Sec. 62.108. EXPIRATION 417-25 (Sections 62.109-62.130 reserved for expansion) 417-26 SUBCHAPTER F. AUDIO CARRIAGE 417-27 Sec. 62.131. APPLICABILITY OF SUBCHAPTER 418-1 Sec. 62.132. BROADCAST STATION ACCESS THROUGH 418-2 TELECOMMUNICATIONS SERVICES 418-3 Sec. 62.133. RETRANSMISSION CONSENT 418-4 Sec. 62.134. WAIVER 418-5 Sec. 62.135. LIMITATION OF JURISDICTION 418-6 Sec. 62.136. EXPIRATION 418-7 CHAPTER 62. BROADCASTER SAFEGUARDS 418-8 SUBCHAPTER A. GENERAL PROVISIONS 418-9 Sec. 62.001. APPLICABILITY OF CHAPTER. This chapter does 418-10 not apply to a cable company. (V.A.C.S. Art. 1446c-0, Sec. 3.506.) 418-11 Sec. 62.002. DEFINITIONS. In this chapter: 418-12 (1) "Audio programming": 418-13 (A) means programming: 418-14 (i) provided by an amplitude modulation or 418-15 frequency modulation broadcast radio station; or 418-16 (ii) generally considered comparable to 418-17 programming described by Subparagraph (i); and 418-18 (B) does not include an audio-related service 418-19 offered by an incumbent local exchange company on September 1, 418-20 1995. 418-21 (2) "Video programming" means programming provided by 418-22 or generally considered comparable to programming provided by a 418-23 television broadcast station as defined by Section 602, 418-24 Communications Act of 1934 (47 U.S.C. Section 522). (V.A.C.S. 418-25 Art. 1446c-0, Sec. 3.502(a).) 418-26 (Sections 62.003-62.020 reserved for expansion) 419-1 SUBCHAPTER B. CUSTOMER PROPRIETARY NETWORK INFORMATION 419-2 Sec. 62.021. DEFINITIONS. In this subchapter: 419-3 (1) "Specific customer proprietary network 419-4 information" means information, other than subscriber list 419-5 information: 419-6 (A) that concerns the customer and is available 419-7 to the telecommunications utility because of the customer's use of 419-8 the telecommunications utility service; 419-9 (B) that is contained in the bills relating to 419-10 telecommunications services received by a customer of a 419-11 telecommunications utility; or 419-12 (C) that: 419-13 (i) is made available to a 419-14 telecommunications utility by a customer of the utility, other than 419-15 a wireless telecommunications provider, solely because of the 419-16 utility-customer relationship; and 419-17 (ii) relates to the quantity, technical 419-18 configuration, type, destination, or amount of use of voice or data 419-19 telecommunications services to which the customer subscribes. 419-20 (2) "Subscriber list information" means information: 419-21 (A) that identifies the listed name of a 419-22 telecommunications utility subscriber or the subscriber's telephone 419-23 number, address, or primary advertising classification; and 419-24 (B) that the telecommunications utility or an 419-25 affiliate has published or accepted for publication. (V.A.C.S. 419-26 Art. 1446c-0, Sec. 3.501(a).) 419-27 Sec. 62.022. USE OF SPECIFIC CUSTOMER PROPRIETARY NETWORK 420-1 INFORMATION. (a) A telecommunications utility may not use 420-2 specific customer proprietary network information for a commercial 420-3 purpose other than the sale or provision of, or billing or 420-4 collection for, telecommunications or enhanced services. 420-5 (b) This section does not prohibit: 420-6 (1) the use of specific customer proprietary network 420-7 information with the customer's consent; or 420-8 (2) the provision of specific customer proprietary 420-9 network information to an affiliate telecommunications provider. 420-10 (c) Subsection (a) has no effect to the extent it is 420-11 preempted by an action of the Federal Communications Commission. 420-12 (V.A.C.S. Art. 1446c-0, Sec. 3.501(b).) 420-13 Sec. 62.023. RULES. (a) The commission shall adopt rules 420-14 that are consistent with rules on the use of specific customer 420-15 proprietary network information adopted by the Federal 420-16 Communications Commission. 420-17 (b) Rules adopted under Subsection (a) shall: 420-18 (1) require each telecommunications utility annually 420-19 to notify, by means approved by the commission, each subscriber of 420-20 the subscriber's right to reject the utility's use of specific 420-21 customer proprietary network information for marketing other 420-22 services; and 420-23 (2) require a telecommunications utility that makes 420-24 nonproprietary aggregate customer proprietary network information 420-25 available to its affiliates to make the information available to 420-26 nonaffiliated entities on the same terms. 420-27 (c) If the Federal Communications Commission adopts rules 421-1 regarding customer proprietary network information that no longer 421-2 preempt this state's authority to adopt inconsistent rules, the 421-3 commission shall conduct a proceeding to determine the appropriate 421-4 use of customer proprietary network information by a 421-5 telecommunications utility. A rule, policy, or order adopted by 421-6 the commission on customer proprietary network information may not 421-7 be discriminatory in its application to telecommunications 421-8 utilities. 421-9 (d) A commission rule governing customer proprietary network 421-10 information may not apply to an incumbent local exchange company 421-11 that has 100,000 or fewer access lines in service in this state if 421-12 the rule is more burdensome to the company than the customer 421-13 proprietary network information rules of the Federal Communications 421-14 Commission. This prohibition does not apply to a rule regarding a 421-15 use of customer proprietary network information that is not related 421-16 to a telecommunications service or product. (V.A.C.S. 421-17 Art. 1446c-0, Secs. 3.501(c), (d).) 421-18 (Sections 62.024-62.040 reserved for expansion) 421-19 SUBCHAPTER C. ADVERTISING 421-20 Sec. 62.041. DEFINITION. In this subchapter, "advertising 421-21 agency services" includes: 421-22 (1) advertising development; 421-23 (2) advertising purchase; 421-24 (3) advertising consultation; 421-25 (4) advertising copy writing; 421-26 (5) advertising research; and 421-27 (6) other functions generally performed by a general 422-1 advertising agency. (V.A.C.S. Art. 1446c-0, Sec. 3.503(a).) 422-2 Sec. 62.042. APPLICABILITY OF SUBCHAPTER. This subchapter 422-3 does not apply to an incumbent local exchange company that has 422-4 100,000 or fewer access lines in service in this state. (V.A.C.S. 422-5 Art. 1446c-0, Sec. 3.503(f).) 422-6 Sec. 62.043. ADVERTISING AGENCY SERVICES PROHIBITED. (a) 422-7 An incumbent local exchange company may not sell an advertising 422-8 agency service to a nonaffiliate in this state. 422-9 (b) Subsection (a) does not prohibit a local exchange 422-10 company from: 422-11 (1) promoting or selling a telecommunications service 422-12 or telecommunications equipment, including: 422-13 (A) voice service or equipment; 422-14 (B) data service or equipment; 422-15 (C) video dial tone service or equipment; 422-16 (D) video or audio programming service or 422-17 equipment; 422-18 (E) cellular service or equipment; 422-19 (F) interactive media service or equipment; 422-20 (G) software service or equipment; or 422-21 (H) another related service or piece of 422-22 equipment; or 422-23 (2) enhancing or promoting the use of the 422-24 telecommunications network. (V.A.C.S. Art. 1446c-0, Sec. 422-25 3.503(b).) 422-26 Sec. 62.044. ADVERTISING ACTIVITIES OF AFFILIATE. (a) A 422-27 separate corporate affiliate of an incumbent local exchange company 423-1 may engage in advertising agency activities. In conducting an 423-2 advertising agency activity, the affiliate shall comply with this 423-3 section. 423-4 (b) The affiliate shall prepare financial statements that 423-5 are not consolidated with the financial statements of the incumbent 423-6 local exchange company. Financial statements and consolidated tax 423-7 returns that consolidate the operation of the separate corporate 423-8 affiliate with a parent company and the parent company's other 423-9 subsidiaries may be prepared. 423-10 (c) The affiliate shall: 423-11 (1) maintain, in accordance with generally accepted 423-12 accounting principles, books, records, and accounts that are 423-13 separate from the books, records, and accounts of the incumbent 423-14 local exchange company; and 423-15 (2) maintain a corporate identity separate from the 423-16 incumbent local exchange company. 423-17 (d) The affiliate may not: 423-18 (1) incur debt in a manner that, on the affiliate's 423-19 default, would permit a creditor to have recourse against an asset 423-20 of the incumbent local exchange company; 423-21 (2) use a name, trademark, or service mark of the 423-22 incumbent local exchange company, unless the name, trademark, or 423-23 service mark is used in common with the parent, affiliate, or owner 423-24 of the incumbent local exchange company; or 423-25 (3) have a director, officer, or employee in common 423-26 with the incumbent local exchange company. (V.A.C.S. Art. 1446c-0, 423-27 Sec. 3.503(c).) 424-1 Sec. 62.045. JOINT MARKETING PROHIBITED. (a) Except as 424-2 permitted by Section 62.043, an incumbent local exchange company 424-3 that has an affiliate that provides advertising agency services on 424-4 behalf of a nonaffiliate in this state may not jointly market the 424-5 affiliate's advertising agency services in connection with a 424-6 telecommunications service or telecommunications equipment the 424-7 incumbent local exchange company provides. 424-8 (b) This section does not apply to advertising in a 424-9 telephone directory disseminated in any form. (V.A.C.S. 424-10 Art. 1446c-0, Sec. 3.503(d).) 424-11 Sec. 62.046. CHARITABLE TELEPHONE SOLICITATION. This 424-12 subchapter does not prohibit an incumbent local exchange company 424-13 from providing a telephone solicitation service for a charitable 424-14 organization. (V.A.C.S. Art. 1446c-0, Sec. 3.503(e).) 424-15 Sec. 62.047. WAIVER. (a) A company may petition the 424-16 commission for a waiver from a requirement this subchapter imposes 424-17 on the company. 424-18 (b) The commission shall grant the waiver if the waiver is 424-19 in the public interest, after considering whether there is a need 424-20 for the requirement in the affected market. 424-21 (c) The commission may revoke a waiver granted under this 424-22 section if: 424-23 (1) conditions under which the waiver was granted have 424-24 materially changed; and 424-25 (2) the revocation is in the public interest. 424-26 (V.A.C.S. Art. 1446c-0, Sec. 3.503(g).) 424-27 (Sections 62.048-62.070 reserved for expansion) 425-1 SUBCHAPTER D. AUDIO AND VIDEO PROGRAMMING 425-2 Sec. 62.071. APPLICABILITY OF SUBCHAPTER. This subchapter 425-3 does not apply to an incumbent local exchange company that has 425-4 100,000 or fewer access lines in service in this state. (V.A.C.S. 425-5 Art. 1446c-0, Sec. 3.502(h).) 425-6 Sec. 62.072. AUDIO OR VIDEO PROGRAMMING PROHIBITED. (a) An 425-7 incumbent local exchange company may not provide audio or video 425-8 programming in this state. 425-9 (b) This section does not prohibit a separate corporate 425-10 affiliate of an incumbent local exchange company from providing 425-11 audio or video programming. (V.A.C.S. Art. 1446c-0, Sec. 425-12 3.502(b).) 425-13 Sec. 62.073. RELATIONSHIP BETWEEN EXCHANGE COMPANY AND 425-14 AFFILIATE THAT PROVIDES AUDIO OR VIDEO PROGRAMMING. (a) This 425-15 section applies only to an incumbent local exchange company's 425-16 separate corporate affiliate that provides audio or video 425-17 programming. 425-18 (b) For a telecommunications service the affiliate obtains 425-19 from the incumbent local exchange company, the affiliate shall pay: 425-20 (1) a tariffed rate; 425-21 (2) the fair market value of the service, if the 425-22 service is not provided under a tariff; or 425-23 (3) the service's long run incremental cost, if: 425-24 (A) the service is not provided under a tariff; 425-25 and 425-26 (B) the service: 425-27 (i) does not have a fair market value; or 426-1 (ii) has a fair market value that is less 426-2 than the service's long run incremental cost. 426-3 (c) In making a transaction with the incumbent local 426-4 exchange company to purchase, use, rent, or access information, 426-5 services, space, or devices that are not telecommunications 426-6 services, the affiliate shall act in a manner consistent with the 426-7 affiliate transaction rules of the Federal Communications 426-8 Commission. The subject of a transaction described by this 426-9 subsection may not be valued at less than the greater of the 426-10 subject's net book value or fair market value, whichever is 426-11 applicable. 426-12 (d) The affiliate shall prepare financial statements that 426-13 are not consolidated with those of the incumbent local exchange 426-14 company. Financial statements and consolidated tax returns that 426-15 consolidate the operation of the separate corporate affiliate with 426-16 a parent company and the parent company's other subsidiaries may be 426-17 prepared. 426-18 (e) The affiliate shall: 426-19 (1) maintain, in accordance with generally accepted 426-20 accounting principles, books, records, and accounts that are 426-21 separate from the books, records, and accounts of the incumbent 426-22 local exchange company; 426-23 (2) perform its marketing and sales functions and 426-24 operation in compliance with open network architecture and the 426-25 affiliate transaction rules of the Federal Communications 426-26 Commission; and 426-27 (3) maintain a corporate identity separate from the 427-1 incumbent local exchange company. 427-2 (f) The affiliate may not: 427-3 (1) incur debt in a manner that, on the affiliate's 427-4 default, would permit a creditor to have recourse against an asset 427-5 of the incumbent local exchange company; 427-6 (2) use a name, trademark, or service mark of the 427-7 incumbent local exchange company, unless the name, trademark, or 427-8 service mark is used in common with the parent, affiliate, or owner 427-9 of the incumbent local exchange company; or 427-10 (3) have a director, officer, or employee in common 427-11 with the incumbent local exchange company. (V.A.C.S. Art. 1446c-0, 427-12 Sec. 3.502(c).) 427-13 Sec. 62.074. REGULATION OF EXCHANGE COMPANY DEALINGS WITH 427-14 SEPARATE AFFILIATE. (a) This section applies only to an incumbent 427-15 local exchange company's separate corporate affiliate that provides 427-16 audio or video programming. 427-17 (b) An incumbent local exchange company may not: 427-18 (1) develop a rate for a telecommunications service or 427-19 provide a telecommunications service to benefit primarily the 427-20 company's separate affiliate for the affiliate's video or audio 427-21 programming unless the rate or service is available to any 427-22 purchaser without discrimination; 427-23 (2) provide a telecommunications service for the 427-24 separate affiliate's audio or video programming in an unreasonably 427-25 preferential manner; 427-26 (3) transfer an asset to the separate affiliate for 427-27 less than the amount for which the asset is available to a third 428-1 party in an arm's-length transaction; 428-2 (4) have a director, officer, or employee in common 428-3 with the separate affiliate; 428-4 (5) own property in common with the separate 428-5 affiliate; or 428-6 (6) enter into a customer-specific contract with the 428-7 separate affiliate to provide tariffed telecommunications services 428-8 unless substantially the same contract terms are generally 428-9 available to nonaffiliated interests. 428-10 (c) An incumbent local exchange company shall: 428-11 (1) maintain and file with the commission copies of 428-12 each contract or arrangement between the company and the separate 428-13 affiliate and report the contract amount for each cash or noncash 428-14 transaction with the separate affiliate, including payments for: 428-15 (A) the cost of a good, service, property right, 428-16 or other item; or 428-17 (B) interest expense; 428-18 (2) value an asset the company transfers to the 428-19 separate affiliate at the greater of the asset's net book value or 428-20 fair market value; 428-21 (3) value an asset the separate affiliate transfers to 428-22 the company at the lesser of the asset's net book value or fair 428-23 market value except in an instance in which Federal Communications 428-24 Commission regulations or commission rules permit: 428-25 (A) in-arrears payment for a tariffed 428-26 telecommunications service; or 428-27 (B) an affiliate to invest a dividend or profit 429-1 derived from an incumbent local exchange company; 429-2 (4) comply with applicable Federal Communications 429-3 Commission cost and other accounting rules; and 429-4 (5) if the company offers telecommunications equipment 429-5 or services to an audio or video programmer, provide the equipment 429-6 or services: 429-7 (A) at just and reasonable rates that, if 429-8 commission rules require the provision to be under a tariff, are 429-9 tariffed on nondiscriminatory terms; and 429-10 (B) on similar terms to all video or audio 429-11 programmers, if the equipment or services are not subject to 429-12 regulation. (V.A.C.S. Art. 1446c-0, Sec. 3.502(d).) 429-13 Sec. 62.075. BILLING OR COLLECTION SERVICES FOR 429-14 NONAFFILIATED PROGRAMMER. (a) An incumbent local exchange company 429-15 that offers billing or collection service to a nonaffiliated audio 429-16 or video programmer shall provide the service on nondiscriminatory 429-17 terms. 429-18 (b) This section does not require an incumbent local 429-19 exchange company to offer billing or collection service to a 429-20 nonaffiliated programmer. 429-21 (c) An incumbent local exchange company may exclude a class 429-22 of programmers from the company's billing or collection service. 429-23 (V.A.C.S. Art. 1446c-0, Sec. 3.502(e).) 429-24 Sec. 62.076. COMPLIANCE AUDIT. (a) An incumbent local 429-25 exchange company shall have a compliance audit performed every 429-26 three years to determine whether the incumbent local exchange 429-27 company, during the preceding three years, complied with the 430-1 requirements this subchapter imposes on the company. 430-2 (b) An independent accounting firm: 430-3 (1) must conduct the audit; and 430-4 (2) shall file the audit report with the commission. 430-5 (c) If the audit report concludes that the incumbent local 430-6 exchange company is not in compliance with this subchapter, the 430-7 commission shall take appropriate action against the company. 430-8 (d) The audit report is confidential commercial or financial 430-9 information for the purposes of Chapter 552, Government Code. 430-10 (V.A.C.S. Art. 1446c-0, Sec. 3.502(f).) 430-11 Sec. 62.077. WAIVER. (a) A company may petition the 430-12 commission for a waiver from a requirement this subchapter imposes 430-13 on the company. 430-14 (b) The commission shall grant the waiver if the waiver is 430-15 in the public interest, after considering whether there is a need 430-16 for the requirement in the affected market. 430-17 (c) The commission may revoke a waiver granted under this 430-18 section if: 430-19 (1) conditions under which the waiver was granted have 430-20 materially changed; and 430-21 (2) the revocation is in the public interest. 430-22 (V.A.C.S. Art. 1446c-0, Sec. 3.502(i).) 430-23 Sec. 62.078. LIMITATION OF JURISDICTION. Except as 430-24 otherwise specifically provided by this title, the commission's 430-25 jurisdiction over an incumbent local exchange company's affiliate 430-26 that is an audio or video programmer is limited to the specific 430-27 requirements of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 431-1 3.502(g).) 431-2 (Sections 62.079-62.100 reserved for expansion) 431-3 SUBCHAPTER E. VIDEO CARRIAGE 431-4 Sec. 62.101. APPLICABILITY OF SUBCHAPTER. This subchapter 431-5 does not apply to: 431-6 (1) an incumbent local exchange company that has 431-7 100,000 or fewer access lines in service in this state; or 431-8 (2) a programmer on the video dial tone platform of an 431-9 incumbent local exchange company described by Subdivision (1). 431-10 (V.A.C.S. Art. 1446c-0, Sec. 3.504(e).) 431-11 Sec. 62.102. RATE FOR BROADCAST STATION ACCESS TO 431-12 TELECOMMUNICATIONS SERVICES. Unless the company is a programmer 431-13 subject to Section 62.104, an incumbent local exchange company that 431-14 provides a telecommunications service used to transmit video 431-15 programming directly to a subscriber or used to enable a customer 431-16 to access video programming shall give a local full-power broadcast 431-17 station licensed by the Federal Communications Commission access to 431-18 the telecommunications service at a tariffed rate, to the extent 431-19 capacity permits. If the service is not provided under a tariff, 431-20 the company shall provide the service on terms similar to those on 431-21 which the service is provided to other video programmers that 431-22 provide similar programming. (V.A.C.S. Art. 1446c-0, Sec. 3.504(a) 431-23 (part).) 431-24 Sec. 62.103. DUTIES OF LOCAL EXCHANGE COMPANY. (a) An 431-25 incumbent local exchange company shall transmit without material 431-26 degradation the signals a local broadcast station delivers. The 431-27 transmission quality offered the station may not be less than the 432-1 quality made available to another video programmer. 432-2 (b) An incumbent local exchange company that provides a 432-3 telecommunications service used to transmit video programming 432-4 directly to a subscriber or used to enable a customer to access 432-5 video programming may not: 432-6 (1) discriminate unreasonably among programming 432-7 providers regarding transmission of their signals; or 432-8 (2) delete, change, or alter a copyright 432-9 identification transmitted as part of the programming signal. 432-10 (c) An incumbent local exchange company described by 432-11 Subsection (b) that provides a video dial tone service with a level 432-12 one gateway, as that term is defined by the Federal Communications 432-13 Commission, shall make available to programmers a menu or 432-14 programming guide on which a programmer may display a listing of 432-15 the stations the programmer is required to carry under Section 432-16 62.104. (V.A.C.S. Art. 1446c-0, Secs. 3.504(a) (part), (b).) 432-17 Sec. 62.104. BROADCAST STATION ACCESS THROUGH 432-18 TELECOMMUNICATIONS SERVICES. (a) As permitted by federal law and 432-19 Federal Communications Commission rules and orders, a programmer 432-20 shall make available to subscribers local full-power television 432-21 stations licensed by the Federal Communications Commission if: 432-22 (1) the programmer is operating as a common channel 432-23 manager; 432-24 (2) for a commercial purpose, the programmer purchases 432-25 50 or more analog channels on a local exchange video dial tone 432-26 level one platform over which video programming is made available 432-27 to subscribers; and 433-1 (3) the television stations grant retransmission 433-2 consent. 433-3 (b) The programmer shall make available up to six television 433-4 stations under this section. If the programmer is in a market that 433-5 contains a county with a population of more than one million, the 433-6 programmer shall make available up to nine television stations 433-7 under this section. 433-8 (c) The programmer shall select the television stations the 433-9 programmer makes available to subscribers under this section. 433-10 (d) This title does not require a programmer or incumbent 433-11 local exchange company to provide valuable consideration in 433-12 exchange for carriage under this section. (V.A.C.S. Art. 1446c-0, 433-13 Secs. 3.504(c), (d) (part).) 433-14 Sec. 62.105. RETRANSMISSION CONSENT. A television station 433-15 licensed by the Federal Communications Commission that seeks 433-16 carriage under Section 62.104 shall grant consent for programming 433-17 retransmission to the programmer and the incumbent local exchange 433-18 company. (V.A.C.S. Art. 1446c-0, Sec. 3.504(d) (part).) 433-19 Sec. 62.106. WAIVER. (a) A company may petition the 433-20 commission for a waiver from a requirement this subchapter imposes 433-21 on the company. 433-22 (b) The commission shall grant the waiver if the waiver is 433-23 in the public interest, after considering whether there is a need 433-24 for the requirement in the affected market. 433-25 (c) The commission may revoke a waiver granted under this 433-26 section if: 433-27 (1) conditions under which the waiver was granted have 434-1 materially changed; and 434-2 (2) the revocation is in the public interest. 434-3 (V.A.C.S. Art. 1446c-0, Sec. 3.504(f).) 434-4 Sec. 62.107. LIMITATION OF JURISDICTION. Except as 434-5 otherwise specifically provided by this title, the commission's 434-6 jurisdiction over an incumbent local exchange company's affiliate 434-7 that is a video programmer is limited to the specific requirements 434-8 of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.504(g).) 434-9 Sec. 62.108. EXPIRATION. This subchapter expires August 31, 434-10 1999. (V.A.C.S. Art. 1446c-0, Sec. 3.504(h).) 434-11 (Sections 62.109-62.130 reserved for expansion) 434-12 SUBCHAPTER F. AUDIO CARRIAGE 434-13 Sec. 62.131. APPLICABILITY OF SUBCHAPTER. This subchapter 434-14 does not apply to: 434-15 (1) an incumbent local exchange company that has 434-16 100,000 or fewer access lines in service in this state; or 434-17 (2) a programmer on the video dial tone platform of an 434-18 incumbent local exchange company described by Subdivision (1). 434-19 (V.A.C.S. Art. 1446c-0, Sec. 3.505(c).) 434-20 Sec. 62.132. BROADCAST STATION ACCESS THROUGH 434-21 TELECOMMUNICATIONS SERVICES. (a) As permitted by federal law and 434-22 Federal Communications Commission rules and orders, and as 434-23 consistent with technical specifications, a programmer shall make 434-24 available to subscribers local radio stations licensed by the 434-25 Federal Communications Commission if: 434-26 (1) the programmer is operating as a common channel 434-27 manager; 435-1 (2) for a commercial purpose, the programmer makes 12 435-2 or more channels of audio programming available to subscribers on 435-3 an incumbent local exchange company's level one video dial tone 435-4 platform; 435-5 (3) the available audio programming is similar to a 435-6 broadcast of a radio station licensed by the Federal Communications 435-7 Commission; and 435-8 (4) the radio stations grant retransmission consent. 435-9 (b) The programmer is not required to make available more 435-10 than one-third of the programmer's analog audio channels to radio 435-11 stations. 435-12 (c) The programmer shall select the radio stations the 435-13 programmer makes available to subscribers under this section. 435-14 (d) This title does not require a programmer or incumbent 435-15 local exchange company to provide valuable consideration in 435-16 exchange for carriage under this section. (V.A.C.S. Art. 1446c-0, 435-17 Secs. 3.505(a), (b) (part).) 435-18 Sec. 62.133. RETRANSMISSION CONSENT. A local radio station 435-19 licensed by the Federal Communications Commission that seeks 435-20 carriage under Section 62.132 shall grant consent for programming 435-21 retransmission to the programmer and the incumbent local exchange 435-22 company. (V.A.C.S. Art. 1446c-0, Sec. 3.505(b) (part).) 435-23 Sec. 62.134. WAIVER. (a) A company may petition the 435-24 commission for a waiver from a requirement this subchapter imposes 435-25 on the company. 435-26 (b) The commission shall grant the waiver if the waiver is 435-27 in the public interest, after considering whether there is a need 436-1 for the requirement in the affected market. 436-2 (c) The commission may revoke a waiver granted under this 436-3 section if: 436-4 (1) conditions under which the waiver was granted have 436-5 materially changed; and 436-6 (2) the revocation is in the public interest. 436-7 (V.A.C.S. Art. 1446c-0, Sec. 3.505(d).) 436-8 Sec. 62.135. LIMITATION OF JURISDICTION. Except as 436-9 otherwise specifically provided by this title, the commission's 436-10 jurisdiction over an incumbent local exchange company's affiliate 436-11 that is an audio programmer is limited to the specific requirements 436-12 of this subchapter. (V.A.C.S. Art. 1446c-0, Sec. 3.505(e).) 436-13 Sec. 62.136. EXPIRATION. This subchapter expires August 31, 436-14 1999. (V.A.C.S. Art. 1446c-0, Sec. 3.505(f).) 436-15 CHAPTER 63. ELECTRONIC PUBLISHING 436-16 SUBCHAPTER A. GENERAL PROVISIONS 436-17 Sec. 63.001. GENERAL DEFINITIONS 436-18 Sec. 63.002. ELECTRONIC PUBLISHING DEFINED 436-19 Sec. 63.003. INCUMBENT LOCAL EXCHANGE COMPANY DEFINED 436-20 Sec. 63.004. CERTAIN SERVICES NOT PROHIBITED 436-21 Sec. 63.005. INVESTMENT OF DIVIDENDS 436-22 Sec. 63.006. JOINT VIOLATIONS 436-23 Sec. 63.007. PRIVATE COMPLAINT; APPLICATION FOR ORDER 436-24 Sec. 63.008. PRIVATE SUIT FOR INJUNCTION 436-25 Sec. 63.009. PRIVATE SUIT FOR DAMAGES 436-26 Sec. 63.010. APPLICABILITY OF ANTITRUST LAWS 436-27 Sec. 63.011. APPLICABILITY OF CHAPTER 437-1 (Sections 63.012-63.030 reserved for expansion) 437-2 SUBCHAPTER B. ELECTRONIC PUBLISHING SAFEGUARDS 437-3 Sec. 63.031. PUBLICATION BY BASIC TELEPHONE SERVICE 437-4 PROHIBITED 437-5 Sec. 63.032. SEPARATED AFFILIATE OR JOINT VENTURE 437-6 REQUIREMENTS 437-7 Sec. 63.033. INCUMBENT LOCAL EXCHANGE COMPANY 437-8 REQUIREMENTS 437-9 Sec. 63.034. COMPLIANCE REVIEW AND REPORT 437-10 Sec. 63.035. SERVICES TO ELECTRONIC PUBLISHER 437-11 Sec. 63.036. INFORMATION PROVIDED 437-12 Sec. 63.037. CUSTOMER PROPRIETARY NETWORK INFORMATION 437-13 Sec. 63.038. PROHIBITED JOINT ACTIVITIES 437-14 Sec. 63.039. PERMITTED JOINT MARKETING OR REFERRAL 437-15 ACTIVITIES 437-16 Sec. 63.040. ELECTRONIC PUBLISHING TEAMING OR BUSINESS 437-17 ARRANGEMENTS 437-18 Sec. 63.041. JOINT VENTURE PARTICIPATION 437-19 Sec. 63.042. OTHER ELECTRONIC PUBLISHERS 437-20 (Sections 63.043-63.060 reserved for expansion) 437-21 SUBCHAPTER C. ELECTRONIC PUBLISHING TRANSACTIONS 437-22 Sec. 63.061. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN INCUMBENT 437-23 LOCAL EXCHANGE COMPANY AND AFFILIATE 437-24 GENERALLY 437-25 Sec. 63.062. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN INCUMBENT 437-26 LOCAL EXCHANGE COMPANY AND SEPARATED 437-27 AFFILIATE 438-1 Sec. 63.063. EXCEPTION 438-2 CHAPTER 63. ELECTRONIC PUBLISHING 438-3 SUBCHAPTER A. GENERAL PROVISIONS 438-4 Sec. 63.001. GENERAL DEFINITIONS. In this chapter: 438-5 (1) "Affiliate" means an entity, other than a 438-6 separated affiliate, that, directly or indirectly, is: 438-7 (A) under common ownership or control with an 438-8 incumbent local exchange company; 438-9 (B) owned or controlled by an incumbent local 438-10 exchange company; or 438-11 (C) the owner or in control of an incumbent 438-12 local exchange company. 438-13 (2) "Basic telephone service" means a wireline 438-14 telephone exchange facility or service provided by an incumbent 438-15 local exchange company in a telephone exchange area, other than a: 438-16 (A) competitive wireline telephone exchange 438-17 service provided in a telephone exchange area in which another 438-18 entity provides a wireline telephone exchange service that was 438-19 provided on January 1, 1984; or 438-20 (B) commercial mobile service provided by an 438-21 affiliate that the Federal Communications Commission requires to be 438-22 a corporate entity separate from the local exchange company. 438-23 (3) "Basic telephone service information" means: 438-24 (A) an incumbent local exchange company's 438-25 network or customer information; and 438-26 (B) information acquired by an incumbent local 438-27 exchange company as a result of its provision of basic telephone 439-1 service. 439-2 (4) "Control" has the meaning assigned by: 439-3 (A) 17 C.F.R. Section 240.12b--2 as adopted by 439-4 the Securities and Exchange Commission under the Securities 439-5 Exchange Act of 1934 (15 U.S.C. Section 78a et seq.); or 439-6 (B) a successor to that section. 439-7 (5) "Electronic publishing joint venture" means a 439-8 joint venture owned by an incumbent local exchange company or 439-9 affiliate that provides electronic publishing disseminated by the 439-10 basic telephone service of: 439-11 (A) the incumbent local exchange company; or 439-12 (B) an affiliate of the incumbent local exchange 439-13 company. 439-14 (6) "Entity" means an organization and includes a 439-15 corporation, partnership, sole proprietorship, association, or 439-16 joint venture. 439-17 (7) "Inbound telemarketing" means marketing property, 439-18 goods, or services by telephone to a customer or potential customer 439-19 who initiates the call. 439-20 (8) "Modification of final judgment" means the order 439-21 entered August 24, 1982, in the antitrust action styled United 439-22 States v. Western Electric, Civil Action No. 82-0192, in the United 439-23 States District Court for the District of Columbia, and includes 439-24 any judgment or order with respect to that action issued on or 439-25 after August 24, 1982. 439-26 (9) "Own" means to have the: 439-27 (A) equivalent of a direct or indirect equity 440-1 interest of more than 10 percent of an entity; or 440-2 (B) right to more than 10 percent of the gross 440-3 revenues of an entity under a revenue sharing or royalty agreement. 440-4 (10) "Separated affiliate" means a corporation that: 440-5 (A) does not own or control an incumbent local 440-6 exchange company; 440-7 (B) is not owned or controlled by an incumbent 440-8 local exchange company; and 440-9 (C) is under common ownership or control with an 440-10 incumbent local exchange company and provides electronic publishing 440-11 that is disseminated by the basic telephone service of: 440-12 (i) the incumbent local exchange company; 440-13 or 440-14 (ii) an affiliate of the incumbent local 440-15 exchange company. (V.A.C.S. Art. 1446c-0, Secs. 3.551(1), (2), 440-16 (3), (4), (6), (7), (8), (9), (10); New.) 440-17 Sec. 63.002. ELECTRONIC PUBLISHING DEFINED. (a) In this 440-18 chapter, "electronic publishing" means the use of an incumbent 440-19 local exchange company's basic telephone service to disseminate, 440-20 provide, publish, or sell to a nonaffiliated entity or person: 440-21 (1) news; 440-22 (2) entertainment other than an interactive game; 440-23 (3) business, financial, legal, consumer, or credit 440-24 material; 440-25 (4) an editorial; 440-26 (5) a column; 440-27 (6) sports reporting; 441-1 (7) a feature; 441-2 (8) advertising; 441-3 (9) a photograph or image; 441-4 (10) archival or research material; 441-5 (11) a legal notice or public record; 441-6 (12) scientific, educational, instructional, 441-7 technical, professional, trade, or other literary material; or 441-8 (13) other similar information. 441-9 (b) In this chapter, "electronic publishing" does not 441-10 include providing the following network services: 441-11 (1) information access, as that term is defined by the 441-12 modification of final judgment; 441-13 (2) transmission of information as a common carrier; 441-14 (3) transmission of information as part of a gateway 441-15 to an information service that does not involve the generation or 441-16 alteration of the content of information, including data 441-17 transmission, address translation, protocol conversion, billing 441-18 management, introductory information content, or navigational 441-19 systems that enable users to access electronic publishing services 441-20 and that do not affect the presentation of those electronic 441-21 publishing services to users; 441-22 (4) a voice storage and retrieval service, including 441-23 voice messaging and electronic mail service; 441-24 (5) level two gateway services as those services are 441-25 defined by the Federal Communications Commission's Second Report 441-26 and Order, Recommendation to Congress and Second Further Notice of 441-27 Proposed Rulemaking in CC Docket No. 87-266 dated August 14, 1992 442-1 (7 FCC Record 5781 (1992)); 442-2 (6) a data processing service that does not involve 442-3 the generation or alteration of the content of information; 442-4 (7) a transaction processing system that does not 442-5 involve the generation or alteration of the content of information; 442-6 (8) electronic billing or advertising of a regulated 442-7 telecommunications service of an incumbent local exchange company; 442-8 (9) language translation; 442-9 (10) conversion of information from one format to 442-10 another; 442-11 (11) information necessary for the management, 442-12 control, or operation of a telephone company telecommunications 442-13 system; 442-14 (12) directory assistance that: 442-15 (A) provides names, addresses, and telephone 442-16 numbers; and 442-17 (B) does not include advertising; 442-18 (13) a caller identification service; 442-19 (14) repairing and provisioning a database for a 442-20 telephone company operation; 442-21 (15) credit card and billing validation for a 442-22 telephone company operation; 442-23 (16) a 911-E or another emergency assistance database; 442-24 (17) another network service of a type that: 442-25 (A) is similar to the network services listed in 442-26 this subsection; and 442-27 (B) does not involve the generation or 443-1 alteration of the content of information; 443-2 (18) an upgrade to a network service listed in this 443-3 subsection that does not involve the generation or alteration of 443-4 the content of information; 443-5 (19) full motion video entertainment on demand; or 443-6 (20) video programming, as defined by Section 602, 443-7 Communications Act of 1934 (47 U.S.C. Section 522). (V.A.C.S. 443-8 Art. 1446c-0, Sec. 3.551(5).) 443-9 Sec. 63.003. INCUMBENT LOCAL EXCHANGE COMPANY DEFINED. 443-10 (a) Except as provided by Subsection (b), in this chapter, 443-11 "incumbent local exchange company" means: 443-12 (1) a corporation that: 443-13 (A) serves more than five million access lines 443-14 in this state; and 443-15 (B) is subject to the modification of final 443-16 judgment; 443-17 (2) an entity owned or controlled by a corporation 443-18 described by Subdivision (1); or 443-19 (3) a successor or assign of a corporation described 443-20 by Subdivision (1). 443-21 (b) In this chapter "incumbent local exchange company" does 443-22 not include an electronic publishing joint venture that is: 443-23 (1) owned by a corporation or entity described by 443-24 Subsection (a); and 443-25 (2) permitted by Section 63.039, 63.040, or 63.041. 443-26 (V.A.C.S. Art. 1446c-0, Sec. 3.551(11).) 443-27 Sec. 63.004. CERTAIN SERVICES NOT PROHIBITED. This chapter 444-1 does not prohibit: 444-2 (1) a separated affiliate or electronic publishing 444-3 joint venture from providing in any area electronic publishing or 444-4 another service; or 444-5 (2) an incumbent local exchange company or affiliate 444-6 from providing: 444-7 (A) a service other than electronic publishing 444-8 in any area; or 444-9 (B) electronic publishing that is not 444-10 disseminated by the basic telephone service of: 444-11 (i) the company; or 444-12 (ii) an affiliate of the company. 444-13 (V.A.C.S. Art. 1446c-0, Secs. 3.552(b), (c).) 444-14 Sec. 63.005. INVESTMENT OF DIVIDENDS. This chapter does not 444-15 prohibit an affiliate from investing a dividend derived from an 444-16 incumbent local exchange company in its separated affiliate. 444-17 (V.A.C.S. Art. 1446c-0, Sec. 3.557 (part).) 444-18 Sec. 63.006. JOINT VIOLATIONS. An incumbent local exchange 444-19 company, an affiliate, or a separated affiliate may not act jointly 444-20 with another entity to knowingly and wilfully violate or evade a 444-21 requirement of this chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.556.) 444-22 Sec. 63.007. PRIVATE COMPLAINT; APPLICATION FOR ORDER. (a) 444-23 A person may file with the commission a complaint that an act or 444-24 practice of an incumbent local exchange company, affiliate, or 444-25 separated affiliate violates this chapter. 444-26 (b) A person may apply to the commission for the commission 444-27 to order an incumbent local exchange company, affiliate, or 445-1 separated affiliate to cease and desist from an act or practice 445-2 that violates this chapter. (V.A.C.S. Art. 1446c-0, Secs. 445-3 3.563(a) (part), (b) (part).) 445-4 Sec. 63.008. PRIVATE SUIT FOR INJUNCTION. A person may 445-5 bring suit in district court for an injunction to compel an 445-6 incumbent local exchange company, affiliate, or separated affiliate 445-7 to discontinue a violation of this chapter or to comply with a 445-8 requirement of this chapter. (V.A.C.S. Art. 1446c-0, Sec. 3.563(b) 445-9 (part).) 445-10 Sec. 63.009. PRIVATE SUIT FOR DAMAGES. (a) A person may 445-11 bring suit to recover damages that result from a violation of this 445-12 chapter. 445-13 (b) An incumbent local exchange company, affiliate, or 445-14 separated affiliate is liable for damages if the incumbent local 445-15 exchange company violates this chapter or causes a violation of 445-16 this chapter. 445-17 (c) The incumbent local exchange company is liable to a 445-18 person injured by a violation of this chapter caused by the company 445-19 for: 445-20 (1) the amount of the damages that result from the 445-21 violation; and 445-22 (2) reasonable attorney's fees. 445-23 (d) The court shall determine and award attorney's fees in 445-24 each case in which damages are awarded. The attorney's fees shall 445-25 be taxed and collected as part of the costs of the suit. 445-26 (e) The court may not award damages for a violation: 445-27 (1) discovered by a compliance review under Section 446-1 63.034; and 446-2 (2) corrected before the 91st day after the date of 446-3 its discovery. (V.A.C.S. Art. 1446c-0, Sec. 3.563(a) (part).) 446-4 Sec. 63.010. APPLICABILITY OF ANTITRUST LAWS. This chapter 446-5 does not modify, impair, or supersede the applicability of 446-6 antitrust laws. (V.A.C.S. Art. 1446c-0, Sec. 3.564.) 446-7 Sec. 63.011. APPLICABILITY OF CHAPTER. This chapter does 446-8 not apply to conduct that occurs after June 30, 2001. (V.A.C.S. 446-9 Art. 1446c-0, Sec. 3.566.) 446-10 (Sections 63.012-63.030 reserved for expansion) 446-11 SUBCHAPTER B. ELECTRONIC PUBLISHING SAFEGUARDS 446-12 Sec. 63.031. PUBLICATION BY BASIC TELEPHONE SERVICE 446-13 PROHIBITED. An incumbent local exchange company or affiliate may 446-14 not provide electronic publishing disseminated by the basic 446-15 telephone service of: 446-16 (1) the incumbent local exchange company; or 446-17 (2) an affiliate of the incumbent local exchange 446-18 company. (V.A.C.S. Art. 1446c-0, Sec. 3.552(a).) 446-19 Sec. 63.032. SEPARATED AFFILIATE OR JOINT VENTURE 446-20 REQUIREMENTS. (a) A separated affiliate or electronic publishing 446-21 joint venture shall maintain books, records, and accounts that: 446-22 (1) are separate from the books, records, and accounts 446-23 of the incumbent local exchange company and any affiliate; and 446-24 (2) record, in accordance with generally accepted 446-25 accounting principles, all direct and indirect transactions with 446-26 the incumbent local exchange company. 446-27 (b) A separated affiliate or electronic publishing joint 447-1 venture shall prepare financial statements that are not 447-2 consolidated with the financial statements of the incumbent local 447-3 exchange company or an affiliate. Additional consolidated 447-4 statements may be prepared. 447-5 (c) A separated affiliate or electronic publishing joint 447-6 venture shall file annual reports with the commission. The reports 447-7 must be in a form substantially equivalent to the Form 10-K 447-8 required by federal Securities and Exchange Commission regulations. 447-9 (d) A separated affiliate or electronic publishing joint 447-10 venture may not hire: 447-11 (1) as a corporate officer, a sales or marketing 447-12 manager whose responsibilities at the separated affiliate or 447-13 electronic publishing joint venture include a geographic area in 447-14 which the incumbent local exchange company provides basic telephone 447-15 service; 447-16 (2) network operations personnel whose 447-17 responsibilities at the separated affiliate or electronic 447-18 publishing joint venture require dealing directly with the 447-19 incumbent local exchange company; or 447-20 (3) a person who was employed by the incumbent local 447-21 exchange company during the year preceding the date of hire. 447-22 (e) Subsection (d)(3) does not apply to a person who is 447-23 subject to a collective bargaining agreement under which the person 447-24 has a right to be employed by a separated affiliate or electronic 447-25 publishing joint venture of the local exchange company. 447-26 (f) A separated affiliate or electronic publishing joint 447-27 venture may not: 448-1 (1) incur debt in a manner that, on default, would 448-2 permit a creditor to have recourse against an asset of the 448-3 incumbent local exchange company; 448-4 (2) provide a wireline telephone exchange service in a 448-5 telephone exchange area in which an incumbent local exchange 448-6 company with which it is under common ownership or control provides 448-7 basic telephone exchange service, unless the service is provided by 448-8 resale; or 448-9 (3) use a name, trademark, or service mark of an 448-10 incumbent local exchange company unless the name, trademark, or 448-11 service mark is used in common with the entity that owns or 448-12 controls the incumbent local exchange company. (V.A.C.S. 448-13 Art. 1446c-0, Sec. 3.553 (part).) 448-14 Sec. 63.033. INCUMBENT LOCAL EXCHANGE COMPANY REQUIREMENTS. 448-15 (a) This section applies only to an incumbent local exchange 448-16 company that is under common ownership or control with a separated 448-17 affiliate or electronic publishing joint venture. 448-18 (b) An incumbent local exchange company shall: 448-19 (1) carry out each transaction with a separated 448-20 affiliate in a manner: 448-21 (A) equivalent to the manner that unrelated 448-22 parties would carry out an independent transaction; and 448-23 (B) able to be audited in accordance with 448-24 generally accepted auditing standards; 448-25 (2) carry out a transaction with a separated affiliate 448-26 that involves the transfer of personnel, assets, or anything of 448-27 value, in accordance with a written contract or tariff that is 449-1 filed with the commission and made available to the public; 449-2 (3) value an asset the company transfers to a 449-3 separated affiliate at the greater of the asset's net book cost or 449-4 fair market value; 449-5 (4) value an asset the company's separated affiliate 449-6 transfers to the company at the lesser of the asset's net book cost 449-7 or fair market value; and 449-8 (5) comply fully with applicable accounting rules of 449-9 the Federal Communications Commission and the commission, including 449-10 rules on cost allocation. 449-11 (c) An incumbent local exchange company may not directly or 449-12 indirectly provide anything of monetary value to a separated 449-13 affiliate unless the item is provided in exchange for consideration 449-14 valued in an amount at least equal to the greater of the item's net 449-15 book cost or fair market value. This subsection does not apply to 449-16 an affiliate's investment of a dividend or profit derived from an 449-17 incumbent local exchange company. 449-18 (d) An incumbent local exchange company may not: 449-19 (1) provide a separated affiliate a facility, a 449-20 service, or basic telephone service information unless the company 449-21 makes the facility, service, or information available to 449-22 nonaffiliated entities on request and on the same terms; 449-23 (2) provide debt or equity financing directly or 449-24 indirectly to a separated affiliate, except in an instance in which 449-25 Federal Communications Commission regulations or commission rules 449-26 permit: 449-27 (A) in-arrears payment for a tariffed 450-1 telecommunications service; or 450-2 (B) an affiliate to invest a dividend or profit 450-3 derived from an incumbent local exchange company; 450-4 (3) discriminate in the presentation or provision of a 450-5 gateway for electronic publishing services or an electronic 450-6 directory of information services that is provided over the 450-7 company's basic telephone service; 450-8 (4) have a director, officer, or employee in common 450-9 with a separated affiliate; 450-10 (5) own property in common with a separated affiliate; 450-11 (6) hire or train personnel for a separated affiliate; 450-12 (7) purchase, install, or maintain equipment for a 450-13 separated affiliate, except for telephone service that the company 450-14 provides under tariff or contract subject to this chapter; or 450-15 (8) perform a research or development activity for a 450-16 separated affiliate. (V.A.C.S. Art. 1446c-0, Secs. 3.554(a) 450-17 (part), (g), (h).) 450-18 Sec. 63.034. COMPLIANCE REVIEW AND REPORT. (a) A separated 450-19 affiliate or an electronic publishing joint venture annually shall 450-20 have a compliance review performed to determine whether the 450-21 separated affiliate or joint venture, during the preceding calendar 450-22 year, complied with the requirements this chapter imposes on the 450-23 separated affiliate or joint venture. 450-24 (b) An incumbent local exchange company that is under common 450-25 ownership or control with a separated affiliate or electronic 450-26 publishing joint venture annually shall have a compliance review 450-27 performed to determine whether the company, during the preceding 451-1 calendar year, complied with the requirements this chapter imposes 451-2 on the company. 451-3 (c) An independent entity that is subject to professional, 451-4 legal, and ethical obligations must conduct the compliance review. 451-5 (d) The compliance review must be performed each year 451-6 before: 451-7 (1) March 31; or 451-8 (2) another date prescribed by the commission. 451-9 (e) An entity subject to a compliance review under 451-10 Subsection (a) or (b) shall maintain the results of the entity's 451-11 compliance review for five years subject to review by a lawful 451-12 authority. 451-13 (f) Before the 91st day after the date an entity subject to 451-14 a compliance review under Subsection (a) or (b) receives the 451-15 results of a compliance review under this section, the entity 451-16 shall: 451-17 (1) file with the commission a report of any 451-18 exceptions or corrective actions; and 451-19 (2) allow any person to inspect and copy the report. 451-20 (g) The right of a person to inspect and copy the report is 451-21 subject to reasonable safeguards to protect proprietary information 451-22 in the report from being used for a purpose other than to enforce 451-23 this chapter or to pursue a remedy under this chapter. (V.A.C.S. 451-24 Art. 1446c-0, Secs. 3.553 (part), 3.554(a) (part).) 451-25 Sec. 63.035. SERVICES TO ELECTRONIC PUBLISHER. (a) This 451-26 section applies only to an incumbent local exchange company that is 451-27 under common ownership and control with a separated affiliate or an 452-1 electronic publishing joint venture. 452-2 (b) If the incumbent local exchange company provides a 452-3 facility or service for telecommunication, transmission, billing 452-4 and collection, or expanded interconnection to an electronic 452-5 publisher, including a separated affiliate, for use in connection 452-6 with the provision of electronic publishing disseminated by the 452-7 basic telephone service of the incumbent local exchange company or 452-8 an affiliate of the incumbent local exchange company, the incumbent 452-9 local exchange company shall provide to any electronic publisher on 452-10 request the same type of facility or service. The facility or 452-11 service must be: 452-12 (1) provided on the same terms as provided to another 452-13 electronic publisher or as required by the Federal Communications 452-14 Commission or the commission; and 452-15 (2) unbundled and individually tariffed to the 452-16 smallest extent technically feasible and economically reasonable. 452-17 (c) The incumbent local exchange company shall provide 452-18 network access and interconnection for basic telephone service to 452-19 an electronic publisher: 452-20 (1) at any technically feasible and economically 452-21 reasonable point in the incumbent local exchange company's network; 452-22 and 452-23 (2) at a just and reasonable rate that: 452-24 (A) is tariffed if rates for the service are 452-25 subject to regulation; and 452-26 (B) is not higher on a per unit basis than the 452-27 rate charged for the service to another electronic publisher or a 453-1 separated affiliate engaged in electronic publishing. 453-2 (d) If the price for network access or interconnection for 453-3 basic telephone service is not subject to regulation, the incumbent 453-4 local exchange company shall provide the service to an electronic 453-5 publisher on the same terms under which a separated affiliate 453-6 receives the service. 453-7 (e) If a tariff is not required for a basic telephone 453-8 service used by an electronic publisher, the incumbent local 453-9 exchange company shall provide an electronic publisher with the 453-10 service on the same terms under which a separated affiliate 453-11 receives the service. (V.A.C.S. Art. 1446c-0, Secs. 3.554(b), (c), 453-12 (d), (e).) 453-13 Sec. 63.036. INFORMATION PROVIDED. (a) An incumbent local 453-14 exchange company under common ownership or control with a separated 453-15 affiliate or an electronic publishing joint venture shall give to 453-16 each affected electronic publisher reasonable advance notification 453-17 of information that: 453-18 (1) is necessary for an interconnected electronic 453-19 publisher to transmit or route information; 453-20 (2) is necessary to ensure the interoperability of an 453-21 electronic publisher's network with the exchange company's network; 453-22 or 453-23 (3) relates to a change in basic telephone service 453-24 network design or a technical standard that may affect the 453-25 provision of electronic publishing. 453-26 (b) The notification must be given to each electronic 453-27 publisher at the same time and on the same terms. (V.A.C.S. 454-1 Art. 1446c-0, Sec. 3.554(f).) 454-2 Sec. 63.037. CUSTOMER PROPRIETARY NETWORK INFORMATION. In 454-3 accordance with Subchapter B, Chapter 62, an incumbent local 454-4 exchange company or an affiliate may not provide an electronic 454-5 publisher, including a separated affiliate or electronic publishing 454-6 joint venture, with customer proprietary network information for 454-7 use with or in connection with providing electronic publishing 454-8 disseminated by the basic telephone service of the incumbent local 454-9 exchange company or an affiliate of the incumbent local exchange 454-10 company unless the exchange company or affiliate makes the 454-11 information available to all electronic publishers on the same 454-12 terms. (V.A.C.S. Art. 1446c-0, Sec. 3.555.) 454-13 Sec. 63.038. PROHIBITED JOINT ACTIVITIES. Except as 454-14 provided by Sections 63.039-63.041, an incumbent local exchange 454-15 company may not engage in any: 454-16 (1) promotion, marketing, sales, or advertising for or 454-17 with a separated affiliate; or 454-18 (2) promotion, marketing, sales, or advertising for or 454-19 with an affiliate if the activity is related to electronic 454-20 publishing. (V.A.C.S. Art. 1446c-0, Sec. 3.558.) 454-21 Sec. 63.039. PERMITTED JOINT MARKETING OR REFERRAL 454-22 ACTIVITIES. (a) An incumbent local exchange company may provide 454-23 an inbound telemarketing or referral service related to the 454-24 provision of electronic publishing for: 454-25 (1) a separated affiliate; 454-26 (2) an electronic publishing joint venture; 454-27 (3) an affiliate; or 455-1 (4) a nonaffiliated electronic publisher. 455-2 (b) To ensure that the company's method of providing the 455-3 service or the company's price structure does not competitively 455-4 disadvantage an electronic publisher, regardless of the publisher's 455-5 size or whether the publisher uses a telemarketing service of the 455-6 company, an incumbent local exchange company that provides an 455-7 inbound telemarketing or referral service to a separated affiliate, 455-8 electronic publishing joint venture, or affiliate shall make the 455-9 service available to all electronic publishers: 455-10 (1) on request; 455-11 (2) on nondiscriminatory terms; 455-12 (3) at compensatory prices; and 455-13 (4) subject to rules of the commission. (V.A.C.S. 455-14 Art. 1446c-0, Sec. 3.559(a).) 455-15 Sec. 63.040. ELECTRONIC PUBLISHING TEAMING OR BUSINESS 455-16 ARRANGEMENTS. (a) An incumbent local exchange company may engage 455-17 in a nondiscriminatory teaming or business arrangement to engage in 455-18 electronic publishing with a separated affiliate or with another 455-19 electronic publisher. 455-20 (b) An incumbent local exchange company engaged in a teaming 455-21 or business arrangement under Subsection (a) may not own the 455-22 teaming or business arrangement. 455-23 (c) An incumbent local exchange company engaged in a teaming 455-24 or business arrangement under Subsection (a) may provide only 455-25 facilities, services, and basic telephone service information 455-26 authorized by this chapter. (V.A.C.S. Art. 1446c-0, Sec. 455-27 3.559(b).) 