Senate File 2195 H-8151 Amend Senate File 2195, as passed by the Senate, as 1 follows: 2 1. By striking everything after the enacting clause 3 and inserting: 4 < Section 1. Section 476.1D, subsection 1, paragraph 5 c, Code 2014, is amended by striking the paragraph. 6 Sec. 2. Section 476.1D, subsection 2, Code 2014, is 7 amended to read as follows: 8 2. Except as provided in subsection 1 , paragraph 9 “c” , deregulation Deregulation of a service or facility 10 for a utility is effective only after a finding of 11 effective competition by the board. 12 Sec. 3. Section 476.3, subsection 2, paragraph b, 13 Code 2014, is amended by striking the paragraph. 14 Sec. 4. Section 476.4, Code 2014, is amended to 15 read as follows: 16 476.4 Tariffs filed. 17 1. Every public utility shall file with the 18 board tariffs showing the rates and charges for its 19 public utility services and the rules and regulations 20 under which such services were furnished, on April 21 1, 1963, which rates and charges shall be subject to 22 investigation by the board as provided in section 23 476.3 , and upon such investigation the burden of 24 establishing the reasonableness of such rates and 25 charges shall be upon the public utility filing the 26 same. These filings shall be made under such rules as 27 the board may prescribe within such time and in such 28 form as the board may designate. In prescribing rules 29 and regulations with respect to the form of tariffs, 30 the board shall, in the case of public utilities 31 subject to regulation by any federal agency, give due 32 regard to any corresponding rules and regulations 33 of such federal agency, to the end that unnecessary 34 duplication of effort and expense may be avoided so far 35 as reasonably possible. Each public utility shall keep 36 copies of its tariffs open to public inspection under 37 such rules as the board may prescribe. 38 2. No