456-1 Sec. 63.041. JOINT VENTURE PARTICIPATION. (a) Except as 456-2 provided by Subsection (b), an incumbent local exchange company or 456-3 affiliate may participate on a nonexclusive basis in an electronic 456-4 publishing joint venture to provide electronic publishing services 456-5 with an entity that is not: 456-6 (1) an incumbent local exchange company; 456-7 (2) an affiliate; or 456-8 (3) a separated affiliate. 456-9 (b) An incumbent local exchange company or affiliate may not 456-10 participate in an electronic publishing joint venture if the 456-11 company or affiliate has: 456-12 (1) a direct or indirect equity interest in the 456-13 venture, or the equivalent, of more than 50 percent; or 456-14 (2) the right to more than 50 percent of the gross 456-15 revenues of the venture under a revenue sharing or royalty 456-16 agreement. 456-17 (c) Officers and employees of an incumbent local exchange 456-18 company or affiliate that participates in an electronic publishing 456-19 joint venture may not have more than 50 percent of the voting 456-20 control over the venture. 456-21 (d) The commission for good cause shown may authorize an 456-22 incumbent local exchange company or affiliate to have a larger 456-23 percentage of equity interest, revenue share, or voting control 456-24 than that prescribed by Subsection (b) or (c) for a joint venture 456-25 between the company and a small, local, electronic publisher. The 456-26 larger percentage may not exceed 80 percent. 456-27 (e) An incumbent local exchange company that participates in 457-1 an electronic publishing joint venture may provide promotion, 457-2 marketing, sales, or advertising personnel or services to the joint 457-3 venture. (V.A.C.S. Art. 1446c-0, Sec. 3.559(c).) 457-4 Sec. 63.042. OTHER ELECTRONIC PUBLISHERS. (a) Except as 457-5 provided by Section 63.041: 457-6 (1) an incumbent local exchange company may not have 457-7 an officer, employee, property, or facility in common with an 457-8 entity whose principal business is publishing if the business 457-9 includes electronic publishing; and 457-10 (2) an officer or employee of an incumbent local 457-11 exchange company may not serve as a director of an entity whose 457-12 principal business is publishing if the business includes 457-13 electronic publishing. 457-14 (b) For the purposes of Subsection (a), an incumbent local 457-15 exchange company or affiliate that owns an electronic publishing 457-16 joint venture is not considered engaged in the electronic 457-17 publishing business solely because of that ownership. 457-18 (c) Except as provided by Section 63.041, an incumbent local 457-19 exchange company may not: 457-20 (1) market or sell for an entity that engages in 457-21 electronic publishing; 457-22 (2) provide a facility, service, or basic telephone 457-23 service information to an entity that engages in electronic 457-24 publishing, for use with or in connection with the provision of 457-25 electronic publishing that is disseminated by the basic telephone 457-26 service of the incumbent local exchange company or an affiliate of 457-27 the incumbent local exchange company, unless an equivalent 458-1 facility, service, or information is made available on equivalent 458-2 terms to all other entities; or 458-3 (3) hire personnel, purchase, or carry out production 458-4 for an entity that engages in electronic publishing. (V.A.C.S. 458-5 Art. 1446c-0, Sec. 3.562.) 458-6 (Sections 63.043-63.060 reserved for expansion) 458-7 SUBCHAPTER C. ELECTRONIC PUBLISHING TRANSACTIONS 458-8 Sec. 63.061. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN 458-9 INCUMBENT LOCAL EXCHANGE COMPANY AND AFFILIATE GENERALLY. (a) If 458-10 related to the provision of electronic publishing, the provision of 458-11 a facility, a service, or basic telephone service information by an 458-12 incumbent local exchange company to an affiliate or the transfer of 458-13 an asset, including personnel or something of commercial or 458-14 competitive value, from an incumbent local exchange company to an 458-15 affiliate shall be: 458-16 (1) recorded in the books and records of the incumbent 458-17 local exchange company and the affiliate; 458-18 (2) able to be audited in accordance with generally 458-19 accepted auditing standards; and 458-20 (3) done in accordance with a written contract or 458-21 tariff filed with the commission. 458-22 (b) A transfer of an asset directly related to the provision 458-23 of electronic publishing from an incumbent local exchange company 458-24 to an affiliate shall be valued at the greater of the asset's net 458-25 book cost or fair market value. 458-26 (c) A transfer of an asset related to the provision of 458-27 electronic publishing from an affiliate to the incumbent local 459-1 exchange company shall be valued at the lesser of the asset's net 459-2 book cost or fair market value. 459-3 (d) An incumbent local exchange company may not directly or 459-4 indirectly provide to a separated affiliate a facility, a service, 459-5 or basic telephone service information related to the provision of 459-6 electronic publishing unless the facility, service, or information 459-7 is made available to nonaffiliated companies on the same terms. 459-8 (V.A.C.S. Art. 1446c-0, Sec. 3.560.) 459-9 Sec. 63.062. ELECTRONIC PUBLISHING TRANSACTIONS BETWEEN 459-10 INCUMBENT LOCAL EXCHANGE COMPANY AND SEPARATED AFFILIATE. (a) If 459-11 an incumbent local exchange company provides to an affiliate a 459-12 facility, a service, or basic telephone service information subject 459-13 to Section 63.061(a) or transfers to an affiliate an asset subject 459-14 to that section and the affiliate provides the facility, service, 459-15 or information to a separated affiliate or transfers the asset to a 459-16 separated affiliate, the transaction shall be: 459-17 (1) recorded in the books and records of each entity; 459-18 (2) able to be audited in accordance with generally 459-19 accepted auditing standards; and 459-20 (3) done in accordance with a written contract or 459-21 tariff filed with the commission. 459-22 (b) A transfer of an asset directly related to the provision 459-23 of electronic publishing from an incumbent local exchange company 459-24 to an affiliate as described by Section 63.061 and then transferred 459-25 to a separated affiliate shall be valued at the greater of the 459-26 asset's net book cost or fair market value. 459-27 (c) A transfer of an asset related to the provision of 460-1 electronic publishing from a separated affiliate to an affiliate 460-2 and then transferred to the incumbent local exchange company as 460-3 described by Section 63.061 shall be valued at the lesser of the 460-4 asset's net book cost or fair market value. 460-5 (d) An affiliate may not provide directly or indirectly to a 460-6 separated affiliate a facility, a service, or basic telephone 460-7 service information related to the provision of electronic 460-8 publishing unless the facility, service, or information is made 460-9 available to nonaffiliated companies on the same terms. (V.A.C.S. 460-10 Art. 1446c-0, Sec. 3.561.) 460-11 Sec. 63.063. EXCEPTION. This subchapter does not apply to 460-12 an investment described by Section 63.005. (V.A.C.S. Art. 1446c-0, 460-13 Sec. 3.557 (part).) 460-14 (Chapters 64-100 reserved for expansion) 460-15 TITLE 3. GAS REGULATION 460-16 SUBTITLE A. GAS UTILITY REGULATORY ACT 460-17 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF 460-18 PUBLIC UTILITY COUNSEL 460-19 SUBCHAPTER A. GENERAL PROVISIONS 460-20 Sec. 101.001. SHORT TITLE 460-21 Sec. 101.002. PURPOSE AND FINDINGS 460-22 Sec. 101.003. DEFINITIONS 460-23 Sec. 101.004. PERSON DETERMINED TO BE AFFILIATE 460-24 Sec. 101.005. ADMINISTRATIVE PROCEDURE 460-25 Sec. 101.006. CUMULATIVE EFFECT; APPLICATION TO GAS 460-26 UTILITIES 460-27 Sec. 101.007. LIBERAL CONSTRUCTION 461-1 Sec. 101.008. CONSTRUCTION WITH FEDERAL AUTHORITY 461-2 (Sections 101.009-101.050 reserved for expansion) 461-3 SUBCHAPTER B. OFFICE OF PUBLIC UTILITY COUNSEL 461-4 Sec. 101.051. OFFICE OF PUBLIC UTILITY COUNSEL 461-5 Sec. 101.052. OFFICE POWERS AND DUTIES 461-6 Sec. 101.053. PROHIBITED ACTS 461-7 Sec. 101.054. PERSONNEL 461-8 CHAPTER 101. GENERAL PROVISIONS AND OFFICE OF 461-9 PUBLIC UTILITY COUNSEL 461-10 SUBCHAPTER A. GENERAL PROVISIONS 461-11 Sec. 101.001. SHORT TITLE. This subtitle may be cited as 461-12 the Gas Utility Regulatory Act. (V.A.C.S. Art. 1446e, Sec. 1.01.) 461-13 Sec. 101.002. PURPOSE AND FINDINGS. (a) This subtitle is 461-14 enacted to protect the public interest inherent in the rates and 461-15 services of gas utilities. The purpose of this subtitle is to 461-16 establish a comprehensive and adequate regulatory system for gas 461-17 utilities to assure rates, operations, and services that are just 461-18 and reasonable to the consumers and to the utilities. 461-19 (b) Gas utilities are by definition monopolies in the areas 461-20 they serve. As a result, the normal forces of competition that 461-21 regulate prices in a free enterprise society do not operate. Public 461-22 agencies regulate utility rates, operations, and services as a 461-23 substitute for competition. (V.A.C.S. Art. 1446e, Sec. 1.02.) 461-24 Sec. 101.003. DEFINITIONS. In this subtitle: 461-25 (1) "Affected person" means: 461-26 (A) a gas utility affected by an action of a 461-27 regulatory authority; 462-1 (B) a person whose utility service or rates are 462-2 affected by a proceeding before a regulatory authority; or 462-3 (C) a person who: 462-4 (i) is a competitor of a gas utility with 462-5 respect to a service performed by the utility; or 462-6 (ii) wants to enter into competition with 462-7 a gas utility. 462-8 (2) "Affiliate" means: 462-9 (A) a person who directly or indirectly owns or 462-10 holds at least five percent of the voting securities of a gas 462-11 utility; 462-12 (B) a person in a chain of successive ownership 462-13 of at least five percent of the voting securities of a gas utility; 462-14 (C) a corporation that has at least five percent 462-15 of its voting securities owned or controlled, directly or 462-16 indirectly, by a gas utility; 462-17 (D) a corporation that has at least five percent 462-18 of its voting securities owned or controlled, directly or 462-19 indirectly, by: 462-20 (i) a person who directly or indirectly 462-21 owns or controls at least five percent of the voting securities of 462-22 a gas utility; or 462-23 (ii) a person in a chain of successive 462-24 ownership of at least five percent of the voting securities of a 462-25 gas utility; 462-26 (E) a person who is an officer or director of a 462-27 gas utility or of a corporation in a chain of successive ownership 463-1 of at least five percent of the voting securities of a gas utility; 463-2 or 463-3 (F) a person determined to be an affiliate under 463-4 Section 101.004. 463-5 (3) "Allocation" means the division among 463-6 municipalities or among municipalities and unincorporated areas of 463-7 the plant, revenues, expenses, taxes, and reserves of a gas utility 463-8 used to provide gas utility service in a municipality or for a 463-9 municipality and unincorporated areas. 463-10 (4) "Corporation" means a domestic or foreign 463-11 corporation, joint-stock company, or association, and each lessee, 463-12 assignee, trustee, receiver, or other successor in interest of the 463-13 corporation, company, or association, that has any of the powers or 463-14 privileges of a corporation not possessed by an individual or 463-15 partnership. The term does not include a municipal corporation, 463-16 except as expressly provided by this subtitle. 463-17 (5) "Counsellor" means the chief executive of the 463-18 Office of Public Utility Counsel. 463-19 (6) "Facilities" means all of the plant and equipment 463-20 of a gas utility, and includes the tangible and intangible 463-21 property, without limitation, owned, operated, leased, licensed, 463-22 used, controlled, or supplied for, by, or in connection with the 463-23 business of the gas utility. 463-24 (7) "Gas utility" includes a person or river authority 463-25 that owns or operates for compensation in this state equipment or 463-26 facilities to transmit or distribute combustible hydrocarbon 463-27 natural gas or synthetic natural gas for sale or resale in a manner 464-1 not subject to the jurisdiction of the Federal Energy Regulatory 464-2 Commission under the Natural Gas Act (15 U.S.C. Section 717 et 464-3 seq.). The term includes a lessee, trustee, or receiver of a gas 464-4 utility. The term does not include: 464-5 (A) a municipal corporation; 464-6 (B) a person or river authority to the extent 464-7 the person or river authority: 464-8 (i) produces, gathers, transports, or 464-9 sells natural gas or synthetic natural gas under Section 121.004 or 464-10 121.005; 464-11 (ii) distributes or sells liquefied 464-12 petroleum gas; or 464-13 (iii) transports, delivers, or sells 464-14 natural gas for fuel for irrigation wells or any other direct 464-15 agricultural use; 464-16 (C) a person to the extent the person: 464-17 (i) sells natural gas for use as vehicle 464-18 fuel; 464-19 (ii) sells natural gas to a person who 464-20 later sells the natural gas for use as vehicle fuel; or 464-21 (iii) owns or operates equipment or 464-22 facilities to sell or transport natural gas for ultimate use as 464-23 vehicle fuel; or 464-24 (D) a person not otherwise a gas utility who 464-25 furnishes gas or gas service only to itself, its employees, or its 464-26 tenants as an incident of employment or tenancy, if the gas or gas 464-27 service is not resold to or used by others. 465-1 (8) "Municipally owned utility" means a utility owned, 465-2 operated, and controlled by a municipality or by a nonprofit 465-3 corporation the directors of which are appointed by one or more 465-4 municipalities. 465-5 (9) "Order" means all or a part of a final disposition 465-6 by a regulatory authority in a matter other than rulemaking, 465-7 without regard to whether the disposition is affirmative or 465-8 negative or injunctive or declaratory. The term includes the 465-9 setting of a rate. 465-10 (10) "Person" includes an individual, a partnership of 465-11 two or more persons having a joint or common interest, a mutual or 465-12 cooperative association, and a corporation. 465-13 (11) "Proceeding" means a hearing, investigation, 465-14 inquiry, or other procedure for finding facts or making a decision 465-15 under this subtitle. The term includes a denial of relief or 465-16 dismissal of a complaint. 465-17 (12) "Rate" means: 465-18 (A) any compensation, tariff, charge, fare, 465-19 toll, rental, or classification that is directly or indirectly 465-20 demanded, observed, charged, or collected by a gas utility for a 465-21 service, product, or commodity described in the definition of gas 465-22 utility in this section; and 465-23 (B) a rule, regulation, practice, or contract 465-24 affecting the compensation, tariff, charge, fare, toll, rental, or 465-25 classification. 465-26 (13) "Regulatory authority" means either the railroad 465-27 commission or the governing body of a municipality, in accordance 466-1 with the context. 466-2 (14) "Service" has its broadest and most inclusive 466-3 meaning. The term includes any act performed, anything supplied, 466-4 and any facilities used or supplied by a gas utility in the 466-5 performance of the utility's duties under this subtitle to its 466-6 patrons, employees, other gas utilities, and the public. The term 466-7 also includes the interchange of facilities between two or more gas 466-8 utilities. 466-9 (15) "State agency" has the meaning assigned by 466-10 Section 572.002, Government Code, to the extent the state agency 466-11 must obtain the approval described by Section 31.401(a), Natural 466-12 Resources Code. 466-13 (16) "Test year" means the most recent 12 months, 466-14 beginning on the first day of a calendar or fiscal year quarter, 466-15 for which operating data for a gas utility are available. 466-16 (V.A.C.S. Art. 1446e, Secs. 1.03(1), (3), (4), (6), (7), (8) 466-17 (part), (9), (10), (11), (12), (13), (14), (15), (16), (17).) 466-18 Sec. 101.004. PERSON DETERMINED TO BE AFFILIATE. (a) The 466-19 railroad commission may determine that a person is an affiliate for 466-20 purposes of this subtitle if the railroad commission after notice 466-21 and hearing finds that the person: 466-22 (1) actually exercises substantial influence or 466-23 control over the policies and actions of a gas utility; 466-24 (2) is a person over which a gas utility exercises the 466-25 control described by Subdivision (1); 466-26 (3) is under common control with a gas utility; or 466-27 (4) actually exercises substantial influence over the 467-1 policies and actions of a gas utility in conjuction with one or 467-2 more persons with whom the person is related by ownership or blood 467-3 relationship, or by action in concert, that together they are 467-4 affiliated with the gas utility within the meaning of this section 467-5 even though neither person may qualify as an affiliate 467-6 individually. 467-7 (b) For purposes of Subsection (a)(3), "common control with 467-8 a gas utility" means the direct or indirect possession of the power 467-9 to direct or cause the direction of the management and policies of 467-10 another, without regard to whether that power is established 467-11 through ownership or voting of securities or by any other direct or 467-12 indirect means. (V.A.C.S. Art. 1446e, Sec. 1.03(8) (part).) 467-13 Sec. 101.005. ADMINISTRATIVE PROCEDURE. Chapter 2001, 467-14 Government Code, applies to a proceeding under this subtitle except 467-15 to the extent inconsistent with this subtitle. (V.A.C.S. 467-16 Art. 1446e, Sec. 1.04.) 467-17 Sec. 101.006. CUMULATIVE EFFECT; APPLICATION TO GAS 467-18 UTILITIES. (a) This subtitle is cumulative of laws existing on 467-19 September 1, 1983, relating to the jurisdiction, power, or 467-20 authority of the railroad commission over a gas utility, and, 467-21 except as specifically in conflict with this subtitle, that 467-22 jurisdiction, power, and authority are not limited by this 467-23 subtitle. 467-24 (b) This subtitle applies to all gas utilities, including a 467-25 gas utility that is under the jurisdiction, power, or authority of 467-26 the railroad commission in accordance with a law other than this 467-27 subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(c).) 468-1 Sec. 101.007. LIBERAL CONSTRUCTION. This subtitle shall be 468-2 construed liberally to promote the effectiveness and efficiency of 468-3 regulation of gas utilities to the extent that this construction 468-4 preserves the validity of this subtitle and its provisions. 468-5 (V.A.C.S. Art. 1446e, Sec. 10.04 (part).) 468-6 Sec. 101.008. CONSTRUCTION WITH FEDERAL AUTHORITY. This 468-7 subtitle shall be construed to apply so as not to conflict with any 468-8 authority of the United States. (V.A.C.S. Art. 1446e, Sec. 10.04 468-9 (part).) 468-10 (Sections 101.009-101.050 reserved for expansion) 468-11 SUBCHAPTER B. OFFICE OF PUBLIC UTILITY COUNSEL 468-12 Sec. 101.051. OFFICE OF PUBLIC UTILITY COUNSEL. The 468-13 independent office of public utility counsel represents the 468-14 interests of residential consumers. (V.A.C.S. Art. 1446e, Sec. 468-15 9.07(a).) 468-16 Sec. 101.052. OFFICE POWERS AND DUTIES. (a) The office: 468-17 (1) may appear or intervene as a party or otherwise 468-18 represent residential consumers, as a class, in appeals to the 468-19 railroad commission only at the written request of an affected 468-20 municipality's governing body; 468-21 (2) may initiate or intervene as a matter of right or 468-22 otherwise appear in a judicial proceeding that involves an action 468-23 taken by the railroad commission in a proceeding in which the 468-24 office was a party; 468-25 (3) is entitled to the same access as a party, other 468-26 than railroad commission staff, to records gathered by the railroad 468-27 commission under Section 102.203; 469-1 (4) is entitled to discovery of any nonprivileged 469-2 matter that is relevant to the subject matter of a proceeding or 469-3 petition before the railroad commission; 469-4 (5) may represent an individual residential consumer 469-5 with respect to the consumer's disputed complaint concerning 469-6 utility services that is unresolved before the railroad commission; 469-7 and 469-8 (6) may recommend legislation to the legislature that 469-9 the office determines would positively affect the interests of 469-10 residential consumers. 469-11 (b) The office may represent only as a class the residential 469-12 consumers of a municipality that makes a request under Subsection 469-13 (a)(1). 469-14 (c) This section does not limit the authority of the 469-15 railroad commission to represent residential consumers. 469-16 (d) The appearance of the counsellor in a proceeding does 469-17 not preclude the appearance of other parties on behalf of 469-18 residential consumers. The counsellor may not be grouped with any 469-19 other party. (V.A.C.S. Art. 1446e, Secs. 9.07(f), (g), (h).) 469-20 Sec. 101.053. PROHIBITED ACTS. (a) The counsellor may not: 469-21 (1) have a direct or indirect interest in a gas 469-22 utility company regulated under this subtitle; or 469-23 (2) provide legal services directly or indirectly to 469-24 or be employed in any capacity by a gas utility company regulated 469-25 under this subtitle, its parent, or its subsidiary companies, 469-26 corporations, or cooperatives. 469-27 (b) The prohibition under Subsection (a) applies during the 470-1 period of the counsellor's service and until the first anniversary 470-2 of the date the counsellor ceases to serve as counsellor. 470-3 (c) This section does not prohibit a person from otherwise 470-4 engaging in the private practice of law after the person ceases to 470-5 serve as counsellor. (V.A.C.S. Art. 1446e, Sec. 9.07(e).) 470-6 Sec. 101.054. PERSONNEL. (a) The counsellor may employ 470-7 lawyers, economists, engineers, consultants, statisticians, 470-8 accountants, clerical staff, and other employees as the counsellor 470-9 determines necessary to carry out this subchapter. 470-10 (b) An employee receives compensation as prescribed by the 470-11 legislature from the assessment imposed by Subchapter A, Chapter 470-12 16. (V.A.C.S. Art. 1446e, Sec. 9.07(c).) 470-13 CHAPTER 102. JURISDICTION AND POWERS OF 470-14 RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES 470-15 SUBCHAPTER A. GENERAL POWERS OF RAILROAD COMMISSION 470-16 Sec. 102.001. RAILROAD COMMISSION JURISDICTION 470-17 Sec. 102.002. LIMITATION ON RAILROAD COMMISSION 470-18 JURISDICTION 470-19 Sec. 102.003. RAILROAD COMMISSION POWERS RELATING 470-20 TO REPORTS 470-21 Sec. 102.004. REPORT OF SUBSTANTIAL INTEREST 470-22 Sec. 102.005. ASSISTANCE TO MUNICIPALITY 470-23 (Sections 102.006-102.050 reserved for expansion) 470-24 SUBCHAPTER B. RESTRICTIONS ON CERTAIN TRANSACTIONS 470-25 Sec. 102.051. REPORT OF CERTAIN TRANSACTIONS; 470-26 RAILROAD COMMISSION CONSIDERATION 470-27 Sec. 102.052. REPORT OF PURCHASE OF VOTING STOCK IN GAS 471-1 UTILITY 471-2 Sec. 102.053. REPORT OF LOAN TO STOCKHOLDERS 471-3 Sec. 102.054. APPROVAL OF CONVEYANCE OF GAS RESERVE RIGHTS 471-4 (Sections 102.055-102.100 reserved for expansion) 471-5 SUBCHAPTER C. RECORDS 471-6 Sec. 102.101. RECORDS OF GAS UTILITY 471-7 Sec. 102.102. MAINTENANCE OF OFFICE AND RECORDS IN THIS 471-8 STATE 471-9 Sec. 102.103. COMMUNICATIONS WITH REGULATORY AUTHORITY 471-10 Sec. 102.104. JURISDICTION OVER AFFILIATE 471-11 (Sections 102.105-102.150 reserved for expansion) 471-12 SUBCHAPTER D. REQUIRED REPORTS AND FILINGS 471-13 Sec. 102.151. SCHEDULE FILINGS 471-14 Sec. 102.152. DEPRECIATION ACCOUNT 471-15 Sec. 102.153. ACCOUNTS OF PROFITS AND LOSSES 471-16 Sec. 102.154. REPORT OF CERTAIN EXPENSES 471-17 (Sections 102.155-102.200 reserved for expansion) 471-18 SUBCHAPTER E. AUDITS AND INSPECTIONS 471-19 Sec. 102.201. INQUIRY INTO MANAGEMENT AND AFFAIRS 471-20 Sec. 102.202. AUDIT OF ACCOUNTS 471-21 Sec. 102.203. INSPECTION 471-22 Sec. 102.204. EXAMINATIONS UNDER OATH 471-23 Sec. 102.205. ENTERING PREMISES OF GAS UTILITY 471-24 Sec. 102.206. PRODUCTION OF OUT-OF-STATE RECORDS 471-25 (Sections 102.207-102.250 reserved for expansion) 472-1 SUBCHAPTER F. GENERAL PROVISIONS RELATING TO PROCEEDINGS 472-2 BEFORE REGULATORY AUTHORITY 472-3 Sec. 102.251. RECORD OF PROCEEDING 472-4 Sec. 102.252. RIGHT TO BE HEARD 472-5 CHAPTER 102. JURISDICTION AND POWERS OF 472-6 RAILROAD COMMISSION AND OTHER REGULATORY AUTHORITIES 472-7 SUBCHAPTER A. GENERAL POWERS OF RAILROAD COMMISSION 472-8 Sec. 102.001. RAILROAD COMMISSION JURISDICTION. (a) The 472-9 railroad commission has exclusive original jurisdiction over the 472-10 rates and services of a gas utility distributing natural gas or 472-11 synthetic natural gas in areas outside a municipality. The 472-12 railroad commission also has exclusive original jurisdiction over 472-13 the rates and services of a gas utility that transmits, transports, 472-14 delivers, or sells natural gas or synthetic natural gas to a gas 472-15 utility that distributes the gas to the public. 472-16 (b) The railroad commission has exclusive appellate 472-17 jurisdiction to review an order or ordinance of a municipality as 472-18 provided by this subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(b).) 472-19 Sec. 102.002. LIMITATION ON RAILROAD COMMISSION 472-20 JURISDICTION. Except as otherwise provided by this subtitle, this 472-21 subtitle does not authorize the railroad commission to: 472-22 (1) regulate or supervise a rate or service of a 472-23 municipally owned utility; or 472-24 (2) affect the jurisdiction, power, or duty of a 472-25 municipality that has elected to regulate and supervise a gas 472-26 utility in the municipality. (V.A.C.S. Art. 1446e, Sec. 2.02.) 472-27 Sec. 102.003. RAILROAD COMMISSION POWERS RELATING TO 473-1 REPORTS. The railroad commission may: 473-2 (1) require a gas utility to report to the railroad 473-3 commission information relating to the gas utility and an affiliate 473-4 inside or outside this state as useful in administering this 473-5 subtitle; 473-6 (2) establish the form for a report; 473-7 (3) determine the time for a report and the frequency 473-8 with which the report is to be made; 473-9 (4) require that a report be made under oath; 473-10 (5) require the filing with the railroad commission of 473-11 a copy of: 473-12 (A) a contract or arrangement between a gas 473-13 utility and an affiliate; 473-14 (B) a report filed with a federal agency or a 473-15 governmental agency or body of another state; and 473-16 (C) an annual report that shows each payment of 473-17 compensation, other than salary or wages subject to federal income 473-18 tax withholding: 473-19 (i) to residents of this state; 473-20 (ii) with respect to legal, 473-21 administrative, or legislative matters in this state; or 473-22 (iii) for representation before the 473-23 legislature of this state or any governmental agency or body; and 473-24 (6) require that a contract or arrangement described 473-25 by Subdivision (5)(A) that is not in writing be reduced to writing 473-26 and filed with the railroad commission. (V.A.C.S. Art. 1446e, Sec. 473-27 4.02.) 474-1 Sec. 102.004. REPORT OF SUBSTANTIAL INTEREST. The railroad 474-2 commission may require disclosure of the identity and respective 474-3 interests of each owner of at least one percent of the voting 474-4 securities of a gas utility or its affiliate. (V.A.C.S. 474-5 Art. 1446e, Sec. 7.02.) 474-6 Sec. 102.005. ASSISTANCE TO MUNICIPALITY. On request of a 474-7 municipality, the railroad commission may advise and assist the 474-8 municipality with respect to a question or proceeding arising under 474-9 this subtitle. Assistance provided by the railroad commission may 474-10 include aid to a municipality on a matter pending before the 474-11 railroad commission, a court, or the municipality's governing body, 474-12 such as making a staff member available as a witness or otherwise 474-13 providing evidence. (V.A.C.S. Art. 1446e, Sec. 3.04.) 474-14 (Sections 102.006-102.050 reserved for expansion) 474-15 SUBCHAPTER B. RESTRICTIONS ON CERTAIN TRANSACTIONS 474-16 Sec. 102.051. REPORT OF CERTAIN TRANSACTIONS; RAILROAD 474-17 COMMISSION CONSIDERATION. (a) Unless a gas utility reports the 474-18 transaction to the railroad commission within a reasonable time, 474-19 the gas utility may not: 474-20 (1) sell, acquire, or lease a plant as an operating 474-21 unit or system in this state for a total consideration of more than 474-22 $100,000; or 474-23 (2) merge or consolidate with another gas utility 474-24 operating in this state. 474-25 (b) On the filing of a report with the railroad commission, 474-26 the railroad commission shall investigate the transaction described 474-27 by Subsection (a), with or without a public hearing, to determine 475-1 whether the action is consistent with the public interest. In 475-2 reaching its determination, the railroad commission shall consider 475-3 the reasonable value of the property, facilities, or securities to 475-4 be acquired, disposed of, merged, or consolidated. 475-5 (c) If the railroad commission finds that a transaction is 475-6 not in the public interest, the railroad commission shall take the 475-7 effect of the transaction into consideration in ratemaking 475-8 proceedings and disallow the effect of the transaction if the 475-9 transaction will unreasonably affect rates or service. 475-10 (d) This section does not apply to: 475-11 (1) the purchase of a unit of property for 475-12 replacement; or 475-13 (2) an addition to the facilities of a gas utility by 475-14 construction. (V.A.C.S. Art. 1446e, Sec. 6.01.) 475-15 Sec. 102.052. REPORT OF PURCHASE OF VOTING STOCK IN GAS 475-16 UTILITY. A gas utility may not purchase voting stock in another 475-17 gas utility doing business in this state unless the utility reports 475-18 the purchase to the railroad commission. (V.A.C.S. Art. 1446e, 475-19 Sec. 6.02.) 475-20 Sec. 102.053. REPORT OF LOAN TO STOCKHOLDERS. A gas utility 475-21 may not loan money, stocks, bonds, notes, or other evidence of 475-22 indebtedness to a person who directly or indirectly owns or holds 475-23 any stock of the gas utility unless the gas utility reports the 475-24 transaction to the railroad commission within a reasonable time. 475-25 (V.A.C.S. Art. 1446e, Sec. 6.03.) 475-26 Sec. 102.054. APPROVAL OF CONVEYANCE OF GAS RESERVE RIGHTS. 475-27 A gas utility may not sell, convey, bank, or assign rights to a gas 476-1 reserve to a utility or an interstate pipeline without the prior 476-2 approval of the railroad commission. (V.A.C.S. Art. 1446e, Sec. 476-3 6.04.) 476-4 (Sections 102.055-102.100 reserved for expansion) 476-5 SUBCHAPTER C. RECORDS 476-6 Sec. 102.101. RECORDS OF GAS UTILITY. (a) Each gas utility 476-7 shall keep and provide to the regulatory authority, in the manner 476-8 and form prescribed by the railroad commission, uniform accounts of 476-9 all business transacted by the gas utility. 476-10 (b) The railroad commission may prescribe the form of books, 476-11 accounts, records, and memoranda to be kept by a gas utility, 476-12 including: 476-13 (1) the books, accounts, records, and memoranda of: 476-14 (A) the provision of and capacity for service; 476-15 and 476-16 (B) the receipt and expenditure of money; and 476-17 (2) any other form, record, and memorandum that the 476-18 railroad commission considers necessary to carry out this subtitle. 476-19 (c) For a gas utility subject to regulation by a federal 476-20 regulatory agency, compliance with the system of accounts 476-21 prescribed for the particular class of utilities by the federal 476-22 agency may be considered sufficient compliance with the system 476-23 prescribed by the railroad commission. The railroad commission may 476-24 prescribe the form of books, accounts, records, and memoranda 476-25 covering information in addition to that required by the federal 476-26 agency. The system of accounts and the form of books, accounts, 476-27 records, and memoranda prescribed by the railroad commission for a 477-1 gas utility or class of utilities may not be inconsistent with the 477-2 systems and forms established by a federal agency for that gas 477-3 utility or class of utilities. 477-4 (d) Each gas utility shall: 477-5 (1) keep and provide its books, accounts, records, and 477-6 memoranda accurately and faithfully in the manner and form 477-7 prescribed by the railroad commission; and 477-8 (2) comply with the directions of the regulatory 477-9 authority relating to the books, accounts, records, and memoranda. 477-10 (e) In this section, "gas utility" includes a municipally 477-11 owned utility. (V.A.C.S. Art. 1446e, Secs. 4.01(a), (d) (part), 477-12 (f).) 477-13 Sec. 102.102. MAINTENANCE OF OFFICE AND RECORDS IN THIS 477-14 STATE. (a) Each gas utility shall maintain an office in this 477-15 state in a county in which some part of the utility's property is 477-16 located. The gas utility shall keep in this office all books, 477-17 accounts, records, and memoranda required by the railroad 477-18 commission to be kept in this state. 477-19 (b) A book, account, record, or memorandum required by the 477-20 regulatory authority to be kept in this state may not be removed 477-21 from this state except as prescribed by the railroad commission. 477-22 (V.A.C.S. Art. 1446e, Sec. 4.07.) 477-23 Sec. 102.103. COMMUNICATIONS WITH REGULATORY AUTHORITY. (a) 477-24 The regulatory authority shall adopt rules governing communications 477-25 with the regulatory authority or a member or employee of the 477-26 regulatory authority by: 477-27 (1) a gas utility; 478-1 (2) an affiliate; or 478-2 (3) a representative of a gas utility or affiliate. 478-3 (b) A record of a communication must contain: 478-4 (1) the name of the person contacting the regulatory 478-5 authority or member or employee of the regulatory authority; 478-6 (2) the name of the business entity represented; 478-7 (3) a brief description of the subject matter of the 478-8 communication; and 478-9 (4) the action, if any, requested by the gas utility, 478-10 affiliate, or representative. 478-11 (c) Records compiled under Subsection (b) shall be available 478-12 to the public monthly. (V.A.C.S. Art. 1446e, Sec. 4.08.) 478-13 Sec. 102.104. JURISDICTION OVER AFFILIATE. The railroad 478-14 commission has jurisdiction over an affiliate that has a 478-15 transaction with a gas utility under the railroad commission's 478-16 jurisdiction to the extent of access to an account or a record of 478-17 the affiliate relating to the transaction, including an account or 478-18 a record of joint or general expenses, any portion of which may be 478-19 applicable to the transaction. (V.A.C.S. Art. 1446e, Sec. 7.01.) 478-20 (Sections 102.105-102.150 reserved for expansion) 478-21 SUBCHAPTER D. REQUIRED REPORTS AND FILINGS 478-22 Sec. 102.151. SCHEDULE FILINGS. (a) A gas utility shall 478-23 file with each regulatory authority schedules showing all rates 478-24 that are: 478-25 (1) subject to the regulatory authority's original or 478-26 appellate jurisdiction; and 478-27 (2) in effect for a gas utility service, product, or 479-1 commodity offered by the gas utility. 479-2 (b) The gas utility shall file as a part of the schedules 479-3 required under Subsection (a) each rule or regulation that relates 479-4 to or affects: 479-5 (1) a rate of the gas utility; or 479-6 (2) a gas utility service, product, or commodity 479-7 furnished by the gas utility. (V.A.C.S. Art. 1446e, Sec. 4.06.) 479-8 Sec. 102.152. DEPRECIATION ACCOUNT. The railroad commission 479-9 shall require each gas utility or municipally owned utility to 479-10 carry a proper and adequate depreciation account in accordance 479-11 with: 479-12 (1) the rates and methods prescribed by the railroad 479-13 commission under Section 104.054; and 479-14 (2) any other rule the railroad commission adopts. 479-15 (V.A.C.S. Art. 1446e, Secs. 4.01(b) (part), (f).) 479-16 Sec. 102.153. ACCOUNTS OF PROFITS AND LOSSES. A gas utility 479-17 or municipally owned utility shall keep separate accounts showing 479-18 profits or losses from the sale or lease of merchandise, including 479-19 an appliance, a fixture, or equipment. (V.A.C.S. Art. 1446e, Secs. 479-20 4.01(c) (part), (f).) 479-21 Sec. 102.154. REPORT OF CERTAIN EXPENSES. A regulatory 479-22 authority may require a gas utility to annually report the 479-23 utility's expenditures for: 479-24 (1) business gifts and entertainment; and 479-25 (2) advertising or public relations, including 479-26 expenditures for institutional and consumption-inducing purposes. 479-27 (V.A.C.S. Art. 1446e, Sec. 4.04 (part).) 480-1 (Sections 102.155-102.200 reserved for expansion) 480-2 SUBCHAPTER E. AUDITS AND INSPECTIONS 480-3 Sec. 102.201. INQUIRY INTO MANAGEMENT AND AFFAIRS. A 480-4 regulatory authority may inquire into the management and affairs of 480-5 each gas utility and shall keep itself informed as to the manner 480-6 and method in which each gas utility is managed and its affairs are 480-7 conducted. (V.A.C.S. Art. 1446e, Sec. 4.03(c).) 480-8 Sec. 102.202. AUDIT OF ACCOUNTS. A regulatory authority may 480-9 require the examination and audit of the accounts of a gas or 480-10 municipally owned utility. (V.A.C.S. Art. 1446e, Secs. 4.01(d) 480-11 (part), (f).) 480-12 Sec. 102.203. INSPECTION. At a reasonable time for a 480-13 reasonable purpose, a regulatory authority and, to the extent 480-14 authorized by the regulatory authority, its counsel, agent, or 480-15 employee may: 480-16 (1) inspect and obtain copies of the papers, books, 480-17 accounts, documents, and other business records of a gas utility 480-18 within its jurisdiction; and 480-19 (2) inspect the plant, equipment, and other property 480-20 of a gas utility within its jurisdiction. (V.A.C.S. Art. 1446e, 480-21 Sec. 4.03(a) (part).) 480-22 Sec. 102.204. EXAMINATIONS UNDER OATH. In connection with 480-23 an investigation taken under Section 102.203, the regulatory 480-24 authority may: 480-25 (1) examine under oath an officer, agent, or employee 480-26 of a gas utility; or 480-27 (2) authorize the person conducting the action to make 481-1 the examination under oath. (V.A.C.S. Art. 1446e, Sec. 4.03(a) 481-2 (part).) 481-3 Sec. 102.205. ENTERING PREMISES OF GAS UTILITY. (a) A 481-4 member, agent, or employee of a regulatory authority may enter the 481-5 premises occupied by a gas utility to conduct an inspection, 481-6 examination, or test or to exercise any other authority provided by 481-7 this subtitle. 481-8 (b) A member, agent, or employee of the regulatory authority 481-9 may act under this section only during reasonable hours and after 481-10 reasonable notice to the gas utility. 481-11 (c) A gas utility is entitled to be represented when an 481-12 inspection, examination, or test is conducted on its premises. The 481-13 gas utility is entitled to a reasonable time to secure a 481-14 representative before the inspection, examination, or test begins. 481-15 (V.A.C.S. Art. 1446e, Secs. 4.03(b), 4.10(a) (part).) 481-16 Sec. 102.206. PRODUCTION OF OUT-OF-STATE RECORDS. (a) A 481-17 regulatory authority may require, by order or subpoena served on a 481-18 gas utility, the production, at the time and place in this state 481-19 that the regulatory authority designates, of any books, accounts, 481-20 papers, or records kept by that gas utility outside this state or, 481-21 if ordered by the railroad commission, verified copies of the 481-22 books, accounts, papers, or records. 481-23 (b) A gas utility that fails or refuses to comply with an 481-24 order or subpoena under this section violates this subtitle. 481-25 (V.A.C.S. Art. 1446e, Sec. 4.03(a) (part).) 482-1 (Sections 102.207-102.250 reserved for expansion) 482-2 SUBCHAPTER F. GENERAL PROVISIONS RELATING TO PROCEEDINGS 482-3 BEFORE REGULATORY AUTHORITY 482-4 Sec. 102.251. RECORD OF PROCEEDING. The regulatory 482-5 authority shall keep a record of each proceeding before the 482-6 authority. (V.A.C.S. Art. 1446e, Sec. 10.02 (part).) 482-7 Sec. 102.252. RIGHT TO BE HEARD. Each party to a proceeding 482-8 before a regulatory authority is entitled to be heard by attorney 482-9 or in person. (V.A.C.S. Art. 1446e, Sec. 10.02 (part).) 482-10 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 482-11 SUBCHAPTER A. GENERAL PROVISIONS 482-12 Sec. 103.001. MUNICIPAL JURISDICTION 482-13 Sec. 103.002. FRANCHISES 482-14 (Sections 103.003-103.020 reserved for expansion) 482-15 SUBCHAPTER B. RATE DETERMINATION 482-16 Sec. 103.021. MUNICIPAL PROCEEDINGS 482-17 Sec. 103.022. RATE ASSISTANCE AND COST REIMBURSEMENT 482-18 Sec. 103.023. MUNICIPAL STANDING 482-19 Sec. 103.024. JUDICIAL REVIEW 482-20 (Sections 103.025-103.050 reserved for expansion) 482-21 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 482-22 Sec. 103.051. APPEAL BY PARTY 482-23 Sec. 103.052. APPEAL BY RESIDENTS 482-24 Sec. 103.053. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY 482-25 Sec. 103.054. FILING OF APPEAL 482-26 Sec. 103.055. HEARING AND ORDER 482-27 Sec. 103.056. APPLICABILITY OF RATES 483-1 CHAPTER 103. JURISDICTION AND POWERS OF MUNICIPALITY 483-2 SUBCHAPTER A. GENERAL PROVISIONS 483-3 Sec. 103.001. MUNICIPAL JURISDICTION. To provide fair, 483-4 just, and reasonable rates and adequate and efficient services, the 483-5 governing body of a municipality has exclusive original 483-6 jurisdiction over the rates, operations, and services of a gas 483-7 utility within the municipality, subject to the limitations imposed 483-8 by this subtitle. (V.A.C.S. Art. 1446e, Sec. 2.01(a).) 483-9 Sec. 103.002. FRANCHISES. (a) This subtitle does not 483-10 restrict the rights and powers of a municipality to grant or refuse 483-11 a franchise to use the streets and alleys in the municipality or to 483-12 make a statutory charge for that use. 483-13 (b) A municipality that performs a regulatory function under 483-14 this subtitle may make each charge that is authorized by: 483-15 (1) this subtitle; or 483-16 (2) the applicable franchise agreement. 483-17 (c) A franchise agreement may not limit or interfere with a 483-18 power conferred on the railroad commission by this subtitle. 483-19 (V.A.C.S. Art. 1446e, Sec. 3.01.) 483-20 (Sections 103.003-103.020 reserved for expansion) 483-21 SUBCHAPTER B. RATE DETERMINATION 483-22 Sec. 103.021. MUNICIPAL PROCEEDINGS. (a) A municipality 483-23 regulating a gas utility under this subtitle shall require the 483-24 utility to submit information as necessary to make a reasonable 483-25 determination of rate base, expenses, investment, and rate of 483-26 return in the municipality. 483-27 (b) A municipality shall make a determination under 484-1 Subsection (a) using the procedures and requirements prescribed by 484-2 this subtitle. 484-3 (c) A municipality shall retain personnel necessary to make 484-4 the determination of reasonable rates. (V.A.C.S. Art. 1446e, Sec. 484-5 3.02.) 484-6 Sec. 103.022. RATE ASSISTANCE AND COST REIMBURSEMENT. (a) 484-7 The governing body of a municipality participating in or conducting 484-8 a ratemaking proceeding may engage rate consultants, accountants, 484-9 auditors, attorneys, and engineers to: 484-10 (1) conduct investigations, present evidence, and 484-11 advise and represent the governing body; and 484-12 (2) assist the governing body with litigation or a gas 484-13 utility ratemaking proceeding before a regulatory authority or 484-14 court. 484-15 (b) The gas utility in the ratemaking proceeding shall 484-16 reimburse the governing body of the municipality for the reasonable 484-17 cost of the services of a person engaged under Subsection (a) to 484-18 the extent the applicable regulatory authority determines 484-19 reasonable. (V.A.C.S. Art. 1446e, Sec. 3.03(a).) 484-20 Sec. 103.023. MUNICIPAL STANDING. (a) A municipality has 484-21 standing in each case before the railroad commission that relates 484-22 to a gas utility's rates and services in the municipality. 484-23 (b) A municipality's standing is subject to the right of the 484-24 railroad commission to consolidate that municipality with another 484-25 party on an issue of common interest. (V.A.C.S. Art. 1446e, Sec. 484-26 3.03(b) (part).) 484-27 Sec. 103.024. JUDICIAL REVIEW. A municipality is entitled 485-1 to judicial review of a railroad commission order relating to a gas 485-2 utility's rates and services in a municipality as provided by 485-3 Section 106.001. (V.A.C.S. Art. 1446e, Sec. 3.03(b) (part).) 485-4 (Sections 103.025-103.050 reserved for expansion) 485-5 SUBCHAPTER C. APPEAL OF MUNICIPAL ORDER 485-6 Sec. 103.051. APPEAL BY PARTY. A party to a rate proceeding 485-7 before a municipality's governing body may appeal the governing 485-8 body's decision to the railroad commission. (V.A.C.S. Art. 1446e, 485-9 Sec. 3.05(a).) 485-10 Sec. 103.052. APPEAL BY RESIDENTS. The residents of a 485-11 municipality may appeal to the railroad commission the decision of 485-12 the municipality's governing body in a rate proceeding by filing 485-13 with the railroad commission a petition for review signed by a 485-14 number of qualified voters of the municipality equal to at least 485-15 the lesser of 20,000 or 10 percent of the qualified voters of the 485-16 municipality. (V.A.C.S. Art. 1446e, Sec. 3.05(b).) 485-17 Sec. 103.053. APPEAL BY RATEPAYERS OUTSIDE MUNICIPALITY. 485-18 (a) The ratepayers of a municipally owned utility who are outside 485-19 the municipality may appeal to the railroad commission an action of 485-20 the municipality's governing body affecting the municipally owned 485-21 utility's rates by filing with the railroad commission a petition 485-22 for review signed by a number of ratepayers served by the utility 485-23 outside the municipality equal to at least the lesser of 10,000 or 485-24 five percent of those ratepayers. 485-25 (b) A petition for review is properly signed if signed by a 485-26 person or the spouse of a person in whose name residential utility 485-27 service is carried. 486-1 (c) For purposes of this section, each person who receives a 486-2 separate bill is a ratepayer. A person who receives more than one 486-3 bill may not be counted as more than one ratepayer. (V.A.C.S. 486-4 Art. 1446e, Sec. 3.05(c).) 486-5 Sec. 103.054. FILING OF APPEAL. (a) An appeal under this 486-6 subchapter is initiated by filing a petition for review with the 486-7 railroad commission and serving a copy of the petition on each 486-8 party to the original rate proceeding. 486-9 (b) The appeal must be initiated not later than the 30th day 486-10 after the date of the final decision by the governing body of the 486-11 municipality. (V.A.C.S. Art. 1446e, Sec. 3.05(d).) 486-12 Sec. 103.055. HEARING AND ORDER. (a) An appeal under this 486-13 subchapter is de novo and based on the test year presented to the 486-14 municipality adjusted for known changes and conditions that are 486-15 measurable with reasonable accuracy. 486-16 (b) The railroad commission shall enter a final order 486-17 establishing the rates the railroad commission determines the 486-18 municipality should have set in the ordinance to which the appeal 486-19 applies. 486-20 (c) If the railroad commission fails to enter a final order 486-21 within 185 days after the date the appeal is perfected, the rates 486-22 proposed by the gas utility are considered to be approved by the 486-23 railroad commission and take effect on the expiration of the 486-24 185-day period. (V.A.C.S. Art. 1446e, Sec. 3.05(e) (part).) 486-25 Sec. 103.056. APPLICABILITY OF RATES. Temporary or 486-26 permanent rates set by the railroad commission are prospective and 486-27 observed from the date of the applicable railroad commission order, 487-1 except an interim rate order necessary to provide a gas utility the 487-2 opportunity to avoid confiscation during the period beginning on 487-3 the date a petition for review is filed with the railroad 487-4 commission and ending on the date of a final order establishing 487-5 rates. (V.A.C.S. Art. 1446e, Sec. 3.05(e) (part).) 487-6 CHAPTER 104. RATES AND SERVICES 487-7 SUBCHAPTER A. GENERAL PROVISIONS 487-8 Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE 487-9 RATES 487-10 Sec. 104.002. COMPLIANCE WITH SUBTITLE 487-11 Sec. 104.003. JUST AND REASONABLE RATES 487-12 Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE PROHIBITED 487-13 Sec. 104.005. EQUALITY OF RATES AND SERVICES 487-14 Sec. 104.006. RATES FOR AREA NOT IN MUNICIPALITY 487-15 Sec. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION 487-16 Sec. 104.008. BURDEN OF PROOF 487-17 (Sections 104.009-104.050 reserved for expansion) 487-18 SUBCHAPTER B. COMPUTATION OF RATES 487-19 Sec. 104.051. ESTABLISHING OVERALL REVENUES 487-20 Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN 487-21 Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED 487-22 CAPITAL 487-23 Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION 487-24 Sec. 104.055. NET INCOME; ALLOWABLE EXPENSES 487-25 Sec. 104.056. TREATMENT OF CERTAIN TAX BENEFITS 487-26 Sec. 104.057. CONSIDERATION OF CERTAIN EXPENSES 487-27 Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE 488-1 OR LEASE OF MERCHANDISE 488-2 (Sections 104.059-104.100 reserved for expansion) 488-3 SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY 488-4 Sec. 104.101. DEFINITION 488-5 Sec. 104.102. STATEMENT OF INTENT TO INCREASE RATES 488-6 Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES 488-7 Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE 488-8 Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 488-9 HEARING 488-10 Sec. 104.106. PREFERENCE TO HEARING 488-11 Sec. 104.107. RATE SUSPENSION; DEADLINE 488-12 Sec. 104.108. TEMPORARY RATES 488-13 Sec. 104.109. BONDED RATES 488-14 Sec. 104.110. ESTABLISHMENT OF FINAL RATES 488-15 Sec. 104.111. APPROVAL OF DECREASE IN RATES 488-16 (Sections 104.112-104.150 reserved for expansion) 488-17 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 488-18 Sec. 104.151. UNREASONABLE OR VIOLATIVE EXISTING RATES 488-19 Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE 488-20 FROM ANOTHER SOURCE 488-21 (Sections 104.153-104.200 reserved for expansion) 488-22 SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES 488-23 Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR 488-24 MUNICIPALLY OWNED UTILITY AND STATE AGENCY 488-25 Sec. 104.202. EXCLUDED EXPENSES 488-26 Sec. 104.203. PAYMENT IN LIEU OF TAX 488-27 (Sections 104.204-104.250 reserved for expansion) 489-1 SUBCHAPTER F. SERVICES 489-2 Sec. 104.251. GENERAL STANDARD 489-3 Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 489-4 STANDARDS 489-5 Sec. 104.253. RULE OR STANDARD 489-6 Sec. 104.254. SERVICE 489-7 Sec. 104.255. BILLING 489-8 Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR EQUIPMENT; 489-9 INSPECTION 489-10 Sec. 104.257. INSPECTION FOR CONSUMER 489-11 CHAPTER 104. RATES AND SERVICES 489-12 SUBCHAPTER A. GENERAL PROVISIONS 489-13 Sec. 104.001. AUTHORIZATION TO ESTABLISH AND REGULATE RATES. 489-14 (a) The railroad commission is vested with all the authority and 489-15 power of this state to ensure compliance with the obligations of 489-16 gas utilities in this subtitle. 489-17 (b) The regulatory authority may establish and regulate 489-18 rates of a gas utility and may adopt rules for determining: 489-19 (1) the classification of customers and services; and 489-20 (2) the applicability of rates. 489-21 (c) A rule or order of the regulatory authority may not 489-22 conflict with a ruling of a federal regulatory body. (V.A.C.S. 489-23 Art. 1446e, Sec. 5.01.) 489-24 Sec. 104.002. COMPLIANCE WITH SUBTITLE. A gas utility may 489-25 not: 489-26 (1) charge, collect, or receive a rate for utility 489-27 service except as provided by this subtitle; or 490-1 (2) impose a rule or regulation except as provided by 490-2 this subtitle. (V.A.C.S. Art. 1446e, Sec. 4.05.) 490-3 Sec. 104.003. JUST AND REASONABLE RATES. (a) The 490-4 regulatory authority shall ensure that each rate a gas utility or 490-5 two or more gas utilities jointly make, demand, or receive is just 490-6 and reasonable. A rate may not be unreasonably preferential, 490-7 prejudicial, or discriminatory but must be sufficient, equitable, 490-8 and consistent in application to each class of consumer. In 490-9 establishing a gas utility's rates, the railroad commission may 490-10 treat as a single class two or more municipalities that a gas 490-11 utility serves if the commission considers that treatment to be 490-12 appropriate. 490-13 (b) A rate for a pipeline-to-pipeline transaction or to a 490-14 transportation, industrial, or similar large volume contract 490-15 customer is considered to be just and reasonable and otherwise to 490-16 comply with this section and shall be approved by the regulatory 490-17 authority if: 490-18 (1) neither the gas utility nor the customer had an 490-19 unfair advantage during the negotiations; 490-20 (2) the rate is substantially the same as the rate 490-21 between the gas utility and at least two of those customers under 490-22 the same or similar conditions of service; or 490-23 (3) competition does or did exist with another gas 490-24 utility, another supplier of natural gas, or a supplier of an 490-25 alternative form of energy. 490-26 (c) Subsection (b) does not apply: 490-27 (1) if a complaint is filed with the railroad 491-1 commission by a transmission pipeline purchaser of gas sold or 491-2 transported under the pipeline-to-pipeline or transportation rate; 491-3 or 491-4 (2) to a direct sale for resale to a gas distribution 491-5 utility at a city gate. 491-6 (d) The reasonableness of gas purchase costs included in a 491-7 city gate rate proposed to be charged for a sale for resale to a 491-8 gas distribution utility at a city gate may be reviewed at a city 491-9 gate rate proceeding even though the costs have been previously 491-10 approved as a rate for other parties under Subsection (b). 491-11 (e) Subsection (b)(1) does not apply to a rate charged or 491-12 offered to be charged to an affiliated pipeline utility. (V.A.C.S. 491-13 Art. 1446e, Secs. 5.02(a), (b), (d), (f).) 491-14 Sec. 104.004. UNREASONABLE PREFERENCE OR PREJUDICE 491-15 PROHIBITED. A gas utility may not: 491-16 (1) grant an unreasonable preference or advantage 491-17 concerning rates or services to a person in a classification; 491-18 (2) subject a person in a classification to an 491-19 unreasonable prejudice or disadvantage concerning rates or 491-20 services; or 491-21 (3) establish or maintain an unreasonable difference 491-22 concerning rates of services between localities or between classes 491-23 of service. (V.A.C.S. Art. 1446e, Sec. 5.10.) 491-24 Sec. 104.005. EQUALITY OF RATES AND SERVICES. (a) A gas 491-25 utility may not directly or indirectly charge, demand, collect, or 491-26 receive from a person a greater or lesser compensation for a 491-27 service provided or to be provided by the utility than the 492-1 compensation prescribed by the applicable schedule of rates filed 492-2 under Section 102.151. 492-3 (b) A person may not knowingly receive or accept a service 492-4 from a gas utility for a compensation greater or less than the 492-5 compensation prescribed by the schedules. A rate charged and 492-6 collected by a gas utility on September 1, 1983, may be continued 492-7 until schedules are filed. 492-8 (c) After notice and hearing, the railroad commission may, 492-9 in the public interest, order a gas utility to refund with interest 492-10 compensation received in violation of this section. 492-11 (d) This subtitle does not prevent a cooperative corporation 492-12 from returning to its members net earnings resulting from its 492-13 operations in proportion to the members' purchases from or through 492-14 the corporation. (V.A.C.S. Art. 1446e, Sec. 5.11.) 492-15 Sec. 104.006. RATES FOR AREA NOT IN MUNICIPALITY. Without 492-16 the approval of the railroad commission, a gas utility's rates for 492-17 an area not in a municipality may not exceed 115 percent of the 492-18 average of all rates for similar services for all municipalities 492-19 served by the same utility in the same county as that area. 492-20 (V.A.C.S. Art. 1446e, Sec. 5.09.) 492-21 Sec. 104.007. DISCRIMINATION AND RESTRICTION ON COMPETITION. 492-22 A gas utility may not: 492-23 (1) discriminate against a person who sells or leases 492-24 equipment or performs services in competition with the gas utility; 492-25 or 492-26 (2) engage in a practice that tends to restrict or 492-27 impair that competition. (V.A.C.S. Art. 1446e, Sec. 5.12.) 493-1 Sec. 104.008. BURDEN OF PROOF. In a proceeding involving a 493-2 proposed rate change, the gas utility has the burden of proving 493-3 that: 493-4 (1) the rate change is just and reasonable, if the 493-5 utility proposes the change; or 493-6 (2) an existing rate is just and reasonable, if the 493-7 proposal is to reduce the rate. (V.A.C.S. Art. 1446e, Sec. 493-8 5.04(b).) 493-9 (Sections 104.009-104.050 reserved for expansion) 493-10 SUBCHAPTER B. COMPUTATION OF RATES 493-11 Sec. 104.051. ESTABLISHING OVERALL REVENUES. In 493-12 establishing a gas utility's rates, the regulatory authority shall 493-13 establish the utility's overall revenues at an amount that will 493-14 permit the utility a reasonable opportunity to earn a reasonable 493-15 return on the utility's invested capital used and useful in 493-16 providing service to the public in excess of its reasonable and 493-17 necessary operating expenses. (V.A.C.S. Art. 1446e, Sec. 5.03 493-18 (part).) 493-19 Sec. 104.052. ESTABLISHING FAIR RATE OF RETURN. The 493-20 regulatory authority may not establish a rate that yields more than 493-21 a fair return on the adjusted value of the invested capital used 493-22 and useful in providing service to the public. (V.A.C.S. 493-23 Art. 1446e, Sec. 5.04(a).) 493-24 Sec. 104.053. COMPONENTS OF ADJUSTED VALUE OF INVESTED 493-25 CAPITAL. (a) Gas utility rates shall be based on the adjusted 493-26 value of invested capital used and useful to the utility in 493-27 providing service and that adjusted value shall be computed on the 494-1 basis of a reasonable balance between: 494-2 (1) original cost, less depreciation; and 494-3 (2) current cost, less an adjustment for present age 494-4 and condition. 494-5 (b) The regulatory authority may determine a reasonable 494-6 balance that reflects: 494-7 (1) not less than 60 percent nor more than 75 percent 494-8 of the original cost of the property at the time the property was 494-9 dedicated to public use, whether by the gas utility that is the 494-10 present owner or by a predecessor, less depreciation; and 494-11 (2) not less than 25 percent nor more than 40 percent 494-12 of the current cost less an adjustment for present age and 494-13 condition. 494-14 (c) In determining a reasonable balance, the regulatory 494-15 authority may consider inflation, deflation, quality of service 494-16 being provided, growth rate of the service area, and need for the 494-17 gas utility to attract new capital. 494-18 (d) Construction work in progress, at cost as recorded on 494-19 the gas utility's books, may be included as part of the adjusted 494-20 value of invested capital used by and useful to the utility in 494-21 providing service, as necessary to the financial integrity of the 494-22 utility. 494-23 (e) Costs of facilities, revenues, expenses, taxes, and 494-24 reserves shall be separated or allocated as prescribed by the 494-25 regulatory authority. 494-26 (f) In this section, "original cost" means the actual money 494-27 cost or the actual money value of consideration paid other than 495-1 money. (V.A.C.S. Art. 1446e, Sec. 5.05.) 495-2 Sec. 104.054. DEPRECIATION, AMORTIZATION, AND DEPLETION. 495-3 (a) The railroad commission shall establish proper and adequate 495-4 rates and methods of depreciation, amortization, or depletion for 495-5 each class of property of a gas utility or municipally owned 495-6 utility. 495-7 (b) The rates and methods established under this section and 495-8 the depreciation account required under Section 102.152 shall be 495-9 used uniformly and consistently throughout rate-setting and appeal 495-10 proceedings. (V.A.C.S. Art. 1446e, Secs. 4.01(b) (part), (f).) 495-11 Sec. 104.055. NET INCOME; ALLOWABLE EXPENSES. (a) Net 495-12 income shall be used to establish just and reasonable rates. For 495-13 that purpose, "net income" means the total revenues of the gas 495-14 utility from gas utility service less all reasonable and necessary 495-15 expenses related to that gas utility service. The regulatory 495-16 authority shall determine those revenues and expenses in a manner 495-17 consistent with this subchapter. 495-18 (b) In establishing a gas utility's rates, the regulatory 495-19 authority may not allow a gas utility's payment to an affiliate for 495-20 the cost of a service, property, right, or other item or for an 495-21 interest expense to be included as capital cost or as expense 495-22 related to gas utility service except to the extent that the 495-23 regulatory authority finds the payment is reasonable and necessary 495-24 for each item or class of items as determined by the regulatory 495-25 authority. That finding must include: 495-26 (1) a specific finding of the reasonableness and 495-27 necessity of each item or class of items allowed; and 496-1 (2) a finding that the price to the gas utility is not 496-2 higher than the prices charged by the supplying affiliate to its 496-3 other affiliates or divisions or to a nonaffiliated person for the 496-4 same item or class of items. 496-5 (c) If an expense is allowed to be included in utility 496-6 rates, or an investment is included in the utility rate base, the 496-7 related income tax deduction or benefit shall be included in the 496-8 computation of income tax expense to reduce the rates. If an 496-9 expense is disallowed or not included in utility rates, or an 496-10 investment is not included in the utility rate base, the related 496-11 income tax deduction or benefit may not be included in the 496-12 computation of income tax expense to reduce the rates. The income 496-13 tax expense shall be computed using the statutory income tax rates. 496-14 (d) The regulatory authority may adopt reasonable rules 496-15 complying with this section with respect to including and excluding 496-16 certain expenses in computing the rates to be established. 496-17 (e) This section is not intended to increase gas utility 496-18 rates to the customer arising from a cause other than utility 496-19 service. Utility rates may include only expenses arising from 496-20 providing utility service. (V.A.C.S. Art. 1446e, Sec. 5.06.) 496-21 Sec. 104.056. TREATMENT OF CERTAIN TAX BENEFITS. (a) In 496-22 determining the allocation of tax savings derived from liberalized 496-23 depreciation and amortization, the investment tax credit, and the 496-24 application of similar methods, the regulatory authority shall: 496-25 (1) balance equitably the interests of present and 496-26 future customers; and 496-27 (2) apportion accordingly the benefits between 497-1 consumers and the gas utility or municipally owned utility. 497-2 (b) If a gas utility or municipally owned utility retains a 497-3 portion of the investment tax credit, that portion shall be 497-4 deducted from the original cost of the facilities or other addition 497-5 to the rate base to which the credit applied to the extent allowed 497-6 by the Internal Revenue Code. (V.A.C.S. Art. 1446e, Secs. 4.01(e), 497-7 (f).) 497-8 Sec. 104.057. CONSIDERATION OF CERTAIN EXPENSES. (a) In 497-9 establishing a gas utility's rates, the regulatory authority may 497-10 not allow as a cost or expense an expenditure: 497-11 (1) described by Section 102.154 that the regulatory 497-12 authority determines to be not in the public interest; or 497-13 (2) for legislative advocacy. 497-14 (b) The regulatory authority may allow as a cost or expense 497-15 reasonable charitable or civic contributions not to exceed the 497-16 amount approved by the regulatory authority. (V.A.C.S. Art. 1446e, 497-17 Sec. 4.04 (part).) 497-18 Sec. 104.058. CONSIDERATION OF PROFIT OR LOSS FROM SALE OR 497-19 LEASE OF MERCHANDISE. In establishing a gas utility's or 497-20 municipally owned utility's rates, the regulatory authority may not 497-21 consider a profit or loss that results from the sale or lease of 497-22 merchandise, including appliances, fixtures, or equipment, to the 497-23 extent that merchandise is not integral to providing utility 497-24 service. (V.A.C.S. Art. 1446e, Secs. 4.01(c) (part), (f).) 497-25 (Sections 104.059-104.100 reserved for expansion) 497-26 SUBCHAPTER C. RATE CHANGES PROPOSED BY UTILITY 497-27 Sec. 104.101. DEFINITION. In this subchapter, "major 498-1 change" means an increase in rates that would increase the 498-2 aggregate revenues of the applicant more than the greater of 498-3 $100,000 or 2-1/2 percent. The term does not include an increase 498-4 in rates that the regulatory authority allows to go into effect or 498-5 the gas utility makes under an order of the regulatory authority 498-6 after hearings held with public notice. (V.A.C.S. Art. 1446e, Sec. 498-7 5.08(b) (part).) 498-8 Sec. 104.102. STATEMENT OF INTENT TO INCREASE RATES. (a) A 498-9 gas utility may not increase its rates unless the utility files a 498-10 statement of its intent with the regulatory authority that has 498-11 original jurisdiction over those rates at least 35 days before the 498-12 effective date of the proposed increase. 498-13 (b) The gas utility shall also mail or deliver a copy of the 498-14 statement of intent to the appropriate officer of each affected 498-15 municipality. 498-16 (c) The statement of intent must include: 498-17 (1) proposed revisions of tariffs and schedules; and 498-18 (2) a detailed statement of: 498-19 (A) each proposed increase; 498-20 (B) the effect the proposed increase is expected 498-21 to have on the revenues of the utility; 498-22 (C) each class and number of utility consumers 498-23 affected; and 498-24 (D) any other information required by the 498-25 regulatory authority's rules and regulations. (V.A.C.S. 498-26 Art. 1446e, Sec. 5.08(a) (part).) 498-27 Sec. 104.103. NOTICE OF INTENT TO INCREASE RATES. (a) The 499-1 gas utility shall: 499-2 (1) publish, in conspicuous form, notice to the public 499-3 of the proposed increase once each week for four successive weeks 499-4 in a newspaper having general circulation in each county containing 499-5 territory affected by the proposed increase; and 499-6 (2) provide notice of the proposed increase to any 499-7 other affected person as required by the regulatory authority's 499-8 rules. 499-9 (b) Instead of publishing newspaper notice, a gas utility 499-10 may provide notice to the public in an area outside the affected 499-11 municipality or in a municipality with a population of less than 499-12 2,500 by: 499-13 (1) mailing the notice by United States mail, postage 499-14 prepaid, to the billing address of each directly affected customer; 499-15 or 499-16 (2) including the notice, in conspicuous form, in the 499-17 bill of each directly affected customer. (V.A.C.S. Art. 1446e, 499-18 Sec. 5.08(a) (part).) 499-19 Sec. 104.104. EARLY EFFECTIVE DATE OF RATE INCREASE. (a) 499-20 For good cause shown, the regulatory authority may allow a rate 499-21 increase, other than a major change, to take effect: 499-22 (1) before the end of the 35-day period prescribed by 499-23 Section 104.102; and 499-24 (2) under conditions the regulatory authority 499-25 prescribes, subject to suspension as provided by this subchapter. 499-26 (b) The gas utility shall immediately revise its schedules 499-27 to include the increase. (V.A.C.S. Art. 1446e, Sec. 5.08(b) 500-1 (part).) 500-2 Sec. 104.105. DETERMINATION OF PROPRIETY OF RATE CHANGE; 500-3 HEARING. (a) If a schedule modifying or increasing rates is filed 500-4 with a regulatory authority, the regulatory authority shall, on 500-5 complaint by an affected person, or may, on its own motion, not 500-6 later than the 30th day after the effective date of the increase, 500-7 enter on a hearing to determine the propriety of the increase. 500-8 (b) The regulatory authority shall hold a hearing in every 500-9 case in which the increase constitutes a major change. The 500-10 regulatory authority may, however, use an informal proceeding if 500-11 the regulatory authority does not receive a complaint before the 500-12 expiration of 45 days after the date notice of the increase is 500-13 filed. 500-14 (c) The regulatory authority shall give reasonable notice of 500-15 the hearing, including notice to the governing body of each 500-16 affected municipality and county. The gas utility is not required 500-17 to provide a formal answer or file any other formal pleading in 500-18 response to the notice, and the absence of an answer does not 500-19 affect an order for a hearing. (V.A.C.S. Art. 1446e, Sec. 500-20 5.08(c).) 500-21 Sec. 104.106. PREFERENCE TO HEARING. The regulatory 500-22 authority shall: 500-23 (1) give preference to the hearing under this 500-24 subchapter and to deciding questions arising under this subchapter 500-25 over any other question pending before it; and 500-26 (2) decide the questions as quickly as possible. 500-27 (V.A.C.S. Art. 1446e, Sec. 5.08(d) (part).) 501-1 Sec. 104.107. RATE SUSPENSION; DEADLINE. (a) Pending the 501-2 hearing and a decision: 501-3 (1) the local regulatory authority, after delivering 501-4 to the gas utility a written statement of the regulatory 501-5 authority's reasons, may suspend the operation of the schedule for 501-6 not longer than 90 days after the date the schedule would 501-7 otherwise be effective; and 501-8 (2) the railroad commission may suspend the operation 501-9 of the schedule for not longer than 150 days after the date the 501-10 schedule would otherwise be effective. 501-11 (b) If the regulatory authority does not make a final 501-12 determination concerning a schedule of rates before expiration of 501-13 the applicable suspension period, the regulatory authority is 501-14 considered to have approved the schedule. This approval is subject 501-15 to the authority of the regulatory authority thereafter to continue 501-16 a hearing in progress. (V.A.C.S. Art. 1446e, Sec. 5.08(d) (part).) 501-17 Sec. 104.108. TEMPORARY RATES. (a) The regulatory 501-18 authority may establish temporary rates to be in effect during the 501-19 applicable suspension period under Section 104.107. 501-20 (b) If the regulatory authority does not establish temporary 501-21 rates, the rates in effect when the suspended schedule was filed 501-22 continue in effect during the suspension period. (V.A.C.S. 501-23 Art. 1446e, Sec. 5.08(d) (part).) 501-24 Sec. 104.109. BONDED RATES. (a) A gas utility may put a 501-25 changed rate into effect by filing a bond with the regulatory 501-26 authority if the regulatory authority fails to make a final 501-27 determination within 90 days from the date the proposed increase 502-1 would otherwise be effective. 502-2 (b) The bonded rate may not exceed the proposed rate. 502-3 (c) The bond must be: 502-4 (1) payable to the regulatory authority in an amount, 502-5 in a form, and with a surety approved by the regulatory authority; 502-6 and 502-7 (2) conditioned on refund. 502-8 (d) The gas utility shall refund or credit against future 502-9 bills: 502-10 (1) money collected under the bonded rates in excess 502-11 of the rate finally ordered; and 502-12 (2) interest on that money, at the current interest 502-13 rate as determined by the regulatory authority. (V.A.C.S. 502-14 Art. 1446e, Sec. 5.08(e).) 502-15 Sec. 104.110. ESTABLISHMENT OF FINAL RATES. (a) If, after 502-16 hearing, the regulatory authority finds the rates are unreasonable 502-17 or in violation of law, the regulatory authority shall: 502-18 (1) enter an order establishing the rates the gas 502-19 utility shall charge or apply for the service in question; and 502-20 (2) serve a copy of the order on the gas utility. 502-21 (b) The rates established in the order shall be observed 502-22 thereafter until changed as provided by this subtitle. (V.A.C.S. 502-23 Art. 1446e, Sec. 5.08(f).) 502-24 Sec. 104.111. APPROVAL OF DECREASE IN RATES. 502-25 Notwithstanding any other provision in this subtitle, the 502-26 regulatory authority may without reference to the cost of service 502-27 standard prescribed by Section 104.051, administratively approve a 503-1 decrease in rates proposed by the applicant and agreed on by each 503-2 party directly affected, unless the regulatory authority determines 503-3 that the proposed decrease is not in the public interest. 503-4 (V.A.C.S. Art. 1446e, Secs. 5.02(e), 5.03(b).) 503-5 (Sections 104.112-104.150 reserved for expansion) 503-6 SUBCHAPTER D. RATE CHANGES PROPOSED BY COMMISSION 503-7 Sec. 104.151. UNREASONABLE OR VIOLATIVE EXISTING RATES. (a) 503-8 If the regulatory authority, on its own motion or on complaint by 503-9 an affected person, after reasonable notice and hearing, finds that 503-10 the existing rates of a gas utility for a service are unreasonable 503-11 or in violation of law, the regulatory authority shall: 503-12 (1) enter an order establishing the just and 503-13 reasonable rates to be observed thereafter, including maximum or 503-14 minimum rates; and 503-15 (2) serve a copy of the order on the gas utility. 503-16 (b) The rates set under Subsection (a) constitute the legal 503-17 rates of the gas utility until changed as provided by this 503-18 subtitle. (V.A.C.S. Art. 1446e, Sec. 5.07(a).) 503-19 Sec. 104.152. INVESTIGATING COSTS OF OBTAINING SERVICE FROM 503-20 ANOTHER SOURCE. If a gas utility does not produce the service that 503-21 it distributes, transmits, or furnishes to the public for 503-22 compensation but obtains the service from another source, the 503-23 regulatory authority may investigate the cost of that production in 503-24 an investigation of the reasonableness of the gas utility's rates. 503-25 (V.A.C.S. Art. 1446e, Sec. 5.07(b).) 503-26 (Sections 104.153-104.200 reserved for expansion) 503-27 SUBCHAPTER E. RATES FOR GOVERNMENTAL ENTITIES 504-1 Sec. 104.201. TRANSPORTATION RATES BETWEEN GAS UTILITY OR 504-2 MUNICIPALLY OWNED UTILITY AND STATE AGENCY. (a) Notwithstanding 504-3 Section 104.003(b), absent a contract for transportation service 504-4 between a state agency and a gas utility or municipally owned 504-5 utility, the railroad commission, not later than the 210th day 504-6 after the date either party files a request to set a transportation 504-7 rate, shall establish the transportation rate for the state agency. 504-8 The commission has exclusive original jurisdiction to establish a 504-9 transportation rate for a state agency under this section. 504-10 (b) The railroad commission shall base its determination of 504-11 the transportation rate under Subsection (a) on the cost of 504-12 providing the transportation service for both the distribution 504-13 system and the transmission system, as applicable, of the gas 504-14 utility or municipally owned utility. 504-15 (c) The railroad commission may order temporary rates under 504-16 Subsection (a) as provided for under the commission's appellate 504-17 jurisdiction. (V.A.C.S. Art. 1446e, Sec. 5.02(c).) 504-18 Sec. 104.202. EXCLUDED EXPENSES. (a) The rates that a gas 504-19 utility or municipally owned utility charges a state agency may not 504-20 include an amount representing a gross receipts assessment, 504-21 regulatory assessment, or similar expense of the utility. 504-22 (b) An expense under Subsection (a) that is reasonable and 504-23 is not recovered from a state agency under this section may be 504-24 recovered from other customers of the gas utility or municipally 504-25 owned utility. (V.A.C.S. Art. 1446e, Sec. 5.061.) 504-26 Sec. 104.203. PAYMENT IN LIEU OF TAX. (a) A payment made 504-27 in lieu of a tax by a municipally owned utility to the municipality 505-1 by which the utility is owned may not be considered an expense of 505-2 operation in establishing the utility's rate for providing utility 505-3 service to a school district or hospital district. 505-4 (b) A rate a municipally owned utility receives from a 505-5 school district or hospital district may not be used to make or to 505-6 cover the cost of making payments in lieu of taxes to the 505-7 municipality that owns the utility. (V.A.C.S. Art. 1446e, Sec. 505-8 5.13.) 505-9 (Sections 104.204-104.250 reserved for expansion) 505-10 SUBCHAPTER F. SERVICES 505-11 Sec. 104.251. GENERAL STANDARD. A gas utility shall furnish 505-12 service, instrumentalities, and facilities that are safe, adequate, 505-13 efficient, and reasonable. (V.A.C.S. Art. 1446e, Sec. 4.09(a).) 505-14 Sec. 104.252. AUTHORITY OF REGULATORY AUTHORITY CONCERNING 505-15 STANDARDS. A regulatory authority, on its own motion or on 505-16 complaint and after reasonable notice and hearing, may: 505-17 (1) adopt just and reasonable standards, 505-18 classifications, regulations, or practices a gas utility must 505-19 follow in furnishing a service; 505-20 (2) adopt adequate and reasonable standards for 505-21 measuring a condition, including quantity, quality, and pressure 505-22 relating to the furnishing of a service; 505-23 (3) adopt reasonable regulations for examining, 505-24 testing, and measuring a service; and 505-25 (4) adopt or approve reasonable rules, regulations, 505-26 specifications, and standards to ensure the accuracy of equipment, 505-27 including meters and instruments, used to measure a service. 506-1 (V.A.C.S. Art. 1446e, Sec. 4.09(b).) 506-2 Sec. 104.253. RULE OR STANDARD. (a) A gas utility may file 506-3 with the regulatory authority a standard, classification, 506-4 regulation, or practice the utility follows. 506-5 (b) The standard, classification, regulation, or practice 506-6 continues in force until: 506-7 (1) amended by the utility; or 506-8 (2) changed by the regulatory authority as provided by 506-9 this subtitle. (V.A.C.S. Art. 1446e, Sec. 4.09(c).) 506-10 Sec. 104.254. SERVICE. A gas utility or municipally owned 506-11 utility may not refuse to provide service to a state agency if 506-12 pipeline capacity is available on an existing facility of the 506-13 utility. (V.A.C.S. Art. 1446e, Sec. 4.09(d).) 506-14 Sec. 104.255. BILLING. (a) A gas utility or municipally 506-15 owned utility may not bill or otherwise require the state or a 506-16 state agency or institution to pay for service before the service 506-17 is provided. 506-18 (b) The railroad commission shall adopt rules concerning 506-19 payment of bills by the state or a state agency to a gas utility or 506-20 municipally owned utility. The rules must be consistent with 506-21 Chapter 2251, Government Code. 506-22 (c) This subtitle does not prohibit a gas utility or 506-23 municipally owned utility from entering into an agreement with the 506-24 state or a state agency to establish a level or average monthly 506-25 service billing plan. An agreement under this subsection must 506-26 require reconciliation of the leveled or equalized bills quarterly. 506-27 (V.A.C.S. Art. 1446e, Secs. 10.05, 10.06.) 507-1 Sec. 104.256. EXAMINATION AND TEST OF INSTRUMENT OR 507-2 EQUIPMENT; INSPECTION. (a) A regulatory authority may: 507-3 (1) examine and test equipment, including meters and 507-4 instruments, used to measure service of a gas utility; and 507-5 (2) set up and use on the premises occupied by a gas 507-6 utility an apparatus or appliance necessary for the examination or 507-7 test. 507-8 (b) The gas utility is entitled to be represented at an 507-9 examination, test, or inspection made under this section. 507-10 (c) The gas utility and its officers and employees shall 507-11 facilitate the examination, test, or inspection by giving 507-12 reasonable aid to the regulatory authority and to any person 507-13 designated by the regulatory authority for the performance of those 507-14 duties. (V.A.C.S. Art. 1446e, Sec. 4.10(a) (part).) 507-15 Sec. 104.257. INSPECTION FOR CONSUMER. (a) A consumer may 507-16 have a meter or other measuring device tested by a gas utility: 507-17 (1) once without charge, after a reasonable period of 507-18 presumed accuracy that the regulatory authority establishes by 507-19 rule; and 507-20 (2) at a shorter interval on payment of a reasonable 507-21 fee established by the regulatory authority. 507-22 (b) The regulatory authority shall establish reasonable fees 507-23 to be paid for other examining or testing of a measuring device on 507-24 the request of a consumer. 507-25 (c) If the consumer requests the test under Subsection 507-26 (a)(2) and the measuring device is found unreasonably defective or 507-27 incorrect to the substantial disadvantage of the consumer, the fee 508-1 the consumer paid at the time of the request shall be refunded. 508-2 (V.A.C.S. Art. 1446e, Sec. 4.10(b).) 508-3 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 508-4 SUBCHAPTER A. JUDICIAL REVIEW 508-5 Sec. 105.001. RIGHT TO JUDICIAL REVIEW 508-6 Sec. 105.002. JUDICIAL STAY OR SUSPENSION 508-7 (Sections 105.003-105.020 reserved for expansion) 508-8 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 508-9 Sec. 105.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE 508-10 Sec. 105.022. CONTEMPT 508-11 Sec. 105.023. CIVIL PENALTY AGAINST GAS UTILITY OR AFFILIATE 508-12 Sec. 105.024. OFFENSE 508-13 Sec. 105.025. PLACE FOR SUIT 508-14 Sec. 105.026. PENALTIES CUMULATIVE 508-15 Sec. 105.027. DISPOSITION OF FINES AND PENALTIES 508-16 (Sections 105.028-105.050 reserved for expansion) 508-17 SUBCHAPTER C. COMPLAINTS 508-18 Sec. 105.051. COMPLAINT BY AFFECTED PERSON 508-19 CHAPTER 105. JUDICIAL REVIEW; ENFORCEMENT AND PENALTIES 508-20 SUBCHAPTER A. JUDICIAL REVIEW 508-21 Sec. 105.001. RIGHT TO JUDICIAL REVIEW. (a) Any party to a 508-22 proceeding before the railroad commission is entitled to judicial 508-23 review under the substantial evidence rule. 508-24 (b) The issue of confiscation is determined by a 508-25 preponderance of the evidence. (V.A.C.S. Art. 1446e, Sec. 8.01.) 508-26 Sec. 105.002. JUDICIAL STAY OR SUSPENSION. While an appeal 508-27 of an order, ruling, or decision of a regulatory authority is 509-1 pending, the district court, court of appeals, or supreme court, as 509-2 appropriate, may stay or suspend all or part of the operation of 509-3 the order, ruling, or decision. In granting or refusing a stay or 509-4 suspension, the court shall act in accordance with the practice of 509-5 a court exercising equity jurisdiction. (V.A.C.S. Art. 1446e, Sec. 509-6 10.03.) 509-7 (Sections 105.003-105.020 reserved for expansion) 509-8 SUBCHAPTER B. ENFORCEMENT AND PENALTIES 509-9 Sec. 105.021. ACTION TO ENJOIN OR REQUIRE COMPLIANCE. (a) 509-10 The attorney general, on the request of the railroad commission, 509-11 shall apply in the name of the commission for an order under 509-12 Subsection (b) if the commission determines that a gas utility or 509-13 other person is: 509-14 (1) engaging in or about to engage in an act that 509-15 violates this subtitle or an order or rule of the commission 509-16 entered or adopted under this subtitle; or 509-17 (2) failing to comply with the requirements of this 509-18 subtitle or a rule or order of the commission. 509-19 (b) A court, in an action under this section, may: 509-20 (1) prohibit the commencement or continuation of an 509-21 act that violates this subtitle or an order or rule of the 509-22 commission entered or adopted under this subtitle; or 509-23 (2) require compliance with a provision of this 509-24 subtitle or an order or rule of the commission. 509-25 (c) The remedy under this section is in addition to any 509-26 other remedy provided under this subtitle. (V.A.C.S. Art. 1446e, 509-27 Sec. 9.01.) 510-1 Sec. 105.022. CONTEMPT. The railroad commission may file an 510-2 action for contempt against a person who: 510-3 (1) fails to comply with a lawful order of the 510-4 commission; 510-5 (2) fails to comply with a subpoena or subpoena duces 510-6 tecum; or 510-7 (3) refuses to testify about a matter on which the 510-8 person may be lawfully interrogated. (V.A.C.S. Art. 1446e, Sec. 510-9 9.04.) 510-10 Sec. 105.023. CIVIL PENALTY AGAINST GAS UTILITY OR 510-11 AFFILIATE. (a) A gas utility or affiliate is subject to a civil 510-12 penalty if the gas utility or affiliate knowingly violates this 510-13 subtitle, fails to perform a duty imposed on it, or fails, 510-14 neglects, or refuses to obey an order, rule, direction, or 510-15 requirement of the railroad commission or a decree or judgment of a 510-16 court. 510-17 (b) A civil penalty under this section shall be in an amount 510-18 of not less than $1,000 and not more than $5,000 for each 510-19 violation. 510-20 (c) A gas utility or affiliate commits a separate violation 510-21 each day it continues to violate Subsection (a). 510-22 (d) The attorney general shall file in the name of the 510-23 railroad commission a suit on the attorney general's own initiative 510-24 or at the request of the commission to recover the civil penalty 510-25 under this section. (V.A.C.S. Art. 1446e, Sec. 9.02.) 510-26 Sec. 105.024. OFFENSE. (a) A person commits an offense if 510-27 the person knowingly violates this subtitle. 511-1 (b) An offense under this section is a felony of the third 511-2 degree. (V.A.C.S. Art. 1446e, Sec. 9.03(a).) 511-3 Sec. 105.025. PLACE FOR SUIT. A suit for an injunction or a 511-4 penalty under this subtitle may be brought in: 511-5 (1) Travis County; 511-6 (2) a county in which the violation is alleged to have 511-7 occurred; or 511-8 (3) a county in which a defendant resides. (V.A.C.S. 511-9 Art. 1446e, Sec. 9.06.) 511-10 Sec. 105.026. PENALTIES CUMULATIVE. (a) A penalty that 511-11 accrues under this subtitle is cumulative of any other penalty. 511-12 (b) A suit for the recovery of a penalty does not bar or 511-13 affect the recovery of any other penalty or bar a criminal 511-14 prosecution against any person, including a gas utility or officer, 511-15 director, agent, or employee of a gas utility. (V.A.C.S. 511-16 Art. 1446e, Sec. 9.03(b).) 511-17 Sec. 105.027. DISPOSITION OF FINES AND PENALTIES. A fine or 511-18 penalty collected under this subtitle, other than a fine or penalty 511-19 collected in a criminal proceeding, shall be paid to the railroad 511-20 commission. (V.A.C.S. Art. 1446e, Sec. 9.05.) 511-21 (Sections 105.028-105.050 reserved for expansion) 511-22 SUBCHAPTER C. COMPLAINTS 511-23 Sec. 105.051. COMPLAINT BY AFFECTED PERSON. An affected 511-24 person may complain to the regulatory authority in writing setting 511-25 forth an act or omission by a gas utility in violation or claimed 511-26 violation of a law that the regulatory authority has jurisdiction 511-27 to administer or of an order, ordinance, or rule of the regulatory 512-1 authority. (V.A.C.S. Art. 1446e, Sec. 10.01.) 512-2 (Chapters 106-120 reserved for expansion) 512-3 SUBTITLE B. REGULATION OF TRANSPORTATION AND USE 512-4 CHAPTER 121. GAS PIPELINES 512-5 SUBCHAPTER A. GAS UTILITY DEFINED 512-6 Sec. 121.001. DEFINITION OF GAS UTILITY 512-7 Sec. 121.002. AFFILIATE OF GAS UTILITY EXCLUDED 512-8 Sec. 121.003. AGRICULTURAL SERVICE EXCLUDED 512-9 Sec. 121.004. TRANSPORTATION OF GAS SOLELY FOR INTERSTATE 512-10 COMMERCE EXCLUDED 512-11 Sec. 121.005. TRANSPORTATION OF GAS IN VICINITY OF PLACE 512-12 OF PRODUCTION EXCLUDED 512-13 Sec. 121.006. VEHICLE FUEL EXCLUDED 512-14 (Sections 121.007-121.050 reserved for expansion) 512-15 SUBCHAPTER B. PUBLIC POLICY 512-16 Sec. 121.051. GAS UTILITY: PUBLIC INTEREST AND JURISDICTION 512-17 OF RAILROAD COMMISSION 512-18 Sec. 121.052. PIPELINES: MONOPOLIES SUBJECT TO RAILROAD 512-19 COMMISSION 512-20 (Sections 121.053-121.100 reserved for expansion) 512-21 SUBCHAPTER C. DUTIES OF GAS UTILITIES AND PIPELINES 512-22 Sec. 121.101. MAINTENANCE OF OFFICE AND RECORDS IN THIS 512-23 STATE 512-24 Sec. 121.102. OPERATOR'S REPORT 512-25 Sec. 121.103. DUTY TO SERVE CERTAIN USERS EXTINGUISHED 512-26 Sec. 121.104. DISCRIMINATION IN SERVICE AND CHARGES 512-27 PROHIBITED 513-1 (Sections 121.105-121.150 reserved for expansion) 513-2 SUBCHAPTER D. REGULATION BY RAILROAD COMMISSION 513-3 Sec. 121.151. RAILROAD COMMISSION REGULATION OF GAS 513-4 PIPELINES 513-5 Sec. 121.152. INITIATION OF REGULATORY PROCEEDING 513-6 Sec. 121.153. RAILROAD COMMISSION REVIEW OF GAS 513-7 PIPELINE ORDERS AND AGREEMENTS 513-8 Sec. 121.154. REFUND OF EXCESS CHARGES 513-9 Sec. 121.155. RATE REDUCTION OR DETERMINATION BY MUNICIPALITY 513-10 AND APPEAL 513-11 Sec. 121.156. RAILROAD COMMISSION REPORT 513-12 Sec. 121.157. RAILROAD COMMISSION EMPLOYEES 513-13 Sec. 121.158. PAYMENT FROM THE GENERAL REVENUE FUND 513-14 (Sections 121.159-121.200 reserved for expansion) 513-15 SUBCHAPTER E. PIPELINE SAFETY 513-16 Sec. 121.201. SAFETY RULES: RAILROAD COMMISSION POWER 513-17 Sec. 121.202. MUNICIPAL AND COUNTY AUTHORITY 513-18 Sec. 121.203. ENFORCEMENT: INJUNCTION 513-19 Sec. 121.204. CIVIL PENALTY 513-20 Sec. 121.205. SETTLEMENT BY ATTORNEY GENERAL 513-21 Sec. 121.206. ADMINISTRATIVE PENALTY FOR VIOLATION OF 513-22 PIPELINE SAFETY STANDARD OR RULE 513-23 Sec. 121.207. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 513-24 ASSESSMENT PROCEDURE 513-25 Sec. 121.208. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 513-26 PAYMENT OF PENALTY 513-27 Sec. 121.209. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 514-1 REFUND OF PAYMENT OR RELEASE OF BOND 514-2 Sec. 121.210. RECOVERY BY ATTORNEY GENERAL 514-3 (Sections 121.211-121.250 reserved for expansion) 514-4 SUBCHAPTER F. GAS SAFETY 514-5 Sec. 121.251. RAILROAD COMMISSION TO INVESTIGATE USE OF 514-6 GAS MALODORANTS 514-7 Sec. 121.252. REGULATION OF USE OF MALODORANTS 514-8 Sec. 121.253. INTERSTATE TRANSPORTATION OF GAS EXCLUDED 514-9 (Sections 121.254-121.300 reserved for expansion) 514-10 SUBCHAPTER G. ENFORCEMENT REMEDIES 514-11 Sec. 121.301. RECEIVERSHIP 514-12 Sec. 121.302. CIVIL PENALTY 514-13 Sec. 121.303. PENALTY RECOVERABLE BY VICTIM OF 514-14 DISCRIMINATION 514-15 Sec. 121.304. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-16 PENALTY 514-17 Sec. 121.305. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-18 PENALTY: ASSESSMENT PROCEDURE 514-19 Sec. 121.306. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-20 PENALTY: PAYMENT OF PENALTY 514-21 Sec. 121.307. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-22 PENALTY: APPEALS 514-23 Sec. 121.308. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-24 PENALTY: REFUND OF PAYMENT OR RELEASE OF 514-25 BOND 514-26 Sec. 121.309. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 514-27 PENALTY: RECOVERY 515-1 Sec. 121.310. CRIMINAL PENALTY 515-2 (Sections 121.311-121.400 reserved for expansion) 515-3 SUBCHAPTER H. APPEALS 515-4 Sec. 121.401. APPEAL TO COURT 515-5 Sec. 121.402. APPEAL: BURDEN AND STANDARD OF PROOF 515-6 Sec. 121.403. APPEAL FROM TRIAL COURT 515-7 CHAPTER 121. GAS PIPELINES 515-8 SUBCHAPTER A. GAS UTILITY DEFINED 515-9 Sec. 121.001. DEFINITION OF GAS UTILITY. (a) In this 515-10 chapter, "gas utility" means a person who owns, manages, operates, 515-11 leases, or controls in this state property or equipment or a 515-12 pipeline, plant, facility, franchise, license, or permit for a 515-13 business that: 515-14 (1) transports, conveys, distributes, or delivers 515-15 natural gas: 515-16 (A) for public use or service for compensation; 515-17 (B) for sale to municipalities or persons 515-18 engaged in distributing or selling natural gas to the public, in a 515-19 situation described by Subdivision (3); 515-20 (C) for sale or delivery to a person operating 515-21 under a franchise or contract with a political subdivision of this 515-22 state; or 515-23 (D) for sale or delivery to the public for 515-24 domestic or other use; 515-25 (2) owns, operates, or manages a pipeline: 515-26 (A) that is for transporting or carrying natural 515-27 gas, whether for public hire or not; and 516-1 (B) for which the right-of-way has been or is 516-2 hereafter acquired by exercising the right of eminent domain; or 516-3 (3) produces or purchases natural gas and transports 516-4 or causes the transportation of natural gas by a pipeline to or 516-5 near the limits of a municipality in which the gas is received and 516-6 distributed or sold to the public by another gas utility or by the 516-7 municipality in a situation in which the business is the only or 516-8 practically the only agency of supply of natural gas to the gas 516-9 utility or municipality. 516-10 (b) In this subchapter, "person" means an individual, 516-11 company, or private corporation and includes a lessee, trustee, or 516-12 receiver of an individual, company, or private corporation. 516-13 (V.A.C.S. Art. 6050, Secs. 1 (part), (a), (b), (c) (part).) 516-14 Sec. 121.002. AFFILIATE OF GAS UTILITY EXCLUDED. A person 516-15 is not a gas utility solely because the person is an affiliate of a 516-16 gas utility. (V.A.C.S. Art. 6050, Sec. 1(d).) 516-17 Sec. 121.003. AGRICULTURAL SERVICE EXCLUDED. (a) A person 516-18 who sells, transports, or delivers natural gas for a direct use in 516-19 an agricultural activity or sells, transports, delivers, or 516-20 otherwise makes available natural gas for fuel, either directly or 516-21 indirectly, to an owner of an irrigation well is not because of one 516-22 or more of these acts a gas utility, so as to make the person 516-23 subject to the jurisdiction, control, and regulation of the 516-24 railroad commission as a gas utility. 516-25 (b) In order for a person furnishing natural gas to qualify 516-26 for the exemption under Subsection (a), the person to whom the gas 516-27 was furnished under Subsection (a) shall use the gas exclusively to 517-1 pump water for farm and other agricultural purposes. (V.A.C.S. 517-2 Art. 6050, Secs. 2, 3 (part).) 517-3 Sec. 121.004. TRANSPORTATION OF GAS SOLELY FOR INTERSTATE 517-4 COMMERCE EXCLUDED. Except as provided by Section 121.001(a)(2), a 517-5 person is not a gas utility if the person certifies to the railroad 517-6 commission that the person transports natural or synthetic gas, for 517-7 sale, for hire, or otherwise, solely in, or in the vicinity of, the 517-8 field or fields where the gas is produced, to another person for 517-9 transportation or sale in interstate commerce. (V.A.C.S. 517-10 Art. 6050, Sec. 4(a) (part).) 517-11 Sec. 121.005. TRANSPORTATION OF GAS IN VICINITY OF PLACE OF 517-12 PRODUCTION EXCLUDED. (a) Except as provided by Section 517-13 121.001(a)(2), a person is not a gas utility if the person 517-14 certifies to the railroad commission that the person transports 517-15 natural or synthetic gas, for sale, for hire, or otherwise, solely: 517-16 (1) in, or in the vicinity of, the field or fields 517-17 where the gas is produced to a gas processing plant or treating 517-18 facility; 517-19 (2) from the outlet of a gas processing plant or 517-20 treating facility described by Subdivision (1) to a person: 517-21 (A) at, or in the vicinity of, the plant or 517-22 treating facility; or 517-23 (B) described by Subdivision (3) or Section 517-24 121.004; or 517-25 (3) to another person in, or in the vicinity of, the 517-26 field or fields where the gas is produced for transportation or 517-27 sale in intrastate commerce. 518-1 (b) A person is not a gas utility because the person 518-2 delivers or sells gas: 518-3 (1) for lease use, compressor fuel, processing plant 518-4 fuel, or a similar use; 518-5 (2) under a lease or right-of-way agreement; 518-6 (3) in, or in the vicinity of, the field where the gas 518-7 is produced; or 518-8 (4) at a processing plant outlet. 518-9 (c) Subsection (b) does not exclude as a gas utility a 518-10 pipeline that: 518-11 (1) transmits or distributes to end users of gas, 518-12 other than: 518-13 (A) those described by Subsection (b); or 518-14 (B) a person who qualifies for the exemption 518-15 provided by Section 121.003; or 518-16 (2) makes city-gate deliveries for local distribution. 518-17 (V.A.C.S. Art. 6050, Secs. 4(a) (part), (b).) 518-18 Sec. 121.006. VEHICLE FUEL EXCLUDED. A person is not a gas 518-19 utility to the extent that the person: 518-20 (1) sells natural gas for use as vehicle fuel; 518-21 (2) sells natural gas to a person who later sells the 518-22 natural gas for use as vehicle fuel; or 518-23 (3) owns or operates equipment or facilities to sell 518-24 or transport the natural gas for ultimate use as vehicle fuel. 518-25 (V.A.C.S. Art. 6050, Sec. 5.) 518-26 (Sections 121.007-121.050 reserved for expansion) 518-27 SUBCHAPTER B. PUBLIC POLICY 519-1 Sec. 121.051. GAS UTILITY: PUBLIC INTEREST AND JURISDICTION 519-2 OF RAILROAD COMMISSION. (a) A gas utility, including a business 519-3 described by Section 121.001(a)(3), is affected with a public 519-4 interest. 519-5 (b) A business described by Section 121.001(a)(3) is a 519-6 virtual monopoly. 519-7 (c) A business described by Section 121.001(a)(3) and the 519-8 property of the business used in this state is subject to the 519-9 jurisdiction, control, and regulation of the railroad commission as 519-10 provided by this chapter. (V.A.C.S. Art. 6050, Secs. 1(c) (part), 519-11 (e).) 519-12 Sec. 121.052. PIPELINES: MONOPOLIES SUBJECT TO RAILROAD 519-13 COMMISSION. (a) The operation of a pipeline for buying, selling, 519-14 transporting, producing, or otherwise dealing in natural gas is a 519-15 business which in its nature and according to the established 519-16 method of conducting the business is a monopoly. 519-17 (b) A business described by this section may not be 519-18 conducted unless the gas pipeline used in connection with the 519-19 business is subject to the jurisdiction conferred by this chapter 519-20 on the railroad commission. 519-21 (c) The attorney general shall enforce this section by 519-22 injunction or other remedy. (V.A.C.S. Art. 6051.) 519-23 (Sections 121.053-121.100 reserved for expansion) 519-24 SUBCHAPTER C. DUTIES OF GAS UTILITIES AND PIPELINES 519-25 Sec. 121.101. MAINTENANCE OF OFFICE AND RECORDS IN THIS 519-26 STATE. (a) A gas utility shall maintain an office in this state 519-27 in a county in which some part of the gas utility's property is 520-1 located. The gas utility shall keep in this office all books, 520-2 accounts, papers, records, vouchers, and receipts that the railroad 520-3 commission requires. 520-4 (b) A book, account, paper, record, receipt, voucher, or 520-5 other item of information required by the railroad commission to be 520-6 kept in this state may not be removed from this state except as 520-7 prescribed by the railroad commission. (V.A.C.S. Art. 6052.) 520-8 Sec. 121.102. OPERATOR'S REPORT. The railroad commission 520-9 may require a person or corporation that owns, controls, or 520-10 operates a pipeline subject to this chapter to make to the 520-11 commission a sworn report of any matter relating to the business of 520-12 the person or corporation that the commission determines to be 520-13 pertinent, including: 520-14 (1) the total quantity of gas distributed by the 520-15 pipelines; 520-16 (2) the total quantity of gas held in storage; 520-17 (3) the source of supply of gas; 520-18 (4) the number of wells from which the person or 520-19 corporation draws its supply; 520-20 (5) the amount of pipeline pressure maintained; and 520-21 (6) the amount and character and description of the 520-22 equipment used. (V.A.C.S. Art. 6056.) 520-23 Sec. 121.103. DUTY TO SERVE CERTAIN USERS EXTINGUISHED. (a) 520-24 A gas utility that provides gas to a customer does not have an 520-25 obligation to serve the customer or to maintain the gas supply or 520-26 physical capacity to serve the customer if the customer: 520-27 (1) is a transportation, industrial, or other similar 521-1 large-volume contract customer; 521-2 (2) is an end-use customer of the gas utility; 521-3 (3) reduces or ceases the purchase of natural gas or 521-4 natural gas service from the gas utility; and 521-5 (4) purchases natural gas or natural gas service from 521-6 another supplier or purchases an alternate form of energy. 521-7 (b) Subsection (a) does not apply to the extent that: 521-8 (1) the customer continues to purchase natural gas or 521-9 natural gas service of any class from the gas utility; or 521-10 (2) the gas utility has a written contract to provide 521-11 natural gas or natural gas service of any class to the customer. 521-12 (c) This section does not prevent the railroad commission 521-13 from requiring a gas utility to comply with an order of the 521-14 railroad commission in apportioning gas under a curtailment plan 521-15 and order. (V.A.C.S. Art. 6053, Sec. 1(c).) 521-16 Sec. 121.104. DISCRIMINATION IN SERVICE AND CHARGES 521-17 PROHIBITED. (a) A pipeline gas utility may not: 521-18 (1) discriminate in favor of or against any person or 521-19 place in: 521-20 (A) apportioning the supply of natural gas; or 521-21 (B) charging for natural gas; or 521-22 (2) directly or indirectly charge, demand, collect, or 521-23 receive from anyone a greater or lesser compensation for a service 521-24 provided than the compensation charged, demanded, or received from 521-25 another for a similar and contemporaneous service. 521-26 (b) This section does not limit the right of the railroad 521-27 commission to prescribe: 522-1 (1) different rates and rules for the use of natural 522-2 gas for manufacturing and similar purposes; or 522-3 (2) rates and rules for service from or to other or 522-4 different places. (V.A.C.S. Arts. 6057, 6057a.) 522-5 (Sections 121.105-121.150 reserved for expansion) 522-6 SUBCHAPTER D. REGULATION BY RAILROAD COMMISSION 522-7 Sec. 121.151. RAILROAD COMMISSION REGULATION OF GAS 522-8 PIPELINES. The railroad commission shall: 522-9 (1) establish and enforce the adequate and reasonable 522-10 price of gas and fair and reasonable rates of charges and rules for 522-11 transporting, producing, distributing, buying, selling, and 522-12 delivering gas by pipelines subject to this chapter in this state; 522-13 (2) establish fair and equitable rules for the full 522-14 control and supervision of the pipelines subject to this chapter 522-15 and all their holdings pertaining to the gas business in all their 522-16 relations to the public, as the railroad commission determines to 522-17 be proper; 522-18 (3) establish a fair and equitable division of the 522-19 proceeds of the sale of gas between the companies transporting or 522-20 producing the gas and the companies distributing or selling it; 522-21 (4) prescribe and enforce rules for the government and 522-22 control of pipelines subject to this chapter in respect to their 522-23 pipelines and producing, receiving, transporting, and distributing 522-24 facilities; 522-25 (5) regulate and apportion the supply of gas between 522-26 municipalities and between municipalities and corporations; and 522-27 (6) prescribe fair and reasonable rules requiring 523-1 pipelines subject to this chapter to augment their supply of gas, 523-2 when: 523-3 (A) the supply of gas controlled by any gas 523-4 pipeline is inadequate; and 523-5 (B) the railroad commission determines that 523-6 augmentation is practicable. (V.A.C.S. Art. 6053, Sec. 1(a) 523-7 (part).) 523-8 Sec. 121.152. INITIATION OF REGULATORY PROCEEDING. The 523-9 railroad commission shall exercise power under Section 121.151: 523-10 (1) on: 523-11 (A) its own motion; 523-12 (B) the petition of a person or county 523-13 commissioner's precinct showing a substantial interest in the 523-14 subject; 523-15 (C) the petition of the attorney general; or 523-16 (D) the petition of a district or county 523-17 attorney of a county in which any portion of a business subject to 523-18 this chapter is conducted; and 523-19 (2) after notice has been given. (V.A.C.S. Art. 6053, 523-20 Sec. 1(a) (part).) 523-21 Sec. 121.153. RAILROAD COMMISSION REVIEW OF GAS PIPELINE 523-22 ORDERS AND AGREEMENTS. The railroad commission, after notice to a 523-23 person or corporation owning, controlling, or operating a pipeline 523-24 subject to this chapter and after a hearing, may review, revise, 523-25 and regulate an order or agreement that is made by the person or 523-26 corporation and establishes a price, rate, rule, regulation, or 523-27 condition of service. (V.A.C.S. Art. 6054.) 524-1 Sec. 121.154. REFUND OF EXCESS CHARGES. (a) On a complaint 524-2 against a person or corporation owning or operating a pipeline 524-3 business subject to this chapter filed by any person authorized by 524-4 Section 121.152 to file a petition and complaint and sustained in 524-5 whole or in part by the railroad commission, each customer of the 524-6 pipeline is entitled to reparation for or reimbursement of a rate 524-7 or charge made or adopted by the pipeline for a purpose relating to 524-8 the operation of that business, including a rate or charge for gas, 524-9 service, or meter rental, or in the event of an inadequate supply 524-10 of gas or inadequate service in any respect. 524-11 (b) The amount recoverable under Subsection (a) is the 524-12 amount paid after the filing of the complaint in excess of the 524-13 proper rate or charge of the pipeline as finally determined by the 524-14 railroad commission. (V.A.C.S. Art. 6055.) 524-15 Sec. 121.155. RATE REDUCTION OR DETERMINATION BY 524-16 MUNICIPALITY AND APPEAL. A gas utility the rates of which have 524-17 been reduced by a municipality may appeal the municipal order, 524-18 decision, regulation, or ordinance to the railroad commission. The 524-19 appeal is initiated by filing with the railroad commission in the 524-20 manner and on the conditions that the railroad commission may 524-21 direct a petition for review and a bond. The appeal is de novo. 524-22 The railroad commission shall set a hearing and may make any order 524-23 or decision in relation to the matter appealed that the commission 524-24 considers just and reasonable. To change a rate, rental, or 524-25 charge, a gas utility that is a local distributing company or 524-26 concern and the rates of which have been established by a 524-27 municipality must submit an application to the municipality in 525-1 which the utility is located. The municipality shall make a 525-2 determination on an application not later than the 60th day after 525-3 the date the application is filed. If the municipality rejects the 525-4 application or fails or refuses to act on the application on or 525-5 before the deadline prescribed by this section, the gas utility may 525-6 appeal to the railroad commission as provided by this section. The 525-7 railroad commission shall make a determination on the appeal not 525-8 later than the 60th day after the date the appeal is filed unless 525-9 the gas utility agrees in writing to a longer period. The rates 525-10 established by the municipality remain in effect until changed by 525-11 the railroad commission. (V.A.C.S. Art. 6058.) 525-12 Sec. 121.156. RAILROAD COMMISSION REPORT. (a) On December 525-13 1 of each year, the railroad commission shall report to the 525-14 governor, fully and in detail, on: 525-15 (1) the proceedings of the railroad commission with 525-16 respect to gas utilities; 525-17 (2) the receipts and sources of gross income taxes; 525-18 and 525-19 (3) the amount and nature of expenditures made under 525-20 and in accordance with this chapter, including the names, titles, 525-21 nature of employment, and salaries of and payments made to each 525-22 person employed under the terms of this chapter with a statement of 525-23 the travel and other expenses incurred by each of those persons and 525-24 approved by the railroad commission. 525-25 (b) The governor shall send the report to the legislature at 525-26 the first legislative session after the governor receives the 525-27 report. (V.A.C.S. Art. 6061.) 526-1 Sec. 121.157. RAILROAD COMMISSION EMPLOYEES. (a) The 526-2 railroad commission may employ or appoint persons as necessary to: 526-3 (1) inspect and audit records or receipts, 526-4 disbursements, vouchers, prices, payrolls, time cards, and books; 526-5 (2) inspect the property and records of a gas utility 526-6 subject to this chapter; and 526-7 (3) perform other services as directed by, or under 526-8 the authority of, the railroad commission. 526-9 (b) The railroad commission shall set the amount of 526-10 compensation for persons employed by the railroad commission. 526-11 (c) The chief supervisor of the oil and gas division of the 526-12 railroad commission shall assist the railroad commission in the 526-13 performance of the railroad commission's duties under this chapter, 526-14 as directed by, and under the rules of, the railroad commission. 526-15 (V.A.C.S. Arts. 6064, 6065.) 526-16 Sec. 121.158. PAYMENT FROM THE GENERAL REVENUE FUND. All 526-17 expenses, including witness fees and mileage, employee wages and 526-18 fees, and the salary and expenses of the chief supervisor of the 526-19 oil and gas division of the railroad commission incurred by or 526-20 under authority of the railroad commission or a railroad 526-21 commissioner in administering and enforcing, or exercising a power 526-22 under, this chapter shall be paid from the general revenue fund. 526-23 (V.A.C.S. Art. 6066 (part).) 526-24 (Sections 121.159-121.200 reserved for expansion) 526-25 SUBCHAPTER E. PIPELINE SAFETY 526-26 Sec. 121.201. SAFETY RULES: RAILROAD COMMISSION POWER. (a) 526-27 The railroad commission by rule may: 527-1 (1) adopt safety standards for the transportation of 527-2 gas and for gas pipeline facilities; 527-3 (2) require record maintenance and reports; 527-4 (3) inspect records and facilities to determine 527-5 compliance with adopted safety standards; and 527-6 (4) make certifications and reports and take any other 527-7 requisite action in accordance with Chapter 601, Title 49, United 527-8 States Code (49 U.S.C. Section 60101 et seq.), or a succeeding law. 527-9 (b) The power granted by Subsection (a) does not apply to 527-10 the transportation of gas or to gas facilities subject to the 527-11 exclusive control of the United States but applies to the 527-12 transportation of gas and gas pipeline facilities in this state to 527-13 the maximum degree permissible under Chapter 601, Title 49, United 527-14 States Code (49 U.S.C. Section 60101 et seq.), or a succeeding law. 527-15 (c) A term that is used in this section and defined by 527-16 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 527-17 et seq.), or a succeeding law has the meaning assigned by that 527-18 chapter or the succeeding law. (V.A.C.S. Art. 6053-1, Subsecs. 527-19 (A), (B).) 527-20 Sec. 121.202. MUNICIPAL AND COUNTY AUTHORITY. (a) A 527-21 municipality or a county may not adopt or enforce an ordinance that 527-22 establishes a safety standard or practice applicable to a facility 527-23 that is regulated under this subchapter, another state law, or a 527-24 federal law. 527-25 (b) Except as provided by Subsection (a), this subchapter 527-26 does not reduce, limit, or impair: 527-27 (1) a power vested by law in: 528-1 (A) a county in relation to a county road; or 528-2 (B) a municipality; or 528-3 (2) the ability of a municipality to: 528-4 (A) adopt an ordinance that establishes 528-5 conditions for mapping, inventorying, installing, or relocating 528-6 pipelines over, under, along, or across a public street or alley or 528-7 private residential area in the boundaries of the municipality; or 528-8 (B) establish conditions for mapping or taking 528-9 an inventory in an area in a municipality's extraterritorial 528-10 jurisdiction. (V.A.C.S. Art. 6053-1, Subsec. (D).) 528-11 Sec. 121.203. ENFORCEMENT: INJUNCTION. The attorney 528-12 general, on behalf of the railroad commission, is entitled to 528-13 injunctive relief to restrain a violation of a safety standard 528-14 adopted under this subchapter, including an injunction that 528-15 restrains the transportation of gas or the operation of a pipeline 528-16 facility. (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 528-17 Sec. 121.204. CIVIL PENALTY. Each day of each violation of 528-18 a safety standard adopted under this subchapter is subject to a 528-19 civil penalty of not more than $25,000, except that the maximum 528-20 penalty that may be assessed for any related series of violations 528-21 may not exceed $500,000. The penalty is payable to the state. 528-22 (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 528-23 Sec. 121.205. SETTLEMENT BY ATTORNEY GENERAL. A civil 528-24 penalty under Section 121.204 may be compromised by the attorney 528-25 general who in determining a compromise shall consider: 528-26 (1) the appropriateness of the penalty in relation to 528-27 the size of the business of the person charged; 529-1 (2) the gravity of the violation; and 529-2 (3) the good faith of the person charged in attempting 529-3 to achieve compliance after notification of the violation. 529-4 (V.A.C.S. Art. 6053-1, Subsec. (C) (part).) 529-5 Sec. 121.206. ADMINISTRATIVE PENALTY FOR VIOLATION OF 529-6 PIPELINE SAFETY STANDARD OR RULE. (a) The railroad commission may 529-7 assess an administrative penalty against a person who violates 529-8 Section 121.201 or a safety standard or rule relating to the 529-9 transportation of gas and gas pipeline facilities adopted under 529-10 that section. 529-11 (b) The penalty for each violation may not exceed $10,000. 529-12 Each day a violation continues may be considered a separate 529-13 violation for the purpose of penalty assessment. 529-14 (c) In determining the amount of the penalty, the railroad 529-15 commission shall consider: 529-16 (1) the person's history of previous violations of 529-17 Section 121.201 or a safety standard or rule relating to the 529-18 transportation of gas and gas pipeline facilities adopted under 529-19 that section; 529-20 (2) the seriousness of the violation; and 529-21 (3) any hazard to the health or safety of the public. 529-22 (V.A.C.S. Art. 6053-2, Secs. (a), (b), (c).) 529-23 Sec. 121.207. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 529-24 ASSESSMENT PROCEDURE. (a) An administrative penalty may be 529-25 assessed only after a person charged under Section 121.206 has been 529-26 given an opportunity for a public hearing. 529-27 (b) If a public hearing is held, the railroad commission 530-1 shall make findings of fact and shall issue a written decision as 530-2 to the occurrence of the violation and the penalty amount warranted 530-3 by the violation, incorporating, if appropriate, an order requiring 530-4 that the penalty be paid. 530-5 (c) If appropriate, the railroad commission shall 530-6 consolidate the hearings with other proceedings under Section 530-7 121.206. 530-8 (d) If a person charged under Section 121.206 fails to take 530-9 advantage of the opportunity for a public hearing, an 530-10 administrative penalty may be assessed by the railroad commission 530-11 after it has determined: 530-12 (1) that a violation occurred; and 530-13 (2) the penalty amount warranted by the violation. 530-14 (e) After assessing an administrative penalty, the railroad 530-15 commission shall issue an order requiring the penalty to be paid. 530-16 (f) Not later than the 30th day after the date an order is 530-17 issued finding that a violation described under Section 121.206 530-18 occurred, the railroad commission shall inform the person found in 530-19 violation of the amount of the penalty. (V.A.C.S. Art. 6053-2, 530-20 Secs. (d), (e), (f), (g), (h), (i).) 530-21 Sec. 121.208. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 530-22 PAYMENT OF PENALTY. Not later than the 30th day after the date the 530-23 railroad commission's decision or order imposing an administrative 530-24 penalty becomes final as provided by Section 2001.144, Government 530-25 Code, the person charged with the violation shall: 530-26 (1) pay the penalty in full; or 530-27 (2) if the person seeks judicial review of either the 531-1 amount of the penalty or the fact of the violation, or both: 531-2 (A) pay the penalty to the railroad commission 531-3 for placement in an escrow account; or 531-4 (B) give to the railroad commission a 531-5 supersedeas bond in a form approved by the railroad commission for 531-6 the amount of the penalty that is effective until all judicial 531-7 review of the order or decision is final. (V.A.C.S. Art. 6053-2, 531-8 Sec. (j).) 531-9 Sec. 121.209. PIPELINE SAFETY ADMINISTRATIVE PENALTY: 531-10 REFUND OF PAYMENT OR RELEASE OF BOND. If through judicial review 531-11 of a decision or order regarding an administrative penalty it is 531-12 determined that a violation did not occur or that the amount of the 531-13 penalty should be reduced or not assessed, the railroad commission 531-14 shall, not later than the 30th day after the date of that 531-15 determination: 531-16 (1) remit the appropriate amount to the person, with 531-17 accrued interest if the utility paid the penalty to the railroad 531-18 commission; or 531-19 (2) execute a release of the bond if the utility 531-20 posted a supersedeas bond. (V.A.C.S. Art. 6053-2, Sec. (k).) 531-21 Sec. 121.210. RECOVERY BY ATTORNEY GENERAL. An 531-22 administrative penalty owed under Sections 121.206-121.208 may be 531-23 recovered in a civil action brought by the attorney general at the 531-24 request of the railroad commission. (V.A.C.S. Art. 6053-2, Sec. 531-25 (m).) 531-26 (Sections 121.211-121.250 reserved for expansion) 531-27 SUBCHAPTER F. GAS SAFETY 532-1 Sec. 121.251. RAILROAD COMMISSION TO INVESTIGATE USE OF GAS 532-2 MALODORANTS. The railroad commission shall investigate the use of 532-3 malodorants by a person, firm, or corporation in the business of: 532-4 (1) handling, storing, selling, or distributing 532-5 natural or liquefied petroleum gases, including butane and other 532-6 odorless gases, for private or commercial uses; or 532-7 (2) supplying these products to a public building or 532-8 the general public. (V.A.C.S. Art. 6053, Sec. 2 (part).) 532-9 Sec. 121.252. REGULATION OF USE OF MALODORANTS. (a) The 532-10 railroad commission, by rule as necessary to carry out the purposes 532-11 of this section, may: 532-12 (1) require a person, firm, or corporation subject to 532-13 Section 121.251 to odorize the gas by using a malodorant agent that 532-14 indicates the presence of gas by a distinctive odor; 532-15 (2) regulate the method of the use of malodorants; and 532-16 (3) direct and approve the use of containers and 532-17 other equipment used in connection with malodorants. 532-18 (b) A required malodorant agent must be: 532-19 (1) nontoxic and noncorrosive; and 532-20 (2) not harmful to leather diaphragms in gas 532-21 equipment. (V.A.C.S. Art. 6053, Sec. 2 (part).) 532-22 Sec. 121.253. INTERSTATE TRANSPORTATION OF GAS EXCLUDED. 532-23 This subchapter does not apply to gas transported out of this 532-24 state. (V.A.C.S. Art. 6053, Sec. 2 (part).) 532-25 (Sections 121.254-121.300 reserved for expansion) 532-26 SUBCHAPTER G. ENFORCEMENT REMEDIES 532-27 Sec. 121.301. RECEIVERSHIP. (a) On application of the 533-1 railroad commission, a court having jurisdiction to appoint a 533-2 receiver may appoint a receiver to control and manage, under the 533-3 direction of the court, the property of a pipeline subject to this 533-4 chapter if the person or corporation owning, operating, or 533-5 controlling the pipeline violates this chapter or a rule of the 533-6 railroad commission. 533-7 (b) The railroad commission may apply for a receivership 533-8 only if the railroad commission determines that the public interest 533-9 requires a receivership. 533-10 (c) The grounds for the appointment of a receiver under this 533-11 section are in addition to any other ground provided by law. 533-12 (V.A.C.S. Art. 6063.) 533-13 Sec. 121.302. CIVIL PENALTY. (a) A gas utility is subject 533-14 to a civil penalty if the gas utility: 533-15 (1) violates this chapter; 533-16 (2) fails to perform a duty imposed by this chapter; 533-17 or 533-18 (3) fails to comply with an order of the railroad 533-19 commission if the order is not stayed or suspended by a court 533-20 order. A penalty under this section is payable to the state and 533-21 shall be not less than $100 and not more than $1,000 for each 533-22 violation or failure. 533-23 (b) Each violation and each day that the failure continues 533-24 is subject to a separate penalty. (V.A.C.S. Art. 6062 (part).) 533-25 Sec. 121.303. PENALTY RECOVERABLE BY VICTIM OF 533-26 DISCRIMINATION. (a) A penalty of not less than $100 and not more 533-27 than $1,000 for each violation is recoverable by any person against 534-1 whom discrimination prohibited by Section 121.104 is committed. 534-2 (b) A suit to collect a penalty under this section must be 534-3 brought in the name of and for the benefit of the person aggrieved. 534-4 (c) A person who recovers a penalty under this section is 534-5 also entitled to reasonable attorney's fees. 534-6 (d) The penalty under this section is in addition to a 534-7 penalty under Section 121.302. (V.A.C.S. Art. 6062 (part).) 534-8 Sec. 121.304. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 534-9 PENALTY. (a) The railroad commission may assess an administrative 534-10 penalty against a gas utility that violates this chapter, fails to 534-11 perform a duty imposed by this chapter, or fails to comply with an 534-12 order of the railroad commission issued under this chapter and 534-13 applicable to the gas utility if the violation: 534-14 (1) results in pollution of the air or water of this 534-15 state; or 534-16 (2) poses a threat to the public safety. 534-17 (b) The penalty for each violation or failure may not exceed 534-18 $10,000 a day. Each day a violation continues may be considered a 534-19 separate violation for purposes of penalty assessment. 534-20 (c) In determining the amount of the penalty, the railroad 534-21 commission shall consider: 534-22 (1) the gas utility's history of previous violations 534-23 of this chapter; 534-24 (2) the seriousness of the violation; and 534-25 (3) any hazard to the health or safety of the public. 534-26 (V.A.C.S. Art. 6062A, Secs. (a), (b), (c).) 534-27 Sec. 121.305. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 535-1 PENALTY: ASSESSMENT PROCEDURE. (a) An administrative penalty may 535-2 be assessed under Section 121.304 only after a gas utility charged 535-3 under Section 121.304 has been given an opportunity for a public 535-4 hearing. 535-5 (b) If a public hearing is held, the railroad commission 535-6 shall make findings of fact and shall issue a written decision as 535-7 to the occurrence of the violation and the penalty amount warranted 535-8 by the violation, incorporating, if appropriate, an order requiring 535-9 that the penalty be paid. 535-10 (c) If appropriate, the railroad commission shall 535-11 consolidate the hearings with other proceedings under Section 535-12 121.304. 535-13 (d) If a gas utility charged under Section 121.304 fails to 535-14 take advantage of the opportunity for a public hearing, an 535-15 administrative penalty may be assessed by the railroad commission 535-16 after it has determined: 535-17 (1) that a violation occurred; and 535-18 (2) the penalty amount warranted by the violation. 535-19 (e) After assessing an administrative penalty, the railroad 535-20 commission shall issue an order requiring the penalty to be paid. 535-21 (f) Not later than the 30th day after the date an order is 535-22 issued finding that a violation described under Section 121.304 535-23 occurred, the railroad commission shall inform the gas utility 535-24 found in violation of the amount of the penalty. (V.A.C.S. 535-25 Art. 6062A, Secs. (d), (e), (f), (g), (h), (i).) 535-26 Sec. 121.306. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 535-27 PENALTY: PAYMENT OF PENALTY. (a) Not later than the 30th day 536-1 after the date the railroad commission's decision or order imposing 536-2 an administrative penalty becomes final as provided by Section 536-3 2001.144, Government Code, the gas utility charged with the 536-4 violation shall: 536-5 (1) pay the penalty in full; or 536-6 (2) if the gas utility seeks judicial review of either 536-7 the amount of the penalty or the fact of the violation, or both: 536-8 (A) pay the penalty to the railroad commission 536-9 for placement in an escrow account; or 536-10 (B) except as provided by Subsection (b), give 536-11 to the railroad commission a supersedeas bond, in the amount of the 536-12 penalty and in the form approved by the railroad commission, to 536-13 stay the collection of the penalty until all judicial review of the 536-14 order or decision is final. 536-15 (b) If the gas utility is appealing a second or subsequent 536-16 decision or order assessing an administrative penalty against the 536-17 gas utility, regardless of the finality of judicial review of any 536-18 previous decision or order, the railroad commission may, but is not 536-19 required to, accept a supersedeas bond. (V.A.C.S. Art. 6062A, Sec. 536-20 (j).) 536-21 Sec. 121.307. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 536-22 PENALTY: APPEALS. (a) The district courts of Travis County have 536-23 exclusive jurisdiction of the appeal of an order or decision of the 536-24 railroad commission assessing an administrative penalty under 536-25 Section 121.304. 536-26 (b) Subchapter G, Chapter 2001, Government Code, and the 536-27 substantial evidence rule apply to an appeal under this section. 537-1 (V.A.C.S. Art. 6062A, Sec. (n).) 537-2 Sec. 121.308. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 537-3 PENALTY: REFUND OF PAYMENT OR RELEASE OF BOND. If through 537-4 judicial review of a decision or order regarding an administrative 537-5 penalty it is determined that a violation did not occur or that the 537-6 amount of the penalty should be reduced or not assessed, the 537-7 railroad commission shall, not later than the 30th day after the 537-8 date of that determination: 537-9 (1) remit the appropriate amount to the gas utility 537-10 with accrued interest if the utility paid the penalty to the 537-11 railroad commission; or 537-12 (2) execute a release of the bond if the utility 537-13 posted a supersedeas bond. (V.A.C.S. Art. 6062A, Sec. (k).) 537-14 Sec. 121.309. POLLUTION OR PUBLIC SAFETY ADMINISTRATIVE 537-15 PENALTY: RECOVERY. An administrative penalty owed under Sections 537-16 121.304-121.308 may be recovered in a civil action brought by the 537-17 attorney general at the request of the railroad commission. 537-18 (V.A.C.S. Art. 6062A, Sec. (m).) 537-19 Sec. 121.310. CRIMINAL PENALTY. (a) A person commits an 537-20 offense if: 537-21 (1) the person is an owner, officer, director, agent, 537-22 or employee of a person or corporation owning, operating, or 537-23 controlling a pipeline of a gas utility; and 537-24 (2) the person wilfully violates this chapter or 537-25 Chapter 122. 537-26 (b) An offense under this section is punishable by a fine of 537-27 not less than $50 and not more than $1,000. In addition to the 538-1 fine, the offense may be punishable by confinement in jail for not 538-2 less than 10 days nor more than six months. (V.A.C.S. Art. 6057b.) 538-3 (Sections 121.311-121.400 reserved for expansion) 538-4 SUBCHAPTER H. APPEALS 538-5 Sec. 121.401. APPEAL TO COURT. (a) A gas utility or other 538-6 party at interest may appeal to a court a decision of any rate, 538-7 classification, rule, charge, order, or act adopted by the railroad 538-8 commission by filing a petition against the railroad commission as 538-9 defendant and specifying each particular reason for objection. 538-10 (b) An action under this section is tried and determined as 538-11 are other civil causes in the court except as provided by Section 538-12 121.402. (V.A.C.S. Art. 6059 (part).) 538-13 Sec. 121.402. APPEAL: BURDEN AND STANDARD OF PROOF. In a 538-14 trial under this subchapter, the burden of proof is on the 538-15 plaintiff, who must show by clear and satisfactory evidence that 538-16 the rate, rule, order, classification, act, or charge that is the 538-17 subject of the complaint is unreasonable and unjust to the 538-18 plaintiff. (V.A.C.S. Art. 6059 (part).) 538-19 Sec. 121.403. APPEAL FROM TRIAL COURT. An appeal from an 538-20 action under Section 121.402: 538-21 (1) is at once returnable to the appellate court; and 538-22 (2) has precedence in the appellate court over each 538-23 other pending cause of a different character. (V.A.C.S. Art. 6059 538-24 (part).) 538-25 CHAPTER 122. GAS UTILITY PIPELINE TAX 538-26 SUBCHAPTER A. DEFINITIONS 538-27 Sec. 122.001. DEFINITIONS 539-1 (Sections 122.002-122.050 reserved for expansion) 539-2 SUBCHAPTER B. TAX IMPOSED 539-3 Sec. 122.051. TAX IMPOSED; RATE 539-4 Sec. 122.052. DEDUCTION OF CERTAIN COSTS 539-5 (Sections 122.053-122.100 reserved for expansion) 539-6 SUBCHAPTER C. PAYMENTS, REPORTS, AND RECORDS 539-7 Sec. 122.101. TAX PAYMENT 539-8 Sec. 122.102. REPORT 539-9 Sec. 122.103. PAYMENT AND REPORT DEADLINE 539-10 Sec. 122.104. RECORDS 539-11 (Sections 122.105-122.150 reserved for expansion) 539-12 SUBCHAPTER D. ADMINISTRATION 539-13 Sec. 122.151. ADMINISTRATION BY RAILROAD COMMISSION 539-14 Sec. 122.152. EXAMINATION OF RECORDS AND PERSON DOING 539-15 BUSINESS IN THIS STATE 539-16 (Sections 122.153-122.200 reserved for expansion) 539-17 SUBCHAPTER E. PENALTIES AND INTEREST 539-18 Sec. 122.201. PENALTY FOR FAILURE TO REPORT TAX 539-19 Sec. 122.202. PENALTY FOR FAILURE TO PAY TAX 539-20 Sec. 122.203. PENALTY FOR FAILURE TO REPORT AND PAY TAX 539-21 Sec. 122.204. MINIMUM PENALTY 539-22 Sec. 122.205. INTEREST 539-23 CHAPTER 122. GAS UTILITY PIPELINE TAX 539-24 SUBCHAPTER A. DEFINITIONS 539-25 Sec. 122.001. DEFINITIONS. In this chapter: 539-26 (1) "Gas utility" has the meaning assigned by Section 539-27 121.001(a)(2) and includes a person without regard to whether the 540-1 person acquired a part of the right-of-way for the pipeline by 540-2 eminent domain. 540-3 (2) "Gross income" includes all gross receipts the gas 540-4 utility received from activities described by Section 121.001(a)(2) 540-5 that are performed in this state, other than an activity excluded 540-6 by Chapter 121 from the activities that make a person a gas utility 540-7 for purposes of that chapter, and excludes the amount of the 540-8 deduction allowed by Section 122.052. (V.A.C.S. Art. 6060, Secs. 540-9 (1)(a) (part), (c) (part).) 540-10 (Sections 122.002-122.050 reserved for expansion) 540-11 SUBCHAPTER B. TAX IMPOSED 540-12 Sec. 122.051. TAX IMPOSED; RATE. (a) A tax is imposed on 540-13 each gas utility. 540-14 (b) The gas utility tax is imposed at the rate of one-half 540-15 of one percent of the gross income of the gas utility. (V.A.C.S. 540-16 Art. 6060, Secs. 1(a) (part), (b).) 540-17 Sec. 122.052. DEDUCTION OF CERTAIN COSTS. A gas utility is 540-18 entitled to deduct from the utility's gross receipts the amount of 540-19 the cost paid to another person by the utility for purchasing, 540-20 treating, or storing natural gas or for gathering or transporting 540-21 natural gas to the utility's facilities. (V.A.C.S. Art. 6060, Sec. 540-22 1(c) (part).) 540-23 (Sections 122.053-122.100 reserved for expansion) 540-24 SUBCHAPTER C. PAYMENTS, REPORTS, AND RECORDS 540-25 Sec. 122.101. TAX PAYMENT. (a) A gas utility on whom a tax 540-26 is imposed by this chapter during a calendar quarter shall pay the 540-27 tax to the railroad commission. 541-1 (b) A gas utility shall make the tax payment payable to the 541-2 comptroller. (V.A.C.S. Art. 6060, Sec. 2(a) (part).) 541-3 Sec. 122.102. REPORT. (a) A gas utility on whom a tax is 541-4 imposed by this chapter during a calendar quarter shall include 541-5 with the tax payment a report to the railroad commission that 541-6 includes a statement of: 541-7 (1) all activity subject to the tax during the period 541-8 covered by the report; and 541-9 (2) the gross income from that activity. 541-10 (b) The president, secretary, or general manager of a gas 541-11 utility that is a corporation or an owner of a gas utility that is 541-12 not a corporation must verify the truth and accuracy of the report. 541-13 (V.A.C.S. Art. 6060, Secs. 2(a) (part), (b).) 541-14 Sec. 122.103. PAYMENT AND REPORT DEADLINE. A tax payment 541-15 and report under this chapter for a calendar quarter are due on or 541-16 before the 20th day of the second month of the succeeding quarter. 541-17 (V.A.C.S. Art. 6060, Sec. 2(a) (part).) 541-18 Sec. 122.104. RECORDS. A person on whom a tax is imposed by 541-19 this chapter shall maintain until the fourth anniversary of the 541-20 date the tax report and payment for a calendar quarter are due 541-21 records sufficient to: 541-22 (1) document the person's tax report; and 541-23 (2) establish the amount of the tax imposed. 541-24 (V.A.C.S. Art. 6060, Sec. 3(b).) 541-25 (Sections 122.105-122.150 reserved for expansion) 541-26 SUBCHAPTER D. ADMINISTRATION 541-27 Sec. 122.151. ADMINISTRATION BY RAILROAD COMMISSION. The 542-1 railroad commission: 542-2 (1) shall administer and collect the taxes imposed by 542-3 this chapter; and 542-4 (2) may adopt rules necessary to administer this 542-5 chapter and to collect and enforce the taxes. (V.A.C.S. Art. 6060, 542-6 Sec. 3(a).) 542-7 Sec. 122.152. EXAMINATION OF RECORDS AND PERSON DOING 542-8 BUSINESS IN THIS STATE. To enforce this chapter, the railroad 542-9 commission may examine: 542-10 (1) a book, record, or paper of a person permitted to 542-11 do business in this state, including an agent of the person, at an 542-12 office of the person or agent in the United States; and 542-13 (2) an officer or employee of a person described by 542-14 Subdivision (1) under oath. (V.A.C.S. Art. 6060, Sec. 3(c).) 542-15 (Sections 122.153-122.200 reserved for expansion) 542-16 SUBCHAPTER E. PENALTIES AND INTEREST 542-17 Sec. 122.201. PENALTY FOR FAILURE TO REPORT TAX. A person 542-18 who is required to report a tax imposed by this chapter and fails 542-19 to report as required by Sections 122.102 and 122.103 shall pay: 542-20 (1) a penalty of five percent of the amount of the tax 542-21 due with the report; and 542-22 (2) if the report is not made before the 31st day 542-23 after the date the report is initially required to be made, an 542-24 additional penalty of five percent of the amount of the tax due 542-25 with the report. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 542-26 Sec. 122.202. PENALTY FOR FAILURE TO PAY TAX. A person who 542-27 is required to pay a tax imposed by this chapter and fails to pay 543-1 the tax as required by Sections 122.101 and 122.103 shall pay: 543-2 (1) a penalty of five percent of the amount of the tax 543-3 due and unpaid; and 543-4 (2) if the tax is not paid before the 31st day after 543-5 the date the tax payment is initially required to be made, an 543-6 additional penalty of five percent of the amount of the tax due and 543-7 unpaid. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 543-8 Sec. 122.203. PENALTY FOR FAILURE TO REPORT AND PAY TAX. If 543-9 a person fails to make the report and to pay the tax for a 543-10 reporting period, only the penalty and additional penalty under 543-11 Section 122.201, as applicable, for failure to make the report is 543-12 imposed. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 543-13 Sec. 122.204. MINIMUM PENALTY. If the amount of a penalty 543-14 or additional penalty computed as provided by this subchapter is 543-15 less than $5, the amount of the penalty or additional penalty is 543-16 $5. (V.A.C.S. Art. 6060, Sec. 4(a) (part).) 543-17 Sec. 122.205. INTEREST. A tax imposed by this chapter that 543-18 becomes delinquent draws interest at the rate of 12 percent a year 543-19 beginning on the 60th day after the date the tax becomes delinquent 543-20 and continues to draw interest until the date the tax is paid. 543-21 (V.A.C.S. Art. 6060, Sec. 4(b).) 543-22 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 543-23 SUBCHAPTER A. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 543-24 Sec. 123.001. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 543-25 Sec. 123.002. EXCEPTION 543-26 (Sections 123.003-123.020 reserved for expansion) 543-27 SUBCHAPTER B. AGRICULTURE GAS USERS ACT 544-1 Sec. 123.021. SHORT TITLE 544-2 Sec. 123.022. DEFINITIONS 544-3 Sec. 123.023. CONTRACT FOR NATURAL GAS 544-4 Sec. 123.024. EXCEPTION 544-5 CHAPTER 123. USE OF NATURAL GAS FOR AGRICULTURAL PURPOSES 544-6 SUBCHAPTER A. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES 544-7 Sec. 123.001. NATURAL GAS SUPPLY FOR AGRICULTURAL PURPOSES. 544-8 A person, firm, corporation, partnership, association, or 544-9 cooperative who sells natural gas for irrigation may not reduce the 544-10 supply of natural gas for an agricultural purpose, including 544-11 irrigation pumping or crop drying, if that person or entity: 544-12 (1) sells and distributes natural gas in a 544-13 municipality; or 544-14 (2) delivers gas to the boundary of a municipality for 544-15 resale in the municipality. (V.A.C.S. Art. 6066f (part).) 544-16 Sec. 123.002. EXCEPTION. This subchapter does not apply to 544-17 the extent that the supply of natural gas is required to maintain 544-18 natural gas service for: 544-19 (1) use by residential users or hospitals; or 544-20 (2) an analogous use that is vital to public health 544-21 and safety. (V.A.C.S. Art. 6066f (part).) 544-22 (Sections 123.003-123.020 reserved for expansion) 544-23 SUBCHAPTER B. AGRICULTURE GAS USERS ACT 544-24 Sec. 123.021. SHORT TITLE. This subchapter may be cited as 544-25 the Agriculture Gas Users Act. (V.A.C.S. Art. 6066g, Sec. 1.) 544-26 Sec. 123.022. DEFINITIONS. In this subchapter: 544-27 (1) "Agriculture energy user" means a person who 545-1 purchases or uses natural gas for fuel for an irrigation well. 545-2 (2) "Corporation" means a domestic or foreign 545-3 corporation or association, and each lessee, assignee, trustee, 545-4 receiver, or other successor in interest of the corporation or 545-5 association, that has any of the powers or privileges of a 545-6 corporation not possessed by an individual or partnership. 545-7 (3) "Person" includes an individual, a partnership of 545-8 two or more persons having a joint or common interest, a mutual or 545-9 cooperative association, and a corporation. 545-10 (4) "Supplier" means a person who furnishes natural 545-11 gas to an agriculture energy user. (V.A.C.S. Art. 6066g, Sec. 2.) 545-12 Sec. 123.023. CONTRACT FOR NATURAL GAS. (a) A supplier and 545-13 an agriculture energy user may by contract establish a price and 545-14 other terms of service for the furnishing of natural gas. 545-15 (b) A contract under this section must be negotiated in good 545-16 faith and the result of arm's-length bargaining between the 545-17 parties. 545-18 (c) Each party shall provide information and maintain 545-19 records as reasonably necessary for the contract. 545-20 (d) A price charged to an agriculture energy user under the 545-21 contract may not exceed the price charged to a majority of the 545-22 supplier's commercial users or other similar large-volume users. 545-23 (V.A.C.S. Art. 6066g, Sec. 3.) 545-24 Sec. 123.024. EXCEPTION. This subchapter does not apply to 545-25 a transaction between an agriculture energy user and a supplier who 545-26 does not deliver gas to a municipality unless: 545-27 (1) the parties agree the subchapter applies to the 546-1 transaction; and 546-2 (2) the contract states the subchapter applies to the 546-3 transaction. (V.A.C.S. Art. 6066g, Sec. 4.) 546-4 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS 546-5 AND APARTMENT HOUSES 546-6 Sec. 124.001. DEFINITIONS 546-7 Sec. 124.002. SUBMETERING 546-8 CHAPTER 124. SUBMETERING TO MOBILE HOME PARKS 546-9 AND APARTMENT HOUSES 546-10 Sec. 124.001. DEFINITIONS. In this chapter: 546-11 (1) "Apartment house" means one or more buildings 546-12 containing more than five dwelling units each of which is rented 546-13 primarily for nontransient use with rent paid at intervals of one 546-14 week or longer. The term includes a rented or owner-occupied 546-15 residential condominium. 546-16 (2) "Dwelling unit" means: 546-17 (A) one or more rooms that are suitable for 546-18 occupancy as a residence and that contain kitchen and bathroom 546-19 facilities; or 546-20 (B) a mobile home in a mobile home park. 546-21 (V.A.C.S. Art. 6053, Sec. 1a(a).) 546-22 Sec. 124.002. SUBMETERING. (a) The railroad commission 546-23 shall adopt rules under which an owner, operator, or manager of a 546-24 mobile home park or apartment house may purchase natural gas 546-25 through a master meter for delivery to a dwelling unit in the 546-26 mobile home park or apartment house using individual submeters to 546-27 allocate fairly the cost of the gas consumption of each dwelling 547-1 unit. 547-2 (b) In addition to other appropriate safeguards for a 547-3 resident of a mobile home park or apartment house, the rules must 547-4 provide that the owner, operator, or manager of the mobile home 547-5 park or apartment house: 547-6 (1) may not deliver natural gas for sale or resale for 547-7 profit; and 547-8 (2) shall maintain adequate records relating to that 547-9 submetering and make those records available for inspection by the 547-10 resident during reasonable business hours. (V.A.C.S. Art. 6053, 547-11 Sec. 1a(b).) 547-12 (Chapters 125-160 reserved for expansion) 547-13 TITLE 4. DELIVERY OF UTILITY SERVICES 547-14 SUBTITLE A. UTILITY CORPORATIONS AND OTHER PROVIDERS 547-15 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 547-16 SUBCHAPTER A. GENERAL PROVISIONS 547-17 Sec. 161.001. SHORT TITLE 547-18 Sec. 161.002. DEFINITIONS 547-19 Sec. 161.003. CONSTRUCTION OF CHAPTER 547-20 Sec. 161.004. CERTAIN CORPORATE NAMES PROHIBITED 547-21 (Sections 161.005-161.050 reserved for expansion) 547-22 SUBCHAPTER B. CREATION AND OPERATION OF ELECTRIC COOPERATIVES 547-23 Sec. 161.051. INCORPORATORS 547-24 Sec. 161.052. DURATION OF CORPORATION 547-25 Sec. 161.053. NAME OF ELECTRIC COOPERATIVE 547-26 Sec. 161.054. ARTICLES OF INCORPORATION 547-27 Sec. 161.055. FILING AND RECORDING OF ARTICLES OF 548-1 INCORPORATION 548-2 Sec. 161.056. REVIVAL OF ARTICLES OF INCORPORATION 548-3 Sec. 161.057. ORGANIZATIONAL MEETING 548-4 Sec. 161.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATION 548-5 Sec. 161.059. NONPROFIT OPERATION 548-6 Sec. 161.060. MEMBERS NOT LIABLE FOR DEBTS OF ELECTRIC 548-7 COOPERATIVE 548-8 Sec. 161.061. LICENSE FEE 548-9 Sec. 161.062. EXEMPTION FROM EXCISE TAXES 548-10 Sec. 161.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT 548-11 Sec. 161.064. BYLAWS 548-12 Sec. 161.065. MEMBERSHIP 548-13 Sec. 161.066. CERTIFICATE OF MEMBERSHIP 548-14 Sec. 161.067. MEETINGS OF MEMBERS 548-15 Sec. 161.068. NOTICE OF MEMBERS' MEETING 548-16 Sec. 161.069. QUORUM OF MEMBERS 548-17 Sec. 161.070. VOTING BY MEMBERS 548-18 Sec. 161.071. BOARD OF DIRECTORS 548-19 Sec. 161.072. ELECTION OF DIRECTORS; VACANCIES 548-20 Sec. 161.073. COMPENSATION OF DIRECTORS 548-21 Sec. 161.074. QUORUM OF DIRECTORS 548-22 Sec. 161.075. BOARD MEETINGS 548-23 Sec. 161.076. OFFICERS, AGENTS, AND EMPLOYEES 548-24 Sec. 161.077. EXECUTIVE COMMITTEE 548-25 Sec. 161.078. INDEMNIFICATION 548-26 Sec. 161.079. APPLICABILITY OF CHAPTER TO CORPORATIONS 548-27 ORGANIZED UNDER OTHER LAW 549-1 (Sections 161.080-161.120 reserved for expansion) 549-2 SUBCHAPTER C. POWERS OF ELECTRIC COOPERATIVE 549-3 Sec. 161.121. GENERAL POWERS 549-4 Sec. 161.122. PROVISION OF RURAL ELECTRIFICATION 549-5 Sec. 161.123. POWERS RELATING TO PROVISION OF ELECTRIC 549-6 ENERGY 549-7 Sec. 161.124. PROVISION OF ELECTRIC ENERGY TO CERTAIN 549-8 NONMEMBER ENTITIES 549-9 Sec. 161.125. EMINENT DOMAIN 549-10 (Sections 161.126-161.150 reserved for expansion) 549-11 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 549-12 Sec. 161.151. AMENDMENT OF ARTICLES OF INCORPORATION 549-13 Sec. 161.152. ARTICLES OF AMENDMENT 549-14 (Sections 161.153-161.200 reserved for expansion) 549-15 SUBCHAPTER E. CONSOLIDATION OF ELECTRIC COOPERATIVES 549-16 Sec. 161.201. CONSOLIDATION 549-17 Sec. 161.202. ARTICLES OF CONSOLIDATION 549-18 (Sections 161.203-161.250 reserved for expansion) 549-19 SUBCHAPTER F. DISSOLUTION 549-20 Sec. 161.251. DISSOLUTION 549-21 Sec. 161.252. EXISTENCE FOLLOWING DISSOLUTION 549-22 Sec. 161.253. DISTRIBUTION OF NET ASSETS ON DISSOLUTION 549-23 Sec. 161.254. DISSOLUTION OF DEFECTIVELY INCORPORATED 549-24 ELECTRIC COOPERATIVE 549-25 CHAPTER 161. ELECTRIC COOPERATIVE CORPORATIONS 549-26 SUBCHAPTER A. GENERAL PROVISIONS 549-27 Sec. 161.001. SHORT TITLE. This chapter may be cited as the 550-1 Electric Cooperative Corporation Act. (V.A.C.S. Art. 1528b, Sec. 550-2 1.) 550-3 Sec. 161.002. DEFINITIONS. In this chapter: 550-4 (1) "Acquire" means and includes construct, acquire by 550-5 purchase, lease, devise, or gift, or other mode of acquisition. 550-6 (2) "Board" means the board of directors of an 550-7 electric cooperative. 550-8 (3) "Central station service" means electric service 550-9 provided by a municipally owned electric system or by an electric 550-10 corporation described by Subchapter A, Chapter 181. 550-11 (4) "Electric cooperative" means a corporation that is 550-12 organized under this chapter or that becomes subject to this 550-13 chapter as provided by this chapter. 550-14 (5) "Member" means: 550-15 (A) an incorporator of an electric cooperative; 550-16 or 550-17 (B) a person admitted to membership in the 550-18 electric cooperative as provided by Section 161.065. 550-19 (6) "Obligation" includes a bond, note, debenture, 550-20 interim certificate or receipt, or other evidence of indebtedness 550-21 issued by an electric cooperative. 550-22 (7) "Rural area" means an area, including both farm 550-23 and nonfarm population of the area, that is not located in: 550-24 (A) a municipality having a population greater 550-25 than 1,500; or 550-26 (B) an unincorporated city, town, village, or 550-27 borough having a population greater than 1,500. (V.A.C.S. 551-1 Art. 1528b, Secs. 2(1), (2), (3), (6), (7), (8), 3 (part).) 551-2 Sec. 161.003. CONSTRUCTION OF CHAPTER. This chapter shall 551-3 be liberally construed. The enumeration of a purpose, power, 551-4 method, or thing does not exclude similar purposes, powers, 551-5 methods, or things. (V.A.C.S. Art. 1528b, Sec. 34.) 551-6 Sec. 161.004. CERTAIN CORPORATE NAMES PROHIBITED. A 551-7 corporation organized under the laws of this state or authorized to 551-8 do business in this state may not use the words "electric 551-9 cooperative" in the corporation's name unless the corporation is 551-10 organized under this chapter. (V.A.C.S. Art. 1528b, Sec. 7.) 551-11 (Sections 161.005-161.050 reserved for expansion) 551-12 SUBCHAPTER B. CREATION AND OPERATION OF ELECTRIC COOPERATIVES 551-13 Sec. 161.051. INCORPORATORS. (a) Three or more individuals 551-14 may act as incorporators of an electric cooperative by executing 551-15 articles of incorporation as provided by this chapter. 551-16 (b) An incorporator must: 551-17 (1) be at least 21 years of age; and 551-18 (2) reside in this state. (V.A.C.S. Art. 1528b, Sec. 551-19 5.) 551-20 Sec. 161.052. DURATION OF CORPORATION. An electric 551-21 cooperative may be created as a perpetual corporation. (V.A.C.S. 551-22 Art. 1528b, Secs. 4 (part), 6(a) (part).) 551-23 Sec. 161.053. NAME OF ELECTRIC COOPERATIVE. The name of an 551-24 electric cooperative must: 551-25 (1) include the words "Electric Cooperative"; 551-26 (2) include the term "Corporation," "Incorporated," 551-27 "Inc.," "Association," or "Company"; and 552-1 (3) be distinct from the name of any other corporation 552-2 organized under the laws of this state. (V.A.C.S. Art. 1528b, Sec. 552-3 6(a) (part).) 552-4 Sec. 161.054. ARTICLES OF INCORPORATION. (a) The articles 552-5 of incorporation of an electric cooperative must state: 552-6 (1) the name of the cooperative; 552-7 (2) the purpose for which the cooperative is formed; 552-8 (3) the name and address of each incorporator; 552-9 (4) the number of directors; 552-10 (5) the address of the cooperative's principal office 552-11 and the name and address of its agent on whom process may be 552-12 served; 552-13 (6) the duration of the cooperative; 552-14 (7) the terms under which a person is admitted to 552-15 membership and retains membership in the cooperative, unless the 552-16 articles expressly state that the determination of membership 552-17 matters is reserved to the directors by the bylaws; and 552-18 (8) any provisions that the incorporators include for 552-19 the regulation of the business and the conduct of the affairs of 552-20 the cooperative. 552-21 (b) The articles of incorporation do not need to state any 552-22 of the corporate powers enumerated in this chapter. (V.A.C.S. 552-23 Art. 1528b, Secs. 6(a) (part), (b).) 552-24 Sec. 161.055. FILING AND RECORDING OF ARTICLES OF 552-25 INCORPORATION. (a) The secretary of state shall receive articles 552-26 of incorporation of an electric cooperative if the incorporators of 552-27 the cooperative: 553-1 (1) apply for filing the articles; 553-2 (2) furnish satisfactory evidence of compliance with 553-3 this chapter to the secretary of state; and 553-4 (3) pay a fee of $10. 553-5 (b) The secretary of state shall: 553-6 (1) file the articles of incorporation in the 553-7 secretary's office; 553-8 (2) record the articles at length in a book to be kept 553-9 for that purpose; 553-10 (3) retain the original articles of incorporation on 553-11 file in the secretary's office; and 553-12 (4) issue a certificate showing the recording of the 553-13 articles of incorporation and the electric cooperative's authority 553-14 to do business under the articles. 553-15 (c) A copy of the articles of incorporation or of the record 553-16 of the articles, certified under the state seal, is evidence of the 553-17 creation of the electric cooperative. 553-18 (d) The existence of the electric cooperative dates from the 553-19 filing of the articles in the office of the secretary of state. 553-20 The certificate of the secretary of state is evidence of that 553-21 filing. (V.A.C.S. Art. 1528b, Secs. 8, 29 (part).) 553-22 Sec. 161.056. REVIVAL OF ARTICLES OF INCORPORATION. (a) If 553-23 the articles of incorporation of an electric cooperative expire by 553-24 limitation, the cooperative, with the consent of a majority of its 553-25 members, may revive the articles by filing: 553-26 (1) new articles of incorporation under this chapter; 553-27 and 554-1 (2) a certified copy of the expired original articles. 554-2 (b) An electric cooperative that revives its articles of 554-3 incorporation has all the privileges, immunities, and rights of 554-4 property exercised and held by the cooperative at the time the 554-5 original articles expired. 554-6 (c) New articles of incorporation filed under this section 554-7 must recite the privileges, immunities, and rights of property 554-8 exercised and held by the cooperative at the time the original 554-9 articles expired. (V.A.C.S. Art. 1528b, Sec. 9.) 554-10 Sec. 161.057. ORGANIZATIONAL MEETING. (a) After the 554-11 certificate of incorporation is issued, the incorporators of an 554-12 electric cooperative shall meet to adopt bylaws, elect officers, 554-13 and transact other business that properly comes before the meeting. 554-14 (b) A majority of the incorporators shall call the 554-15 organizational meeting. 554-16 (c) The incorporators calling the organizational meeting 554-17 shall give at least three days' notice of the meeting by mail to 554-18 each incorporator. The notice must state the time and place of the 554-19 meeting. The notice may be waived in writing. (V.A.C.S. 554-20 Art. 1528b, Sec. 10.) 554-21 Sec. 161.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATION. 554-22 (a) An electric cooperative that files defective articles of 554-23 incorporation or fails to take an action necessary to perfect its 554-24 corporate organization may: 554-25 (1) file corrected articles of incorporation or amend 554-26 the original articles; and 554-27 (2) take any action necessary to correct the defect. 555-1 (b) An action taken under this section is valid and binding 555-2 on any person concerned. (V.A.C.S. Art. 1528b, Sec. 32.) 555-3 Sec. 161.059. NONPROFIT OPERATION. (a) An electric 555-4 cooperative shall operate without profit to its members. 555-5 (b) The rates, fees, rents, and other charges for electric 555-6 energy and other facilities, supplies, equipment, or services 555-7 furnished by the cooperative must be sufficient at all times to: 555-8 (1) pay all operating and maintenance expenses 555-9 necessary or desirable for the prudent conduct of its business; 555-10 (2) pay the principal of and interest on the 555-11 obligations issued or assumed by the cooperative in performing the 555-12 purpose for which the cooperative was organized; and 555-13 (3) create reserves. 555-14 (c) The cooperative shall devote its revenues: 555-15 (1) first to the payment of operating and maintenance 555-16 expenses and the principal and interest on outstanding obligations; 555-17 and 555-18 (2) then to the reserves prescribed by the board for 555-19 improvement, new construction, depreciation, and contingencies. 555-20 (d) The cooperative shall periodically return revenues not 555-21 required for the purposes prescribed by Subsection (c) to the 555-22 members in proportion to the amount of business done with each 555-23 member during the applicable period. The cooperative may return 555-24 revenues: 555-25 (1) in cash, by abatement of current charges for 555-26 electric energy, or in another manner determined by the board; or 555-27 (2) through a general rate reduction to members. 556-1 (V.A.C.S. Art. 1528b, Sec. 25.) 556-2 Sec. 161.060. MEMBERS NOT LIABLE FOR DEBTS OF ELECTRIC 556-3 COOPERATIVE. A member is not liable for a debt of an electric 556-4 cooperative except for: 556-5 (1) a debt contracted between the member and the 556-6 cooperative; or 556-7 (2) an amount not to exceed the unpaid amount of the 556-8 member's membership fee. (V.A.C.S. Art. 1528b, Sec. 16 (part).) 556-9 Sec. 161.061. LICENSE FEE. Not later than May 1 of each 556-10 year, each electric cooperative shall pay to the secretary of 556-11 state a license fee of $10. (V.A.C.S. Art. 1528b, Sec. 30 556-12 (part).) 556-13 Sec. 161.062. EXEMPTION FROM EXCISE TAXES. An electric 556-14 cooperative is exempt from all excise taxes but is exempt from the 556-15 franchise tax imposed by Chapter 171, Tax Code, only if the 556-16 cooperative is exempted by that chapter. (V.A.C.S. Art. 1528b, 556-17 Sec. 30 (part).) 556-18 Sec. 161.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT. 556-19 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 556-20 Statutes) does not apply to: 556-21 (1) an obligation issued to secure a debt of an 556-22 electric cooperative to the United States; or 556-23 (2) the issuance of a membership certificate by an 556-24 electric cooperative. (V.A.C.S. Art. 1528b, Sec. 31.) 556-25 Sec. 161.064. BYLAWS. (a) The board may adopt, amend, or 556-26 repeal the bylaws of the cooperative. 556-27 (b) The bylaws may contain any provision for the regulation 557-1 and management of the affairs of the electric cooperative that is 557-2 consistent with the articles of incorporation. (V.A.C.S. 557-3 Art. 1528b, Secs. 4 (part), 11.) 557-4 Sec. 161.065. MEMBERSHIP. (a) A person is eligible to 557-5 become a member of an electric cooperative if the person has a 557-6 dwelling, structure, apparatus, or point of delivery at which the 557-7 person does not receive central station service from another source 557-8 and that is located in an area in which the cooperative is 557-9 authorized to provide electric energy, and the person: 557-10 (1) uses or agrees to use electric energy or the 557-11 facilities, supplies, equipment, or services furnished by the 557-12 cooperative at the dwelling, structure, apparatus, or point of 557-13 delivery; or 557-14 (2) is an incorporator of the cooperative. 557-15 (b) An electric cooperative may become a member of another 557-16 electric cooperative and may fully use the facilities and services 557-17 of that cooperative. 557-18 (c) Membership in an electric cooperative is not 557-19 transferable. (V.A.C.S. Art. 1528b, Secs. 12, 16 (part).) 557-20 Sec. 161.066. CERTIFICATE OF MEMBERSHIP. (a) An electric 557-21 cooperative shall issue a certificate of membership to a member who 557-22 pays the member's membership fee in full. 557-23 (b) A certificate of membership is not transferable. 557-24 (c) A certificate of membership shall be surrendered to the 557-25 cooperative on the resignation, expulsion, or death of the member. 557-26 (V.A.C.S. Art. 1528b, Sec. 16 (part).) 557-27 Sec. 161.067. MEETINGS OF MEMBERS. (a) An electric 558-1 cooperative may hold a meeting of its members at a place provided 558-2 in the bylaws. If the bylaws do not provide for a place for a 558-3 meeting, the cooperative shall hold the meeting in the principal 558-4 office of the cooperative in this state. 558-5 (b) An electric cooperative shall hold an annual meeting of 558-6 its members at the time provided in the bylaws. Failure to hold 558-7 the annual meeting at the designated time does not result in 558-8 forfeiture or dissolution of the cooperative. 558-9 (c) A special meeting of the members may be called by: 558-10 (1) the president; 558-11 (2) the board; 558-12 (3) a majority of the directors; 558-13 (4) the members by a petition signed by at least 10 558-14 percent of the members; or 558-15 (5) an officer or other person as provided by the 558-16 articles of incorporation or bylaws. (V.A.C.S. Art. 1528b, Sec. 558-17 13.) 558-18 Sec. 161.068. NOTICE OF MEMBERS' MEETING. (a) Written 558-19 notice of each meeting of the members shall be delivered to each 558-20 member of record, either personally or by mail, not earlier than 558-21 the 30th day or later than the 10th day before the date of the 558-22 meeting. The notice must be delivered by or at the direction of 558-23 the president, the secretary, or the officers or other persons 558-24 calling the meeting. 558-25 (b) The notice must state the time and place of the meeting 558-26 and, in the case of a special meeting, each purpose for which the 558-27 meeting is called. 559-1 (c) A member may waive notice of meetings in writing. 559-2 (d) A notice that is mailed is considered to be delivered 559-3 when the notice is deposited in the United States mail in a sealed 559-4 envelope with postage prepaid addressed to the member at the 559-5 member's address as it appears on the records of the electric 559-6 cooperative. (V.A.C.S. Art. 1528b, Sec. 14.) 559-7 Sec. 161.069. QUORUM OF MEMBERS. Unless otherwise provided 559-8 by the articles of incorporation, a quorum for the transaction of 559-9 business at a meeting of the members of an electric cooperative is 559-10 a majority of the members present in person or represented by 559-11 proxy. If voting by mail is provided for in the bylaws, members 559-12 voting by mail are counted as present for purposes of determining 559-13 whether a quorum is present. (V.A.C.S. Art. 1528b, Sec. 17.) 559-14 Sec. 161.070. VOTING BY MEMBERS. Each member present at a 559-15 meeting of the members is entitled to one vote on each matter 559-16 submitted to a vote at the meeting. The bylaws may provide for 559-17 voting by proxy or by mail. (V.A.C.S. Art. 1528b, Sec. 15.) 559-18 Sec. 161.071. BOARD OF DIRECTORS. (a) A board of at least 559-19 three directors shall manage the business and affairs of an 559-20 electric cooperative. Each director must be a member of the 559-21 cooperative. The bylaws may prescribe additional qualifications 559-22 for directors. 559-23 (b) The board may exercise any power of an electric 559-24 cooperative not conferred on the members by this chapter or by the 559-25 cooperative's articles of incorporation or bylaws. (V.A.C.S. 559-26 Art. 1528b, Secs. 6(a) (part), 18, 19 (part).) 559-27 Sec. 161.072. ELECTION OF DIRECTORS; VACANCIES. (a) The 560-1 incorporators of an electric cooperative named in the articles of 560-2 incorporation shall serve as directors until the first annual 560-3 meeting of the members, and until their successors are elected and 560-4 qualify. Subsequently, the directors shall be elected by the 560-5 members at each annual meeting or as otherwise provided by the 560-6 bylaws. 560-7 (b) A vacancy on the board shall be filled as provided by 560-8 the bylaws. A person selected to fill a vacancy serves until the 560-9 next regular election of directors. (V.A.C.S. Art. 1528b, Secs. 560-10 6(a) (part), 19 (part), 20.) 560-11 Sec. 161.073. COMPENSATION OF DIRECTORS. A director of an 560-12 electric cooperative is entitled to the compensation and 560-13 reimbursement for expenses actually and necessarily incurred by the 560-14 director as provided by the bylaws. (V.A.C.S. Art. 1528b, Sec. 19 560-15 (part).) 560-16 Sec. 161.074. QUORUM OF DIRECTORS. (a) A majority of the 560-17 directors is a quorum unless the articles of incorporation or the 560-18 bylaws provide that a greater number of the directors is a quorum. 560-19 (b) A majority of the directors present at a meeting at 560-20 which a quorum is present may exercise the board's authority unless 560-21 the articles of incorporation or the bylaws require a greater 560-22 number of directors to exercise the board's authority. (V.A.C.S. 560-23 Art. 1528b, Sec. 21.) 560-24 Sec. 161.075. BOARD MEETINGS. (a) The board shall hold a 560-25 regular or special board meeting at the place and on the notice 560-26 prescribed by the bylaws. 560-27 (b) The attendance of a director at a board meeting 561-1 constitutes a waiver of notice of the meeting unless the director 561-2 attends the meeting for the express purpose of objecting to the 561-3 transaction of business at the meeting because the meeting is not 561-4 lawfully called or convened. 561-5 (c) A notice or waiver of notice of a board meeting is not 561-6 required to specify the business to be transacted at the meeting or 561-7 the purpose of the meeting. (V.A.C.S. Art. 1528b, Sec. 22.) 561-8 Sec. 161.076. OFFICERS, AGENTS, AND EMPLOYEES. (a) The 561-9 board shall elect from the board's membership a president, a vice 561-10 president, a secretary, and a treasurer. The terms of office, 561-11 powers, duties, and compensation of the officers elected under this 561-12 subsection shall be provided for by the bylaws. 561-13 (b) The same person may hold the offices of secretary and of 561-14 treasurer. 561-15 (c) The board may appoint other officers, agents, and 561-16 employees as the board considers necessary and shall prescribe the 561-17 powers, duties, and compensation of those persons. 561-18 (d) The board may remove an officer, agent, or employee 561-19 elected or appointed by the board if the board determines that the 561-20 removal will serve the best interests of the cooperative. 561-21 (V.A.C.S. Art. 1528b, Secs. 4 (part), 23.) 561-22 Sec. 161.077. EXECUTIVE COMMITTEE. (a) The bylaws of an 561-23 electric cooperative may authorize the board to elect an executive 561-24 committee from the board's membership. 561-25 (b) The board may delegate to the executive committee the 561-26 management of the current and ordinary business of the cooperative 561-27 and other duties as prescribed by the bylaws. 562-1 (c) The designation of an executive committee and the 562-2 delegation of authority to the committee does not relieve the board 562-3 or any director of a responsibility imposed on the board or the 562-4 director by this chapter. (V.A.C.S. Art. 1528b, Sec. 24.) 562-5 Sec. 161.078. INDEMNIFICATION. An electric cooperative may 562-6 indemnify and provide indemnity insurance in the same manner and to 562-7 the same extent as a nonprofit corporation under Article 2.22A, 562-8 Texas Non-Profit Corporation Act (Article 1396-2.22A, Vernon's 562-9 Texas Civil Statutes). (V.A.C.S. Art. 1528b, Sec. 19A.) 562-10 Sec. 161.079. APPLICABILITY OF CHAPTER TO CORPORATIONS 562-11 ORGANIZED UNDER OTHER LAW. A cooperative or nonprofit corporation 562-12 or association organized under any other law of this state for the 562-13 purpose of engaging in rural electrification may, by a majority 562-14 vote of the members present in person or represented by proxy at a 562-15 meeting called for that purpose, amend its articles of 562-16 incorporation to comply with this chapter. (V.A.C.S. Art. 1528b, 562-17 Sec. 33.) 562-18 (Sections 161.080-161.120 reserved for expansion) 562-19 SUBCHAPTER C. POWERS OF ELECTRIC COOPERATIVE 562-20 Sec. 161.121. GENERAL POWERS. An electric cooperative may: 562-21 (1) sue and be sued in its corporate name; 562-22 (2) adopt and alter a corporate seal and use the seal 562-23 or a facsimile of the seal as required by law; 562-24 (3) acquire, own, hold, maintain, exchange, or use 562-25 property or an interest in property, including plants, buildings, 562-26 works, machinery, supplies, equipment, apparatus, and transmission 562-27 and distribution lines or systems that are necessary, convenient, 563-1 or useful; 563-2 (4) dispose of, mortgage, or lease as lessor any of 563-3 its property or assets; 563-4 (5) borrow money and otherwise contract indebtedness, 563-5 issue obligations for its indebtedness, and secure the payment of 563-6 indebtedness by mortgage, pledge, or deed of trust on any or all of 563-7 its property or revenue; 563-8 (6) accept gifts or grants of money, services, or 563-9 property; 563-10 (7) make any contracts necessary or convenient for the 563-11 exercise of the powers granted by this chapter; 563-12 (8) conduct its business and have offices inside or 563-13 outside this state; 563-14 (9) adopt and amend bylaws not inconsistent with the 563-15 articles of incorporation for the administration and regulation of 563-16 the affairs of the cooperative; and 563-17 (10) perform any other acts for the cooperative or its 563-18 members or for another electric cooperative or its members, and 563-19 exercise any other power, that may be appropriate to accomplish the 563-20 purpose for which the cooperative is organized. (V.A.C.S. 563-21 Art. 1528b, Sec. 4 (part).) 563-22 Sec. 161.122. PROVISION OF RURAL ELECTRIFICATION. An 563-23 electric cooperative may engage in rural electrification by: 563-24 (1) furnishing electric energy to any person for 563-25 delivery to a dwelling, structure, apparatus, or point of delivery 563-26 that is: 563-27 (A) located in a rural area; and 564-1 (B) not receiving central station service, even 564-2 if the person is receiving central station service at other points 564-3 of delivery; 564-4 (2) furnishing electric energy to a person desiring 564-5 that service in a municipality or unincorporated city or town, 564-6 rural or nonrural, served by the cooperative and in which central 564-7 station service was not available at the time the cooperative began 564-8 furnishing electric energy to the residents of the municipality or 564-9 unincorporated city or town; 564-10 (3) assisting in the wiring of the premises of persons 564-11 in rural areas or the acquisition, supply, or installation of 564-12 electrical or plumbing equipment in those premises; or 564-13 (4) furnishing electric energy, wiring facilities, or 564-14 electrical or plumbing equipment or service to another electric 564-15 cooperative or to the members of another electric cooperative. 564-16 (V.A.C.S. Art. 1528b, Sec. 3 (part).) 564-17 Sec. 161.123. POWERS RELATING TO PROVISION OF ELECTRIC 564-18 ENERGY. An electric cooperative may: 564-19 (1) generate, acquire, and accumulate electric energy 564-20 and transmit, distribute, sell, furnish, and dispose of that 564-21 electric energy to its members only; 564-22 (2) assist its members only to wire their premises and 564-23 install in those premises electrical and plumbing fixtures, 564-24 machinery, supplies, apparatus, and equipment of any kind, and in 564-25 connection with those activities: 564-26 (A) acquire, lease, sell, distribute, install, 564-27 and repair electrical and plumbing fixtures, machinery, supplies, 565-1 apparatus, and equipment of any kind; and 565-2 (B) receive, acquire, endorse, pledge, and 565-3 dispose of notes, bonds, and other evidences of indebtedness; 565-4 (3) furnish to other electric cooperatives or their 565-5 members electric energy, wiring facilities, electrical and plumbing 565-6 equipment, and services that are convenient or useful; and 565-7 (4) establish, regulate, and collect rates, fees, 565-8 rents, or other charges for electric energy or other facilities, 565-9 supplies, equipment, or services furnished by the electric 565-10 cooperative. (V.A.C.S. Art. 1528b, Sec. 4 (part).) 565-11 Sec. 161.124. PROVISION OF ELECTRIC ENERGY TO CERTAIN 565-12 NONMEMBER ENTITIES. An electric cooperative may generate, acquire, 565-13 and accumulate electric energy and transmit, distribute, sell, 565-14 furnish, and dispose of that electric energy to any of the 565-15 following that is engaged in the generation, transmission, or 565-16 distribution of electricity: 565-17 (1) a corporation, association, or firm; 565-18 (2) the United States; 565-19 (3) this state or a political subdivision of this 565-20 state; or 565-21 (4) a municipal power agency or political subdivision 565-22 of this state that is a co-owner with the electric cooperative of 565-23 an electric generation facility. (V.A.C.S. Art. 1528b, Sec. 4A 565-24 (part).) 565-25 Sec. 161.125. EMINENT DOMAIN. An electric cooperative may 565-26 exercise the power of eminent domain in the manner provided by 565-27 state law for acquiring private property for public use. The power 566-1 does not apply to state property or property of a political 566-2 subdivision in this state. (V.A.C.S. Art. 1528b, Sec. 4 (part).) 566-3 (Sections 161.126-161.150 reserved for expansion) 566-4 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 566-5 Sec. 161.151. AMENDMENT OF ARTICLES OF INCORPORATION. (a) 566-6 An electric cooperative may amend its articles of incorporation by 566-7 a majority vote of the members of the cooperative present in person 566-8 or represented by proxy at a regular meeting or at a special 566-9 meeting of its members called for that purpose as provided by the 566-10 bylaws. 566-11 (b) Notice of the meeting to members must state the general 566-12 nature of each proposed amendment to be presented and voted on at 566-13 the meeting. Valid action may not be taken at the meeting unless 566-14 at least five percent of the members of the electric cooperative 566-15 either attend the meeting in person or are represented at the 566-16 meeting by proxy. 566-17 (c) The power to amend the articles of incorporation 566-18 includes the power to accomplish any desired change in the articles 566-19 of incorporation and to include any purpose, power, or provision 566-20 that is permitted to be included in original articles of 566-21 incorporation executed at the time the amendment is made. 566-22 (V.A.C.S. Art. 1528b, Sec. 26 (part).) 566-23 Sec. 161.152. ARTICLES OF AMENDMENT. (a) Articles of 566-24 amendment of an electric cooperative must be: 566-25 (1) signed by the president or vice president and 566-26 attested by the secretary, certifying to the amendment and its 566-27 lawful adoption; and 567-1 (2) executed, acknowledged, filed, and recorded in the 567-2 same manner as the original articles of incorporation. 567-3 (b) An amendment takes effect when the secretary of state 567-4 accepts the articles of amendment for filing and recording and 567-5 issues a certificate of amendment. The certificate of amendment is 567-6 evidence of the filing of the amendment. 567-7 (c) The secretary of state shall charge and collect a fee of 567-8 $2.50 for filing articles of amendment and issuing a certificate of 567-9 amendment. (V.A.C.S. Art. 1528b, Secs. 26 (part), 29 (part).) 567-10 (Sections 161.153-161.200 reserved for expansion) 567-11 SUBCHAPTER E. CONSOLIDATION OF ELECTRIC COOPERATIVES 567-12 Sec. 161.201. CONSOLIDATION. (a) Two or more electric 567-13 cooperatives may enter into an agreement to consolidate the 567-14 cooperatives. The agreement must state: 567-15 (1) the terms of the consolidation; 567-16 (2) the name of the proposed consolidated cooperative; 567-17 (3) the number of directors of the proposed 567-18 consolidated cooperative; 567-19 (4) the time of the annual meeting and election; and 567-20 (5) the names of at least three persons to be 567-21 directors until the first annual meeting. 567-22 (b) A consolidation agreement may be approved only on the 567-23 votes of a majority of the members of each electric cooperative 567-24 present in person or represented by proxy at a regular meeting or 567-25 at a special meeting of its members called for that purpose. 567-26 (V.A.C.S. Art. 1528b, Sec. 27(a) (part).) 567-27 Sec. 161.202. ARTICLES OF CONSOLIDATION. (a) The articles 568-1 of consolidation must: 568-2 (1) conform substantially to original articles of 568-3 incorporation of an electric cooperative; and 568-4 (2) be executed, acknowledged, filed, and recorded in 568-5 the same manner as original articles of incorporation. 568-6 (b) The directors named in the consolidation agreement shall 568-7 as incorporators sign and acknowledge the articles of 568-8 consolidation. 568-9 (c) The secretary of state shall charge and collect a fee of 568-10 $10 for filing articles of consolidation and issuing a certificate 568-11 of consolidation. 568-12 (d) When the secretary of state accepts the articles of 568-13 consolidation for filing and recording and issues a certificate of 568-14 consolidation, the proposed consolidated electric cooperative 568-15 described in the articles under its designated name exists as a 568-16 body corporate, with all the powers of an electric cooperative 568-17 originally organized under this chapter. (V.A.C.S. Art. 1528b, 568-18 Secs. 27(a) (part), (b), 29 (part).) 568-19 (Sections 161.203-161.250 reserved for expansion) 568-20 SUBCHAPTER F. DISSOLUTION 568-21 Sec. 161.251. DISSOLUTION. (a) An electric cooperative may 568-22 be dissolved by a majority vote of its members present in person or 568-23 represented by proxy at a regular meeting or at a special meeting 568-24 of its members called for that purpose. 568-25 (b) A certificate of dissolution must be: 568-26 (1) signed by the president or vice president and 568-27 attested by the secretary, certifying to the dissolution and 569-1 stating that the officers have been authorized by a vote of the 569-2 members under Subsection (a) to execute and file the certificate; 569-3 and 569-4 (2) executed, acknowledged, filed, and recorded in the 569-5 same manner as original articles of incorporation of an electric 569-6 cooperative. 569-7 (c) The cooperative is dissolved when the secretary of state 569-8 accepts the certificate of dissolution for filing and recording and 569-9 issues a certificate of dissolution. 569-10 (d) The secretary of state shall charge and collect a fee of 569-11 $2.50 for filing articles of dissolution. (V.A.C.S. Art. 1528b, 569-12 Secs. 28(a), 29 (part).) 569-13 Sec. 161.252. EXISTENCE FOLLOWING DISSOLUTION. (a) A 569-14 dissolved electric cooperative continues to exist to: 569-15 (1) satisfy existing liabilities or obligations; 569-16 (2) collect or liquidate its assets; and 569-17 (3) take any other action required to adjust and wind 569-18 up its business and affairs. 569-19 (b) A dissolved electric cooperative may sue and be sued in 569-20 its corporate name. (V.A.C.S. Art. 1528b, Sec. 28(b) (part).) 569-21 Sec. 161.253. DISTRIBUTION OF NET ASSETS ON DISSOLUTION. 569-22 Assets of a dissolved electric cooperative that remain after all 569-23 liabilities or obligations of the cooperative have been satisfied 569-24 shall be distributed pro rata to the members of the cooperative who 569-25 were members when the certificate of dissolution was filed. 569-26 (V.A.C.S. Art. 1528b, Sec. 28(b) (part).) 569-27 Sec. 161.254. DISSOLUTION OF DEFECTIVELY INCORPORATED 570-1 ELECTRIC COOPERATIVE. (a) An electric cooperative that purports 570-2 to have been incorporated or reincorporated under this chapter but 570-3 that has not complied with a requirement for legal corporate 570-4 existence may file a certificate of dissolution in the same manner 570-5 as a validly incorporated electric cooperative. 570-6 (b) The certificate of dissolution may be authorized by a 570-7 majority of the incorporators or directors at a meeting called by 570-8 an incorporator and held at the principal office of the cooperative 570-9 named in the articles of incorporation. 570-10 (c) The incorporator calling the meeting must give at least 570-11 10 days' notice of the meeting by mail to the last known post 570-12 office address of each incorporator or director. (V.A.C.S. 570-13 Art. 1528b, Sec. 28(c).) 570-14 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 570-15 SUBCHAPTER A. GENERAL PROVISIONS 570-16 Sec. 162.001. SHORT TITLE 570-17 Sec. 162.002. PURPOSE 570-18 Sec. 162.003. DEFINITIONS 570-19 Sec. 162.004. CERTAIN CORPORATE NAMES PROHIBITED 570-20 Sec. 162.005. EFFECT OF RECORDING CERTAIN MORTGAGES 570-21 EXECUTED BY TELEPHONE COOPERATIVES 570-22 Sec. 162.006. CONSTRUCTION STANDARDS 570-23 (Sections 162.007-162.050 reserved for expansion) 570-24 SUBCHAPTER B. CREATION AND OPERATION OF TELEPHONE 570-25 COOPERATIVES 570-26 Sec. 162.051. INCORPORATORS 570-27 Sec. 162.052. DURATION OF CORPORATION 571-1 Sec. 162.053. NAME OF TELEPHONE COOPERATIVE 571-2 Sec. 162.054. ARTICLES OF INCORPORATION 571-3 Sec. 162.055. FILING AND RECORDING OF ARTICLES OF 571-4 INCORPORATION 571-5 Sec. 162.056. REVIVAL OF ARTICLES OF INCORPORATION 571-6 Sec. 162.057. ORGANIZATIONAL MEETING 571-7 Sec. 162.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATIONS 571-8 Sec. 162.059. NONPROFIT OPERATION 571-9 Sec. 162.060. MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE 571-10 COOPERATIVE 571-11 Sec. 162.061. LICENSE FEE 571-12 Sec. 162.062. EXEMPTION FROM EXCISE TAXES 571-13 Sec. 162.063. EXEMPTION FROM APPLICATION OF SECURITIES 571-14 ACT 571-15 Sec. 162.064. BYLAWS 571-16 Sec. 162.065. MEMBERSHIP 571-17 Sec. 162.066. PATRONS 571-18 Sec. 162.067. MEETINGS OF MEMBERS 571-19 Sec. 162.068. NOTICE OF MEMBERS' MEETING 571-20 Sec. 162.069. WAIVER OF NOTICE 571-21 Sec. 162.070. MEMBERS' MEETING: QUORUM AND VOTING 571-22 Sec. 162.071. BOARD OF DIRECTORS 571-23 Sec. 162.072. ELECTION OF DIRECTORS; TERMS 571-24 Sec. 162.073. COMPENSATION OF DIRECTORS 571-25 Sec. 162.074. INSURANCE FOR DIRECTORS 571-26 Sec. 162.075. BOARD MEETINGS; QUORUM 571-27 Sec. 162.076. DISTRICTS 572-1 Sec. 162.077. OFFICERS, AGENTS, AND EMPLOYEES 572-2 Sec. 162.078. EXECUTIVE COMMITTEE 572-3 Sec. 162.079. INDEMNIFICATION 572-4 Sec. 162.080. CHANGE OF LOCATION OF PRINCIPAL OFFICE 572-5 Sec. 162.081. DIRECTOR, OFFICER, OR MEMBER ACTING AS 572-6 NOTARY 572-7 Sec. 162.082. APPLICABILITY TO CORPORATIONS ORGANIZED 572-8 UNDER OTHER LAW 572-9 (Sections 162.083-162.120 reserved for expansion) 572-10 SUBCHAPTER C. POWERS OF TELEPHONE COOPERATIVE 572-11 Sec. 162.121. GENERAL POWERS 572-12 Sec. 162.122. POWERS RELATING TO PROVISION OF 572-13 COMMUNICATION SERVICE 572-14 Sec. 162.123. CONNECTION AND INTERCONNECTION OF FACILITIES 572-15 Sec. 162.124. EMINENT DOMAIN 572-16 Sec. 162.125. ENCUMBRANCE AND DISPOSITION OF PROPERTY 572-17 WITHOUT MEMBERS' AUTHORIZATION 572-18 Sec. 162.126. ENCUMBRANCE, LEASE, AND DISPOSITION OF 572-19 PROPERTY WITH MEMBERS' AUTHORIZATION 572-20 (Sections 162.127-162.150 reserved for expansion) 572-21 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 572-22 Sec. 162.151. AMENDMENT OF ARTICLES OF INCORPORATION 572-23 Sec. 162.152. PRESENTATION AND APPROVAL OF PROPOSED 572-24 AMENDMENT 572-25 Sec. 162.153. ARTICLES OF AMENDMENT 572-26 Sec. 162.154. FILING OF ARTICLES OF AMENDMENT 572-27 (Sections 162.155-162.200 reserved for expansion) 573-1 SUBCHAPTER E. CONSOLIDATION OR MERGER OF TELEPHONE 573-2 COOPERATIVES 573-3 Sec. 162.201. CONSOLIDATION 573-4 Sec. 162.202. ARTICLES OF CONSOLIDATION 573-5 Sec. 162.203. MERGER 573-6 Sec. 162.204. ARTICLES OF MERGER 573-7 Sec. 162.205. EFFECT OF CONSOLIDATION OR MERGER 573-8 (Sections 162.206-162.250 reserved for expansion) 573-9 SUBCHAPTER F. CONVERSION OF CORPORATION INTO TELEPHONE 573-10 COOPERATIVE 573-11 Sec. 162.251. CONVERSION OF CORPORATION INTO TELEPHONE 573-12 COOPERATIVE 573-13 Sec. 162.252. ARTICLES OF CONVERSION 573-14 Sec. 162.253. CONSOLIDATION AND CONVERSION OF 573-15 CORPORATIONS INTO TELEPHONE COOPERATIVE 573-16 Sec. 162.254. ARTICLES OF CONSOLIDATION AND CONVERSION 573-17 (Sections 162.255-162.300 reserved for expansion) 573-18 SUBCHAPTER G. DISSOLUTION 573-19 Sec. 162.301. DISSOLUTION 573-20 Sec. 162.302. EXISTENCE FOLLOWING DISSOLUTION 573-21 Sec. 162.303. DISTRIBUTION OF NET ASSETS ON DISSOLUTION 573-22 Sec. 162.304. DISSOLUTION OF DEFECTIVELY INCORPORATED TELEPHONE 573-23 COOPERATIVE 573-24 CHAPTER 162. TELEPHONE COOPERATIVE CORPORATIONS 573-25 SUBCHAPTER A. GENERAL PROVISIONS 573-26 Sec. 162.001. SHORT TITLE. This chapter may be cited as the 573-27 Telephone Cooperative Act. (V.A.C.S. Art. 1528c, Sec. 1.) 574-1 Sec. 162.002. PURPOSE. A cooperative, nonprofit corporation 574-2 may be organized under this chapter to furnish communication 574-3 service to the widest practicable number of users of that service. 574-4 (V.A.C.S. Art. 1528c, Sec. 3.) 574-5 Sec. 162.003. DEFINITIONS. In this chapter: 574-6 (1) "Board" means the board of directors of a 574-7 telephone cooperative. 574-8 (2) "Communication service" means: 574-9 (A) the transmission or reception of 574-10 information, signals, or messages by any means, including by wire, 574-11 radio, cellular radio, microwave, or fiber optics; and 574-12 (B) the provision of lines, facilities, and 574-13 systems used in the transmission or reception described by 574-14 Paragraph (A). 574-15 (3) "Member" means: 574-16 (A) an incorporator of a telephone cooperative; 574-17 or 574-18 (B) a person admitted to membership in a 574-19 telephone cooperative as provided by Section 162.065. 574-20 (4) "Patron" means a member who is eligible to receive 574-21 patronage dividends or to earn capital credits as a result of 574-22 purchasing certain services from a telephone cooperative as 574-23 provided by Section 162.066. 574-24 (5) "Telephone cooperative" means a corporation that 574-25 is organized under this chapter or that becomes subject to this 574-26 chapter as provided by this chapter. (V.A.C.S. Art. 1528c, Secs. 574-27 2(1), (2), (3), (6), (8).) 575-1 Sec. 162.004. CERTAIN CORPORATE NAMES PROHIBITED. A 575-2 corporation organized under the laws of this state or authorized to 575-3 do business in this state may not use the words "telephone 575-4 cooperative" in the corporation's name unless the corporation is 575-5 organized under this chapter. (V.A.C.S. Art. 1528c, Sec. 6(a) 575-6 (part).) 575-7 Sec. 162.005. EFFECT OF RECORDING CERTAIN MORTGAGES EXECUTED 575-8 BY TELEPHONE COOPERATIVES. (a) An instrument executed by a 575-9 telephone cooperative or a foreign corporation doing business in 575-10 this state under this chapter that affects real and personal 575-11 property and that is recorded in the real property records of any 575-12 county in which the property is located or is to be located has the 575-13 same effect as if the instrument were also recorded as provided by 575-14 law in the proper office in that county as a mortgage of personal 575-15 property. 575-16 (b) All after-acquired property of a telephone cooperative 575-17 or foreign corporation doing business in this state under this 575-18 chapter described by or referred to as being pledged in an 575-19 instrument to which Subsection (a) applies becomes subject to the 575-20 lien described by the instrument immediately when the cooperative 575-21 or corporation acquires the property, without regard to whether the 575-22 property existed at the time the instrument was executed. The 575-23 execution of the instrument constitutes notice and otherwise has 575-24 the same effect with respect to after-acquired property to which 575-25 this subsection applies as it has under the laws relating to 575-26 recordation with respect to property that is owned by the 575-27 cooperative or foreign corporation at the time the instrument is 576-1 executed and that is described in the instrument as being pledged 576-2 by the instrument. 576-3 (c) After a lien on personal property under an instrument to 576-4 which Subsection (a) applies is recorded, the lien continues in 576-5 existence and of record for the period specified in the instrument 576-6 without: 576-7 (1) the refiling of the instrument; or 576-8 (2) the filing of any renewal certificate, affidavit, 576-9 or other supplemental information required by a law relating to the 576-10 renewal, maintenance, or extension of a lien on personal property. 576-11 (V.A.C.S. Art. 1528c, Sec. 25.) 576-12 Sec. 162.006. CONSTRUCTION STANDARDS. A telephone 576-13 cooperative that constructs communication lines or facilities must 576-14 at a minimum comply with the standards of the National Electrical 576-15 Safety Code in effect at the time of construction. (V.A.C.S. 576-16 Art. 1528c, Sec. 26.) 576-17 (Sections 162.007-162.050 reserved for expansion) 576-18 SUBCHAPTER B. CREATION AND OPERATION OF TELEPHONE COOPERATIVES 576-19 Sec. 162.051. INCORPORATORS. (a) Three or more individuals 576-20 may act as incorporators of a telephone cooperative by executing 576-21 articles of incorporation as provided by this chapter. 576-22 (b) An incorporator must: 576-23 (1) be at least 21 years of age; and 576-24 (2) reside in this state. (V.A.C.S. Art. 1528c, Sec. 576-25 5.) 576-26 Sec. 162.052. DURATION OF CORPORATION. A telephone 576-27 cooperative may be created as a perpetual corporation. (V.A.C.S. 577-1 Art. 1528c, Secs. 4 (part), 6(a) (part).) 577-2 Sec. 162.053. NAME OF TELEPHONE COOPERATIVE. The name of a 577-3 telephone cooperative must: 577-4 (1) include the words "telephone" and "cooperative" 577-5 and the abbreviation "Inc."; and 577-6 (2) be distinct from the name of any other corporation 577-7 organized under the laws of or authorized to do business in this 577-8 state. (V.A.C.S. Art. 1528c, Sec. 6(a) (part).) 577-9 Sec. 162.054. ARTICLES OF INCORPORATION. (a) The articles 577-10 of incorporation of a telephone cooperative must: 577-11 (1) state that the articles are executed under this 577-12 chapter; 577-13 (2) be signed by each incorporator and acknowledged by 577-14 at least two incorporators; and 577-15 (3) state: 577-16 (A) the name of the cooperative; 577-17 (B) the purpose for which the cooperative is 577-18 formed; 577-19 (C) the name and address of each incorporator; 577-20 (D) the number of directors; 577-21 (E) the address of the cooperative's principal 577-22 office and the name and address of its agent on whom process may be 577-23 served; 577-24 (F) the duration of the cooperative; 577-25 (G) the terms under which a person is admitted 577-26 to membership and retains membership in the cooperative, unless the 577-27 articles expressly state that the determination of membership 578-1 matters is reserved to the directors by the bylaws; and 578-2 (H) any provisions that the incorporators 578-3 include for the regulation of the business and the conduct of the 578-4 affairs of the cooperative. 578-5 (b) The articles of incorporation do not need to state any 578-6 of the corporate powers enumerated in this chapter. (V.A.C.S. 578-7 Art. 1528c, Secs. 6(a) (part), (b).) 578-8 Sec. 162.055. FILING AND RECORDING OF ARTICLES OF 578-9 INCORPORATION. (a) The secretary of state shall receive articles 578-10 of incorporation of a telephone cooperative if the incorporators of 578-11 the cooperative: 578-12 (1) apply for filing the articles; 578-13 (2) furnish satisfactory evidence of compliance with 578-14 this chapter to the secretary of state; and 578-15 (3) pay a fee of $25. 578-16 (b) The secretary of state shall: 578-17 (1) file the articles of incorporation in the 578-18 secretary's office; 578-19 (2) record the articles at length in a book to be kept 578-20 for that purpose; 578-21 (3) retain the original articles of incorporation on 578-22 file in the secretary's office; and 578-23 (4) issue a certificate showing the recording of the 578-24 articles of incorporation and the telephone cooperative's authority 578-25 to do business under the articles. 578-26 (c) A copy of the articles of incorporation or of the record 578-27 of the articles, certified under the state seal, is evidence of the 579-1 creation of the telephone cooperative. 579-2 (d) The existence of the telephone cooperative dates from 579-3 the filing of the articles in the office of the secretary of state. 579-4 The certificate of the secretary of state is evidence of that 579-5 filing. (V.A.C.S. Art. 1528c, Secs. 7, 28 (part).) 579-6 Sec. 162.056. REVIVAL OF ARTICLES OF INCORPORATION. (a) If 579-7 the articles of incorporation of a telephone cooperative expire by 579-8 limitation, the cooperative, with the consent of a majority of its 579-9 members, may revive the articles by filing: 579-10 (1) new articles of incorporation under this chapter; 579-11 and 579-12 (2) a certified copy of the expired original articles. 579-13 (b) A telephone cooperative that revives its articles of 579-14 incorporation has all the privileges, immunities, and rights of 579-15 property exercised and held by the cooperative at the time the 579-16 original articles expired. 579-17 (c) New articles of incorporation filed under this section 579-18 must recite the privileges, immunities, and rights of property 579-19 exercised and held by the cooperative at the time the original 579-20 articles expired. (V.A.C.S. Art. 1528c, Sec. 8.) 579-21 Sec. 162.057. ORGANIZATIONAL MEETING. (a) After the 579-22 certificate of incorporation is issued, the incorporators of a 579-23 telephone cooperative shall meet to adopt bylaws, elect officers, 579-24 and transact other business that properly comes before the meeting. 579-25 (b) A majority of the incorporators shall call the 579-26 organizational meeting. 579-27 (c) The incorporators calling the organizational meeting 580-1 shall give at least three days' notice of the meeting by mail to 580-2 each incorporator. The notice must state the time and place of the 580-3 meeting. The notice may be waived in writing. (V.A.C.S. 580-4 Art. 1528c, Sec. 9.) 580-5 Sec. 162.058. PERFECTING DEFECTIVELY ORGANIZED CORPORATIONS. 580-6 (a) A telephone cooperative that files defective articles of 580-7 incorporation or fails to take an action necessary to perfect its 580-8 corporate organization may: 580-9 (1) file corrected articles of incorporation or amend 580-10 the original articles; and 580-11 (2) take any action necessary to correct the defect. 580-12 (b) An action taken under this section is valid and binding 580-13 on any person concerned. (V.A.C.S. Art. 1528c, Sec. 32.) 580-14 Sec. 162.059. NONPROFIT OPERATION. (a) A telephone 580-15 cooperative shall be operated on a nonprofit basis for the mutual 580-16 benefit of its members and patrons. 580-17 (b) A cooperative's bylaws and its contracts with members 580-18 and patrons must contain appropriate provisions relating to the 580-19 disposition of revenues and receipts to establish and maintain the 580-20 cooperative's nonprofit and cooperative character. (V.A.C.S. 580-21 Art. 1528c, Sec. 22.) 580-22 Sec. 162.060. MEMBERS NOT LIABLE FOR DEBTS OF TELEPHONE 580-23 COOPERATIVE. A member is not liable for a debt of a telephone 580-24 cooperative, and the member's property is not subject to execution 580-25 for that debt. (V.A.C.S. Art. 1528c, Sec. 24.) 580-26 Sec. 162.061. LICENSE FEE. Not later than July 1 of each 580-27 year, each telephone cooperative doing business in this state shall 581-1 pay to the secretary of state a fee of $10. (V.A.C.S. Art. 1528c, 581-2 Sec. 29 (part).) 581-3 Sec. 162.062. EXEMPTION FROM EXCISE TAXES. A telephone 581-4 cooperative doing business in this state is exempt from all excise 581-5 taxes but is exempt from the franchise tax imposed by Chapter 171, 581-6 Tax Code, only if the cooperative is exempted by that chapter. 581-7 (V.A.C.S. Art. 1528c, Sec. 29 (part).) 581-8 Sec. 162.063. EXEMPTION FROM APPLICATION OF SECURITIES ACT. 581-9 The Securities Act (Article 581-1 et seq., Vernon's Texas Civil 581-10 Statutes) does not apply to: 581-11 (1) a note, bond, or other evidence of indebtedness 581-12 issued by a telephone cooperative doing business in this state to 581-13 the United States; 581-14 (2) an instrument executed to secure a debt of a 581-15 telephone cooperative to the United States; or 581-16 (3) the issuance of a membership certificate by a 581-17 telephone cooperative or a foreign corporation doing business in 581-18 this state under this chapter. (V.A.C.S. Art. 1528c, Sec. 31.) 581-19 Sec. 162.064. BYLAWS. (a) The board shall adopt the 581-20 initial bylaws of a telephone cooperative to be adopted following: 581-21 (1) an incorporation; 581-22 (2) a consolidation; or 581-23 (3) an amendment by an existing cooperative, 581-24 corporation, or association of its articles of incorporation as 581-25 provided by Section 162.082. 581-26 (b) After the initial bylaws are adopted, the members may 581-27 adopt, amend, or repeal the bylaws by the affirmative vote of a 582-1 majority of those members voting on the question at a meeting of 582-2 the members. 582-3 (c) The bylaws may contain any provision for the regulation 582-4 and management of the affairs of the telephone cooperative that is 582-5 consistent with the articles of incorporation. (V.A.C.S. 582-6 Art. 1528c, Sec. 10.) 582-7 Sec. 162.065. MEMBERSHIP. (a) Each incorporator of a 582-8 telephone cooperative is a member of the cooperative. A person 582-9 other than an incorporator may become a member of a telephone 582-10 cooperative only if the person agrees to use communication service 582-11 furnished by the cooperative when that service is made available 582-12 through the cooperative's facilities. The bylaws may prescribe 582-13 additional qualifications and limitations with respect to 582-14 membership. 582-15 (b) Membership in a telephone cooperative is evidenced by a 582-16 certificate of membership. A membership certificate must contain 582-17 the provisions, consistent with this chapter and the articles of 582-18 incorporation, that are prescribed by the cooperative's bylaws. A 582-19 certificate may be transferred only as provided by the bylaws. 582-20 (c) A telephone cooperative may become a member of another 582-21 telephone cooperative and may fully use the facilities and services 582-22 of that cooperative. (V.A.C.S. Art. 1528c, Sec. 11(a).) 582-23 Sec. 162.066. PATRONS. (a) A member is a patron of a 582-24 telephone cooperative if the member purchases local 582-25 telecommunications service or toll telecommunications service or 582-26 pays end user access charges in the ordinary course of business of 582-27 the cooperative. 583-1 (b) The use of interexchange access, payment of 583-2 interexchange access fees or settlements, or purchase of equipment 583-3 does not qualify a member or other person as a patron. (V.A.C.S. 583-4 Art. 1528c, Sec. 11(b).) 583-5 Sec. 162.067. MEETINGS OF MEMBERS. (a) A telephone 583-6 cooperative shall hold an annual meeting of members at the time and 583-7 place provided by the bylaws. Failure to hold the annual meeting 583-8 at the designated time does not result in forfeiture or dissolution 583-9 of the cooperative. 583-10 (b) A special meeting of the members may be called by: 583-11 (1) the president; 583-12 (2) the board; 583-13 (3) any three directors; or 583-14 (4) the lesser of: 583-15 (A) 200 members; or 583-16 (B) 10 percent of all the members. (V.A.C.S. 583-17 Art. 1528c, Secs. 12(a), (b).) 583-18 Sec. 162.068. NOTICE OF MEMBERS' MEETING. (a) Except as 583-19 otherwise provided by this chapter, written notice of each meeting 583-20 of the members shall be given to each member, either personally or 583-21 by mail, not earlier than the 25th day or later than the 10th day 583-22 before the date of the meeting. 583-23 (b) The notice must state the time and place of the meeting 583-24 and, in the case of a special meeting, each purpose for which the 583-25 meeting is called. 583-26 (c) A notice that is mailed is considered to have been given 583-27 when the notice is deposited in the United States mail with postage 584-1 prepaid addressed to the member at the member's address as it 584-2 appears on the records of the telephone cooperative. (V.A.C.S. 584-3 Art. 1528c, Sec. 12(c).) 584-4 Sec. 162.069. WAIVER OF NOTICE. A person entitled to notice 584-5 of a meeting may waive notice in writing either before or after the 584-6 meeting. If a person entitled to notice of a meeting attends the 584-7 meeting, the person's attendance constitutes a waiver of notice of 584-8 the meeting, unless the person participates in the meeting solely 584-9 to object to the transaction of business because the meeting is not 584-10 legally called or convened. (V.A.C.S. Art. 1528c, Sec. 13.) 584-11 Sec. 162.070. MEMBERS' MEETING: QUORUM AND VOTING. (a) 584-12 Unless the bylaws prescribe a greater percentage or number of 584-13 members for a quorum, a quorum at a meeting of the members of a 584-14 telephone cooperative is the personal presence of: 584-15 (1) 10 percent of all members, if the cooperative has 584-16 500 or fewer members; or 584-17 (2) the greater of 50 members or two percent of all 584-18 members, if the cooperative has more than 500 members. 584-19 (b) If fewer than a quorum are present at a meeting, a 584-20 majority of the members present in person may adjourn the meeting 584-21 from time to time without further notice. 584-22 (c) Each member present at a meeting of the members is 584-23 entitled to one vote on each matter submitted to a vote at the 584-24 meeting. Voting must be in person unless the bylaws provide for 584-25 voting by mail. (V.A.C.S. Art. 1528c, Secs. 12(d), (e).) 584-26 Sec. 162.071. BOARD OF DIRECTORS. (a) A board of at least 584-27 five directors shall manage the business of a telephone 585-1 cooperative. Each director must be a member of the cooperative. 585-2 The bylaws must prescribe the number of directors and their 585-3 qualifications other than those prescribed by this chapter. 585-4 (b) The board may exercise any power of a telephone 585-5 cooperative not conferred on the members by this chapter or by the 585-6 cooperative's articles of incorporation or bylaws. (V.A.C.S. 585-7 Art. 1528c, Secs. 6(a) (part), 14(a) (part), (e).) 585-8 Sec. 162.072. ELECTION OF DIRECTORS; TERMS. (a) The 585-9 incorporators of a telephone cooperative named in the articles of 585-10 incorporation shall serve as directors and hold office until the 585-11 first annual meeting of the members and until their successors are 585-12 elected and qualify. 585-13 (b) At each annual meeting or, in the case of failure to 585-14 hold the annual meeting as specified in the bylaws, at a special 585-15 meeting called for that purpose, the members shall elect directors 585-16 to hold office until the next annual members' meeting, except as 585-17 otherwise provided by this chapter. Except as provided by 585-18 Subsection (e), each director holds office for the term for which 585-19 the person is elected and until the person's successor is elected 585-20 and qualifies. 585-21 (c) Instead of electing all the directors annually, the 585-22 bylaws may provide that the directors, other than those named in 585-23 the articles of incorporation to serve until the first annual 585-24 meeting of the members, are elected by the members for a term of 585-25 two years or three years. The terms must be set so that: 585-26 (1) one-half of the directors, as nearly as possible, 585-27 are elected annually, if a two-year term is provided; or 586-1 (2) one-third of the directors, as nearly as possible, 586-2 are elected annually, if a three-year term is provided. 586-3 (d) After the implementation of two-year or three-year terms 586-4 for directors, as directors' terms expire, the members shall elect 586-5 their successors to serve until the second or third succeeding 586-6 annual meeting after their election, as appropriate. 586-7 (e) The bylaws must prescribe the manner of electing a 586-8 successor to a director who resigns, dies, or otherwise becomes 586-9 incapable of acting. The bylaws may provide for the removal of a 586-10 director from office and for the election of the director's 586-11 successor. (V.A.C.S. Art. 1528c, Secs. 6(a) (part), 14(a) (part), 586-12 (b), (c).) 586-13 Sec. 162.073. COMPENSATION OF DIRECTORS. (a) A director 586-14 may not receive a salary for services as a director. Except in an 586-15 emergency, a director may not receive a salary for services in a 586-16 capacity other than director without the approval of the members. 586-17 (b) The bylaws may: 586-18 (1) prescribe a fixed fee for attendance at each board 586-19 meeting, committee meeting, industry-related conference approved by 586-20 the board, or training program; and 586-21 (2) provide for reimbursement of actual expenses of 586-22 attendance or a reasonable per diem. (V.A.C.S. Art. 1528c, Sec. 586-23 14(a) (part).) 586-24 Sec. 162.074. INSURANCE FOR DIRECTORS. A telephone 586-25 cooperative may provide liability, accident, life, and health 586-26 insurance coverage for a director who chooses to have that 586-27 coverage. (V.A.C.S. Art. 1528c, Sec. 14(a) (part).) 587-1 Sec. 162.075. BOARD MEETINGS; QUORUM. (a) The bylaws shall 587-2 prescribe the manner of holding board meetings. 587-3 (b) A majority of the directors is a quorum. (V.A.C.S. 587-4 Art. 1528c, Secs. 14(a) (part), (d).) 587-5 Sec. 162.076. DISTRICTS. (a) The bylaws may provide for 587-6 the territory served or to be served by a telephone cooperative to 587-7 be divided into two or more districts for any purpose, including 587-8 the nomination and election of directors and the election and 587-9 functioning of district delegates. 587-10 (b) The bylaws must prescribe: 587-11 (1) the boundaries of each district or the manner of 587-12 establishing a district's boundaries; 587-13 (2) the manner of changing a district's boundaries; 587-14 and 587-15 (3) the manner in which each district functions. 587-16 (c) District delegates may nominate and elect directors. A 587-17 district delegate must be a member. 587-18 (d) A member may not vote by proxy or by mail at a district 587-19 meeting. 587-20 (e) A district delegate may not vote by proxy or by mail at 587-21 any meeting. (V.A.C.S. Art. 1528c, Sec. 15.) 587-22 Sec. 162.077. OFFICERS, AGENTS, AND EMPLOYEES. (a) The 587-23 board of a telephone cooperative shall annually elect from the 587-24 board's membership a president, a vice president, a secretary, and 587-25 a treasurer. 587-26 (b) An officer who ceases to be a director ceases to hold 587-27 office. 588-1 (c) The same person may hold the offices of secretary and of 588-2 treasurer. 588-3 (d) The board may also elect or appoint other officers, 588-4 agents, or employees as the board considers appropriate and shall 588-5 prescribe the powers and duties of those persons. 588-6 (e) An officer may be removed from office and a successor 588-7 elected in the manner prescribed by the bylaws. (V.A.C.S. 588-8 Art. 1528c, Sec. 16.) 588-9 Sec. 162.078. EXECUTIVE COMMITTEE. (a) The bylaws of a 588-10 telephone cooperative may authorize the board to elect an executive 588-11 committee from the board's membership. 588-12 (b) The board may delegate to the executive committee the 588-13 management of the current and ordinary business of the cooperative 588-14 and other duties as prescribed by the bylaws. 588-15 (c) The designation of an executive committee and the 588-16 delegation of authority to the committee does not relieve the board 588-17 or any director of a responsibility imposed on the board or the 588-18 director by this chapter. (V.A.C.S. Art. 1528c, Sec. 17.) 588-19 Sec. 162.079. INDEMNIFICATION. Article 2.22A, Texas 588-20 Non-Profit Corporation Act (Article 1396-2.22A, Vernon's Texas 588-21 Civil Statutes), applies to a telephone cooperative in the same 588-22 manner as if the cooperative were formed under the Texas Non-Profit 588-23 Corporation Act. (V.A.C.S. Art. 1528c, Sec. 4A.) 588-24 Sec. 162.080. CHANGE OF LOCATION OF PRINCIPAL OFFICE. 588-25 (a) A telephone cooperative may, with the authorization of the 588-26 board or the members, change the location of its principal office 588-27 by filing a certificate reciting the change of principal office 589-1 with the secretary of state. 589-2 (b) The cooperative's president or vice president must 589-3 execute and acknowledge the certificate under the cooperative's 589-4 seal as attested by the secretary. 589-5 (c) The secretary of state shall charge and collect a fee of 589-6 $5 for filing a certificate of change of principal office. 589-7 (V.A.C.S. Art. 1528c, Secs. 19, 28 (part).) 589-8 Sec. 162.081. DIRECTOR, OFFICER, OR MEMBER ACTING AS NOTARY. 589-9 A person who is an officer, director, or member of a telephone 589-10 cooperative and who is authorized to take acknowledgments under 589-11 state law is not disqualified because of the person's association 589-12 with the cooperative from taking an acknowledgment of an instrument 589-13 executed in favor of the cooperative or to which the cooperative is 589-14 a party. (V.A.C.S. Art. 1528c, Sec. 27.) 589-15 Sec. 162.082. APPLICABILITY TO CORPORATIONS ORGANIZED UNDER 589-16 OTHER LAW. A cooperative or nonprofit corporation or association 589-17 organized under any other law of this state for the purpose of 589-18 furnishing communication service may, by a majority vote of the 589-19 members present in person at a meeting called for that purpose, 589-20 amend its articles of incorporation to comply with this chapter. 589-21 (V.A.C.S. Art. 1528c, Sec. 33.) 589-22 (Sections 162.083-162.120 reserved for expansion) 589-23 SUBCHAPTER C. POWERS OF TELEPHONE COOPERATIVE 589-24 Sec. 162.121. GENERAL POWERS. A telephone cooperative may: 589-25 (1) sue and be sued in its corporate name; 589-26 (2) adopt and alter a corporate seal and use the seal 589-27 or a facsimile of the seal as required by law; 590-1 (3) construct, acquire, lease, improve, install, 590-2 equip, maintain, and operate, and, subject to Sections 162.125 and 590-3 162.126, dispose of, lease, or encumber, communication lines, 590-4 facilities or systems, lands, structures, plants and equipment, 590-5 exchanges, and other property, considered appropriate to 590-6 accomplish the purpose for which the cooperative is organized; 590-7 (4) issue membership certificates as provided by this 590-8 chapter; 590-9 (5) borrow money and otherwise contract indebtedness, 590-10 issue or guarantee notes, bonds, and other evidences of 590-11 indebtedness, and secure the payment of indebtedness by pledge or 590-12 other encumbrance on any or all of its property or revenue; 590-13 (6) conduct its business and exercise its powers 590-14 inside or outside this state; 590-15 (7) adopt, amend, and repeal bylaws; 590-16 (8) make any contracts appropriate for the full 590-17 exercise of the powers granted by this chapter; and 590-18 (9) perform any other acts and exercise any other 590-19 power that may be appropriate to accomplish the purpose for which 590-20 the cooperative is organized. (V.A.C.S. Art. 1528c, Sec. 4 590-21 (part).) 590-22 Sec. 162.122. POWERS RELATING TO PROVISION OF COMMUNICATION 590-23 SERVICE. (a) A telephone cooperative may: 590-24 (1) furnish and improve communication service to its 590-25 members, to governmental agencies and political subdivisions, to 590-26 any number of subscribers of other communication systems through 590-27 interconnection of facilities, and to any number of users through 591-1 pay stations; 591-2 (2) connect and interconnect its communication lines, 591-3 facilities, or systems with other communication lines, facilities, 591-4 or systems; 591-5 (3) make its facilities available to persons 591-6 furnishing communication service inside or outside this state; and 591-7 (4) construct, maintain, and operate a communication 591-8 line along, on, under, or across publicly owned land or a public 591-9 thoroughfare, subject to the same restrictions and obligations that 591-10 apply to an electric transmission cooperative under Subchapter C, 591-11 Chapter 181. 591-12 (b) A telephone cooperative that acquires communication 591-13 facilities may continue to furnish service to a person who is 591-14 already receiving service from those facilities without requiring 591-15 the person to become a member, but the person may become a member 591-16 on the terms prescribed by the bylaws. (V.A.C.S. Art. 1528c, Sec. 591-17 4 (part).) 591-18 Sec. 162.123. CONNECTION AND INTERCONNECTION OF FACILITIES. 591-19 A telephone cooperative doing business in this state may require a 591-20 person furnishing communication service to the public in this state 591-21 to interconnect that person's lines, facilities, or systems with, 591-22 or otherwise make available those lines, facilities, or systems to, 591-23 the cooperative's communication lines, facilities, or systems to 591-24 provide a continuous line of communication for the cooperative's 591-25 subscribers. (V.A.C.S. Art. 1528c, Sec. 30 (part).) 591-26 Sec. 162.124. EMINENT DOMAIN. A telephone cooperative may 591-27 exercise the power of eminent domain in the manner provided by 592-1 state law for the exercise of that power by other corporations 592-2 constructing or operating communication lines, facilities, or 592-3 systems. (V.A.C.S. Art. 1528c, Sec. 4 (part).) 592-4 Sec. 162.125. ENCUMBRANCE AND DISPOSITION OF PROPERTY 592-5 WITHOUT MEMBERS' AUTHORIZATION. (a) The board of a telephone 592-6 cooperative may, without authorization of the members, authorize 592-7 the execution and delivery of a mortgage or deed of trust of or the 592-8 encumbering of any property of the cooperative, including property 592-9 to be acquired and the revenues from property of the cooperative, 592-10 to secure any indebtedness of the cooperative to the United States 592-11 or any lending institution licensed by the United States or a 592-12 state. 592-13 (b) A mortgage or deed of trust described by Subsection (a) 592-14 is exempt from a tax for recording the instrument. (V.A.C.S. 592-15 Art. 1528c, Sec. 23(a).) 592-16 Sec. 162.126. ENCUMBRANCE, LEASE, AND DISPOSITION OF 592-17 PROPERTY WITH MEMBERS' AUTHORIZATION. (a) Except as provided by 592-18 Section 162.125, a telephone cooperative may not dispose of, lease, 592-19 or encumber all or a major portion of its property unless the 592-20 disposition, lease, or encumbrance is authorized by the affirmative 592-21 vote of at least two-thirds of all the members of the cooperative. 592-22 (b) The board may, on the authorization of two-thirds of all 592-23 the members of the cooperative at a members' meeting, dispose of or 592-24 lease all or a major portion of its property to: 592-25 (1) another telephone cooperative; 592-26 (2) a foreign corporation doing business in this state 592-27 under this chapter; or 593-1 (3) the holder of a note, bond, or other evidence of 593-2 indebtedness issued to the United States or to a lending 593-3 institution licensed by the United States or a state. 593-4 (c) The notice of a meeting at which a disposition or lease 593-5 under Subsection (b) is to be considered must state the proposed 593-6 action. (V.A.C.S. Art. 1528c, Sec. 23(b).) 593-7 (Sections 162.127-162.150 reserved for expansion) 593-8 SUBCHAPTER D. AMENDMENT OF ARTICLES OF INCORPORATION 593-9 Sec. 162.151. AMENDMENT OF ARTICLES OF INCORPORATION. A 593-10 telephone cooperative may amend its articles of incorporation in 593-11 accordance with this subchapter. (V.A.C.S. Art. 1528c, Sec. 18 593-12 (part).) 593-13 Sec. 162.152. PRESENTATION AND APPROVAL OF PROPOSED 593-14 AMENDMENT. (a) A proposed amendment to the articles of 593-15 incorporation must be presented to a meeting of the members. The 593-16 notice of the meeting must state the proposed amendment or must 593-17 have the proposed amendment attached to it. 593-18 (b) A proposed amendment, with any changes, may be approved 593-19 only on the affirmative vote of at least two-thirds of the members 593-20 voting on the question at the meeting. (V.A.C.S. Art. 1528c, Sec. 593-21 18 (part).) 593-22 Sec. 162.153. ARTICLES OF AMENDMENT. (a) The president or 593-23 vice president, on behalf of the telephone cooperative, shall 593-24 execute and acknowledge the approved articles of amendment. The 593-25 cooperative's seal must be affixed to the articles of amendment and 593-26 attested by its secretary. 593-27 (b) The articles of amendment must state: 594-1 (1) that the articles of amendment are executed under 594-2 this chapter; 594-3 (2) the name of the telephone cooperative; 594-4 (3) the address of the cooperative's principal office; 594-5 and 594-6 (4) the amendment to the articles of incorporation. 594-7 (c) The president or vice president executing the articles 594-8 of amendment shall make and attach to the articles an affidavit 594-9 stating that the cooperative complied with this subchapter with 594-10 respect to the amendment set forth in the articles. (V.A.C.S. 594-11 Art. 1528c, Sec. 18 (part).) 594-12 Sec. 162.154. FILING OF ARTICLES OF AMENDMENT. (a) 594-13 Articles of amendment shall be filed with the secretary of state in 594-14 the same manner as the original articles of incorporation. 594-15 (b) The secretary of state shall charge and collect a fee of 594-16 $25 for filing articles of amendment. (V.A.C.S. Art. 1528c, Secs. 594-17 18 (part), 28 (part).) 594-18 (Sections 162.155-162.200 reserved for expansion) 594-19 SUBCHAPTER E. CONSOLIDATION OR MERGER OF TELEPHONE 594-20 COOPERATIVES 594-21 Sec. 162.201. CONSOLIDATION. (a) Two or more telephone 594-22 cooperatives may enter into an agreement to consolidate the 594-23 cooperatives. The agreement must state: 594-24 (1) the terms of the consolidation; 594-25 (2) the name of the proposed consolidated cooperative; 594-26 (3) the number of directors of the proposed 594-27 consolidated cooperative; 595-1 (4) the time of the annual meeting and election; and 595-2 (5) the names of at least five persons to be directors 595-3 until the first annual meeting. 595-4 (b) A consolidation agreement may be approved only on the 595-5 votes of a majority of the members of each telephone cooperative at 595-6 a regular meeting or at a special meeting of its members called for 595-7 that purpose. 595-8 (c) Telephone cooperatives may not consolidate for the 595-9 purpose of duplicating the facilities of another communication 595-10 company where the other communication company is giving or is 595-11 willing to give reasonably adequate communication service. 595-12 (V.A.C.S. Art. 1528c, Secs. 20(a) (part), (b) (part).) 595-13 Sec. 162.202. ARTICLES OF CONSOLIDATION. (a) The articles 595-14 of consolidation must: 595-15 (1) conform substantially to original articles of 595-16 incorporation of a telephone cooperative; and 595-17 (2) be executed, acknowledged, filed, and recorded in 595-18 the same manner as original articles of incorporation. 595-19 (b) The directors named in the consolidation agreement shall 595-20 as incorporators sign and acknowledge the articles of 595-21 consolidation. 595-22 (c) The secretary of state shall charge and collect a fee of 595-23 $50 for filing articles of consolidation. 595-24 (d) When the secretary of state accepts the articles of 595-25 consolidation for filing and recording and issues a certificate of 595-26 consolidation, the proposed consolidated telephone cooperative 595-27 described in the articles under its designated name exists as a 596-1 body corporate, with all the powers of a telephone cooperative 596-2 originally organized under this chapter. (V.A.C.S. Art. 1528c, 596-3 Secs. 20(a) (part), (b) (part), 28 (part).) 596-4 Sec. 162.203. MERGER. (a) One or more telephone 596-5 cooperatives may merge into another cooperative as provided by this 596-6 section and Section 162.204. 596-7 (b) The proposition for the merger and proposed articles of 596-8 merger must be submitted at a meeting of the members of each 596-9 merging cooperative and the surviving cooperative. A copy of the 596-10 proposed articles of merger must be attached to the notice of each 596-11 meeting. 596-12 (c) A proposed merger and proposed articles of merger, with 596-13 any amendments, may be approved only on the affirmative vote of at 596-14 least two-thirds of the members of each cooperative voting on the 596-15 proposed merger and articles. (V.A.C.S. Art. 1528c, Secs. 20A(a), 596-16 (b), (c) (part).) 596-17 Sec. 162.204. ARTICLES OF MERGER. (a) The president or 596-18 vice president of each telephone cooperative, on behalf of the 596-19 telephone cooperative, shall execute and acknowledge the approved 596-20 articles of merger. The cooperative's seal must be affixed to the 596-21 articles of merger and attested by its secretary. 596-22 (b) The articles of merger must state: 596-23 (1) that they are executed under this chapter; 596-24 (2) the name of each merging cooperative and the 596-25 address of its principal office; 596-26 (3) the name of the surviving cooperative and the 596-27 address of its principal office; 597-1 (4) that each merging cooperative and the surviving 597-2 cooperative agree to the merger; 597-3 (5) the name and address of each director of the 597-4 surviving cooperative; 597-5 (6) the terms of the merger and the manner in which 597-6 the merger will be carried out, including the manner in which 597-7 members of the merging cooperatives become or may become members of 597-8 the surviving cooperative; 597-9 (7) the duration of the surviving cooperative; and 597-10 (8) the purpose for which the surviving cooperative is 597-11 formed. 597-12 (c) The articles of merger may contain any provision 597-13 consistent with this chapter considered appropriate for the conduct 597-14 of the business of the surviving cooperative. The president or 597-15 vice president of each cooperative executing the articles of merger 597-16 shall make and attach to the articles an affidavit stating that the 597-17 cooperative complied with this subchapter with respect to the 597-18 articles. 597-19 (d) The original and a copy of the articles of merger shall 597-20 be delivered to the secretary of state. If the secretary of state 597-21 finds that the articles conform to law, the secretary of state, on 597-22 payment of a fee of $50, shall: 597-23 (1) file and record the articles of merger; 597-24 (2) issue a certificate of merger; and 597-25 (3) attach to the certificate of merger the copy of 597-26 the articles of merger and deliver the certificate and attached 597-27 copy to the surviving cooperative or its representative. (V.A.C.S. 598-1 Art. 1528c, Secs. 20A(c) (part), (d), (e), (f), 28 (part).) 598-2 Sec. 162.205. EFFECT OF CONSOLIDATION OR MERGER. (a) In a 598-3 consolidation the existence of each telephone cooperative ceases 598-4 and the articles of consolidation are considered to be the articles 598-5 of incorporation of the new cooperative. In a merger the separate 598-6 existence of each merging telephone cooperative ceases and the 598-7 articles of incorporation of the surviving cooperative are 598-8 considered to be amended to the extent, if any, that amendment is 598-9 provided for in the articles of merger. 598-10 (b) All the rights, privileges, immunities, property, and 598-11 applications for membership of each of the consolidating or merging 598-12 cooperatives are transferred to and vested in the new or surviving 598-13 cooperative, except that this chapter does not relieve a 598-14 cooperative of the obligation to comply with the applicable 598-15 provisions of Title 2. 598-16 (c) The new or surviving cooperative is liable for all the 598-17 liabilities and obligations of the consolidating or merging 598-18 cooperatives. A claim existing or action or proceeding pending by 598-19 or against a consolidating or merging cooperative may be prosecuted 598-20 as if the consolidation or merger had not taken place, and the new 598-21 or surviving cooperative may be substituted in the place of the 598-22 consolidating or merging cooperative. The consolidation or merger 598-23 does not impair the rights of creditors of or liens on the 598-24 property of a consolidating or merging cooperative. (V.A.C.S. 598-25 Art. 1528c, Sec. 20B.) 598-26 (Sections 162.206-162.250 reserved for expansion) 598-27 SUBCHAPTER F. CONVERSION OF CORPORATION INTO TELEPHONE 599-1 COOPERATIVE 599-2 Sec. 162.251. CONVERSION OF CORPORATION INTO TELEPHONE 599-3 COOPERATIVE. (a) A corporation organized under the laws of this 599-4 state that furnishes or is authorized to furnish communication 599-5 service may be converted into a telephone cooperative in accordance 599-6 with this subchapter. On conversion, the corporation is subject to 599-7 this chapter as if it had been originally organized under this 599-8 chapter. 599-9 (b) The proposition for the conversion and proposed articles 599-10 of conversion must be submitted at a meeting of the members or 599-11 stockholders of the corporation or, in the case of a corporation 599-12 that does not have members or stockholders, at a meeting of the 599-13 incorporators of the corporation. A copy of the proposed articles 599-14 of conversion must be attached to the notice of the meeting. 599-15 (c) A proposed conversion and proposed articles of 599-16 conversion, with any amendments, may be approved only on the 599-17 affirmative vote of: 599-18 (1) at least two-thirds of the members of the 599-19 corporation voting on the proposed conversion and articles; 599-20 (2) the holders of at least two-thirds of the shares 599-21 of the capital stock of the corporation represented at the meeting 599-22 and voting on the proposition and articles, if the corporation is a 599-23 stock corporation; or 599-24 (3) at least two-thirds of the corporation's 599-25 incorporators, if the corporation does not have members or 599-26 outstanding shares of capital stock. (V.A.C.S. Art. 1528c, Secs. 599-27 20C(a), (b), (c) (part).) 600-1 Sec. 162.252. ARTICLES OF CONVERSION. (a) The president or 600-2 vice president, on behalf of the corporation, shall execute and 600-3 acknowledge the approved articles of conversion. The 600-4 corporation's seal must be affixed to the articles and attested by 600-5 its secretary. 600-6 (b) The articles of conversion must state: 600-7 (1) that they are executed under this chapter; 600-8 (2) the name of the corporation and the address of its 600-9 principal office before its conversion into a telephone 600-10 cooperative; 600-11 (3) the law under which the corporation was organized; 600-12 (4) that the corporation elects to become a 600-13 cooperative, nonprofit corporation subject to this chapter; 600-14 (5) the corporation's name as a cooperative; 600-15 (6) the address of the principal office of the 600-16 cooperative; 600-17 (7) the name and address of each director of the 600-18 cooperative; 600-19 (8) the manner in which a member, stockholder, or 600-20 incorporator of the corporation becomes or may become a member of 600-21 the cooperative; 600-22 (9) the duration of the cooperative; and 600-23 (10) the purpose for which the cooperative is formed. 600-24 (c) The articles of conversion may contain any provision 600-25 consistent with this chapter considered appropriate for the conduct 600-26 of the business of the cooperative. The president or vice 600-27 president executing the articles of conversion shall make and 601-1 attach to the articles an affidavit stating that the corporation 601-2 complied with this section with respect to the articles. The 601-3 articles of conversion are considered to be the articles of 601-4 incorporation of the cooperative. 601-5 (d) The original and a copy of the articles of conversion 601-6 shall be delivered to the secretary of state. If the secretary of 601-7 state finds that the articles conform to law, the secretary of 601-8 state, on payment of a fee of $50, shall: 601-9 (1) file and record the articles of conversion; 601-10 (2) issue a certificate of conversion; and 601-11 (3) attach to the certificate of conversion the copy 601-12 of the articles of conversion and deliver the certificate and 601-13 attached copy to the cooperative or its representative. (V.A.C.S. 601-14 Art. 1528c, Secs. 20C(c) (part), (d), (e), (f), 28 (part).) 601-15 Sec. 162.253. CONSOLIDATION AND CONVERSION OF CORPORATIONS 601-16 INTO TELEPHONE COOPERATIVE. (a) Two or more corporations 601-17 organized under the laws of this state that furnish or are 601-18 authorized to furnish communication service may, if otherwise 601-19 permitted to consolidate under state law, consolidate and convert 601-20 into a telephone cooperative in accordance with this subchapter. 601-21 On consolidation and conversion, the new cooperative is subject to 601-22 this chapter as if it had been originally organized under this 601-23 chapter. 601-24 (b) The proposition for the consolidation and conversion and 601-25 the proposed articles of consolidation and conversion, with any 601-26 amendments, must be approved by each corporation in accordance 601-27 with: 602-1 (1) the law under which it was organized; and 602-2 (2) Sections 162.251 and 162.252. (V.A.C.S. 602-3 Art. 1528c, Secs. 20D(a), (b).) 602-4 Sec. 162.254. ARTICLES OF CONSOLIDATION AND CONVERSION. (a) 602-5 The approved articles of consolidation and conversion: 602-6 (1) shall be executed, acknowledged, and sealed as 602-7 prescribed by Section 162.252 and by the law under which the 602-8 consolidating and converting corporations were organized; 602-9 (2) must: 602-10 (A) state that they are executed under this 602-11 chapter and the law under which the corporations were organized and 602-12 that each consolidating corporation elects that the new corporation 602-13 be a cooperative; and 602-14 (B) contain all other information required by 602-15 the law under which the corporations were organized; and 602-16 (3) may contain any provision consistent with this 602-17 chapter considered appropriate for the conduct of the business of 602-18 the cooperative. 602-19 (b) The president or vice president executing the articles 602-20 of consolidation and conversion shall make and attach to the 602-21 articles an affidavit stating that the corporations complied with 602-22 this section and Section 162.253 and with the applicable provisions 602-23 of the law under which the consolidating corporations were 602-24 organized with respect to the articles. The articles of 602-25 consolidation and conversion are considered to be the articles of 602-26 incorporation of the cooperative and shall be filed in accordance 602-27 with the provisions both of this chapter and of the law under which 603-1 the consolidating corporations were organized. 603-2 (c) The original and a copy of the articles of consolidation 603-3 and conversion shall be delivered to the secretary of state. If 603-4 the secretary of state finds that the articles conform to law, the 603-5 secretary of state, on payment of a fee of $50, shall: 603-6 (1) file and record the articles of consolidation and 603-7 conversion; 603-8 (2) issue a certificate of consolidation and 603-9 conversion; and 603-10 (3) attach to the certificate the copy of the articles 603-11 and deliver the certificate and attached copy to the cooperative or 603-12 its representative. (V.A.C.S. Art. 1528c, Secs. 20D(c), (d), 28 603-13 (part).) 603-14 (Sections 162.255-162.300 reserved for expansion) 603-15 SUBCHAPTER G. DISSOLUTION 603-16 Sec. 162.301. DISSOLUTION. (a) A telephone cooperative may 603-17 be dissolved by a two-thirds vote of all the members of the 603-18 cooperative. The vote must be taken at a regular meeting or at a 603-19 special meeting of its members called for that purpose. Votes must 603-20 be cast in person. 603-21 (b) A certificate of dissolution must be: 603-22 (1) signed by the president or vice president and 603-23 attested by the secretary, certifying to the dissolution and 603-24 stating that the officers have been authorized by a vote of the 603-25 members under Subsection (a) to execute and file the certificate; 603-26 and 603-27 (2) executed, acknowledged, filed, and recorded in the 604-1 same manner as original articles of incorporation of a telephone 604-2 cooperative. 604-3 (c) The cooperative is dissolved when the secretary of state 604-4 accepts the certificate of dissolution for filing and recording and 604-5 issues a certificate of dissolution. 604-6 (d) The secretary of state shall charge and collect: 604-7 (1) a fee of $5 for filing a certificate of election 604-8 to dissolve; and 604-9 (2) a fee of $5 for filing articles of dissolution. 604-10 (V.A.C.S. Art. 1528c, Secs. 21(a), 28 (part).) 604-11 Sec. 162.302. EXISTENCE FOLLOWING DISSOLUTION. (a) A 604-12 dissolved telephone cooperative continues to exist to: 604-13 (1) satisfy existing liabilities or obligations; 604-14 (2) collect or liquidate its assets; and 604-15 (3) take any other action required to adjust and wind 604-16 up its business and affairs. 604-17 (b) A dissolved telephone cooperative may sue and be sued in 604-18 its corporate name. (V.A.C.S. Art. 1528c, Sec. 21(b) (part).) 604-19 Sec. 162.303. DISTRIBUTION OF NET ASSETS ON DISSOLUTION. 604-20 Assets of a dissolved telephone cooperative that remain after all 604-21 liabilities or obligations of the cooperative have been satisfied 604-22 shall be distributed as follows: 604-23 (1) first, to patrons for the pro rata return of 604-24 amounts standing to their credit because of their patronage; and 604-25 (2) second, to members for the pro rata repayment of 604-26 membership fees. (V.A.C.S. Art. 1528c, Sec. 21(b) (part).) 604-27 Sec. 162.304. DISSOLUTION OF DEFECTIVELY INCORPORATED 605-1 TELEPHONE COOPERATIVE. (a) A telephone cooperative that purports 605-2 to have been incorporated or reincorporated under this chapter but 605-3 that has not complied with a requirement for legal corporate 605-4 existence may file a certificate of dissolution in the same manner 605-5 as a validly incorporated telephone cooperative. 605-6 (b) The certificate of dissolution may be authorized by a 605-7 majority of the incorporators or directors at a meeting called by 605-8 an incorporator and held at the principal office of the cooperative 605-9 named in the articles of incorporation. 605-10 (c) The incorporator calling the meeting must give at least 605-11 ten days' notice of the meeting by mail to the last known post 605-12 office address of each incorporator or director. (V.A.C.S. 605-13 Art. 1528c, Sec. 21(c).) 605-14 CHAPTER 163. JOINT POWERS AGENCIES 605-15 SUBCHAPTER A. GENERAL PROVISIONS 605-16 Sec. 163.001. DEFINITIONS 605-17 (Sections 163.002-163.010 reserved for expansion) 605-18 SUBCHAPTER B. COOPERATION BY PUBLIC AND PRIVATE ENTITIES 605-19 Sec. 163.011. EFFECT OF SUBCHAPTER 605-20 Sec. 163.012. AUTHORITY TO MAKE AGREEMENTS 605-21 Sec. 163.013. GENERAL RIGHTS, POWERS, AND DUTIES OF ENTITIES 605-22 Sec. 163.014. USE OF EMINENT DOMAIN 605-23 Sec. 163.015. TAXATION 605-24 Sec. 163.016. INSURANCE 605-25 (Sections 163.017-163.050 reserved for expansion) 605-26 SUBCHAPTER C. MUNICIPAL POWER AGENCIES 605-27 Sec. 163.051. DEFINITIONS 606-1 Sec. 163.052. CONSTRUCTION 606-2 Sec. 163.053. CONFLICTS WITH OTHER LAW 606-3 Sec. 163.054. CREATION OF AGENCY 606-4 Sec. 163.055. RE-CREATION OF AGENCY 606-5 Sec. 163.056. NOTICE 606-6 Sec. 163.057. CONTENTS OF CONCURRENT ORDINANCE 606-7 Sec. 163.058. ELECTION 606-8 Sec. 163.059. BOARD OF DIRECTORS 606-9 Sec. 163.060. POWERS 606-10 Sec. 163.061. CONSTRUCTION CONTRACTS 606-11 Sec. 163.062. SALE OR EXCHANGE OF ELECTRIC ENERGY 606-12 Sec. 163.063. RATES AND CHARGES 606-13 Sec. 163.064. REVENUE BONDS 606-14 Sec. 163.065. REFUNDING BONDS 606-15 Sec. 163.066. ISSUANCE, FORM, AND PROVISIONS OF BONDS 606-16 Sec. 163.067. NONNEGOTIABLE PURCHASE MONEY NOTES 606-17 Sec. 163.068. BOND ANTICIPATION NOTES 606-18 (Sections 163.069-163.100 reserved for expansion) 606-19 SUBCHAPTER D. AGENCY RECEIVING POWER THROUGH 606-20 INTERSTATE SYSTEM 606-21 Sec. 163.101. CREATION 606-22 Sec. 163.102. POWERS 606-23 (Sections 163.103-163.120 reserved for expansion) 606-24 SUBCHAPTER E. ELECTRIC COOPERATIVE CORPORATIONS 606-25 Sec. 163.121. CREATION 606-26 Sec. 163.122. APPLICATION OF OPEN MEETINGS LAW 606-27 Sec. 163.123. AUTHORITY OF PUBLIC UTILITY COMMISSION 607-1 Sec. 163.124. POWER TO ISSUE CERTAIN BONDS OR SECURITIES 607-2 CHAPTER 163. JOINT POWERS AGENCIES 607-3 SUBCHAPTER A. GENERAL PROVISIONS 607-4 Sec. 163.001. DEFINITIONS. In this chapter: 607-5 (1) "Electric facility" means a facility necessary or 607-6 incidental to generating or transmitting electric power and energy, 607-7 including: 607-8 (A) a generating unit or plant or a plant site; 607-9 (B) transmission lines; 607-10 (C) a right-of-way or other right relating to a 607-11 facility; and 607-12 (D) property and equipment. 607-13 (2) "Entity" means a person who engages in the 607-14 authorized generation, transmission, or distribution of electric 607-15 energy for sale to the public. 607-16 (3) "Private entity" means an entity that is not a 607-17 public entity. 607-18 (4) "Public entity" means an entity that is an agency 607-19 or political subdivision of this state. (V.A.C.S. Art. 1435a, Sec. 607-20 2.) 607-21 (Sections 163.002-163.010 reserved for expansion) 607-22 SUBCHAPTER B. COOPERATION BY PUBLIC AND PRIVATE ENTITIES 607-23 Sec. 163.011. EFFECT OF SUBCHAPTER. This subchapter does 607-24 not affect: 607-25 (1) the statutory purposes prescribed by state law 607-26 relating to creating, establishing, or operating an entity that 607-27 co-owns a facility; 608-1 (2) an entity's rights or powers in effect on August 608-2 27, 1973, relating to the generation, transmission, distribution, 608-3 or sale of electric power and energy; or 608-4 (3) a contract in effect on August 27, 1973. 608-5 (V.A.C.S. Art. 1435a, Secs. 1 (part), 5.) 608-6 Sec. 163.012. AUTHORITY TO MAKE AGREEMENTS. Public and 608-7 private entities may by agreement jointly plan, finance, acquire, 608-8 construct, own, operate, and maintain electric facilities to: 608-9 (1) achieve economies of scale in providing electric 608-10 energy to the public; 608-11 (2) promote the economic development of this state and 608-12 its natural resources; and 608-13 (3) meet the state's future power needs. (V.A.C.S. 608-14 Art. 1435a, Secs. 1 (part), 3 (part).) 608-15 Sec. 163.013. GENERAL RIGHTS, POWERS, AND DUTIES OF 608-16 ENTITIES. (a) A participating entity may: 608-17 (1) use its means and assets to plan, acquire, 608-18 construct, own, operate, and maintain its interest in an electric 608-19 facility; 608-20 (2) issue bonds and other securities to raise money 608-21 for a purpose described by Subdivision (1) in the same manner and 608-22 to the same extent and subject to the same conditions as would be 608-23 applicable if the entity had sole ownership of the electric 608-24 facility; 608-25 (3) acquire, for the use and benefit of each 608-26 participating entity, land, easements, and property for an electric 608-27 facility by purchase or by exercising the power of eminent domain; 609-1 and 609-2 (4) transfer or otherwise convey the acquired land, 609-3 property, or property interest or otherwise cause the land, 609-4 property, or interest to become vested in other participating 609-5 entities to the extent to which and in the manner in which the 609-6 participating entities agree. 609-7 (b) Each participating entity is a cotenant or co-owner of 609-8 the electric facility and in relation to the entity's undivided 609-9 interest in the facility has each right, privilege, exemption, 609-10 power, duty, and liability the entity would have had if the entity 609-11 had sole ownership. (V.A.C.S. Art. 1435a, Secs. 1 (part), 3 609-12 (part), 4(1), 4(2) (part).) 609-13 Sec. 163.014. USE OF EMINENT DOMAIN. (a) A participating 609-14 entity has the power of eminent domain to be exercised as provided 609-15 by this section. 609-16 (b) The use of eminent domain authority by a participating 609-17 entity is governed by the law relating to an eminent domain 609-18 proceeding involving a municipality in this state. 609-19 (c) A participating entity may acquire a fee title to the 609-20 condemned real property. 609-21 (d) A participating entity may not use eminent domain 609-22 authority to acquire: 609-23 (1) an interest in an electric facility that belongs 609-24 to another entity; or 609-25 (2) an interest in real property to drill, mine, or 609-26 produce from that property oil, gas, geothermal resources, 609-27 geothermal/geopressured resources, or lignite, coal, sulphur, 610-1 uranium, plutonium, or other minerals that belong to another person 610-2 regardless of whether the material is in place or is in the process 610-3 of being drilled, mined, or produced. 610-4 (e) Subsection (d) does not affect the authority of a 610-5 participating entity to acquire full title to real property for a 610-6 plant site and any related surface installation or equipment, 610-7 including a cooling reservoir. (V.A.C.S. Art. 1435a, Sec. 4(2) 610-8 (part).) 610-9 Sec. 163.015. TAXATION. (a) A participating private entity 610-10 shall render for ad valorem taxation its undivided fractional 610-11 interest in a jointly owned electric facility. An ad valorem or 610-12 similar tax shall be imposed separately against the undivided 610-13 interest of the participating private entity. 610-14 (b) A tax or assessment, including an excise tax or sales 610-15 and use tax, attributable to a property or service bought, sold, 610-16 leased, or used to construct, maintain, repair, or operate a 610-17 jointly owned electric facility shall be imposed separately against 610-18 each participating entity in proportion to the entity's respective 610-19 undivided interest in the facility. 610-20 (c) A participating entity is not liable for a tax or 610-21 assessment attributable to another participating entity under 610-22 Subsection (a) or (b). 610-23 (d) A participating entity is entitled to each 610-24 constitutional or statutory ad valorem or other tax exemption 610-25 attributable to the jointly owned electric facility or to a 610-26 property or service bought, sold, leased, or used to construct, 610-27 maintain, repair, or operate the facility to the extent the entity 611-1 would have been exempt from the tax if the entity's undivided 611-2 interest were an entire interest in the facility or in the property 611-3 or service. The entity is entitled to any applicable exemption 611-4 certificate or statement provided by law to claim or prove the 611-5 exemption. (V.A.C.S. Art. 1435a, Sec. 4(3).) 611-6 Sec. 163.016. INSURANCE. A participating entity may: 611-7 (1) contract for insurance, including specialized 611-8 insurance for property and risks relating to the ownership, 611-9 operation, and maintenance of electric facilities; 611-10 (2) contract for insurance for the use and benefit of 611-11 each of the other participating entities as though the insurance 611-12 was for the sole benefit of the contracting entity; and 611-13 (3) cause the rights of the other participating 611-14 entities to be protected under the contract in accordance with each 611-15 entity's undivided interest or entitlement under any applicable 611-16 agreement between the entities. (V.A.C.S. Art. 1435a, Sec. 4(4).) 611-17 (Sections 163.017-163.050 reserved for expansion) 611-18 SUBCHAPTER C. MUNICIPAL POWER AGENCIES 611-19 Sec. 163.051. DEFINITIONS. In this subchapter: 611-20 (1) "Agency" means a municipal power agency created 611-21 under this subchapter. 611-22 (2) "Bond" includes a note, but does not include a 611-23 nonnegotiable purchase money note issued under Section 163.067. 611-24 (3) "Concurrent ordinance" means an ordinance or order 611-25 adopted under this subchapter by two or more public entities that 611-26 relates to the creation or re-creation of a municipal power agency. 611-27 (4) "Obligations" means revenue bonds or notes. 612-1 (V.A.C.S. Art. 1435a, Secs. 4a(c) (part), (j) (part); New.) 612-2 Sec. 163.052. CONSTRUCTION. This subchapter shall be 612-3 liberally construed to carry out its purpose. (V.A.C.S. 612-4 Art. 1435a, Sec. 4a(s) (part).) 612-5 Sec. 163.053. CONFLICTS WITH OTHER LAW. This subchapter 612-6 prevails to the extent of a conflict between this subchapter and 612-7 any other law, including: 612-8 (1) a law regulating the affairs of a municipal 612-9 corporation; or 612-10 (2) a home-rule charter provision. (V.A.C.S. 612-11 Art. 1435a, Sec. 4a(s) (part).) 612-12 Sec. 163.054. CREATION OF AGENCY. (a) Public entities may 612-13 create an agency by concurrent ordinances subject to voter 612-14 approval. 612-15 (b) A public entity may join in the creation of an agency 612-16 under this subchapter only if on May 8, 1975, and at the time the 612-17 concurrent ordinance is adopted, the entity was engaged in the 612-18 authorized generation of electric energy for sale to the public. 612-19 This subsection does not prohibit a public entity from disposing of 612-20 its electric generating capabilities after creation of the agency. 612-21 (c) An agency is a: 612-22 (1) separate municipal corporation; 612-23 (2) political subdivision of this state; and 612-24 (3) political entity and corporate body. 612-25 (d) An agency may not impose a tax but has all the other 612-26 powers relating to municipally owned utilities and provided by law 612-27 to a municipality that owns a public utility. (V.A.C.S. 613-1 Art. 1435a, Secs. 4a(a) (part); (b) (part).) 613-2 Sec. 163.055. RE-CREATION OF AGENCY. (a) The public 613-3 entities that create an agency may by concurrent ordinances 613-4 re-create the agency by adding or deleting, or both, a public 613-5 entity. 613-6 (b) The public entities may not re-create an agency if the 613-7 re-creation will impair an agency obligation. 613-8 (c) Re-creation by adding a public entity is subject to 613-9 voter approval in accordance with Section 163.058. (V.A.C.S. 613-10 Art. 1435a, Sec. 4a(b) (part).) 613-11 Sec. 163.056. NOTICE. (a) The governing body of each 613-12 public entity shall publish notice of its intention to create an 613-13 agency once a week for two consecutive weeks. 613-14 (b) The first publication must appear before the 14th day 613-15 before the date set for passage of the concurrent ordinance. 613-16 (c) The notice must state: 613-17 (1) the date, time, and location at which the 613-18 governing body proposes to enact the concurrent ordinance; and 613-19 (2) that an agency will be created on the date on 613-20 which the concurrent ordinances take effect. (V.A.C.S. Art. 1435a, 613-21 Sec. 4a(a) (part).) 613-22 Sec. 163.057. CONTENTS OF CONCURRENT ORDINANCE. A 613-23 concurrent ordinance creating an agency under Section 163.054 or 613-24 re-creating an agency under Section 163.055 must, as adopted by 613-25 each public entity: 613-26 (1) contain identical provisions; 613-27 (2) define the boundaries of the agency to include the 614-1 territory within the boundaries of each participating public 614-2 entity; 614-3 (3) designate the name of the agency; and 614-4 (4) designate the number, place, initial term, and 614-5 manner of appointment of directors in accordance with Section 614-6 163.059. (V.A.C.S. Art. 1435a, Secs. 4a(c) (part), (d) (part), (e) 614-7 (part).) 614-8 Sec. 163.058. ELECTION. (a) An agency may not be created 614-9 unless the creation is approved by a majority of the qualified 614-10 voters of each public entity creating the agency at an election 614-11 called and held for that purpose. 614-12 (b) An agency may not be re-created by addition of a public 614-13 entity unless the re-creation is approved by a majority of the 614-14 qualified voters of the additional public entity at an election 614-15 called and held for that purpose. 614-16 (c) Notice of an election under this section shall be given 614-17 in accordance with Article 704, Revised Statutes. The election 614-18 shall be called and held in accordance with: 614-19 (1) the Election Code; 614-20 (2) Chapter 1, Title 22, Revised Statutes; and 614-21 (3) this subchapter. (V.A.C.S. Art. 1435a, Secs. 614-22 4a(a) (part), (b) (part).) 614-23 Sec. 163.059. BOARD OF DIRECTORS. (a) The agency shall be 614-24 governed by a board of directors. The board is responsible for the 614-25 management, operation, and control of the property belonging to the 614-26 agency. 614-27 (b) The board must include at least four directors. Each 615-1 director must be appointed by place by the governing bodies of the 615-2 participating public entities. Each participating public entity is 615-3 entitled to appoint at least one director. 615-4 (c) Directors must serve staggered terms. Successor 615-5 directors are appointed in the same manner as the original 615-6 appointees. 615-7 (d) To qualify to serve as a director, a person must be a 615-8 qualified voter and reside in the boundaries of the appointing 615-9 public entity when the person takes the constitutional oath of 615-10 office. 615-11 (e) An employee, officer, or member of the governing body of 615-12 a public entity may serve as a director but may not have a personal 615-13 interest in a contract executed by the agency other than as an 615-14 employee, officer, or member of the governing body of the public 615-15 entity. 615-16 (f) Directors serve without compensation. (V.A.C.S. 615-17 Art. 1435a, Secs. 4a(d) (part), (e) (part), (f) (part).) 615-18 Sec. 163.060. POWERS. (a) An agency may not engage in any 615-19 utility business other than the generation, transmission, and sale 615-20 or exchange of electric energy to: 615-21 (1) a participating public entity; or 615-22 (2) a private entity that owns jointly with the agency 615-23 an electric generating facility in this state. 615-24 (b) The agency may: 615-25 (1) perform any act necessary to the full exercise of 615-26 the agency's powers; 615-27 (2) enter into a contract, lease, or agreement with or 616-1 accept a grant or loan from a: 616-2 (A) department or agency of the United States; 616-3 (B) department, agency, or political subdivision 616-4 of this state; or 616-5 (C) public or private person; 616-6 (3) sell, lease, convey, or otherwise dispose of any 616-7 right, interest, or property the agency considers to be unnecessary 616-8 for the efficient maintenance or operation of its electric 616-9 facilities; 616-10 (4) use the uniform system of accounts prescribed for 616-11 utilities and licenses by the Federal Energy Regulatory Commission; 616-12 and 616-13 (5) adopt rules to govern the operation of the agency 616-14 and its employees, facilities, and service. (V.A.C.S. Art. 1435a, 616-15 Secs. 4a(a) (part), (f) (part), (o) (part), (p).) 616-16 Sec. 163.061. CONSTRUCTION CONTRACTS. (a) Except as 616-17 provided by Subsection (c), an agency may award a contract for 616-18 construction of an improvement that involves the expenditure of 616-19 more than $20,000 only on the basis of competitive bids. 616-20 (b) The agency shall publish notice of intent to receive 616-21 bids once a week for two consecutive weeks in a newspaper of 616-22 general circulation in this state. The first publication must 616-23 appear before the 14th day before the date bids are to be received. 616-24 (c) An entity that has joint ownership of the improvement to 616-25 be constructed or that is an agent of a joint owner shall award a 616-26 contract using the entity's contracting procedures. (V.A.C.S. 616-27 Art. 1435a, Sec. 4a(o) (part).) 617-1 Sec. 163.062. SALE OR EXCHANGE OF ELECTRIC ENERGY. (a) An 617-2 agency may participate through appropriate contracts in power 617-3 pooling and power exchange agreements with other entities through 617-4 direct or indirect system interconnections. 617-5 (b) An entity that participates with an agency under this 617-6 section may: 617-7 (1) purchase electric energy from the agency; 617-8 (2) sell or dispose of electric energy to the agency; 617-9 or 617-10 (3) exchange electric energy with the agency. 617-11 (c) An entity payment for electric energy purchased from the 617-12 agency is an operating expense of the entity's electric system. 617-13 (d) An agency contract to sell or exchange electric energy 617-14 may require the purchaser to pay for the electric energy regardless 617-15 of whether the electric energy is produced or delivered. (V.A.C.S. 617-16 Art. 1435a, Secs. 4a(f) (part), (g) (part), (o) (part).) 617-17 Sec. 163.063. RATES AND CHARGES. (a) An agency may 617-18 establish and maintain rates and charges for electric power and 617-19 energy the agency delivers, transmits, or exchanges. The rates and 617-20 charges must: 617-21 (1) be reasonable and in accordance with prudent 617-22 utility practices; 617-23 (2) be based on periodic cost of service studies and 617-24 subject to modification, unless such a basis for rates and charges 617-25 is waived by the purchaser by contract; and 617-26 (3) be developed to recover the agency's cost of 617-27 producing and transmitting the electric power and energy, as 618-1 applicable, which cost must include the amortization of capital 618-2 investment. 618-3 (b) Notwithstanding Subsection (a), this state reserves its 618-4 power to regulate an agency's rates and charges for electric energy 618-5 supplied by the agency's facilities. 618-6 (c) Until obligations issued under this subchapter have been 618-7 paid and discharged, with all interest on the obligations, interest 618-8 on unpaid interest installments on the obligations, and other 618-9 connected and incurred costs or expenses, this state pledges to and 618-10 agrees with the purchasers and successive holders of the 618-11 obligations that it will not: 618-12 (1) limit or alter the power of an agency to establish 618-13 and collect rates and charges under this section sufficient to pay: 618-14 (A) necessary operational and maintenance 618-15 expenses; 618-16 (B) interest and principal on obligations issued 618-17 by the agency; 618-18 (C) sinking funds and reserve fund payments; and 618-19 (D) other charges necessary to fulfill the terms 618-20 of any agreement; or 618-21 (2) take any action that will impair the rights or 618-22 remedies of the holders of the obligations. (V.A.C.S. Art. 1435a, 618-23 Secs. 4a(g) (part), (h).) 618-24 Sec. 163.064. REVENUE BONDS. (a) The agency may issue 618-25 revenue bonds to accomplish the purposes of the agency. 618-26 (b) The agency may pledge to the payment of the obligations 618-27 the revenues of all or part of its electric facilities, including 619-1 facilities acquired after the obligations are issued. However, 619-2 operating and maintenance expenses, including salaries and labor, 619-3 materials, and repairs of electric facilities necessary to render 619-4 efficient service constitute a first lien on and charge against the 619-5 pledged revenue. 619-6 (c) The agency may set aside from the proceeds from the sale 619-7 of the obligations amounts for payment into the interest and 619-8 sinking fund and reserve fund, and for interest and operating 619-9 expenses during construction and development, as specified in the 619-10 proceedings authorizing the obligations. 619-11 (d) Obligation proceeds may be invested, pending their use, 619-12 in securities, interest-bearing certificates, or time deposits as 619-13 specified in the authorizing proceedings. 619-14 (e) Agency obligations are authorized investments for: 619-15 (1) a bank; 619-16 (2) a savings bank; 619-17 (3) a trust company; 619-18 (4) a savings and loan association; and 619-19 (5) an insurance company. 619-20 (f) The obligations, when accompanied by all appurtenant, 619-21 unmatured coupons and to the extent of the lesser of their face 619-22 value or market value, are eligible to secure the deposit of public 619-23 funds of this state, a political subdivision of this state, and any 619-24 other political corporation of this state. (V.A.C.S. Art. 1435a, 619-25 Secs. 4a(i), (j) (part), (k), (n).) 619-26 Sec. 163.065. REFUNDING BONDS. The agency may issue 619-27 refunding bonds. (V.A.C.S. Art. 1435a, Sec. 4a(m) (part).) 620-1 Sec. 163.066. ISSUANCE, FORM, AND PROVISIONS OF BONDS. (a) 620-2 Agency bonds that are payable from agency revenues or anticipated 620-3 bond proceeds and the records relating to their issuance must be 620-4 submitted to the attorney general for examination before delivery. 620-5 (b) The bonds: 620-6 (1) must mature serially or otherwise not more than 50 620-7 years after the date of issuance; 620-8 (2) may be made redeemable before maturity at the time 620-9 and at the price or prices set by the agency; and 620-10 (3) may be sold at public or private sale under the 620-11 terms and for the price the agency determines to be in the best 620-12 interest of the agency. 620-13 (c) The bonds must be signed by the presiding officer or 620-14 assistant presiding officer of the agency, be attested by the 620-15 secretary, and bear the seal of the agency. The signatures may be 620-16 printed on the bonds if authorized by the agency, and the seal may 620-17 be impressed or printed on the bonds. The agency may adopt or use 620-18 for any purpose the signature of an individual who has been an 620-19 officer of the agency, regardless of whether the individual has 620-20 ceased to be an officer at the time the bonds are delivered to the 620-21 purchaser. (V.A.C.S. Art. 1435a, Secs. 4a(l) (part), (q) (part), 620-22 (r) (part).) 620-23 Sec. 163.067. NONNEGOTIABLE PURCHASE MONEY NOTES. (a) The 620-24 agency may issue nonnegotiable purchase money notes to acquire land 620-25 or fuel resources. 620-26 (b) Nonnegotiable purchase money notes are: 620-27 (1) payable in installments; 621-1 (2) secured by the property acquired with the notes or 621-2 other collateral the agency substitutes; and 621-3 (3) not a security or agency obligation. 621-4 (c) Nonnegotiable purchase money notes may be further 621-5 secured by a promise to issue bonds or bond anticipation notes to 621-6 pay the purchase money notes. (V.A.C.S. Art. 1435a, Sec. 4a(r) 621-7 (part).) 621-8 Sec. 163.068. BOND ANTICIPATION NOTES. (a) The agency may 621-9 issue bond anticipation notes: 621-10 (1) for any purpose for which the agency may issue 621-11 bonds; or 621-12 (2) to refund previously issued bond anticipation 621-13 notes or nonnegotiable purchase money notes. 621-14 (b) Bond anticipation notes are subject to the limitations 621-15 and conditions prescribed by this subchapter for bonds. 621-16 (c) The agency may contract with purchasers of bond 621-17 anticipation notes that the proceeds of one or more series of bonds 621-18 will be used to pay or refund the notes. (V.A.C.S. Art. 1435a, 621-19 Sec. 4a(r) (part).) 621-20 (Sections 163.069-163.100 reserved for expansion) 621-21 SUBCHAPTER D. AGENCY RECEIVING POWER THROUGH 621-22 INTERSTATE SYSTEM 621-23 Sec. 163.101. CREATION. (a) Notwithstanding Section 621-24 163.054, two or more public entities may create a municipal power 621-25 agency governed by Subchapter C if the entities: 621-26 (1) are municipalities; 621-27 (2) are engaged in the distribution and sale of 622-1 electric energy to the public; and 622-2 (3) receive a major portion of their power through or 622-3 from an interstate electric system. 622-4 (b) The entities must comply with the provisions of 622-5 Subchapter C relating to the creation of a municipal power agency, 622-6 including the concurrent ordinance and election provisions. 622-7 (V.A.C.S. Art. 1435a, Sec. 4b (part).) 622-8 Sec. 163.102. POWERS. (a) An agency created under this 622-9 subchapter may: 622-10 (1) generate and transmit electric power and energy 622-11 inside and outside this state; 622-12 (2) sell, purchase, or exchange electric power and 622-13 energy with entities inside or outside this state; and 622-14 (3) construct or acquire new steam electric generating 622-15 facilities, but only if the facilities are owned jointly by the 622-16 agency and one or more private entities. 622-17 (b) This section does not authorize an agency created under 622-18 this subchapter to engage in the distribution and retail sale of 622-19 electric power and energy. (V.A.C.S. Art. 1435a, Sec. 4b (part).) 622-20 (Sections 163.103-163.120 reserved for expansion) 622-21 SUBCHAPTER E. ELECTRIC COOPERATIVE CORPORATIONS 622-22 Sec. 163.121. CREATION. An electric cooperative corporation 622-23 may join one or more public entities to create a joint powers 622-24 agency as if the corporation were also a public entity. (V.A.C.S. 622-25 Art. 1435a, Sec. 4c(a).) 622-26 Sec. 163.122. APPLICATION OF OPEN MEETINGS LAW. A joint 622-27 powers agency created under this subchapter is a governmental body 623-1 subject to Chapter 551, Government Code. (V.A.C.S. Art. 1435a, 623-2 Sec. 4c(c).) 623-3 Sec. 163.123. AUTHORITY OF PUBLIC UTILITY COMMISSION. A 623-4 joint powers agency created under this subchapter is: 623-5 (1) subject to all applicable provisions of Title 2; 623-6 and 623-7 (2) under the jurisdiction of the Public Utility 623-8 Commission of Texas as provided by Title 2. (V.A.C.S. Art. 1435a, 623-9 Sec. 4c(b).) 623-10 Sec. 163.124. POWER TO ISSUE CERTAIN BONDS OR SECURITIES. 623-11 This subchapter does not authorize an electric cooperative 623-12 corporation to issue bonds or other securities that are tax exempt 623-13 under federal law. (V.A.C.S. Art. 1435a, Sec. 4c(d).) 623-14 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES 623-15 BY PUBLIC ENTITIES 623-16 Sec. 164.001. JOINT OWNERSHIP OF ELECTRIC UTILITY FACILITIES 623-17 AUTHORIZED 623-18 Sec. 164.002. PUBLIC PURPOSE 623-19 Sec. 164.003. APPROVAL OF AGREEMENT BY ATTORNEY 623-20 GENERAL 623-21 Sec. 164.004. INCREASE IN OWNERSHIP SHARES 623-22 Sec. 164.005. CONTRACTUAL OBLIGATIONS AS LIEN ON 623-23 SYSTEM REVENUE 623-24 Sec. 164.006. CONSTRUCTION WITH OTHER LAWS 623-25 CHAPTER 164. JOINT OWNERSHIP OF ELECTRIC FACILITIES 623-26 BY PUBLIC ENTITIES 623-27 Sec. 164.001. JOINT OWNERSHIP OF ELECTRIC UTILITY FACILITIES 624-1 AUTHORIZED. (a) Political subdivisions may join together to 624-2 finance, construct, complete, acquire, or operate electric utility 624-3 facilities so that the facilities or an undivided interest in the 624-4 facilities is jointly owned by the political subdivisions as 624-5 cotenants or co-owners. 624-6 (b) The ownership shares in the facilities are those 624-7 approved by the governing bodies of the political subdivisions, as 624-8 set forth in an agreement authorized by the governing bodies. 624-9 (V.A.C.S. Art. 1435b, Sec. 1 (part).) 624-10 Sec. 164.002. PUBLIC PURPOSE. The exercise by a political 624-11 subdivision of the authority granted by this chapter, including the 624-12 exercise of the power to issue bonds, notes, or other obligations 624-13 to accomplish the purposes of this chapter, and the performance of 624-14 an agreement entered into under this chapter are considered to be 624-15 additional public purposes of the political subdivision, without 624-16 regard to any express or implied limitation on the authority or 624-17 purposes of the political subdivision under any other general or 624-18 special law or charter provision. (V.A.C.S. Art. 1435b, Sec. 3 624-19 (part).) 624-20 Sec. 164.003. APPROVAL OF AGREEMENT BY ATTORNEY GENERAL. 624-21 (a) An agreement between political subdivisions establishing an 624-22 interest in electric utility facilities that is executed under this 624-23 chapter shall be submitted to the attorney general in connection 624-24 with any proceeding to finance the contractual obligation by the 624-25 issuance of bonds. 624-26 (b) An agreement submitted under Subsection (a) is 624-27 incontestable on approval as to legality by the attorney general. 625-1 (V.A.C.S. Art. 1435b, Sec. 1 (part).) 625-2 Sec. 164.004. INCREASE IN OWNERSHIP SHARES. (a) An 625-3 agreement under this chapter may provide for a political 625-4 subdivision to increase its present or future ownership share of 625-5 the electric utility facilities by installment purchase payments 625-6 and for another political subdivision that is a party to the 625-7 agreement to transfer, in consideration of those payments, any 625-8 portion of its present or future ownership share of the facilities 625-9 to the purchasing political subdivision. 625-10 (b) A payment made by a political subdivision to acquire an 625-11 ownership interest is not treated as a maintenance and operating 625-12 expense but is treated as a capital cost as if the political 625-13 subdivision had issued bonds to construct or acquire the ownership 625-14 interest, unless otherwise specified in the agreement. (V.A.C.S. 625-15 Art. 1435b, Sec. 1 (part).) 625-16 Sec. 164.005. CONTRACTUAL OBLIGATIONS AS LIEN ON SYSTEM 625-17 REVENUE. (a) If the electric utility facilities financed, 625-18 acquired, constructed, or completed are a part of a utility system 625-19 of a political subdivision, the obligation to make the contract 625-20 payments to acquire an ownership interest is a lien on the revenue 625-21 of the system on a parity with the outstanding bonds of the system 625-22 to the extent permitted in the ordinance or resolution authorizing 625-23 or the deed of trust or indenture securing the payment of the 625-24 outstanding bonds. 625-25 (b) If the ordinance or resolution authorizing or the deed 625-26 of trust or trust indenture securing the revenue bonds of a utility 625-27 system provides for the subsequent issuance of additional bonds or 626-1 the creation of a contractual obligation described by Section 626-2 164.004 and provides that the payments to be made for the security 626-3 or payment of the subsequent bonds or contractual obligation are to 626-4 be on a parity with the previously issued bonds or bonds then to be 626-5 issued, the political subdivision may, subject to any conditions 626-6 contained in that ordinance, resolution, deed of trust, or trust 626-7 indenture, authorize, issue, and sell additional bonds or incur the 626-8 contractual obligation in a different series payable from the 626-9 entire revenue of the utility system on a parity with the 626-10 previously issued bonds or bonds then to be issued and secured by a 626-11 lien on the revenue of the system on a parity with the lien 626-12 securing the previously issued bonds or bonds then to be issued. 626-13 This subsection applies without regard to whether the previously 626-14 issued bonds: 626-15 (1) were issued before August 29, 1977; or 626-16 (2) are an original issue or a refunding issue. 626-17 (c) A political subdivision may pledge the revenue of a 626-18 utility system to pay contract payments to acquire an ownership 626-19 interest in an electric utility facility under this chapter. 626-20 (d) In this section, "utility system" includes a combined 626-21 utility system. (V.A.C.S. Art. 1435b, Sec. 2.) 626-22 Sec. 164.006. CONSTRUCTION WITH OTHER LAWS. To provide full 626-23 authority for the execution of an agreement under this chapter, 626-24 this chapter applies to a municipality as if this chapter were 626-25 originally contained in Chapter 10, Title 28, Revised Statutes. 626-26 This chapter prevails over any charter provision or general or 626-27 special law. (V.A.C.S. Art. 1435b, Sec. 3 (part).) 627-1 (Chapters 165-180 reserved for expansion) 627-2 SUBTITLE B. PROVISIONS REGULATING DELIVERY OF SERVICES 627-3 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 627-4 SUBCHAPTER A. POWERS AND DUTIES OF GAS AND ELECTRIC CORPORATIONS 627-5 Sec. 181.001. DEFINITIONS 627-6 Sec. 181.002. CORPORATE POWERS 627-7 Sec. 181.003. AUTHORITY TO BORROW MONEY, ISSUE STOCK, OR MORTGAGE 627-8 PROPERTY 627-9 Sec. 181.004. CONDEMNATION OF PROPERTY 627-10 Sec. 181.005. AUTHORITY TO LAY AND MAINTAIN LINES 627-11 Sec. 181.006. CONSENT REQUIRED IN MUNICIPALITY 627-12 Sec. 181.007. AUTHORITY TO HOLD LAND OR OTHER 627-13 PROPERTY 627-14 Sec. 181.008. AUTHORITY RELATING TO TRANSPORT OR SALE 627-15 Sec. 181.009. DISCRIMINATION PROHIBITED 627-16 (Sections 181.010-181.020 reserved for expansion) 627-17 SUBCHAPTER B. PROVISIONS APPLYING TO GAS UTILITIES 627-18 Sec. 181.021. DEFINITIONS 627-19 Sec. 181.022. AUTHORITY TO LAY AND MAINTAIN GAS FACILITY 627-20 Sec. 181.023. CONSENT REQUIRED IN MUNICIPALITY 627-21 Sec. 181.024. NOTICE TO STATE OR COUNTY 627-22 Sec. 181.025. RELOCATION OF GAS FACILITY TO ALLOW CHANGE TO 627-23 TRAFFIC LANE 627-24 Sec. 181.026. EFFECT OF MUNICIPAL INCORPORATION ON GAS 627-25 FACILITY PREVIOUSLY LAID 627-26 (Sections 181.027-181.040 reserved for expansion) 627-27 SUBCHAPTER C. PROVISIONS APPLYING TO ELECTRIC UTILITIES 628-1 Sec. 181.041. DEFINITIONS 628-2 Sec. 181.042. AUTHORITY TO CONSTRUCT, MAINTAIN, AND OPERATE 628-3 LINES 628-4 Sec. 181.043. CONSENT REQUIRED IN MUNICIPALITY 628-5 Sec. 181.044. NOTICE TO STATE OR COUNTY 628-6 Sec. 181.045. STANDARDS FOR CONSTRUCTION, OPERATION, AND 628-7 MAINTENANCE OF LINES 628-8 Sec. 181.046. RELOCATION OF LINE TO ALLOW ROAD OR DITCH 628-9 IMPROVEMENT 628-10 Sec. 181.047. EFFECT OF MUNICIPAL INCORPORATION ON LINE 628-11 PREVIOUSLY CONSTRUCTED 628-12 (Sections 181.048-181.060 reserved for expansion) 628-13 SUBCHAPTER D. PROVISIONS APPLYING TO TELEGRAPH COMPANIES 628-14 Sec. 181.061. DEFINITION 628-15 Sec. 181.062. TELEGRAPH CONNECTIONS 628-16 Sec. 181.063. EXCEPTIONS 628-17 Sec. 181.064. HEARING AND DETERMINATION 628-18 Sec. 181.065. PENALTY 628-19 Sec. 181.066. APPEAL 628-20 (Sections 181.067-181.080 reserved for expansion) 628-21 SUBCHAPTER E. PROVISIONS APPLYING TO TELEPHONE AND 628-22 TELEGRAPH CORPORATIONS 628-23 Sec. 181.081. DEFINITIONS 628-24 Sec. 181.082. AUTHORITY TO INSTALL FACILITY IN 628-25 RELATION TO PUBLIC PROPERTY 628-26 Sec. 181.083. AUTHORITY TO CONSTRUCT LINE ON 628-27 PRIVATE PROPERTY 629-1 Sec. 181.084. APPROPRIATION OR CONDEMNATION OF LAND 629-2 Sec. 181.085. PROHIBITION ON LAND CONTRACT EXCLUDING ANOTHER 629-3 TELEGRAPH UTILITY 629-4 Sec. 181.086. LINES IN OR OUTSIDE STATE 629-5 Sec. 181.087. USE OF ANOTHER'S TELEGRAPH LINE 629-6 Sec. 181.088. CONSOLIDATION OF UTILITIES 629-7 Sec. 181.089. MUNICIPAL REGULATION 629-8 (Sections 181.090-181.100 reserved for expansion) 629-9 SUBCHAPTER F. PROVISIONS APPLYING TO COMMUNITY ANTENNA AND 629-10 CABLE TELEVISION UTILITIES 629-11 Sec. 181.101. DEFINITIONS 629-12 Sec. 181.102. AUTHORITY TO INSTALL AND MAINTAIN EQUIPMENT 629-13 Sec. 181.103. NOTICE TO STATE OR COUNTY 629-14 Sec. 181.104. RELOCATION OF EQUIPMENT TO ALLOW CHANGE TO 629-15 TRAFFIC LANE 629-16 (Sections 181.105-181.900 reserved for expansion) 629-17 SUBCHAPTER Z. MISCELLANEOUS PROVISIONS 629-18 Sec. 181.901. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 629-19 PROTECT UTILITY 629-20 Sec. 181.902. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 629-21 PREVENT USE OR WASTE OF UTILITY 629-22 COMMODITY OR SERVICE 629-23 CHAPTER 181. MISCELLANEOUS POWERS AND DUTIES OF UTILITIES 629-24 SUBCHAPTER A. POWERS AND DUTIES OF GAS AND ELECTRIC CORPORATIONS 629-25 Sec. 181.001. DEFINITIONS. In this chapter: 629-26 (1) "Corporation" includes partnerships and other 629-27 combinations composed exclusively of corporations or in which a 630-1 corporation is a general partner. 630-2 (2) "Electric corporation" means an electric current 630-3 and power corporation. (V.A.C.S. Art. 1435 (part); (New).) 630-4 Sec. 181.002. CORPORATE POWERS. A gas or electric 630-5 corporation has the powers and rights of a corporation organized 630-6 for profit in this state whenever those powers and duties may be 630-7 applicable. (V.A.C.S. Art. 1437 (part).) 630-8 Sec. 181.003. AUTHORITY TO BORROW MONEY, ISSUE STOCK, OR 630-9 MORTGAGE PROPERTY. A gas or electric corporation has the right to: 630-10 (1) borrow money; 630-11 (2) issue stock, including preferred stock; or 630-12 (3) mortgage a franchise or other property of the 630-13 corporation to secure a debt contracted for any purpose of the 630-14 corporation. (V.A.C.S. Art. 1437 (part).) 630-15 Sec. 181.004. CONDEMNATION OF PROPERTY. A gas or electric 630-16 corporation has the right and power to enter on, condemn, and 630-17 appropriate the land, right-of-way, easement, or other property of 630-18 any person or corporation. (V.A.C.S. Art. 1436 (part).) 630-19 Sec. 181.005. AUTHORITY TO LAY AND MAINTAIN LINES. A gas 630-20 corporation has the right to lay and maintain lines over and across 630-21 a public road, a railroad, railroad right-of-way, an interurban 630-22 railroad, a street railroad, a canal or stream, or a municipal 630-23 street or alley. (V.A.C.S. Art. 1436 (part).) 630-24 Sec. 181.006. CONSENT REQUIRED IN MUNICIPALITY. A gas 630-25 corporation may exercise authority under Section 181.005 in 630-26 relation to a municipal street or alley with the consent of and 630-27 subject to the direction of the governing body of the municipality. 631-1 (V.A.C.S. Art. 1436 (part).) 631-2 Sec. 181.007. AUTHORITY TO HOLD LAND OR OTHER PROPERTY. A 631-3 gas or electric corporation has the power to own, hold, or use 631-4 land, a right-of-way, an easement, a franchise, or a building or 631-5 other structure as necessary for the purpose of the corporation. 631-6 (V.A.C.S. Art. 1435 (part).) 631-7 Sec. 181.008. AUTHORITY RELATING TO TRANSPORT OR SALE. (a) 631-8 A gas or electric corporation has the power to generate, make, 631-9 manufacture, transport, and sell gas, electric current, and power 631-10 to an individual, the public, or a municipality for any purpose. 631-11 (b) A gas or electric corporation may: 631-12 (1) impose reasonable charges for an action taken 631-13 under Subsection (a); and 631-14 (2) construct, maintain, and operate power plants and 631-15 substations and any machinery, apparatus, pipe, pole, wire, device, 631-16 or arrangements as necessary to operate its lines in this state. 631-17 (V.A.C.S. Art. 1435 (part).) 631-18 Sec. 181.009. DISCRIMINATION PROHIBITED. A gas or electric 631-19 corporation may not discriminate against a person, corporation, 631-20 firm, association, or location in: 631-21 (1) charging for gas, electric current, or power; or 631-22 (2) providing service under similar circumstances. 631-23 (V.A.C.S. Arts. 1435 (part), 1438.) 631-24 (Sections 181.010-181.020 reserved for expansion) 631-25 SUBCHAPTER B. PROVISIONS APPLYING TO GAS UTILITIES 631-26 Sec. 181.021. DEFINITIONS. In this subchapter: 631-27 (1) "Gas facility" means a pipe, main, conductor, or 632-1 other facility or fixture used to carry gas. 632-2 (2) "Gas utility" means a person, firm, corporation, 632-3 or municipality engaged in the business of transporting or 632-4 distributing gas for public consumption. (V.A.C.S. Art. 1436b, 632-5 Secs. 1 (part), 2 (part).) 632-6 Sec. 181.022. AUTHORITY TO LAY AND MAINTAIN GAS FACILITY. A 632-7 gas utility has the right to lay and maintain a gas facility 632-8 through, under, along, across, or over a public highway, a public 632-9 road, a public street or alley, or public water. (V.A.C.S. Art. 632-10 1436b, Sec. 1 (part).) 632-11 Sec. 181.023. CONSENT REQUIRED IN MUNICIPALITY. A gas 632-12 utility may exercise authority under Section 181.022 in a 632-13 municipality with the consent of and subject to the direction of 632-14 the governing body of the municipality. (V.A.C.S. Art. 1436b, Sec. 632-15 1 (part).) 632-16 Sec. 181.024. NOTICE TO STATE OR COUNTY. (a) A gas utility 632-17 proposing under this subchapter to locate a gas facility in the 632-18 right-of-way of a state highway or a county road not in a 632-19 municipality shall give notice of the proposal to: 632-20 (1) the Texas Transportation Commission if the 632-21 proposal relates to a state highway; or 632-22 (2) the commissioners court of the county if the 632-23 proposal relates to a county road. 632-24 (b) On receipt of the notice, the Texas Transportation 632-25 Commission or the commissioners court may designate the location in 632-26 the right-of-way where the gas utility may place the gas facility. 632-27 (V.A.C.S. Art. 1436b, Sec. 1 (part).) 633-1 Sec. 181.025. RELOCATION OF GAS FACILITY TO ALLOW CHANGE TO 633-2 TRAFFIC LANE. (a) The authority of the Texas Transportation 633-3 Commission under this section is limited to a gas facility on a 633-4 state highway not in a municipality. The authority of the 633-5 commissioners court under this section is limited to a gas facility 633-6 on a county road not in a municipality. 633-7 (b) The Texas Transportation Commission or the commissioners 633-8 court of a county may require a gas utility to relocate the 633-9 utility's gas facility, at the utility's own expense, to allow the 633-10 widening or other changing of a traffic lane. 633-11 (c) To impose a requirement under this section, the Texas 633-12 Transportation Commission or the commissioners court, as 633-13 appropriate, must give to the gas utility 30 days' written notice 633-14 of the requirement. The notice must identify the gas facility to 633-15 be relocated and indicate the location on the new right-of-way 633-16 where the gas utility may place the facility. 633-17 (d) The gas utility shall replace the grade and surface of 633-18 the highway or road at the utility's own expense. (V.A.C.S. 633-19 Art. 1436b, Sec. 1 (part).) 633-20 Sec. 181.026. EFFECT OF MUNICIPAL INCORPORATION ON GAS 633-21 FACILITY PREVIOUSLY LAID. A gas utility having a gas facility 633-22 located in an area that becomes incorporated after the facility is 633-23 in place may continue to exercise in that area the authority 633-24 granted by this subchapter until the 10th anniversary of the date 633-25 of the incorporation without the consent of but subject to the 633-26 direction of the governing body of the municipality. (V.A.C.S. 633-27 Art. 1436b, Sec. 2.) 634-1 (Sections 181.027-181.040 reserved for expansion) 634-2 SUBCHAPTER C. PROVISIONS APPLYING TO ELECTRIC UTILITIES 634-3 Sec. 181.041. DEFINITIONS. In this subchapter: 634-4 (1) "Electric utility" means: 634-5 (A) an electric cooperative organized under 634-6 Chapter 161; 634-7 (B) a corporation or river authority, if the 634-8 river authority is created by a statute of this state: 634-9 (i) that generates, transmits, or 634-10 distributes electric energy in this state; and 634-11 (ii) whose operations are subject to the 634-12 judicial and legislative processes of this state; or 634-13 (C) a municipal electric utility. 634-14 (2) "Municipal electric utility" means a municipality 634-15 in this state that owns and operates an electric generating plant 634-16 or that operates electric transmission lines or an electric 634-17 distribution system. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a 634-18 (part).) 634-19 Sec. 181.042. AUTHORITY TO CONSTRUCT, MAINTAIN, AND OPERATE 634-20 LINES. An electric utility has the right to construct, maintain, 634-21 and operate lines over, under, across, on, or along a state 634-22 highway, a county road, a municipal street or alley, or other 634-23 public property in a municipality. (V.A.C.S. Art. 1436a, Secs. 1 634-24 (part), 1a (part).) 634-25 Sec. 181.043. CONSENT REQUIRED IN MUNICIPALITY. (a) An 634-26 electric utility may exercise authority under Section 181.042 in a 634-27 municipality with the consent of and subject to the direction of 635-1 the governing body of the municipality. 635-2 (b) Subsection (a) does not apply to a municipal electric 635-3 utility exercising authority under Section 181.042 in its municipal 635-4 territory. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 635-5 Sec. 181.044. NOTICE TO STATE OR COUNTY. (a) An electric 635-6 utility proposing under this subchapter to construct a line along 635-7 the right-of-way of a state highway or a county road not in a 635-8 municipality shall give notice of the proposal to: 635-9 (1) the Texas Transportation Commission if the 635-10 proposal relates to a state highway; or 635-11 (2) the commissioners court of the county if the 635-12 proposal relates to a county road. 635-13 (b) On receipt of the notice, the Texas Transportation 635-14 Commission or the commissioners court may designate the location 635-15 along the right-of-way where the electric utility may construct the 635-16 line. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 635-17 Sec. 181.045. STANDARDS FOR CONSTRUCTION, OPERATION, AND 635-18 MAINTENANCE OF LINES. (a) A municipal electric utility shall 635-19 construct, operate, and maintain its lines for the transmission and 635-20 distribution of electric energy along highways and at other places 635-21 in accordance with the national electrical safety code. With 635-22 regard to clearances, an electric utility that is not a municipal 635-23 electric utility shall construct, operate, and maintain its lines 635-24 for the transmission and distribution of electric energy along 635-25 highways and at other places in accordance with the national 635-26 electrical safety code. 635-27 (b) Regardless of Subsection (a), an electric utility shall: 636-1 (1) use single pole construction for a line along a 636-2 highway or county road; 636-3 (2) construct a transmission line that crosses a 636-4 highway or road so that the line is at least 22 feet above the 636-5 surface of the traffic lane; and 636-6 (3) construct a line that is above a railroad track or 636-7 railroad siding so that the line is at least 22 feet above the 636-8 surface of the track or siding. 636-9 (c) Subsection (a) does not apply to a line in a 636-10 municipality to the extent an ordinance or regulation applying in 636-11 the municipality provides differently than the national electrical 636-12 safety code. 636-13 (d) In this section, "national electrical safety code" means 636-14 the National Electrical Safety Code, as published in March 1948 by 636-15 the National Bureau of Standards, Handbook 30, as revised by 636-16 Handbook 81, published by the National Bureau of Standards in 636-17 November 1961. (V.A.C.S. Art. 1436a, Secs. 1 (part), 1a (part).) 636-18 Sec. 181.046. RELOCATION OF LINE TO ALLOW ROAD OR DITCH 636-19 IMPROVEMENT. (a) The authority of the Texas Transportation 636-20 Commission under this section is limited to a line on a state 636-21 highway not in a municipality. The authority of the commissioners 636-22 court under this section is limited to a line on a county road not 636-23 in a municipality. 636-24 (b) The Texas Transportation Commission or the commissioners 636-25 court of a county may require an electric utility to relocate a 636-26 line of the utility, at the utility's own expense, to allow the: 636-27 (1) widening of a right-of-way; 637-1 (2) changing of a traffic lane; 637-2 (3) improving of a road bed; or 637-3 (4) improving of a drainage ditch located on a 637-4 right-of-way. 637-5 (c) To impose a requirement under this section, the Texas 637-6 Transportation Commission or the commissioners court, as 637-7 appropriate, must give to the electric utility 30 days' written 637-8 notice of the requirement. The notice must identify the line to be 637-9 relocated and indicate the location on the new right-of-way where 637-10 the electric utility may place the line. (V.A.C.S. Art. 1436a, 637-11 Secs. 1 (part), 1a (part).) 637-12 Sec. 181.047. EFFECT OF MUNICIPAL INCORPORATION ON LINE 637-13 PREVIOUSLY CONSTRUCTED. (a) An electric utility that owns a line 637-14 on a state highway or county road in a city or town that, at the 637-15 time of the construction of the line, is unincorporated but that 637-16 later incorporates as a municipality may continue to exercise in 637-17 the municipality the authority granted by Section 181.042 until the 637-18 10th anniversary of the date of the incorporation. 637-19 (b) After that period, to continue to exercise the authority 637-20 in the municipality the electric utility must have the consent of 637-21 the governing body of the municipality. 637-22 (c) The governing body of the municipality may require the 637-23 electric utility to relocate a pole or line, at the utility's own 637-24 expense, to allow the widening or straightening of a street. To 637-25 impose a requirement under this subsection, the governing body of 637-26 the municipality must give to the electric utility 30 days' notice. 637-27 The notice must indicate the new location for the pole or line 638-1 along the right-of-way of the street. 638-2 (d) This section does not prohibit a municipality from 638-3 imposing a tax or special charge for the use of a street as 638-4 authorized by Subchapter B, Chapter 182, Tax Code. (V.A.C.S. 638-5 Art. 1436a, Secs. 1 (part), 1a (part).) 638-6 (Sections 181.048-181.060 reserved for expansion) 638-7 SUBCHAPTER D. PROVISIONS APPLYING TO TELEGRAPH COMPANIES 638-8 Sec. 181.061. DEFINITION. In this subchapter, "telegraph 638-9 company" includes a person, firm, corporation, or association 638-10 engaged in the business of accepting and transmitting messages to 638-11 and from different locations in this state through use of a 638-12 telegraph. (V.A.C.S. Art. 1428 (part).) 638-13 Sec. 181.062. TELEGRAPH CONNECTIONS. A telegraph company 638-14 engaged in business at the same location or in the same 638-15 municipality as another telegraph company shall provide: 638-16 (1) means through which a message may be transferred 638-17 to the lines of the other telegraph company at common locations and 638-18 transmitted to the message's final destination; and 638-19 (2) facilities to assure the transfer of a message in 638-20 compliance with this section. (V.A.C.S. Art. 1428 (part).) 638-21 Sec. 181.063. EXCEPTIONS. (a) A telegraph company is not 638-22 required to transfer a message to another line if: 638-23 (1) the message originated on the company's line; and 638-24 (2) the company can deliver the message directly to 638-25 its intended recipient on the company's lines. 638-26 (b) A telegraph company is not required to receive a message 638-27 from another's line and transmit the message to its final 639-1 destination if the message originated at a location on the 639-2 company's lines. (V.A.C.S. Art. 1429.) 639-3 Sec. 181.064. HEARING AND DETERMINATION. (a) The governing 639-4 body of a municipality or, for an unincorporated area, the 639-5 commissioners court of the county, shall on its own motion or on 639-6 application of at least 100 residents: 639-7 (1) hear evidence as the governing body or 639-8 commissioners court considers necessary; and 639-9 (2) determine whether a connection between different 639-10 lines or other arrangements for transfer of messages is: 639-11 (A) necessary for public convenience; and 639-12 (B) just to the telegraph companies. 639-13 (b) After conducting a hearing and making the determinations 639-14 required by Subsection (a), the governing body or commissioners 639-15 court shall issue an order that: 639-16 (1) includes the findings of the governing body or 639-17 commissioners court; 639-18 (2) specifies the conditions under which the 639-19 arrangements for transfer of messages will be made; and 639-20 (3) specifies the proportion of expense to be paid by 639-21 the owner or operator of each line. (V.A.C.S. Art. 1430.) 639-22 Sec. 181.065. PENALTY. (a) A telegraph company shall 639-23 comply with an order of a municipality's governing body or a 639-24 commissioners court requiring the company to arrange for transfer 639-25 of messages. 639-26 (b) A telegraph company that fails to comply with an order 639-27 is subject to a penalty of $10 for each day of noncompliance, 640-1 payable to the state. The county or district attorney may bring 640-2 suit to recover the penalty. 640-3 (c) A penalty may not be imposed against a telegraph company 640-4 for noncompliance with an order if: 640-5 (1) the company is prevented from making a connection 640-6 through the fault or omission of another company; and 640-7 (2) the fault or omission causes the company's failure 640-8 to connect. (V.A.C.S. Art. 1431.) 640-9 Sec. 181.066. APPEAL. (a) A telegraph company ordered to 640-10 transfer messages under this subchapter has the right to appeal to 640-11 the court having jurisdiction over the matter. 640-12 (b) If the court finds that the telegraph company had 640-13 reasonable grounds for bringing the appeal, the court shall suspend 640-14 any penalty imposed under this subchapter until the appeal is 640-15 finally determined. (V.A.C.S. Art. 1432.) 640-16 (Sections 181.067-181.080 reserved for expansion) 640-17 SUBCHAPTER E. PROVISIONS APPLYING TO TELEPHONE AND 640-18 TELEGRAPH CORPORATIONS 640-19 Sec. 181.081. DEFINITIONS. In this subchapter: 640-20 (1) "Facility" means a pole, pier, abutment, wire, or 640-21 other fixture related to a telephone or magnetic telegraph line. 640-22 (2) "Telegraph corporation" means a corporation 640-23 created to construct and maintain magnetic telegraph lines. 640-24 (3) "Telephone corporation" means a corporation 640-25 created to construct and maintain telephone lines. (V.A.C.S. Arts. 640-26 1416 (part), 1417 (part), 1422 (part).) 640-27 Sec. 181.082. AUTHORITY TO INSTALL FACILITY IN RELATION TO 641-1 PUBLIC PROPERTY. A telephone or telegraph corporation may install 641-2 a facility of the corporation along, on, or across a public road, a 641-3 public street, or public water in a manner that does not 641-4 inconvenience the public in the use of the road, street, or water. 641-5 (V.A.C.S. Art. 1416 (part).) 641-6 Sec. 181.083. AUTHORITY TO CONSTRUCT LINE ON PRIVATE 641-7 PROPERTY. A telephone or telegraph corporation may enter land in 641-8 which a private person or a corporation owns a fee or lesser estate 641-9 to: 641-10 (1) make a preliminary survey or examination to 641-11 prepare for the construction of a telephone or telegraph line; 641-12 (2) change the location of a part of a telephone or 641-13 telegraph line as necessary; or 641-14 (3) construct or repair a telephone or telegraph line. 641-15 (V.A.C.S. Art. 1417 (part).) 641-16 Sec. 181.084. APPROPRIATION OR CONDEMNATION OF LAND. A 641-17 telephone or telegraph corporation has the right to: 641-18 (1) appropriate as much land owned by a private person 641-19 or a corporation as is necessary to construct a facility; or 641-20 (2) condemn land to acquire a right-of-way or other 641-21 interest in the land for the use of the telephone or telegraph 641-22 corporation. (V.A.C.S. Art. 1417 (part).) 641-23 Sec. 181.085. PROHIBITION ON LAND CONTRACT EXCLUDING ANOTHER 641-24 TELEGRAPH UTILITY. A telegraph corporation may not contract with 641-25 an owner of land for the right to construct and maintain a 641-26 telegraph line over the land to the exclusion of the line of 641-27 another telegraph corporation. (V.A.C.S. Art. 1418.) 642-1 Sec. 181.086. LINES IN OR OUTSIDE STATE. A telegraph 642-2 corporation may construct, own, use, or maintain a telegraph line 642-3 in or outside this state. (V.A.C.S. Art. 1419.) 642-4 Sec. 181.087. USE OF ANOTHER'S TELEGRAPH LINE. (a) A 642-5 telegraph corporation may: 642-6 (1) lease the telegraph line of another telegraph 642-7 corporation; 642-8 (2) as the result of a lease or purchase, attach to 642-9 its telegraph line the telegraph line of another telegraph 642-10 corporation; or 642-11 (3) join with any other corporation or association 642-12 to construct, lease, own, use, or maintain a telegraph 642-13 line. 642-14 (b) An action under Subsection (a)(3) must be taken in 642-15 accordance with an agreement made by the directors or managers of 642-16 the telegraph corporations. (V.A.C.S. Art. 1420.) 642-17 Sec. 181.088. CONSOLIDATION OF UTILITIES. (a) A telephone 642-18 or telegraph corporation organized under the law of this state may 642-19 consolidate or otherwise unite with one or more other companies 642-20 organized under the law of a state or the United States if the 642-21 union or consolidation: 642-22 (1) is approved, at a regular meeting of the 642-23 corporation's stockholders, by a vote of persons holding a majority 642-24 of the shares of stock of the corporation; and 642-25 (2) is done with the consent of each other company. 642-26 (b) The company resulting from the consolidation or other 642-27 union may hold, use, and enjoy the rights and privileges given by 643-1 the law of this state to, and has the same liabilities of, a 643-2 company separately organized under the law of this state relating 643-3 to corporations. (V.A.C.S. Art. 1421.) 643-4 Sec. 181.089. MUNICIPAL REGULATION. (a) The appropriate 643-5 authorities of a municipality through which a line of a telephone 643-6 or telegraph corporation is to pass may adopt, by ordinance or 643-7 another method, regulations governing the corporation that specify 643-8 the: 643-9 (1) location of the facilities of the corporation; 643-10 (2) kind of posts that must be used by the 643-11 corporation; or 643-12 (3) height at which the wires of the corporation must 643-13 be placed. 643-14 (b) After the construction of the telephone or telegraph 643-15 line, the appropriate authorities of the municipality, after giving 643-16 the corporation or its agents an opportunity to be heard, may 643-17 direct any change in: 643-18 (1) the construction or location of the facilities; or 643-19 (2) the height at which the corporation must locate 643-20 the wires. (V.A.C.S. Art. 1422 (part).) 643-21 (Sections 181.090-181.100 reserved for expansion) 643-22 SUBCHAPTER F. PROVISIONS APPLYING TO COMMUNITY ANTENNA AND 643-23 CABLE TELEVISION UTILITIES 643-24 Sec. 181.101. DEFINITIONS. In this subchapter: 643-25 (1) "Equipment" means a line, wire, cable, pipe, 643-26 conduit, conductor, pole, or other facility for the transmission of 643-27 community antenna or cable television service. 644-1 (2) "Person" means an individual, firm, or 644-2 corporation. (V.A.C.S. Art. 9021, Sec. 1.) 644-3 Sec. 181.102. AUTHORITY TO INSTALL AND MAINTAIN EQUIPMENT. 644-4 (a) In an unincorporated area, a person in the business of 644-5 providing community antenna or cable television service to the 644-6 public may install and maintain equipment through, under, along, 644-7 across, or over a utility easement, a public road, an alley, or a 644-8 body of public water in accordance with this subchapter. 644-9 (b) The installation and maintenance of the equipment must 644-10 be done in a way that does not unduly inconvenience the public 644-11 using the affected property. (V.A.C.S. Art. 9021, Secs. 2, 3.) 644-12 Sec. 181.103. NOTICE TO STATE OR COUNTY. (a) A person 644-13 proposing to install equipment under Section 181.102 in the 644-14 right-of-way of a state highway or a county road shall give notice 644-15 of the proposal to: 644-16 (1) the Texas Department of Transportation if the 644-17 proposal relates to a state highway; or 644-18 (2) the commissioners court of the county if the 644-19 proposal relates to a county road. 644-20 (b) On receipt of the notice, the department or 644-21 commissioners court may designate the location in the right-of-way 644-22 where the person may install the equipment, if the equipment is not 644-23 to be installed on an existing facility. (V.A.C.S. Art. 9021, 644-24 Secs. 4(a), (b).) 644-25 Sec. 181.104. RELOCATION OF EQUIPMENT TO ALLOW CHANGE TO 644-26 TRAFFIC LANE. (a) The authority of the Texas Department of 644-27 Transportation under this section is limited to equipment installed 645-1 in connection with a state highway. The authority of the 645-2 commissioners court under this section is limited to equipment 645-3 installed in connection with a county road. 645-4 (b) The Texas Department of Transportation or the 645-5 commissioners court of a county may require a person who has 645-6 installed equipment in the right-of-way of a state highway or 645-7 county road to relocate the person's equipment to allow the 645-8 widening or other changing of a traffic lane. 645-9 (c) To impose a requirement under this section, the Texas 645-10 Department of Transportation or the commissioners court, as 645-11 appropriate, must give to the person written notice of the 645-12 requirement not later than the 45th day before the date the 645-13 relocation is to be made. The notice must identify the equipment 645-14 to be relocated and indicate the location in the right-of-way where 645-15 the person may reinstall the equipment. 645-16 (d) The person shall pay the cost of repairing a state 645-17 highway or county road damaged by the relocation. (V.A.C.S. 645-18 Art. 9021, Sec. 4(c).) 645-19 (Sections 181.105-181.900 reserved for expansion) 645-20 SUBCHAPTER Z. MISCELLANEOUS PROVISIONS 645-21 Sec. 181.901. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 645-22 PROTECT UTILITY. (a) The governing body of a general-law 645-23 municipality may adopt an ordinance that applies to a utility using 645-24 the streets and public grounds of the municipality and that 645-25 protects the utility: 645-26 (1) in the free enjoyment of the utility's rights and 645-27 privileges; and 646-1 (2) from interference with the utility's property and 646-2 franchises. 646-3 (b) In this section, "utility" means a person, company, or 646-4 corporation engaged in furnishing water, gas, telephone, light, 646-5 power, or sewage service to the public. (V.A.C.S. Art. 1120 646-6 (part); New.) 646-7 Sec. 181.902. AUTHORITY OF GENERAL-LAW MUNICIPALITY TO 646-8 PREVENT USE OR WASTE OF UTILITY COMMODITY OR SERVICE. (a) The 646-9 governing body of a general-law municipality may adopt an ordinance 646-10 that prevents the free or unauthorized use or the waste of a 646-11 commodity or service furnished by a utility that uses the streets 646-12 and public grounds of the municipality. 646-13 (b) In this section, "utility" has the meaning assigned to 646-14 the term by Section 181.901. (V.A.C.S. Art. 1120 (part); New.) 646-15 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 646-16 SUBCHAPTER A. PAYMENT DATE OF UTILITY BILL 646-17 FOR ELDERLY INDIVIDUAL 646-18 Sec. 182.001. DEFINITIONS 646-19 Sec. 182.002. DELAY OF BILL PAYMENT DATE FOR ELDERLY 646-20 INDIVIDUAL 646-21 Sec. 182.003. REQUEST FOR DELAY 646-22 Sec. 182.004. PROOF OF AGE 646-23 Sec. 182.005. CERTAIN UTILITIES NOT AFFECTED 646-24 (Sections 182.006-182.050 reserved for expansion) 646-25 SUBCHAPTER B. CONFIDENTIALITY OF CUSTOMER INFORMATION 646-26 Sec. 182.051. DEFINITIONS 646-27 Sec. 182.052. CONFIDENTIALITY OF PERSONAL INFORMATION 647-1 Sec. 182.053. FEE 647-2 Sec. 182.054. EXCEPTIONS 647-3 Sec. 182.055. NO CIVIL LIABILITY FROM VIOLATION 647-4 (Sections 182.056-182.100 reserved for expansion) 647-5 SUBCHAPTER C. TESTING OF METERS 647-6 Sec. 182.101. DEFINITIONS 647-7 Sec. 182.102. TESTING OF METER 647-8 Sec. 182.103. UTILITY REPRESENTATIVE; NOTICE 647-9 Sec. 182.104. OFFENSE 647-10 CHAPTER 182. RIGHTS OF UTILITY CUSTOMERS 647-11 SUBCHAPTER A. PAYMENT DATE OF UTILITY BILL 647-12 FOR ELDERLY INDIVIDUAL 647-13 Sec. 182.001. DEFINITIONS. In this subchapter: 647-14 (1) "Elderly individual" means an individual who is 60 647-15 years of age or older. 647-16 (2) "Utility" means an electric, gas, water, or 647-17 telephone utility operated by a public or private entity. 647-18 (V.A.C.S. Art. 1446c-2, Sec. 1.) 647-19 Sec. 182.002. DELAY OF BILL PAYMENT DATE FOR ELDERLY 647-20 INDIVIDUAL. (a) On request by an elderly individual, a utility 647-21 shall delay without penalty the payment date of a bill for 647-22 providing utility service to that individual until the 25th day 647-23 after the date the bill is issued. 647-24 (b) This subchapter applies only to an elderly individual 647-25 who: 647-26 (1) is a residential customer; and 647-27 (2) occupies the entire premises for which a delay is 648-1 requested. (V.A.C.S. Art. 1446c-2, Secs. 2(a), (d).) 648-2 Sec. 182.003. REQUEST FOR DELAY. An elderly individual may 648-3 request that the utility implement the delay under Section 182.002 648-4 for: 648-5 (1) the most recent utility bill; or 648-6 (2) the most recent utility bill and each subsequent 648-7 utility bill. (V.A.C.S. Art. 1446c-2, Sec. 2(b).) 648-8 Sec. 182.004. PROOF OF AGE. A utility may require an 648-9 individual requesting a delay under this subchapter to present 648-10 reasonable proof that the individual is 60 years of age or older. 648-11 (V.A.C.S. Art. 1446c-2, Sec. 2(c).) 648-12 Sec. 182.005. CERTAIN UTILITIES NOT AFFECTED. This 648-13 subchapter does not apply to a utility that: 648-14 (1) does not assess a late payment charge on a 648-15 residential customer; 648-16 (2) does not suspend service before the 26th day after 648-17 the date of the bill for which collection action is taken; and 648-18 (3) is regulated under Title 2. (V.A.C.S. 648-19 Art. 1446c-2, Sec. 2(e).) 648-20 (Sections 182.006-182.050 reserved for expansion) 648-21 SUBCHAPTER B. CONFIDENTIALITY OF CUSTOMER INFORMATION 648-22 Sec. 182.051. DEFINITIONS. In this subchapter: 648-23 (1) "Consumer reporting agency" means a person who, 648-24 for a monetary fee or payment of dues, or on a cooperative 648-25 nonprofit basis, regularly engages in the practice of assembling or 648-26 evaluating consumer credit information or other information 648-27 relating to consumers in order to furnish a consumer report to a 649-1 third party. 649-2 (2) "Governmental body" has the meaning assigned by 649-3 Section 552.003, Government Code. 649-4 (3) "Government-operated utility" means a governmental 649-5 body or an entity governed by a governmental body that, for 649-6 compensation, provides water, wastewater, sewer, gas, garbage, 649-7 electricity, or drainage service. 649-8 (4) "Personal information" means an individual's 649-9 address, telephone number, or social security number. (V.A.C.S. 649-10 Art. 1446h, Sec. 1.) 649-11 Sec. 182.052. CONFIDENTIALITY OF PERSONAL INFORMATION. (a) 649-12 Except as provided by Section 182.054, a government-operated 649-13 utility may not disclose personal information in a customer's 649-14 account record if the customer requests that the 649-15 government-operated utility keep the information confidential. 649-16 (b) A customer may request confidentiality by delivering to 649-17 the government-operated utility an appropriately marked form 649-18 provided under Subsection (c)(3) or any other written request for 649-19 confidentiality. 649-20 (c) A government-operated utility shall include with a bill 649-21 sent to each customer: 649-22 (1) a notice of the customer's right to request 649-23 confidentiality under this subchapter; 649-24 (2) a statement of the amount of any fee applicable to 649-25 the request; and 649-26 (3) a form by which the customer may request 649-27 confidentiality by marking an appropriate box on the form and 650-1 returning it to the government-operated utility. 650-2 (d) A customer may rescind a request for confidentiality by 650-3 providing the government-operated utility written permission to 650-4 disclose personal information. (V.A.C.S. Art. 1446h, Secs. 2, 4.) 650-5 Sec. 182.053. FEE. A government-operated utility may charge 650-6 each customer who requests confidentiality under this subchapter a 650-7 fee not to exceed the administrative cost of complying with the 650-8 request of confidentiality. (V.A.C.S. Art. 1446h, Sec. 3.) 650-9 Sec. 182.054. EXCEPTIONS. This subchapter does not prohibit 650-10 a government-operated utility from disclosing personal information 650-11 in a customer's account record to: 650-12 (1) an official or employee of the state, a political 650-13 subdivision of the state, or the United States acting in an 650-14 official capacity; 650-15 (2) an employee of a utility acting in connection with 650-16 the employee's duties; 650-17 (3) a consumer reporting agency; 650-18 (4) a contractor or subcontractor approved by and 650-19 providing services to the utility, the state, a political 650-20 subdivision of the state, or the United States; 650-21 (5) a person for whom the customer has contractually 650-22 waived confidentiality for personal information; or 650-23 (6) another entity that provides water, wastewater, 650-24 sewer, gas, garbage, electricity, or drainage service for 650-25 compensation. (V.A.C.S. Art. 1446h, Sec. 5.) 650-26 Sec. 182.055. NO CIVIL LIABILITY FROM VIOLATION. A 650-27 government-operated utility or an officer or employee of a 651-1 government-operated utility is immune from civil liability for a 651-2 violation of this subchapter. (V.A.C.S. Art. 1446h, Sec. 6.) 651-3 (Sections 182.056-182.100 reserved for expansion) 651-4 SUBCHAPTER C. TESTING OF METERS 651-5 Sec. 182.101. DEFINITIONS. In this subchapter: 651-6 (1) "Consumer" means a person who obtains electricity 651-7 or gas from a utility. 651-8 (2) "Gas" includes natural gas and artificial gas. 651-9 (3) "Meter" means an instrument or machine used to 651-10 measure and record the use of electricity or gas. 651-11 (4) "Test" includes, in reference to the testing of a 651-12 meter and as necessary to the reading and examination of a meter, 651-13 the authority to break the seal. 651-14 (5) "Utility" means a person, other than a 651-15 governmental entity, who provides for compensation electricity or 651-16 gas for consumption in a municipality. (V.A.C.S. Art. 1124a, 651-17 Secs. 1 (part), 2, 3; New.) 651-18 Sec. 182.102. TESTING OF METER. (a) On complaint by a 651-19 consumer to the governing body of a municipality, an agent or 651-20 employee of the municipality shall examine, read, and test a meter 651-21 that is installed by the utility furnishing the electricity or gas. 651-22 (b) On demand by a consumer to the governing body of a 651-23 municipality, the governing body shall provide the consumer with a 651-24 detailed report stating the results of the examination, reading, 651-25 and test, including: 651-26 (1) whether the meter is in good condition; 651-27 (2) whether the meter functions properly; and 652-1 (3) the amount of electricity or gas used during a 652-2 period designated by the consumer in the demand, not to exceed one 652-3 year. (V.A.C.S. Art. 1124a, Secs. 1 (part), 4.) 652-4 Sec. 182.103. UTILITY REPRESENTATIVE; NOTICE. A utility 652-5 representative may be present during a meter test. The 652-6 municipality shall provide notice to a utility regarding the 652-7 testing of a meter not later than the third day before the date the 652-8 meter test is conducted. (V.A.C.S. Art. 1124a, Sec. 1 (part).) 652-9 Sec. 182.104. OFFENSE. (a) A utility or other person 652-10 commits an offense if the utility or other person fails or refuses 652-11 to allow an agent or employee of a municipality to examine a meter. 652-12 (b) An offense under this section is a misdemeanor 652-13 punishable by a fine not to exceed $200. 652-14 (c) Each day a utility or other person refuses to allow an 652-15 agent or employee of a municipality to examine a meter is a 652-16 separate offense. (V.A.C.S. Art. 1124a, Sec. 5.) 652-17 CHAPTER 183. UTILITY DEPOSITS 652-18 Sec. 183.001. DEFINITIONS 652-19 Sec. 183.002. INTEREST ON DEPOSIT 652-20 Sec. 183.003. RATE OF INTEREST 652-21 Sec. 183.004. INTEREST PAYMENT TO DEPOSITOR 652-22 Sec. 183.005. RETURN OF DEPOSIT 652-23 Sec. 183.006. CRIMINAL PENALTY 652-24 CHAPTER 183. UTILITY DEPOSITS 652-25 Sec. 183.001. DEFINITIONS. In this chapter: 652-26 (1) "Commission" means the Public Utility Commission 652-27 of Texas. 653-1 (2) "Utility" means a person, firm, company, 653-2 corporation, receiver, or trustee who furnishes water, electric, 653-3 gas, or telephone service. (V.A.C.S. Arts. 1440 (part), 1440a 653-4 (part); New.) 653-5 Sec. 183.002. INTEREST ON DEPOSIT. A utility that requires 653-6 the user of a service to pay a money deposit as a condition to 653-7 furnishing the service shall pay interest on the deposit from the 653-8 time the deposit is made. (V.A.C.S. Arts. 1440 (part), 1440a 653-9 (part).) 653-10 Sec. 183.003. RATE OF INTEREST. (a) The commission each 653-11 December 1, or the next regular workday if December 1 is a 653-12 Saturday, Sunday, or legal holiday, shall set the annual interest 653-13 rate for the next calendar year on deposits governed by this 653-14 chapter. 653-15 (b) The commission may not set the rate at an amount that 653-16 exceeds the lesser of: 653-17 (1) 85 percent of the average rate paid over the 653-18 previous 12-month period on United States treasury bills with a 653-19 12-month maturity date; or 653-20 (2) 12 percent. 653-21 (c) The commission may not set the rate at an amount that is 653-22 less than six percent. (V.A.C.S. Arts. 1440 (part), 1440a (part).) 653-23 Sec. 183.004. INTEREST PAYMENT TO DEPOSITOR. A utility 653-24 shall pay interest on the deposit to the depositor or the 653-25 depositor's heirs or assigns annually on demand or sooner if the 653-26 service is discontinued. (V.A.C.S. Arts. 1440 (part), 1440a 653-27 (part).) 654-1 Sec. 183.005. RETURN OF DEPOSIT. (a) When the service is 654-2 discontinued, the utility shall return the deposit and any unpaid 654-3 interest on the deposit to the depositor or the depositor's heirs 654-4 or legal representatives. 654-5 (b) The utility company may deduct from the amount returned 654-6 under Subsection (a) any payments due for the services. (V.A.C.S. 654-7 Arts. 1440 (part), 1440a (part).) 654-8 Sec. 183.006. CRIMINAL PENALTY. (a) A person commits an 654-9 offense if the person violates this chapter. 654-10 (b) An offense under this section is punishable by: 654-11 (1) a fine of not less than $25 and not more than 654-12 $200; 654-13 (2) confinement in jail for not less than six months 654-14 and not more than one year; or 654-15 (3) both the fine and confinement. (V.A.C.S. 654-16 Art. 1440a (part).) 654-17 CHAPTER 184. ELECTRIC AND WATER METERING 654-18 SUBCHAPTER A. GENERAL PROVISIONS 654-19 Sec. 184.001. DEFINITION 654-20 (Sections 184.002-184.010 reserved for expansion) 654-21 SUBCHAPTER B. METERING IN APARTMENTS, CONDOMINIUMS, 654-22 AND MOBILE HOME PARKS 654-23 Sec. 184.011. DEFINITIONS 654-24 Sec. 184.012. NEW CONSTRUCTION OR CONVERSION 654-25 Sec. 184.013. SUBMETERING 654-26 Sec. 184.014. RULES 654-27 (Sections 184.015-184.030 reserved for expansion) 655-1 SUBCHAPTER C. METERING IN RECREATIONAL VEHICLE PARKS 655-2 Sec. 184.031. DEFINITIONS 655-3 Sec. 184.032. METERED SALE UNDER COMMISSION RULES 655-4 Sec. 184.033. METERED SALE UNDER THIS CHAPTER 655-5 Sec. 184.034. COMPUTATION OF CHARGES 655-6 Sec. 184.035. REFUND OF SURCHARGES 655-7 (Sections 184.036-184.050 reserved for expansion) 655-8 SUBCHAPTER D. CENTRAL SYSTEM UTILITIES 655-9 Sec. 184.051. DEFINITIONS 655-10 Sec. 184.052. RULES 655-11 (Sections 184.053-184.070 reserved for expansion) 655-12 SUBCHAPTER E. LIABILITY FOR RULE VIOLATION 655-13 Sec. 184.071. LIABILITY 655-14 CHAPTER 184. ELECTRIC AND WATER METERING 655-15 SUBCHAPTER A. GENERAL PROVISIONS 655-16 Sec. 184.001. DEFINITION. In this chapter, "commission" 655-17 means the Public Utility Commission of Texas. (New.) 655-18 (Sections 184.002-184.010 reserved for expansion) 655-19 SUBCHAPTER B. METERING IN APARTMENTS, CONDOMINIUMS, 655-20 AND MOBILE HOME PARKS 655-21 Sec. 184.011. DEFINITIONS. In this subchapter: 655-22 (1) "Apartment house" means one or more buildings 655-23 containing more than five dwelling units each of which is rented 655-24 primarily for nontransient use with rent paid at intervals of one 655-25 week or longer. The term includes a rented or owner-occupied 655-26 residential condominium. 655-27 (2) "Dwelling unit" means: 656-1 (A) one or more rooms that are suitable for 656-2 occupancy as a residence and that contain kitchen and bathroom 656-3 facilities; or 656-4 (B) a mobile home in a mobile home park. 656-5 (V.A.C.S. Art. 1446d, Sec. 1.) 656-6 Sec. 184.012. NEW CONSTRUCTION OR CONVERSION. (a) A 656-7 political subdivision may not authorize the construction or 656-8 occupancy of a new apartment house, including the conversion of 656-9 property to a condominium, unless the construction plan provides 656-10 for the measurement of the quantity of electricity consumed by the 656-11 occupants of each dwelling unit of the apartment house, either by 656-12 individual metering by the utility company or by submetering by the 656-13 owner. 656-14 (b) This section does not prohibit a political subdivision 656-15 from issuing a permit to a nonprofit organization for construction 656-16 of a new apartment house for occupancy by low-income elderly 656-17 tenants if the nonprofit organization establishes, by submitting 656-18 engineering and cost data and a sworn statement, that all cost 656-19 savings will be passed on to the low-income elderly tenants. 656-20 (V.A.C.S. Art. 1446d, Secs. 2(a), (b).) 656-21 Sec. 184.013. SUBMETERING. (a) The owner of an apartment 656-22 house or mobile home park may submeter each dwelling unit in the 656-23 apartment house or mobile home park to measure the quantity of 656-24 electricity consumed by the occupants of the dwelling unit. 656-25 (b) Electric submetering equipment is subject to: 656-26 (1) the same rules adopted by the commission for 656-27 accuracy, testing, and recordkeeping of meters installed by 657-1 electric utilities; and 657-2 (2) the meter testing requirements of Subchapter C, 657-3 Chapter 38. 657-4 (c) If not more than 90 days before the date an owner, 657-5 operator, or manager of an apartment house installs individual 657-6 meters or submeters in the apartment house the owner, operator, or 657-7 manager increases rental rates and the increase in rental rates is 657-8 attributable to the increased cost of utilities, the owner, 657-9 operator, or manager, on installation of the meters or submeters, 657-10 shall: 657-11 (1) immediately reduce the rental rate by the amount 657-12 of the increase attributable to the increased cost of utilities; 657-13 and 657-14 (2) refund the amount of the increased rent: 657-15 (A) collected in the 90-day period preceding the 657-16 installation of the meters or submeters; and 657-17 (B) attributable to the cost of increased 657-18 utilities. (V.A.C.S. Art. 1446d, Secs. 2(c), 3 (part), 4.) 657-19 Sec. 184.014. RULES. (a) The commission shall adopt rules 657-20 under which an owner, operator, or manager of an apartment house or 657-21 mobile home park for which electricity is not individually metered 657-22 may install submetering equipment to allocate fairly the cost of 657-23 the electrical consumption of each dwelling unit in the apartment 657-24 house or mobile home park. 657-25 (b) In addition to other appropriate safeguards for a tenant 657-26 of an apartment house or mobile home park, a rule adopted under 657-27 Subsection (a) must provide that: 658-1 (1) the apartment house owner or a mobile home park 658-2 owner may not charge a tenant more than the cost per kilowatt hour 658-3 charged by the utility to the owner; and 658-4 (2) the apartment house owner shall maintain adequate 658-5 records relating to submetering and make those records available 658-6 for inspection by the tenant during reasonable business hours. 658-7 (c) A rule adopted under this section has the same effect as 658-8 a rule adopted under Title 2, and a utility company and the owner, 658-9 operator, or manager of an apartment house subject to this 658-10 subchapter is subject to enforcement under Sections 15.021, 15.022, 658-11 15.028, 15.029, 15.030, 15.031, 15.032, and 15.033. (V.A.C.S. 658-12 Art. 1446d, Sec. 3 (part).) 658-13 (Sections 184.015-184.030 reserved for expansion) 658-14 SUBCHAPTER C. METERING IN RECREATIONAL VEHICLE PARKS 658-15 Sec. 184.031. DEFINITIONS. In this subchapter: 658-16 (1) "Recreational vehicle" has the meaning assigned by 658-17 Section 522.004(b), Transportation Code. 658-18 (2) "Supplying utility" means the electric utility 658-19 from which a recreational vehicle park owner purchases electricity 658-20 consumed at the recreational vehicle park. (V.A.C.S. Art. 1446d-2, 658-21 Sec. 1.) 658-22 Sec. 184.032. METERED SALE UNDER COMMISSION RULES. The 658-23 metered sale of electricity by a recreational vehicle park owner in 658-24 compliance with submetering rules adopted by the commission under 658-25 Title 2 does not constitute the provision of electric service for 658-26 compensation. (V.A.C.S. Art. 1446d-2, Sec. 2 (part).) 658-27 Sec. 184.033. METERED SALE UNDER THIS CHAPTER. 659-1 Notwithstanding any provision of Title 2, the metered sale of 659-2 electricity by a recreational vehicle park owner does not 659-3 constitute the provision of electric service for compensation if: 659-4 (1) the electricity is consumed in a recreational 659-5 vehicle that is located in a recreational vehicle park; 659-6 (2) the owner can show that the owner does not 659-7 annually recover from recreational vehicle occupants through 659-8 metered charges more than the supplying utility charges the owner 659-9 for electricity that is submetered, taking into account fuel 659-10 refunds; 659-11 (3) the owner establishes a fiscal year for the 659-12 purposes of this subchapter and maintains for at least three years 659-13 records of: 659-14 (A) bills received from the supplying utility; 659-15 (B) charges made to recreational vehicle 659-16 occupants; and 659-17 (C) consumption records for each fiscal year; 659-18 (4) the owner charges for electricity using a fixed 659-19 rate per kilowatt hour for each fiscal year computed at the 659-20 beginning of the fiscal year in the manner provided by Section 659-21 184.034; and 659-22 (5) the owner complies with the refund requirements of 659-23 Section 184.035. (V.A.C.S. Art. 1446d-2, Sec. 2 (part).) 659-24 Sec. 184.034. COMPUTATION OF CHARGES. (a) For the purposes 659-25 of computing the charge for electricity under Section 184.033(4), 659-26 the recreational vehicle park owner shall divide the amount charged 659-27 the owner by the supplying utility for the preceding fiscal year by 660-1 the total number of kilowatt hours consumed by occupants visiting 660-2 the park in the preceding fiscal year and round the quotient to the 660-3 nearest cent. 660-4 (b) If since or during the preceding fiscal year the 660-5 supplying utility increases its rates, the owner may recompute the 660-6 preceding fiscal year's charges by the utility using the current 660-7 rates charged by the utility. 660-8 (c) If since or during the preceding fiscal year the 660-9 supplying utility decreases its rates, the owner shall recompute 660-10 the preceding fiscal year's charges by the utility using the 660-11 current rates charged by the utility. 660-12 (d) An owner may not: 660-13 (1) include a charge by the supplying utility for 660-14 electricity used in a common area or office of the recreational 660-15 vehicle park in computing the amounts under Subsection (b) or (c); 660-16 or 660-17 (2) recover that charge through a metered charge to a 660-18 recreational vehicle occupant. (V.A.C.S. Art. 1446d-2, Sec. 2 660-19 (part).) 660-20 Sec. 184.035. REFUND OF SURCHARGES. A recreational vehicle 660-21 park owner who determines at the end of a fiscal year that the 660-22 owner has collected more than the amount charged by the supplying 660-23 utility shall refund the excess amount to occupants visiting the 660-24 park in the succeeding fiscal year. (V.A.C.S. Art. 1446d-2, Sec. 2 660-25 (part).) 660-26 (Sections 184.036-184.050 reserved for expansion) 661-1 SUBCHAPTER D. CENTRAL SYSTEM UTILITIES 661-2 Sec. 184.051. DEFINITIONS. In this subchapter: 661-3 (1) "Apartment house" means one or more buildings 661-4 containing two or more dwelling units rented primarily for 661-5 nontransient use with rent paid at intervals of one week or longer. 661-6 (2) "Apartment house owner" means the legal 661-7 titleholder of an apartment house or an individual, firm, or 661-8 corporation purporting to be the landlord of tenants in the 661-9 apartment house. 661-10 (3) "Central system utilities" means electricity and 661-11 water consumed by and wastewater services related to a central air 661-12 conditioning system, central heating system, central hot water 661-13 system, or central chilled water system in an apartment house. The 661-14 term does not include utilities directly consumed in a dwelling 661-15 unit. 661-16 (4) "Customer" means an individual, firm, or 661-17 corporation in whose name a master meter is connected by a utility. 661-18 (5) "Dwelling unit" means one or more rooms that are 661-19 suitable for occupancy as a residence and that contain kitchen and 661-20 bathroom facilities. 661-21 (6) "Nonsubmetered master metered utility service" 661-22 means an electric utility service that is master metered for an 661-23 apartment house but is not submetered. 661-24 (7) "Tenant" means a person who is entitled to occupy 661-25 a dwelling unit in an apartment house to the exclusion of others 661-26 and who is obligated to pay for the occupancy under a written or 661-27 oral rental agreement. 662-1 (8) "Utility" means a public, private, or member-owned 662-2 utility that provides electricity, water, or wastewater service to 662-3 an apartment house served by a master meter. (V.A.C.S. Art. 1446f, 662-4 Sec. 1.) 662-5 Sec. 184.052. RULES. (a) The commission shall adopt rules 662-6 governing billing systems or methods used by an apartment house 662-7 owner to prorate or allocate among tenants central system utility 662-8 costs or nonsubmetered master metered utility service costs. 662-9 (b) In addition to other appropriate safeguards for a tenant 662-10 of an apartment house, a rule adopted under this section must 662-11 require that: 662-12 (1) a rental agreement contain: 662-13 (A) a clear written description of the method of 662-14 computing the allocation of central system utilities or 662-15 nonsubmetered master metered utilities for the apartment house; and 662-16 (B) a statement of the average apartment unit 662-17 monthly bill for all apartment units for any allocation of central 662-18 system utilities' costs or nonsubmetered master metered utility 662-19 service costs for the previous calendar year; and 662-20 (2) the apartment house owner: 662-21 (A) not impose a charge on a tenant in excess of 662-22 the actual charge imposed on the owner for utility consumption by 662-23 the apartment house; and 662-24 (B) maintain adequate records, including utility 662-25 bills and records concerning the central system utility or 662-26 nonsubmetered master metered utility service consumption of the 662-27 apartment house, the charges assessed by the utility, and the 663-1 allocation of central system utilities' costs or nonsubmetered 663-2 master metered utility service costs to the tenants and make the 663-3 records available for inspection by the tenants during normal 663-4 business hours. 663-5 (c) A rule adopted under this section has the same effect as 663-6 a rule adopted under Title 2, and an owner, operator, or manager of 663-7 an apartment house subject to this subchapter is subject to 663-8 enforcement under Sections 15.021, 15.022, 15.028, 15.029, 15.030, 663-9 15.031, 15.032, and 15.033. (V.A.C.S. Art. 1446f, Sec. 2.) 663-10 (Sections 184.053-184.070 reserved for expansion) 663-11 SUBCHAPTER E. LIABILITY FOR RULE VIOLATION 663-12 Sec. 184.071. LIABILITY. (a) A landlord who violates a 663-13 commission rule relating to submetering of electric utilities 663-14 consumed exclusively in a tenant's dwelling unit or a rule relating 663-15 to the allocation of central system utility costs or nonsubmetered 663-16 master metered electric utility costs is liable to the tenant for: 663-17 (1) three times the amount of any overcharge; 663-18 (2) a civil penalty equal to one month's rent; 663-19 (3) reasonable attorney's fees; and 663-20 (4) court costs. 663-21 (b) A landlord is not liable for the civil penalty provided 663-22 by Subsection (a)(2) if the landlord proves that the landlord's 663-23 violation of the rule was an unintentional mistake made in good 663-24 faith. (V.A.C.S. Art. 1446g.) 663-25 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 663-26 Sec. 185.001. DEFINITIONS 663-27 Sec. 185.002. COMPLIANCE 664-1 Sec. 185.003. ADOPTION OF STANDARDS 664-2 Sec. 185.004. USE OF NATIONAL STANDARDS 664-3 Sec. 185.005. REVIEW OF STANDARDS 664-4 CHAPTER 185. RATING OF SOLAR ENERGY DEVICES 664-5 Sec. 185.001. DEFINITIONS. In this chapter: 664-6 (1) "Commission" means the Public Utility Commission 664-7 of Texas. 664-8 (2) "Solar energy device" means a solar energy 664-9 collector or solar energy system that provides for the collection 664-10 of solar energy or the subsequent use of that energy as thermal, 664-11 mechanical, or electrical energy. (V.A.C.S. Art. 1446c-1, Sec. 1.) 664-12 Sec. 185.002. COMPLIANCE. A person who rates, labels, or 664-13 certifies the performance of a solar energy device in this state 664-14 shall comply with the standards adopted by the commission under 664-15 this chapter. (V.A.C.S. Art. 1446c-1, Sec. 5.) 664-16 Sec. 185.003. ADOPTION OF STANDARDS. (a) The commission 664-17 shall study and adopt standards for rating solar energy devices. 664-18 The standards shall be used in performance labeling and 664-19 certification of solar energy devices in this state. 664-20 (b) The commission shall examine rating standards and 664-21 certification programs used by other states and by industry in 664-22 adopting standards under this section. 664-23 (c) The commission shall adopt the standards that the 664-24 commission finds are the most widely used unless the commission 664-25 finds that those standards are not suitable for use in this state. 664-26 If the commission finds that a widely used standard is not 664-27 suitable, the commission may amend the standard or adopt a standard 665-1 that the commission finds suitable. (V.A.C.S. Art. 1446c-1, Sec. 665-2 2.) 665-3 Sec. 185.004. USE OF NATIONAL STANDARDS. If national 665-4 standards for rating and certifying solar energy devices are 665-5 developed by a federal agency in conjunction with the states and 665-6 industry, the commission shall adopt those national standards as 665-7 the standards for use in this state. (V.A.C.S. Art. 1446c-1, Sec. 665-8 4.) 665-9 Sec. 185.005. REVIEW OF STANDARDS. The commission shall 665-10 periodically review the standards adopted under this chapter and 665-11 shall amend those standards as necessary to ensure that the 665-12 standards are: 665-13 (1) appropriate in view of current technology; and 665-14 (2) the same as or similar to the standards widely 665-15 used by other states and by industry. (V.A.C.S. Art. 1446c-1, Sec. 665-16 3.) 665-17 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY 665-18 AND INTEGRITY OF UTILITY SERVICE 665-19 SUBCHAPTER A. CONTINUITY OF UTILITY SERVICE 665-20 Sec. 186.001. DEFINITION 665-21 Sec. 186.002. POLICY 665-22 Sec. 186.003. ENFORCEMENT BY EXECUTIVE DEPARTMENT 665-23 Sec. 186.004. UNLAWFUL PICKETING, THREATS, OR 665-24 INTIMIDATION 665-25 Sec. 186.005. RESTRAINING ORDER 665-26 Sec. 186.006. EMPLOYEE RIGHTS 665-27 (Sections 186.007-186.020 reserved for expansion) 666-1 SUBCHAPTER B. MANIPULATION OF SERVICE FOR CERTAIN LAW 666-2 ENFORCEMENT PURPOSES 666-3 Sec. 186.021. EMERGENCY INVOLVING HOSTAGE OR ARMED SUSPECT 666-4 (Sections 186.022-186.030 reserved for expansion) 666-5 SUBCHAPTER C. FRAUDULENT OBTAINING OF SERVICE 666-6 Sec. 186.031. DEFINITIONS 666-7 Sec. 186.032. FRAUDULENTLY OBTAINING TELECOMMUNICATIONS 666-8 SERVICES 666-9 Sec. 186.033. DISPOSITION OF CERTAIN EQUIPMENT 666-10 (Sections 186.034-186.040 reserved for expansion) 666-11 SUBCHAPTER D. AVAILABILITY OF EMERGENCY TELEPHONE SERVICE 666-12 Sec. 186.041. DEFINITIONS 666-13 Sec. 186.042. OBSTRUCTION OF EMERGENCY TELEPHONE CALL; 666-14 PENALTY 666-15 Sec. 186.043. FALSIFICATION OF EMERGENCY TELEPHONE CALL; 666-16 PENALTY 666-17 Sec. 186.044. NOTICE OF CERTAIN OFFENSES REQUIRED 666-18 Sec. 186.045. FAILURE TO PROVIDE NOTICE; PENALTY 666-19 CHAPTER 186. PROVISIONS TO ENSURE THE RELIABILITY 666-20 AND INTEGRITY OF UTILITY SERVICE 666-21 SUBCHAPTER A. CONTINUITY OF UTILITY SERVICE 666-22 Sec. 186.001. DEFINITION. In this subchapter, "public 666-23 utility" means a private corporation that does business in this 666-24 state and has the right of eminent domain, a municipality, or a 666-25 state agency, authority, or subdivision engaged in the business of: 666-26 (1) generating, transmitting, or distributing electric 666-27 energy to the public; 667-1 (2) producing, transmitting, or distributing natural 667-2 or artificial gas to the public; or 667-3 (3) furnishing water to the public. (V.A.C.S. 667-4 Art. 1446a, Sec. 2.) 667-5 Sec. 186.002. POLICY. (a) Continuous service by a public 667-6 utility is essential to the life, health, and safety of the public. 667-7 A person's wilful interruption of that service is a public calamity 667-8 that cannot be endured. 667-9 (b) A public utility is dedicated to public service. The 667-10 primary duty of a public utility, including its management and 667-11 employees, is to maintain continuous and adequate service at all 667-12 times to protect the safety and health of the public against the 667-13 danger inherent in the interruption of service. 667-14 (c) Each court and administrative agency of this state 667-15 shall: 667-16 (1) recognize the policy stated in this section; and 667-17 (2) interpret and apply this subchapter in accordance 667-18 with that policy. (V.A.C.S. Art. 1446a, Sec. 1.) 667-19 Sec. 186.003. ENFORCEMENT BY EXECUTIVE DEPARTMENT. In 667-20 accordance with Section 186.002, the governor, and the department 667-21 of the executive branch of government under the governor's 667-22 direction, shall exercise all power available under the 667-23 constitution and laws of this state to protect the public from 667-24 dangers incident to an interruption in water, electric, or gas 667-25 utility service in this state that occurs because of a violation of 667-26 this subchapter. (V.A.C.S. Art. 1446a, Sec. 6.) 667-27 Sec. 186.004. UNLAWFUL PICKETING, THREATS, OR INTIMIDATION. 668-1 (a) A person may not: 668-2 (1) picket the plant, premises, or other property of a 668-3 public utility with intent to disrupt the service of that utility 668-4 or to prevent the maintenance of that service; or 668-5 (2) engage in picketing that has the effect of 668-6 disrupting the service of a public utility or preventing the 668-7 maintenance of that service. 668-8 (b) A person may not: 668-9 (1) intimidate, threaten, or harass an employee of a 668-10 public utility with intent to disrupt the service of the utility or 668-11 prevent the maintenance of that service; or 668-12 (2) intimidate, threaten, or harass an employee of a 668-13 public utility if that conduct has the effect of disrupting the 668-14 service of the utility or preventing the maintenance of that 668-15 service. (V.A.C.S. Art. 1446a, Sec. 3.) 668-16 Sec. 186.005. RESTRAINING ORDER. (a) A district court 668-17 shall immediately inquire into the matter if a public utility 668-18 presents a verified petition to the court: 668-19 (1) alleging that in the judicial district of the 668-20 court a person is violating or threatening to violate Section 668-21 186.004 and that the violation or threatened violation will 668-22 interfere with the maintenance of adequate water, electric, or gas 668-23 service; and 668-24 (2) describing the acts committed in violation of 668-25 Section 186.004, or the threatened acts that, if committed, will 668-26 violate Section 186.004. 668-27 (b) If it appears that there is a violation or threatened 669-1 violation of Section 186.004, the court shall immediately issue an 669-2 order restraining the person, the person's agent, and any other 669-3 person acting with them from committing an act prohibited by that 669-4 section. 669-5 (c) A restraining order issued under this section is 669-6 effective when the petitioner files with the clerk of the court a 669-7 good and sufficient bond in an amount set by the court to cover 669-8 court costs that may reasonably accrue in connection with the case. 669-9 A judgment rendered in the case may not be superseded pending 669-10 appeal. 669-11 (d) Venue for a suit under this section is in any judicial 669-12 district in which the violation or threat to violate occurs. 669-13 (V.A.C.S. Art. 1446a, Sec. 4.) 669-14 Sec. 186.006. EMPLOYEE RIGHTS. This subchapter does not 669-15 limit the right of an employee of a public utility to: 669-16 (1) quit work and leave the employer's premises at any 669-17 time the employee chooses; or 669-18 (2) refuse to report for work when the employee does 669-19 not want to report. (V.A.C.S. Art. 1446a, Sec. 7.) 669-20 (Sections 186.007-186.020 reserved for expansion) 669-21 SUBCHAPTER B. MANIPULATION OF SERVICE FOR CERTAIN LAW 669-22 ENFORCEMENT PURPOSES 669-23 Sec. 186.021. EMERGENCY INVOLVING HOSTAGE OR ARMED SUSPECT. 669-24 (a) In an emergency in which the supervising law enforcement 669-25 official having jurisdiction in the geographical area has probable 669-26 cause to believe that an armed and barricaded suspect or a person 669-27 holding a hostage is committing a crime, the supervising law 670-1 enforcement official may order a designated telephone company 670-2 security official to cut or otherwise control telephone lines to 670-3 prevent telephone communication by the armed suspect or the hostage 670-4 holder with a person other than a peace officer or person 670-5 authorized by a peace officer. 670-6 (b) The serving telephone company in the geographical area 670-7 of a law enforcement unit shall designate a telephone company 670-8 security official and an alternate to provide all required 670-9 assistance to law enforcement officials to carry out this section. 670-10 (c) Good faith reliance on an order given by a supervising 670-11 law enforcement official under this section is a complete defense 670-12 to a civil or criminal action brought against a telephone company 670-13 or the company's director, officer, agent, or employee as a result 670-14 of compliance with the order. (V.A.C.S. Art. 1432b.) 670-15 (Sections 186.022-186.030 reserved for expansion) 670-16 SUBCHAPTER C. FRAUDULENT OBTAINING OF SERVICE 670-17 Sec. 186.031. DEFINITIONS. In this subchapter: 670-18 (1) "Publish" means to communicate information to 670-19 another by any means. 670-20 (2) "Telecommunications service" means the 670-21 transmission of a message or other information by a public utility, 670-22 including a telephone or telegraph company. (V.A.C.S. Art. 1446b, 670-23 Sec. 1.) 670-24 Sec. 186.032. FRAUDULENTLY OBTAINING TELECOMMUNICATIONS 670-25 SERVICES. (a) A person commits an offense if: 670-26 (1) knowing that another will use the published 670-27 information to avoid payment of a charge for telecommunications 671-1 service, the person publishes: 671-2 (A) an existing, cancelled, revoked, or 671-3 nonexistent telephone number; 671-4 (B) a credit number or other credit device; or 671-5 (C) a method of numbering or coding that is used 671-6 in issuing telephone numbers or credit devices, including credit 671-7 numbers; or 671-8 (2) the person makes or possesses equipment 671-9 specifically designed to be used fraudulently to avoid charges for 671-10 telecommunications service. 671-11 (b) An offense under this section is a misdemeanor 671-12 punishable by a fine of not more than $500, by confinement in jail 671-13 for not more than 60 days, or by both, unless the person has been 671-14 previously convicted of an offense under this section. A second or 671-15 subsequent offense is a felony punishable by a fine of not more 671-16 than $5,000, by imprisonment in the penitentiary for not less than 671-17 two years and not more than five years, or by both. 671-18 (c) This section does not apply to an employee of a public 671-19 utility who provides telecommunications service while acting in the 671-20 course of employment. (V.A.C.S. Art. 1446b, Secs. 2, 4.) 671-21 Sec. 186.033. DISPOSITION OF CERTAIN EQUIPMENT. (a) A 671-22 peace officer may seize equipment described by Section 671-23 186.032(a)(2) under a warrant or incident to a lawful arrest. 671-24 (b) If the person who possessed equipment seized under 671-25 Subsection (a) is convicted under Section 186.032, the court 671-26 entering the judgment of conviction shall order the sheriff to 671-27 destroy the equipment. (V.A.C.S. Art. 1446b, Sec. 3.) 672-1 (Sections 186.034-186.040 reserved for expansion) 672-2 SUBCHAPTER D. AVAILABILITY OF EMERGENCY TELEPHONE SERVICE 672-3 Sec. 186.041. DEFINITIONS. In this subchapter: 672-4 (1) "Emergency" means a situation in which property or 672-5 human life is in jeopardy and the prompt summoning of aid is 672-6 essential. 672-7 (2) "Party line" means a subscriber's telephone 672-8 circuit, consisting of two or more main telephone stations 672-9 connected with the circuit, each station with a distinctive ring or 672-10 telephone number. (V.A.C.S. Art. 1432a, Sec. 3.) 672-11 Sec. 186.042. OBSTRUCTION OF EMERGENCY TELEPHONE CALL; 672-12 PENALTY. (a) A person commits an offense if: 672-13 (1) the person wilfully refuses to relinquish a party 672-14 line immediately on being informed that the line is needed for an 672-15 emergency call described by Subdivision (2); and 672-16 (2) the party line is needed for an emergency call: 672-17 (A) to a fire or police department; or 672-18 (B) for medical aid or an ambulance service. 672-19 (b) An offense under this section is a misdemeanor 672-20 punishable by: 672-21 (1) a fine of not less than $25 and not more than 672-22 $500; 672-23 (2) confinement in the county jail for not more than 672-24 one month; or 672-25 (3) both fine and confinement. (V.A.C.S. Art. 1432a, 672-26 Sec. 1.) 672-27 Sec. 186.043. FALSIFICATION OF EMERGENCY TELEPHONE CALL; 673-1 PENALTY. (a) A person commits an offense if the person secures 673-2 the use of a party line by falsely stating that the line is needed 673-3 for an emergency call: 673-4 (1) to a fire or police department; or 673-5 (2) for medical aid or an ambulance service. 673-6 (b) An offense under this section is a misdemeanor 673-7 punishable by: 673-8 (1) a fine of not less than $25 and not more than 673-9 $500; 673-10 (2) confinement in the county jail for not more than 673-11 one month; or 673-12 (3) both fine and confinement. (V.A.C.S. Art. 1432a, 673-13 Sec. 2.) 673-14 Sec. 186.044. NOTICE OF CERTAIN OFFENSES REQUIRED. (a) A 673-15 telephone directory distributed to the public in this state that 673-16 lists the telephone numbers of an exchange located in this state 673-17 must contain a notice explaining the offenses under Sections 673-18 186.042 and 186.043. The notice must be: 673-19 (1) printed in type not smaller than the smallest type 673-20 on the same page; and 673-21 (2) preceded by the word "warning" printed in type at 673-22 least as large as the largest type on the same page. 673-23 (b) At least once each year, a person providing telephone 673-24 service shall enclose in the telephone bill mailed to each person 673-25 who uses a party line telephone a notice of Sections 186.042 and 673-26 186.043. 673-27 (c) This section does not apply to a directory, commonly 674-1 known as a classified directory, that is distributed solely for 674-2 business advertising purposes. (V.A.C.S. Art. 1432a, Sec. 4 674-3 (part).) 674-4 Sec. 186.045. FAILURE TO PROVIDE NOTICE; PENALTY. (a) A 674-5 person providing telephone service commits an offense if the 674-6 person: 674-7 (1) distributes copies of a telephone directory 674-8 subject to Section 186.044(a) from which the notice required by 674-9 that section is wilfully omitted; or 674-10 (2) wilfully fails to enclose in telephone bills the 674-11 notice required by Section 186.044(b). 674-12 (b) An offense under this section is a misdemeanor 674-13 punishable by a fine of not less than $25 and not more than $500. 674-14 (V.A.C.S. Art. 1432a, Sec. 4 (part).) 674-15 SECTION 2. CONFORMING AMENDMENT. Title 4, Water Code, is 674-16 amended by adding Chapter 67 to read as follows: 674-17 CHAPTER 67. WATER SUPPLY OR SEWER SERVICE CORPORATIONS 674-18 Sec. 67.001. DEFINITIONS. In this chapter: 674-19 (1) "Board" means the board of directors of a 674-20 corporation. 674-21 (2) "Corporation" means a water supply or sewer 674-22 service corporation operating under this chapter. 674-23 (3) "Director" means a member of the board of 674-24 directors. (New.) 674-25 Sec. 67.002. PURPOSE OF CORPORATION. A corporation may be 674-26 organized under this chapter to provide: 674-27 (1) water supply, sewer service, or both for a 675-1 municipality, a private corporation, an individual, or a military 675-2 camp or base; or 675-3 (2) flood control and a drainage system for a 675-4 political subdivision or for another person. (V.A.C.S. Art. 1434a, 675-5 Sec. 1 (part).) 675-6 Sec. 67.003. CREATION OF CORPORATION. (a) Three or more 675-7 individuals who are citizens of this state may form a corporation 675-8 by making an application to the secretary of state in the same 675-9 manner as provided by law for an application for a private 675-10 corporation. 675-11 (b) The application for charter must include the number of 675-12 directors and the name of each director. 675-13 (c) The name designated for the corporation must include the 675-14 words "Water Supply Corporation." (V.A.C.S. Art. 1434a, Secs. 1 675-15 (part), 3(a) (part).) 675-16 Sec. 67.004. APPLICATION OF TEXAS NON-PROFIT CORPORATION 675-17 ACT. To the extent it does not conflict with this chapter, the 675-18 Texas Non-Profit Corporation Act (Article 1396-1.01 et seq., 675-19 Vernon's Texas Civil Statutes) applies to a corporation created 675-20 under: 675-21 (1) this chapter; or 675-22 (2) Chapter 76, Acts of the 43rd Legislature, 1st 675-23 Called Session, 1933 (Article 1434a, Vernon's Texas Civil 675-24 Statutes). (V.A.C.S. Art. 1434a, Sec. 2(d).) 675-25 Sec. 67.005. DIRECTORS. (a) A corporation may not have 675-26 more than 21 directors. 675-27 (b) The corporation may increase the number of directors by 676-1 amendment to the bylaws but may not exceed the limit imposed by 676-2 Subsection (a). 676-3 (c) The bylaws of the corporation may provide that directors 676-4 serve staggered terms of approximately two or three years. 676-5 (d) At the first annual meeting of the shareholders, the 676-6 directors shall be divided into two or three classes according to 676-7 the length of the terms the directors serve. The classification of 676-8 directors may not take effect before that meeting. 676-9 (e) The division of the directors and the corresponding 676-10 terms must be set so that: 676-11 (1) one-half of the directors, as nearly as possible, 676-12 are elected annually, if a two-year term is provided; or 676-13 (2) one-third of the directors, as nearly as possible, 676-14 are elected annually, if a three-year term is provided. 676-15 (f) After the implementation of two-year or three-year terms 676-16 for directors, as directors' terms expire, the members shall elect 676-17 their successors to serve until the second or third succeeding 676-18 annual meeting after their election, as appropriate. (V.A.C.S. 676-19 Art. 1434a, Secs. 3(a) (part), (b).) 676-20 Sec. 67.006. OFFICERS. (a) The board shall elect a 676-21 president, a vice president, and a secretary-treasurer following 676-22 the issuance of a charter and after each annual meeting of the 676-23 membership or shareholders. 676-24 (b) The board may require a bond of an officer for faithful 676-25 performance of the officer's duties. 676-26 (c) The salary of an officer of the corporation other than 676-27 secretary-treasurer or a manager employed under Section 67.012 may 677-1 not exceed $5,000 a year. The board shall set the 677-2 secretary-treasurer's salary at an amount commensurate with the 677-3 secretary-treasurer's duties. (V.A.C.S. Art. 1434a, Sec. 5 677-4 (part).) 677-5 Sec. 67.007. ANNUAL MEETING. The annual meeting of the 677-6 members or shareholders of the corporation must be held between 677-7 January 1 and May 1 at a time specified by the bylaws or the board. 677-8 (V.A.C.S. Art. 1434a, Sec. 5 (part).) 677-9 Sec. 67.008. DISTRIBUTION OF PROFITS. (a) The 677-10 incorporators may provide in the charter of the corporation that a 677-11 dividend will not be paid on the stock and that all profits of the 677-12 corporation will be paid annually to political subdivisions or 677-13 other persons that have transacted business with the corporation 677-14 during the previous year. 677-15 (b) The corporation shall distribute any profits under 677-16 Subsection (a) in direct proportion to the amount of business the 677-17 corporation transacts with each entity during that year. 677-18 (c) The corporation may not make a distribution under 677-19 Subsection (a) if the corporation has unpaid indebtedness. 677-20 (d) A corporation may allocate to a sinking fund an amount 677-21 of the annual profits as determined necessary by the board for 677-22 maintenance, operation, and replacements. (V.A.C.S. Art. 1434a, 677-23 Sec. 1 (part).) 677-24 Sec. 67.009. FACILITIES. A corporation may construct, 677-25 acquire, lease, improve, or maintain a facility, plant, equipment, 677-26 or appliance helpful or necessary to provide more adequate sewer 677-27 service, flood control, or drainage for a political subdivision. 678-1 (V.A.C.S. Art. 1434a, Sec. 2(c).) 678-2 Sec. 67.010. POWER TO CONTRACT WITH OTHER ENTITIES. (a) A 678-3 corporation may enter into a contract with any political 678-4 subdivision, federal agency, or other entity for the acquisition, 678-5 construction, or maintenance of a project or improvement for an 678-6 authorized purpose. 678-7 (b) A corporation may obtain money from any political 678-8 subdivision of this state, federal agency, or other entity to 678-9 finance the acquisition or construction of a project or improvement 678-10 for an authorized purpose. 678-11 (c) A corporation may encumber the project or improvement 678-12 and may encumber any revenue derived from the operation of the 678-13 project or improvement. The corporation may issue bonds, notes, or 678-14 warrants to secure payment of funds received. Indebtedness 678-15 authorized by this subsection is a charge only on specifically 678-16 encumbered property and revenues and is not a general obligation of 678-17 indebtedness of the corporation. 678-18 (d) A political subdivision may contract with a corporation 678-19 under Section 402.014, Local Government Code, to carry out this 678-20 chapter. (V.A.C.S. Art. 1434a, Secs. 2(a), (b).) 678-21 Sec. 67.011. POWERS OF CORPORATION IN CERTAIN COUNTIES. In 678-22 a county with a population of less than 2 million, a corporation 678-23 may: 678-24 (1) own, hold, lease, or otherwise acquire water 678-25 wells, springs, or other sources of water supply; 678-26 (2) build, operate, and maintain pipelines to 678-27 transport water or wastewater; 679-1 (3) build and operate plants and equipment necessary 679-2 to distribute water or to treat and dispose of wastewater; and 679-3 (4) sell water or provide wastewater services to a 679-4 political subdivision, a private corporation, or an individual. 679-5 (V.A.C.S. Art. 1434a, Sec. 4 (part).) 679-6 Sec. 67.012. USE OF MANAGER. The board may employ a manager 679-7 to handle the business of the corporation under the direction of 679-8 the board. The board shall set the salary for the manager. 679-9 (V.A.C.S. Art. 1434a, Sec. 6.) 679-10 Sec. 67.013. USE OF COUNSEL. The board may employ and 679-11 compensate counsel to represent the corporation as the board 679-12 determines is necessary. (V.A.C.S. Art. 1434a, Sec. 7.) 679-13 Sec. 67.014. DEPOSITORY OF FUNDS. (a) The board shall 679-14 select as depository for the funds of the corporation a bank in 679-15 this state that is insured by the Federal Deposit Insurance 679-16 Corporation and require from the depository a bond in an amount the 679-17 board finds necessary to protect the corporation. 679-18 (b) Funds allocated by the board to a sinking fund for 679-19 replacement, amortization of debts, and the payment of interest 679-20 that are not required to be spent in the year in which deposited 679-21 shall be: 679-22 (1) invested in bonds or other evidence of 679-23 indebtedness of the United States; 679-24 (2) placed with the depository in an interest-bearing 679-25 savings account; or 679-26 (3) invested in shares or share accounts in a savings 679-27 and loan association insured by the Federal Deposit Insurance 680-1 Corporation. (V.A.C.S. Art. 1434a, Sec. 8, as amended Acts 57th 680-2 Leg., R.S., Ch. 81; Acts 57th Leg., 1st C.S., Ch. 54.) 680-3 Sec. 67.015. EXEMPTION FROM SECURITIES ACT. The Securities 680-4 Act (Article 581-1 et seq., Vernon's Texas Civil Statutes) does not 680-5 apply to: 680-6 (1) a note, bond, or other evidence of indebtedness 680-7 issued by a corporation doing business in this state to the United 680-8 States; 680-9 (2) an instrument executed to secure a debt of a 680-10 corporation to the United States; or 680-11 (3) the issuance of a membership certificate or stock 680-12 certificate of a corporation. (V.A.C.S. Art. 1434a, Sec. 9.) 680-13 Sec. 67.016. TRANSFER OR CANCELLATION OF RIGHT OF 680-14 PARTICIPATION. (a) A person or entity that owns any stock of, is 680-15 a member of, or has some other right of participation in a 680-16 corporation may not sell or transfer that right of participation to 680-17 another person or entity except: 680-18 (1) by will to a person who is related to the testator 680-19 within the second degree by consanguinity; 680-20 (2) by transfer without compensation to a person who 680-21 is related to the owner of the stock or other interest within the 680-22 second degree by consanguinity; or 680-23 (3) by transfer without compensation or by sale to the 680-24 corporation. 680-25 (b) Subsection (a) does not apply to a person or entity that 680-26 transfers the right of participation to another person or entity as 680-27 part of the conveyance of real estate from which the right of 681-1 participation arose. 681-2 (c) The transfer of a right of participation under this 681-3 section does not entitle the transferee to water or sewer service 681-4 unless each condition for water or sewer service is met as provided 681-5 in the corporation's published rates, charges, and conditions of 681-6 service. A transfer and service application must be completed on 681-7 the corporation's standardized forms and filed with the 681-8 corporation's office in a timely manner. The conditions of service 681-9 may not require a personal appearance in the office of the 681-10 corporation if the transferee accepts in writing the rates, 681-11 charges, and conditions of service. 681-12 (d) The corporation may make water or sewer service provided 681-13 as a result of a right of participation in the corporation 681-14 conditional on ownership of the real estate designated to receive 681-15 service and from which the right of participation arises. 681-16 (e) The corporation may cancel a person's or other entity's 681-17 right of participation if the person or entity fails to: 681-18 (1) meet the conditions for water or sewer service 681-19 prescribed by the corporation's published rates, charges, and 681-20 conditions of service; or 681-21 (2) comply with any other condition placed on the 681-22 receipt of water or sewer service under the right of participation. 681-23 (f) Consistent with Subsection (a), the corporation may 681-24 reassign a canceled right of participation to a person or entity 681-25 that has legal title to the real estate from which the canceled 681-26 right of participation arose and for which water or sewer service 681-27 is requested. 682-1 (g) Notwithstanding Subsection (a), the corporation shall 682-2 reassign a canceled right of participation to a person or entity 682-3 that acquires the real estate from which the right of participation 682-4 arose through judicial or nonjudicial foreclosure. The corporation 682-5 may require proof of ownership resulting from the foreclosure. 682-6 (h) Service provided following a transfer under Subsection 682-7 (f) or (g) is made subject to compliance with the conditions for 682-8 water or sewer service prescribed by the corporation's published 682-9 rates, charges, and conditions of service. (V.A.C.S. Art. 1434a, 682-10 Sec. 9A.) 682-11 Sec. 67.017. VOLUNTARY CONTRIBUTIONS ON BEHALF OF EMERGENCY 682-12 SERVICES. (a) A corporation may as part of its billing process 682-13 collect from its customers a voluntary contribution, including a 682-14 voluntary membership or subscription fee, on behalf of a volunteer 682-15 fire department or an emergency medical service. 682-16 (b) A corporation that collects contributions under this 682-17 section shall provide each customer at the time that the customer 682-18 first subscribes to the water or sewer service, and at least 682-19 annually thereafter, a written statement: 682-20 (1) describing the procedure by which the customer may 682-21 make a contribution with the customer's bill payment; 682-22 (2) designating the volunteer fire department or 682-23 emergency medical service to which the corporation will deliver the 682-24 contribution; 682-25 (3) informing the customer that a contribution is 682-26 voluntary; and 682-27 (4) describing the deductibility status of the 683-1 contribution under federal income tax law. 683-2 (c) A billing by the corporation that includes a voluntary 683-3 contribution under this section must clearly state that the 683-4 contribution is voluntary and that it may be deducted from the 683-5 billed amount. 683-6 (d) The corporation shall promptly deliver contributions 683-7 that it collects under this section to the designated volunteer 683-8 fire department or emergency medical service, except that the 683-9 corporation may keep from the contributions an amount equal to the 683-10 lesser of: 683-11 (1) the corporation's expenses in administering the 683-12 contribution program; or 683-13 (2) five percent of the amount collected as 683-14 contributions. (V.A.C.S. Art. 1434a, Sec. 4A.) 683-15 SECTION 3. CONFORMING AMENDMENT. Chapter 402, Local 683-16 Government Code, is amended by adding Subchapter F to read as 683-17 follows: 683-18 SUBCHAPTER F. MUNICIPAL WATER CORPORATIONS 683-19 AND MUNICIPAL WATER SYSTEMS 683-20 Sec. 402.101. MUNICIPAL WATER CONTRACTS. The governing body 683-21 of a municipality in which there is a water corporation may 683-22 contract with the corporation to supply water to a street, alley, 683-23 lot, square, or public place in a municipality. (V.A.C.S. 683-24 Art. 1434.) 683-25 Sec. 402.102. EMINENT DOMAIN BY MUNICIPAL SEWER PROVIDERS. 683-26 (a) A corporation incorporated in this state for the purpose of 683-27 owning, constructing, or maintaining a sewer system in a 684-1 municipality may by eminent domain condemn private property to: 684-2 (1) construct and maintain sewer pipes, mains and 684-3 laterals, and connections; and 684-4 (2) maintain vats, filtration pipes, and other pipes 684-5 for the final disposition of sewage. 684-6 (b) A corporation may exercise a power described by 684-7 Subsection (a) only if: 684-8 (1) the use of private property is necessary for the 684-9 successful operation of the sewer system; and 684-10 (2) the sewer system is beneficial to the public use, 684-11 health, or convenience. 684-12 (c) The power of eminent domain may not be used under this 684-13 section in the boundaries of a municipality unless permitted or 684-14 required by the municipality granting a franchise to the 684-15 corporation seeking the right of condemnation. (V.A.C.S. 684-16 Art. 1439.) 684-17 Sec. 402.103. RIGHTS OF WATER CORPORATION PROVIDING SERVICE 684-18 TO MUNICIPALITY; EMINENT DOMAIN. (a) A water corporation in a 684-19 municipality may sell and furnish water required by a municipality 684-20 for a public or private building or for any other purpose. 684-21 (b) A water corporation may lay water system pipes, mains, 684-22 or conductors through a street, alley, lane, or square of a 684-23 municipality if the governing body of the municipality consents, 684-24 subject to any regulation by the governing body. 684-25 (c) If necessary to preserve the public health, a water 684-26 corporation incorporated under state law to construct waterworks or 684-27 to furnish water supply to a municipality may exercise the power of 685-1 eminent domain to condemn private property necessary to construct a 685-2 supply reservoir or standpipe for water work. (V.A.C.S. Art. 1433 685-3 (part).) 685-4 Sec. 402.104. LOCATION OF WATER LINES OUTSIDE MUNICIPAL 685-5 BOUNDARIES. (a) A water corporation or municipality may lay water 685-6 system pipes, mains, conductors, or other fixtures through, under, 685-7 along, across, or over a public road, a public street, or a public 685-8 waterway not in a municipality in a manner that does not 685-9 inconvenience the public using the road, street, or waterway. 685-10 (b) A water corporation or municipality proposing under this 685-11 subchapter to build a water line along the right-of-way of a state 685-12 highway or county road not in a municipality shall give notice of 685-13 the proposal to: 685-14 (1) the Texas Transportation Commission, if the 685-15 proposal relates to a state highway; or 685-16 (2) the commissioners court of the county if the 685-17 proposal relates to a county road. 685-18 (c) On receipt of notice under Subsection (b), the Texas 685-19 Transportation Commission or commissioners court may designate the 685-20 location in the right-of-way where the corporation or municipality 685-21 may construct the water line. (V.A.C.S. Arts. 1433 (part), 1433a 685-22 (part).) 685-23 Sec. 402.105. RELOCATION OF WATER LINE TO ALLOW CHANGE TO 685-24 TRAFFIC LANE. (a) The authority of the Texas Transportation 685-25 Commission under this section is limited to a water line on a state 685-26 highway not in a municipality. The authority of the commissioners 685-27 court under this section is limited to a water line on a county 686-1 road not in a municipality. 686-2 (b) The Texas Transportation Commission or the commissioners 686-3 court of a county may require a water corporation or municipality 686-4 to relocate the corporation's or municipality's water line at the 686-5 corporation's or municipality's own expense to allow the widening 686-6 or other changing of a traffic lane. 686-7 (c) To impose a requirement under this section, the Texas 686-8 Transportation Commission or the commissioners court, as 686-9 appropriate, must give to the water corporation or municipality 30 686-10 days' written notice of the requirement. The notice must identify 686-11 the water line to be relocated and indicate the location on the new 686-12 right-of-way where the corporation or municipality may place the 686-13 line. (V.A.C.S. Arts. 1433 (part), 1433a (part).) 686-14 SECTION 4. CONFORMING AMENDMENT. Subchapter Z, Chapter 402, 686-15 Local Government Code, is amended by adding Section 402.906 to read 686-16 as follows: 686-17 Sec. 402.906. MUNICIPAL UTILITY PLANTS. (a) This section 686-18 applies only to a general-law municipality that owns a utility 686-19 plant that provides utility service. 686-20 (b) The governing body of a municipality may: 686-21 (1) by ordinance regulate the rates and compensation 686-22 charged the public by the municipality for utility service; 686-23 (2) establish and operate a plant to manufacture, 686-24 generate, or produce utility service; and 686-25 (3) sell and distribute utility service to the public 686-26 in the municipality's boundaries. 686-27 (c) In this section, "utility service" means the provision 687-1 of water, sewer service, gas, electric energy, or a substance used 687-2 for lighting, heat, or power. (V.A.C.S. Art. 1123.) 687-3 SECTION 5. CONFORMING AMENDMENT. Chapter 91, Natural 687-4 Resources Code, is amended by adding Subchapter H to read as 687-5 follows: 687-6 SUBCHAPTER H. UNDERGROUND STORAGE FACILITIES FOR NATURAL GAS 687-7 Sec. 91.251. DEFINITIONS. In this subchapter: 687-8 (1) "Intrastate gas pipeline facility" has the meaning 687-9 assigned by the United States Department of Transportation under 687-10 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 687-11 et seq.), and its subsequent amendments. 687-12 (2) "Natural gas" means any gaseous material composed 687-13 primarily of methane in either its original or its manufactured 687-14 state. 687-15 (3) "Natural gas underground storage" means the 687-16 storage of natural gas beneath the surface of the earth in a 687-17 formation, stratum, or reservoir. 687-18 (4) "Storage facility" has the meaning assigned by 687-19 Section 91.173. (V.A.C.S. Art. 6053-3, Secs. 1, 4(f) (part).) 687-20 Sec. 91.252. COMMISSION JURISDICTION. (a) The commission 687-21 has jurisdiction over: 687-22 (1) natural gas underground storage; and 687-23 (2) surface and subsurface equipment and facilities 687-24 used for natural gas underground storage. 687-25 (b) This subchapter does not apply to a storage facility 687-26 that is: 687-27 (1) part of an interstate gas pipeline facility as 688-1 defined by the United States Department of Transportation; and 688-2 (2) subject to federal minimum standards adopted under 688-3 Chapter 601, Title 49, United States Code (49 U.S.C. Section 60101 688-4 et seq.), and its subsequent amendments. (V.A.C.S. Art. 6053-3, 688-5 Secs. 2, 3.) 688-6 Sec. 91.253. COMMISSION ENFORCEMENT. (a) In addition to 688-7 other authority specifically granted to the commission under this 688-8 subchapter, the commission may enforce this subchapter or a rule 688-9 adopted or an order or permit issued under this subchapter as 688-10 provided by Section 91.207. 688-11 (b) Section 91.003 does not apply to this subchapter. 688-12 (V.A.C.S. Art. 6053-3, Sec. 10; New.) 688-13 Sec. 91.254. INSPECTION; EXAMINATION; CREDENTIALS. (a) The 688-14 commission may inspect a storage facility for compliance with the 688-15 safety standards and practices and the recordkeeping requirements 688-16 adopted under Sections 91.255, 91.257, and 91.258. 688-17 (b) To conduct an inspection under this section, a 688-18 commissioner or a designated commission employee or agent may enter 688-19 property on which a storage facility is located at a reasonable 688-20 time and in a reasonable manner to examine: 688-21 (1) the facility and any related buildings or 688-22 equipment; and 688-23 (2) the records required to be maintained at the 688-24 storage facility under Section 91.258. 688-25 (c) A commissioner or a commission employee or agent may not 688-26 enter the premises of a storage facility having personnel on the 688-27 premises of the facility unless proper credentials are first 689-1 presented to the person at the facility who is in charge of the 689-2 property. (V.A.C.S. Art. 6053-3, Sec. 6.) 689-3 Sec. 91.255. SAFETY STANDARDS AND PRACTICES. (a) The 689-4 commission by rule shall adopt safety standards and practices for 689-5 natural gas underground storage and storage facilities. The 689-6 standards and practices must: 689-7 (1) require the installation and periodic testing of 689-8 safety devices; 689-9 (2) establish emergency notification procedures for 689-10 the operator of a facility in the event of a release of a hazardous 689-11 substance that poses a substantial risk to the public; 689-12 (3) establish fire prevention and response procedures; 689-13 (4) require training for the employees of the storage 689-14 facility on the safe operation of the storage facility; and 689-15 (5) establish any other safety standard or practice 689-16 that is reasonable and necessary for underground natural gas 689-17 storage and the safe construction, operation, and maintenance of a 689-18 storage facility. 689-19 (b) The commission may adopt different standards and 689-20 practices for different types of storage facilities and may 689-21 distinguish among natural gas underground storage in salt dome 689-22 caverns, depleted reservoirs, and embedded salt formations. 689-23 (c) The commission may grant an exception to a standard or 689-24 practice adopted under this section in a permit or amended permit 689-25 issued to a storage facility if the exception will not constitute 689-26 an unreasonable danger to the public. 689-27 (d) The commission may impose an additional standard or 690-1 practice in a permit or amended permit issued to a storage 690-2 facility. 690-3 (e) A safety standard or practice adopted by the commission 690-4 for a storage facility that is part of an intrastate gas pipeline 690-5 facility must be compatible with federal minimum standards. 690-6 (f) The commission shall require that records of safety 690-7 device tests required by Subsection (a)(1) be: 690-8 (1) filed with the commission; or 690-9 (2) maintained by the owner or operator and made 690-10 available for inspection by the commission. (V.A.C.S. Art. 6053-3, 690-11 Secs. 4(a), (b), (c), (d), (f) (part).) 690-12 Sec. 91.256. LIMITATION ON POWERS OF MUNICIPALITIES AND 690-13 COUNTIES. A municipality or county may not adopt or enforce an 690-14 ordinance that establishes a safety standard or practice applicable 690-15 to a storage facility that is subject to regulation under this 690-16 subchapter, another state law, or a federal law. (V.A.C.S. 690-17 Art. 6053-3, Sec. 11.) 690-18 Sec. 91.257. SAFETY PROCEDURE MANUAL. The commission may 690-19 require the owner or operator of a storage facility to prepare a 690-20 safety procedure manual for each storage facility and to: 690-21 (1) file a copy of the manual with the commission; or 690-22 (2) make the manual available for inspection under 690-23 Section 91.254. (V.A.C.S. Art. 6053-3, Sec. 4(e).) 690-24 Sec. 91.258. RECORDS; REPORTS. (a) An owner or operator of 690-25 a storage facility shall: 690-26 (1) maintain records and make reports relating to 690-27 construction, operation, or maintenance of the facility as required 691-1 by commission rule; and 691-2 (2) provide any other information required by the 691-3 commission relating to construction, operation, or maintenance of 691-4 the facility. 691-5 (b) The commission may provide forms for reports required 691-6 under Subsection (a). (V.A.C.S. Art. 6053-3, Sec. 5.) 691-7 Sec. 91.259. DAMAGE TO STORAGE FACILITY; DISABLING A SAFETY 691-8 DEVICE. A person may not: 691-9 (1) intentionally damage or destroy a storage 691-10 facility; or 691-11 (2) disable a safety device in a storage facility 691-12 except to: 691-13 (A) repair, maintain, test, or replace the 691-14 device; or 691-15 (B) conduct other activities that are reasonably 691-16 necessary for the safe operation of the storage facility. 691-17 (V.A.C.S. Art. 6053-3, Sec. 7.) 691-18 Sec. 91.260. INJUNCTION; CIVIL PENALTY. (a) The attorney 691-19 general, at the request of the commission, shall bring a civil 691-20 action against a person who has violated or is violating this 691-21 subchapter or a rule adopted or an order or permit issued under 691-22 this subchapter for: 691-23 (1) injunctive relief to restrain the person from the 691-24 violation; 691-25 (2) the assessment and recovery of a civil penalty for 691-26 a violation; or 691-27 (3) both injunctive relief and a civil penalty. 692-1 (b) A civil penalty assessed under this section may not 692-2 exceed $25,000 for each violation. 692-3 (c) Each day of a continuing violation may be considered a 692-4 separate violation for the purpose of penalty assessment. 692-5 (d) The maximum penalty assessed for a related series of 692-6 violations may not exceed $500,000. (V.A.C.S. Art. 6053-3, Sec. 692-7 8.) 692-8 Sec. 91.261. ADMINISTRATIVE PENALTY. (a) The commission 692-9 may assess, as provided by this section and Sections 91.262, 692-10 91.263, and 91.264, an administrative penalty against a person who 692-11 violates this subchapter or a rule adopted or an order or permit 692-12 issued under this subchapter. 692-13 (b) Except as provided by Subsection (c), the penalty for 692-14 each violation may be in an amount not to exceed $10,000. The 692-15 maximum penalty assessed under this subsection for a related series 692-16 of violations may not exceed $200,000. 692-17 (c) The penalty for each violation of Section 91.259 may be 692-18 in an amount not to exceed $25,000. The maximum penalty assessed 692-19 under this subsection for a continuing violation may not exceed 692-20 $300,000. 692-21 (d) Each day a violation continues or occurs may be 692-22 considered a separate violation for the purpose of penalty 692-23 assessment under Subsection (b) or (c). 692-24 (e) In determining the amount of the penalty, the commission 692-25 shall consider: 692-26 (1) the seriousness of the violation, including the 692-27 nature, circumstances, extent, and gravity of the prohibited act 693-1 and the hazard or potential hazard created to the health, safety, 693-2 or economic welfare of the public; 693-3 (2) the economic harm to property or the environment 693-4 caused by the violation; 693-5 (3) the history of previous violations; 693-6 (4) the amount necessary to deter future violations; 693-7 (5) efforts to correct the violation; and 693-8 (6) any other matter that justice may require. 693-9 (V.A.C.S. Art. 6053-3, Secs. 9(a), (b), (c), (d).) 693-10 Sec. 91.262. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE. 693-11 (a) An administrative penalty may be assessed only after the 693-12 person charged under Section 91.261 has been given an opportunity 693-13 for a public hearing. If a public hearing is held, the commission 693-14 shall make findings of fact and issue a written decision as to the 693-15 occurrence of the violation and the penalty amount warranted by the 693-16 violation, incorporating, if appropriate, an order requiring that 693-17 the penalty be paid. If appropriate, the commission shall 693-18 consolidate the hearing with other proceedings. 693-19 (b) If a person charged under Section 91.261 fails to take 693-20 advantage of the opportunity for a public hearing, a penalty may be 693-21 assessed by the commission after it has determined that a violation 693-22 occurred and the penalty amount warranted by the violation. The 693-23 commission shall then issue an order requiring the penalty to be 693-24 paid. 693-25 (c) The commission shall give notice of the commission's 693-26 order to the person charged with the violation as provided by 693-27 Chapter 2001, Government Code. The notice must include a statement 694-1 of the right of the person to judicial review of the order. 694-2 (V.A.C.S. Art. 6053-3, Secs. 9(e), (f), (g), (h), (i), (j).) 694-3 Sec. 91.263. PAYMENT OF ADMINISTRATIVE PENALTY. (a) Not 694-4 later than the 30th day after the date on which the commission's 694-5 order imposing an administrative penalty becomes final as provided 694-6 by Section 2001.144, Government Code, the person charged with the 694-7 violation shall: 694-8 (1) pay the amount of the penalty; 694-9 (2) pay the amount of the penalty and file a petition 694-10 for judicial review contesting: 694-11 (A) the amount of the penalty; 694-12 (B) the fact of the violation; or 694-13 (C) both the amount of the penalty and the fact 694-14 of the violation; or 694-15 (3) without paying the amount of the penalty, file a 694-16 petition for judicial review contesting: 694-17 (A) the amount of the penalty; 694-18 (B) the fact of the violation; or 694-19 (C) both the amount of the penalty and the fact 694-20 of the violation. 694-21 (b) Within the 30-day period, a person who acts under 694-22 Subsection (a)(3) may: 694-23 (1) stay the enforcement of the penalty by: 694-24 (A) paying the amount of the penalty to the 694-25 court for placement in an escrow account; or 694-26 (B) giving to the court a supersedeas bond in a 694-27 form approved by the court that is effective until all judicial 695-1 review of the order or decision is final; or 695-2 (2) request the court to stay enforcement of the 695-3 penalty by: 695-4 (A) filing with the court a sworn affidavit 695-5 stating that the person is financially unable to pay the amount of 695-6 the penalty and is financially unable to give the supersedeas bond; 695-7 and 695-8 (B) delivering a copy of the affidavit to the 695-9 commission. 695-10 (c) If the commission receives a copy of an affidavit under 695-11 Subsection (b), the commission may file a contest to the affidavit 695-12 with the court not later than the fifth day after the date the copy 695-13 is received. The court shall hold a hearing on the facts alleged 695-14 in the affidavit as soon as practicable. The person who files an 695-15 affidavit has the burden of proving that the person is financially 695-16 unable to pay the amount of the penalty and to give a supersedeas 695-17 bond. 695-18 (d) If the person does not pay the amount of the penalty and 695-19 the penalty is not stayed, the commission may refer the matter to 695-20 the attorney general for enforcement. (V.A.C.S. Art. 6053-3, Secs. 695-21 9(k), (l), (m), (n).) 695-22 Sec. 91.264. JUDICIAL REVIEW OF ADMINISTRATIVE PENALTY. (a) 695-23 Judicial review of a commission order imposing an administrative 695-24 penalty is: 695-25 (1) instituted by filing a petition as provided by 695-26 Subchapter G, Chapter 2001, Government Code; and 695-27 (2) under the substantial evidence rule. 696-1 (b) If the person paid the amount of the penalty and that 696-2 amount is reduced or is not assessed by the court, the court shall 696-3 order that the appropriate amount plus accrued interest be remitted 696-4 to the person. The rate of interest is the rate charged on loans 696-5 to depository institutions by the New York Federal Reserve Bank and 696-6 shall be paid for the period beginning on the date the penalty is 696-7 paid and ending on the date the penalty is remitted. If the person 696-8 gave a supersedeas bond, the court shall order the release of the 696-9 bond: 696-10 (1) without further action by the person if the 696-11 penalty is not assessed by the court; or 696-12 (2) on payment of the penalty in the amount determined 696-13 by the court. 696-14 (c) A penalty collected under this section shall be 696-15 deposited to the credit of the oil-field cleanup fund account. 696-16 (V.A.C.S. Art. 6053-3, Secs. 9(o), (p), (q).) 696-17 SECTION 6. CONFORMING AMENDMENT. Chapter 111, Natural 696-18 Resources Code, is amended by adding Subchapter J to read as 696-19 follows: 696-20 SUBCHAPTER J. WELL WASTEWATER CORPORATION 696-21 Sec. 111.401. DEFINITION. In this subchapter, "well 696-22 wastewater" means water containing salt or other substances 696-23 produced during drilling or operating oil and other types of wells. 696-24 (V.A.C.S. Art. 1508 (part); New.) 696-25 Sec. 111.402. CREATION OF WELL WASTEWATER CORPORATION. A 696-26 well wastewater corporation may be created to gather, store, and 696-27 impound well wastewater and to prevent the flow of the well 697-1 wastewater into a stream when the stream may be used for 697-2 irrigation. (V.A.C.S. Art. 1508 (part).) 697-3 Sec. 111.403. CORPORATION POWERS. In addition to the 697-4 general powers conferred to a private corporation, a well 697-5 wastewater corporation may acquire, own, and operate a ditch, 697-6 canal, pipeline, levee, or reservoir, and an associated appliance 697-7 as appropriate to gather, impound, or store well wastewater and to 697-8 protect a reservoir from inflow or damage by surface water. 697-9 (V.A.C.S. Art. 1509.) 697-10 Sec. 111.404. CONDEMNATION. (a) A well wastewater 697-11 corporation may condemn land or a property right necessary for a 697-12 purpose of the corporation. 697-13 (b) A well wastewater corporation's ditch, canal, or 697-14 pipeline may cross under a highway, canal, pipeline, railroad, or 697-15 tram or logging road if the use of the highway, canal, pipeline, 697-16 railroad, or tram or logging road is not impaired except for the 697-17 time necessary to construct the crossing. 697-18 (c) Without the consent of the appropriate authority, a well 697-19 wastewater corporation's ditch, canal, or pipeline may not: 697-20 (1) pass through a cemetery; 697-21 (2) pass under a residence or public building; or 697-22 (3) cross a street or alley of a municipality. 697-23 (V.A.C.S. Art. 1510.) 697-24 Sec. 111.405. SERVICE TO WELL WASTEWATER PRODUCERS. (a) A 697-25 well wastewater corporation shall serve all well wastewater 697-26 producers in the area in which the corporation operates to the 697-27 extent the corporation has adequate facilities to gather, impound, 698-1 and store well wastewater. 698-2 (b) A well wastewater corporation: 698-3 (1) shall serve a well wastewater producer in 698-4 proportion to the needs of all of the producers in the area; 698-5 (2) shall charge a fair and reasonable fee for its 698-6 services; and 698-7 (3) may not discriminate between different producers 698-8 under similar conditions. (V.A.C.S. Art. 1511.) 698-9 Sec. 111.406. OWNERSHIP OF STOCK. A corporation interested 698-10 in the proper disposition of well wastewater may purchase, own, or 698-11 vote stock in a well wastewater corporation. (V.A.C.S. 698-12 Art. 1512.) 698-13 SECTION 7. CONFORMING AMENDMENT. Subtitle D, Title 3, 698-14 Natural Resources Code, is amended by adding Chapter 115 to read as 698-15 follows: 698-16 CHAPTER 115. REGULATION OF CERTAIN TRANSPORTERS 698-17 OF OIL OR PETROLEUM PRODUCTS 698-18 SUBCHAPTER A. GENERAL PROVISIONS 698-19 Sec. 115.001. DEFINITIONS. In this chapter: 698-20 (1) "Commission" means the Railroad Commission of 698-21 Texas. 698-22 (2) "Commission order" includes a rule or order 698-23 adopted by the commission under the oil and gas conservation 698-24 statutes of this state, including this title and Subtitle B, Title 698-25 3, Utilities Code. 698-26 (3) "Gas" includes natural gas, bradenhead gas, 698-27 casinghead gas, or gas produced from an oil or gas well. 699-1 (4) "Manifest" includes a document issued by a shipper 699-2 that covers oil or a petroleum product transported by motor 699-3 vehicle. 699-4 (5) "Oil" includes crude petroleum oil: 699-5 (A) in its natural state as produced; or 699-6 (B) from which only the basic sediment and water 699-7 have been removed. 699-8 (6) "Person" includes an individual, corporation, 699-9 association, partnership, receiver, trustee, guardian, executor, 699-10 administrator, or representative. 699-11 (7) "Petroleum product" includes: 699-12 (A) refined crude oil; 699-13 (B) crude tops; 699-14 (C) topped crude; 699-15 (D) processed crude petroleum; 699-16 (E) residue from crude petroleum; 699-17 (F) cracking stock; 699-18 (G) uncracked fuel oil; 699-19 (H) fuel oil; 699-20 (I) treated crude oil; 699-21 (J) residuum; 699-22 (K) gas oil; 699-23 (L) casinghead gasoline; 699-24 (M) natural gas gasoline; 699-25 (N) naphtha; 699-26 (O) distillate; 699-27 (P) gasoline; 700-1 (Q) kerosene; 700-2 (R) benzine; 700-3 (S) wash oil; 700-4 (T) waste oil; 700-5 (U) blended gasoline; 700-6 (V) lubricating oil; 700-7 (W) blends or mixtures of petroleum; or 700-8 (X) any other liquid petroleum product or 700-9 byproduct derived from crude petroleum oil or gas. 700-10 (8) "Shipping papers" includes: 700-11 (A) a bill of lading that covers oil or a 700-12 petroleum product transported by railway; 700-13 (B) a manifest; or 700-14 (C) a document that covers oil or a petroleum 700-15 product transported by pipeline, boat, or barge. 700-16 (9) "Tender" means a permit or certificate of 700-17 clearance for the transportation of oil or a petroleum product that 700-18 is approved and issued or registered under the authority of the 700-19 commission. 700-20 (10) "Unlawful gas" includes gas produced or 700-21 transported in violation of a law of this state or commission 700-22 order. 700-23 (11) "Unlawful petroleum product" includes a petroleum 700-24 product: 700-25 (A) any part of which was processed or derived 700-26 in whole or in part from: 700-27 (i) unlawful oil; 701-1 (ii) a product of unlawful oil; or 701-2 (iii) unlawful gas; or 701-3 (B) transported in violation of a law of this 701-4 state or commission order. (V.A.C.S. Art. 6066a, Secs. 1(a), (b), 701-5 (c), (e), (f), (g) (part), (h) (part), (i), (j) (part), 2(b) 701-6 (part).) 701-7 Sec. 115.002. EXCEPTION. This chapter does not apply to the 701-8 retail purchase of a petroleum product if that product is: 701-9 (1) contained in the ordinary equipment of a motor 701-10 vehicle; and 701-11 (2) used only to operate the motor vehicle in which it 701-12 is contained. (V.A.C.S. Art. 6066a, Sec. 13.) 701-13 Sec. 115.003. DEFINITION OF UNLAWFUL OIL; PRESUMPTION. (a) 701-14 For purposes of this chapter, oil is unlawful if the oil is: 701-15 (1) produced in this state from a well in excess of 701-16 the amount allowed by a commission order or otherwise in violation 701-17 of a law of this state or commission order; or 701-18 (2) transported in violation of a law of this state or 701-19 commission order. 701-20 (b) It is presumed that oil is "unlawful oil" for purposes 701-21 of this chapter if the oil is retained in storage for more than six 701-22 years without being used, consumed, or moved into regular 701-23 commercial channels. 701-24 (c) The presumption under Subsection (b) may be rebutted by 701-25 proof that the oil: 701-26 (1) was produced from a well within the production 701-27 allowable then applying to that well; 702-1 (2) was not produced in violation of a law of this 702-2 state or commission order; and 702-3 (3) if transported from the lease from which it was 702-4 produced, was not transported in violation of a law of this state 702-5 or commission order. (V.A.C.S. Art. 6066a, Secs. 1(d), 2(b) 702-6 (part).) 702-7 (Sections 115.004-115.010 reserved for expansion 702-8 SUBCHAPTER B. TENDERS AND MANIFESTS 702-9 Sec. 115.011. TENDER REQUIREMENTS. The commission by order 702-10 may require that a tender be obtained before oil or a petroleum 702-11 product may be transported or received for transportation by 702-12 pipeline, railway, boat, or barge. (V.A.C.S. Art. 6066a, Sec. 2(a) 702-13 (part), Sec. 4(c) (part).) 702-14 Sec. 115.012. TENDER; APPLICATION REQUIREMENTS. (a) The 702-15 commission by order shall prescribe the form of a tender and a 702-16 tender application. 702-17 (b) The form must show: 702-18 (1) the name and address of the shipper or other 702-19 person who tenders oil or a petroleum product for transportation; 702-20 (2) the name and address of the transporter if the 702-21 commission order requires the transporter to be designated; 702-22 (3) the quantity and classification of each commodity 702-23 authorized to be transported; 702-24 (4) each location at which delivery is to be made to 702-25 the transporter; and 702-26 (5) other related information as prescribed by 702-27 commission order. 703-1 (c) Each tender must: 703-2 (1) bear a date and serial number; 703-3 (2) state the expiration date of the tender; and 703-4 (3) be executed by an agent authorized by the 703-5 commission to deny, approve, or register tenders. 703-6 (d) An agent may not approve or register a tender for the 703-7 transportation of unlawful oil or an unlawful petroleum product. 703-8 (V.A.C.S. Art. 6066a, Sec. 1(g) (part).) 703-9 Sec. 115.013. ACTION ON TENDER APPLICATION. (a) If an 703-10 agent of the commission rejects an application for a tender, the 703-11 agent shall return a copy of the application to the applicant with 703-12 the reasons for the rejection indicated on the copy. 703-13 (b) A person whose tender application is not acted on before 703-14 the 21st day after the date on which the application is filed is 703-15 entitled to judicial review in the manner provided by Section 703-16 115.014 for the appeal of a rejection of a tender application. 703-17 (V.A.C.S. Art. 6066a, Sec. 9 (part).) 703-18 Sec. 115.014. JUDICIAL REVIEW. (a) A person whose tender 703-19 application is rejected may appeal that action by filing a petition 703-20 against the commission in a district court of Travis County for 703-21 review of the agent's decision. 703-22 (b) The clerk of the court shall issue to the commission a 703-23 notice setting forth briefly the cause of action stated in the 703-24 petition. The court may not enter an order on the petition until 703-25 the court conducts a hearing. The court must conduct the hearing 703-26 not later than the fifth day after the date of issuance of the 703-27 notice. 704-1 (c) The court may sustain, modify, or overrule the agent's 704-2 decision and may issue a restraining order or injunction as 704-3 warranted by the facts. 704-4 (d) A person dissatisfied with the decision of the district 704-5 court may appeal to the court of appeals. (V.A.C.S. Art. 6066a, 704-6 Sec. 9 (part).) 704-7 Sec. 115.015. TRANSFER UNDER TENDER. (a) A person who 704-8 obtains a tender may not transport or deliver, or cause or permit 704-9 to be transported or delivered, any more or any different commodity 704-10 than that authorized by the tender. 704-11 (b) A connecting carrier or consignee who receives oil or a 704-12 petroleum product from another transporter by pipeline, railway, 704-13 boat, or barge under authority of shipping papers executed by the 704-14 initial transporter that bear the date and serial number of a 704-15 tender issued to that initial transporter is considered to receive 704-16 the oil or petroleum product by authority of that tender if the 704-17 commission order provides that a connecting carrier or consignee 704-18 may rely on the shipping papers. (V.A.C.S. Art. 6066a, Secs. 2(a) 704-19 (part), 4(c) (part).) 704-20 Sec. 115.016. ISSUANCE OF MANIFEST. (a) A person who 704-21 obtains a tender required under this subchapter shall sign and 704-22 issue a manifest to the operator of each motor vehicle used to 704-23 transport the oil or petroleum product that is covered by the 704-24 tender. 704-25 (b) The person shall issue a separate manifest for each load 704-26 carried by the motor vehicle. (V.A.C.S. Art. 6066a, Sec. 2(a) 704-27 (part).) 705-1 Sec. 115.017. FORM OF MANIFEST. (a) The commission by 705-2 order may prescribe the form of a manifest. 705-3 (b) A manifest must: 705-4 (1) bear a certificate signed by the shipper that 705-5 states the amount of oil or petroleum products to be transported 705-6 and specifies each petroleum product to be transported; and 705-7 (2) include, if required by commission order: 705-8 (A) the date and serial number of the tender 705-9 that authorizes the transportation or a seal, number, or other 705-10 evidence of the tender, if a tender is required; 705-11 (B) the amount and classification of each 705-12 petroleum product to be transported; 705-13 (C) the name and address of the transporter, the 705-14 name and address of the shipper, and the name and address of the 705-15 consignee, if known; 705-16 (D) the name and address of the operator of the 705-17 motor vehicle; 705-18 (E) the license plate number of the motor 705-19 vehicle; 705-20 (F) the date, time, and place at which the motor 705-21 vehicle was loaded and the destination, if known, of the load; and 705-22 (G) other related information as required by 705-23 commission order. 705-24 (c) If the form of the manifest is not prescribed by 705-25 commission order, each shipper required to issue a manifest to a 705-26 transporter shall use a form of manifest that is: 705-27 (1) commonly used in commercial transactions; or 706-1 (2) required by another state agency to accompany the 706-2 movement of gasoline. (V.A.C.S. Art. 6066a, Secs. 1(h) (part), 706-3 2(a) (part).) 706-4 Sec. 115.018. TRANSFER UNDER MANIFEST; RESTRICTIONS. (a) A 706-5 person authorized to transport oil or a petroleum product on a 706-6 manifest issued by a shipper may not receive: 706-7 (1) a commodity for transportation that is different 706-8 from the commodity described in the manifest; or 706-9 (2) oil or a petroleum product in an amount exceeding 706-10 the amount authorized by the manifest. 706-11 (b) A person authorized to transport oil or a petroleum 706-12 product by a shipper-issued manifest that bears on its face the 706-13 date and serial number of the tender may rely on the manifest 706-14 delivered to that person and each consignee or person to whom the 706-15 transporter delivers oil or a petroleum product covered by that 706-16 manifest may rely on the manifest as authority to receive the 706-17 commodity delivered if the manifest: 706-18 (1) appears to be valid on its face; 706-19 (2) is signed by the shipper; and 706-20 (3) bears the certificate of the shipper that the 706-21 transportation of the oil or petroleum product is authorized by the 706-22 tender. 706-23 (c) If the commission by order prohibits the transportation 706-24 of oil or a petroleum product by motor vehicle without a manifest 706-25 that shows the date and serial number of a tender authorizing the 706-26 transportation, a person may not ship or transport or cause to be 706-27 shipped or transported by motor vehicle oil or a petroleum product 707-1 unless the person furnishes the manifest to the operator of the 707-2 motor vehicle. The person transporting the oil or petroleum 707-3 product shall maintain the manifest in the vehicle at all times 707-4 during the shipment. If the person to whom the tender is issued is 707-5 the operator of the motor vehicle and the tender identifies the 707-6 motor vehicle by license number and covers one load, the person may 707-7 carry the tender in the vehicle in lieu of a manifest. (V.A.C.S. 707-8 Art. 6066a, Secs. 2(a) (part), (b) (part).) 707-9 Sec. 115.019. RECEIPT REQUIRED. A person who transports oil 707-10 or a petroleum product by motor vehicle under conditions that 707-11 require a tender or manifest shall obtain a receipt from each 707-12 person to whom any part of the oil or petroleum product is 707-13 delivered. The receipt must be on the reverse side of the tender 707-14 or manifest and must indicate: 707-15 (1) the number of gallons of oil or of each petroleum 707-16 product delivered; 707-17 (2) the date of delivery; and 707-18 (3) the signature and address of the purchaser or 707-19 consignee of the oil or petroleum product. (V.A.C.S. Art. 6066a, 707-20 Sec. 2(c) (part).) 707-21 Sec. 115.020. RECORDS; INSPECTION. (a) A person who 707-22 transports by motor vehicle and delivers oil or a petroleum product 707-23 shall keep in this state for two years each tender or manifest 707-24 issued to the person, together with the receipts and endorsements 707-25 on the tender or manifest. 707-26 (b) A tender or manifest is at all times subject to 707-27 inspection by the commission or an agent or inspector of the 708-1 commission. (V.A.C.S. Art. 6066a, Sec. 2(c) (part).) 708-2 (Sections 115.021-115.030 reserved for expansion 708-3 SUBCHAPTER C. FORFEITURE OF UNLAWFUL OIL OR PETROLEUM PRODUCT 708-4 Sec. 115.031. FORFEITURE AUTHORIZED. Unlawful oil and 708-5 unlawful petroleum products, regardless of the date of production 708-6 or manufacture, are declared to be a nuisance and shall be 708-7 forfeited to this state as provided by this subchapter. 708-8 (V.A.C.S. Art. 6066a, Sec. 10(a) (part).) 708-9 Sec. 115.032. REPORT TO ATTORNEY GENERAL. On the discovery 708-10 of unlawful oil or an unlawful petroleum product, a member of the 708-11 commission, an agent or employee of the commission, or a peace 708-12 officer shall immediately file with the attorney general a report 708-13 that describes the unlawful oil or unlawful petroleum product. The 708-14 report must state the ownership, party in possession, amount, 708-15 location, and classification of the oil or petroleum product. 708-16 (V.A.C.S. Art. 6066a, Sec. 10(a) (part).) 708-17 Sec. 115.033. ACTION IN REM. (a) If the attorney general 708-18 is advised of the presence of unlawful oil or an unlawful petroleum 708-19 product, the attorney general shall bring an action in rem in the 708-20 name of the state in Travis County or in the county in which the 708-21 oil or petroleum product is located against the unlawful oil or 708-22 petroleum product and against each person who owns, claims, or is 708-23 in possession of the oil or petroleum product. 708-24 (b) If it appears to the court from an examination of the 708-25 petition or after hearing evidence on the petition at a preliminary 708-26 hearing that the unlawful oil or petroleum product mentioned in the 708-27 petition is in danger of being removed, wasted, lost, or destroyed, 709-1 the court shall: 709-2 (1) issue restraining orders or injunctive relief, 709-3 either mandatory or prohibitive; 709-4 (2) appoint a receiver to take charge of the oil or 709-5 petroleum product; or 709-6 (3) direct the sheriff of the county in which the 709-7 unlawful oil or petroleum product is located to seize and impound 709-8 the oil or petroleum product pending further orders of the court. 709-9 (c) A party to the action may demand a trial by jury on any 709-10 issue of fact raised by the pleadings, and the case shall proceed 709-11 to trial in the manner provided for other civil cases. (V.A.C.S. 709-12 Art. 6066a, Secs. 10(b), (c) (part).) 709-13 Sec. 115.034. FORFEITURE SALE. (a) If, on the trial of the 709-14 action, the oil or petroleum product in controversy is found to be 709-15 unlawful, the court shall render judgment forfeiting the oil or 709-16 petroleum product to this state. The court shall issue an order of 709-17 sale directing the sheriff or a constable of the county in which 709-18 the oil or petroleum product is located to seize and sell the oil 709-19 or petroleum product in the same manner as personal property is 709-20 sold under execution. The court may order the oil or petroleum 709-21 product sold in whole or in part. 709-22 (b) The sale shall be conducted at the courthouse door of 709-23 the county in which the oil or petroleum product is located. 709-24 (c) The court shall apply the money realized from the sale 709-25 first to the payment of the costs of the action and expenses 709-26 incident to the sale of the oil or petroleum product. The court 709-27 may then use not more than one-half of the money to compensate a 710-1 person for expenses incurred in storing the unlawful oil or 710-2 petroleum product. Any balance remaining shall be remitted to the 710-3 comptroller. 710-4 (d) The officers of the court shall receive the same fees 710-5 provided by law for other civil actions. The sheriff who executes 710-6 the sale shall issue a bill of sale or certificate to the purchaser 710-7 of the oil or petroleum product, and the commission, on 710-8 presentation of that certificate of clearance, shall issue a 710-9 tender, if a tender is required, permitting the purchaser of the 710-10 oil or petroleum product to move the oil or petroleum product into 710-11 commerce. (V.A.C.S. Art. 6066a, Secs. 10(c) (part), (d).) 710-12 (Sections 115.035-115.040 reserved for expansion 710-13 SUBCHAPTER D. ENFORCEMENT AND PENALTIES 710-14 Sec. 115.041. ENFORCEMENT; ARRESTS. (a) To enforce this 710-15 chapter, an agent of the commission or a peace officer of this 710-16 state who has probable cause and reasonable grounds to believe that 710-17 a motor vehicle is transporting unlawful oil or an unlawful 710-18 petroleum product may stop the vehicle to take samples of the cargo 710-19 and to inspect the shipping papers. 710-20 (b) If, on examination of the motor vehicle, the agent or 710-21 officer finds that the vehicle is transporting unlawful oil or an 710-22 unlawful petroleum product or is transporting oil or a petroleum 710-23 product without a required tender, the agent or officer, with or 710-24 without a warrant, shall arrest the operator of the vehicle and 710-25 file a complaint against the operator under this chapter. 710-26 (c) In a criminal action under this chapter, the agent or 710-27 officer is not entitled to a fee for executing a warrant of arrest 711-1 or capias or for making an arrest with or without a warrant. 711-2 (V.A.C.S. Art. 6066a, Sec. 3.) 711-3 Sec. 115.042. PUBLICATION OF COMMISSION ORDER PRIOR TO 711-4 ENFORCEMENT. A criminal action may not be maintained against a 711-5 person involving the violation of a rule or order that the 711-6 commission adopts, modifies, or amends until the commission 711-7 publishes a complete copy of the rule or order. (V.A.C.S. 711-8 Art. 6066a, Sec. 5 (part).) 711-9 Sec. 115.043. CERTIFICATE AS EVIDENCE. (a) A certificate 711-10 that sets forth the terms of a commission order and states that the 711-11 order has been adopted and published and was in effect on a 711-12 specified date or during a specified period is prima facie evidence 711-13 of those facts if the certificate is: 711-14 (1) made under the seal of the commission; and 711-15 (2) executed by a member or the secretary of the 711-16 commission. 711-17 (b) The certificate is admissible in evidence in any civil 711-18 or criminal action that involves the order without further proof of 711-19 the adoption, publication, or contents of the order. (V.A.C.S. 711-20 Art. 6066a, Sec. 6.) 711-21 Sec. 115.044. SERVICE OF PROCESS. (a) In an action or 711-22 proceeding that involves the enforcement of this chapter or a 711-23 commission order, a Texas Ranger or agent of the commission may 711-24 serve any judicial process, warrant, subpoena, or writ as directed 711-25 by the court issuing the process and shall serve the process in the 711-26 same manner as a peace officer. 711-27 (b) The ranger or agent may serve the process, warrant, or 712-1 subpoena anywhere in this state although it may be directed to the 712-2 sheriff or a constable of a particular county. 712-3 (c) The ranger or agent shall make the same return as any 712-4 other officer, sign the return, and add under the name the title 712-5 "State Ranger" or "Agent, Railroad Commission of Texas," as 712-6 appropriate, which is sufficient to make the writ valid if the writ 712-7 is otherwise properly prepared. 712-8 (d) A Texas Ranger or agent of the commission is not 712-9 entitled to a fee in addition to that person's regular compensation 712-10 for a service provided under this section. (V.A.C.S. Art. 6066a, 712-11 Sec. 7.) 712-12 Sec. 115.045. PLEADING; PROOF. (a) In a complaint, 712-13 information, or indictment that alleges a violation of a commission 712-14 order, it is unnecessary to set forth fully the terms of the order 712-15 and sufficient to allege the substance of the order or the 712-16 pertinent terms of the order that are alleged to have been 712-17 violated. 712-18 (b) In a criminal action filed under this chapter, a 712-19 certificate executed by a member or the secretary of the commission 712-20 that shows the amount of allowable oil that may be produced per day 712-21 or during a stated period from an oil well, proof of production 712-22 from which is involved in the criminal action, is admissible and is 712-23 prima facie evidence of the facts stated in the certificate. 712-24 (c) This section does not limit the power of the commission 712-25 to adopt rules or orders under the oil and gas conservation 712-26 statutes of this state, including this title and Subtitle B, Title 712-27 3, Utilities Code. (V.A.C.S. Art. 6066a, Secs. 8(a), (b), (d).) 713-1 Sec. 115.046. VENUE. A criminal action maintained under 713-2 this chapter must be brought in: 713-3 (1) the county in which the oil or petroleum product 713-4 involved in the criminal action is received or delivered; or 713-5 (2) any county in or through which that oil or 713-6 petroleum product is transported. (V.A.C.S. Art. 6066a, Sec. 713-7 8(c).) 713-8 Sec. 115.047. PENALTIES. (a) A person commits an offense 713-9 if the person is the operator of a motor vehicle that transports 713-10 oil or a petroleum product and the person: 713-11 (1) intentionally fails to stop the vehicle on the 713-12 command of an agent of the commission or peace officer; or 713-13 (2) intentionally fails to permit inspection by the 713-14 agent or officer of the contents of or the shipping papers 713-15 accompanying the vehicle. 713-16 (b) A person commits an offense if the person: 713-17 (1) knowingly violates Section 115.011, 115.015(a), 713-18 115.016, 115.018, 115.019, or 115.020; 713-19 (2) knowingly ships or transports or causes to be 713-20 shipped or transported unlawful oil or an unlawful petroleum 713-21 product by motor vehicle over a public highway in this state; 713-22 (3) knowingly ships or transports or causes to be 713-23 shipped or transported by motor vehicle oil or a petroleum product 713-24 without the authority of a tender if a tender is required by a 713-25 commission order; or 713-26 (4) if a tender is required by a commission order, 713-27 knowingly receives from a motor vehicle or knowingly delivers to a 714-1 motor vehicle oil or a petroleum product that is not covered by a 714-2 tender authorizing the transportation of the oil or petroleum 714-3 product. 714-4 (c) A person commits an offense if the person: 714-5 (1) knowingly ships or transports or causes or permits 714-6 to be shipped or transported by pipeline, railway, boat, or barge 714-7 unlawful oil or an unlawful petroleum product; 714-8 (2) knowingly receives or delivers for transportation 714-9 by pipeline, railway, boat, or barge unlawful oil or an unlawful 714-10 petroleum product; 714-11 (3) knowingly ships or transports or causes or permits 714-12 to be shipped or transported by pipeline, railway, boat, or barge 714-13 oil or a petroleum product without authority of a tender if a 714-14 tender is required by a commission order; or 714-15 (4) knowingly receives or delivers by pipeline, 714-16 railway, boat, or barge oil or a petroleum product without 714-17 authority of a tender if a tender is required by a commission 714-18 order. 714-19 (d) An offense under this section is punishable by a fine of 714-20 not less than $50 or more than $200. (V.A.C.S. Art. 6066a, Secs. 714-21 4(a), (b), (d).) 714-22 SECTION 8. CONFORMING AMENDMENT. Subchapter D, Chapter 54, 714-23 Water Code, is amended by adding Section 54.2051 to read as 714-24 follows: 714-25 Sec. 54.2051. SERVICE CONNECTIONS TO CERTAIN DWELLING UNITS. 714-26 (a) If the tenant of an individually metered dwelling unit applies 714-27 to a district for utility service for that unit, the district may 715-1 not require that the service be connected in the name of the 715-2 landlord or owner of the unit. 715-3 (b) This section does not apply to a dwelling unit that is 715-4 located in a building that: 715-5 (1) contains two or more dwelling units; and 715-6 (2) is served by a master meter or demand meter. 715-7 (c) In this section, "individually metered dwelling unit" 715-8 means one or more rooms: 715-9 (1) rented for use as a permanent residence under a 715-10 single verbal or written rental agreement; and 715-11 (2) served by a utility meter that belongs to the 715-12 district and measures service only for that unit. (V.A.C.S. 715-13 Art. 1446d-1.) 715-14 SECTION 9. REPEALER. The following Acts and articles as 715-15 compiled in Vernon's Texas Civil Statutes are repealed: 1120; 715-16 1123; 1124a; 1416; 1417; 1418; 1419; 1420; 1421; 1422; 1426; 1427; 715-17 1428; 1429; 1430; 1431; 1432; 1432a; 1432b; 1433; 1433a; 1434; 715-18 1434a; 1435; 1435a; 1435a-1; 1435b; 1436; 1436a; 1436b; 1437; 1438; 715-19 1439; 1440; 1440a; 1446a, Secs. 1, 3, 4, 6, 7, and 8; 1446b; 715-20 1446c-0; 1446c-1; 1446c-2; 1446d; 1446d-1; 1446d-2; 1446e; 1446f; 715-21 1446g; 1446h; 1508; 1509; 1510; 1511; 1512; 1528b; 1528c; 2372q-1; 715-22 6050; 6051; 6052; 6053; 6053-1; 6053-2; 6053-3; 6054; 6055; 6056; 715-23 6057; 6057a; 6057b; 6058; 6059; 6060; 6061; 6062; 6062A; 6063; 715-24 6064; 6065; 6066; 6066a; 6066f; 6066g; and 9021. 715-25 SECTION 10. LEGISLATIVE INTENT OF NO SUBSTANTIVE CHANGE. 715-26 This Act is enacted under Section 43, Article III, Texas 715-27 Constitution. This Act is intended as a recodification only, and 716-1 no substantive change in law is intended by this Act. 716-2 SECTION 11. EFFECTIVE DATE. This Act takes effect September 716-3 1, 1997. 716-4 SECTION 12. EMERGENCY. The importance of this legislation 716-5 and the crowded condition of the calendars in both houses create an 716-6 emergency and an imperative public necessity that the 716-7 constitutional rule requiring bills to be read on three several 716-8 days in each house be suspended, and this rule is hereby suspended.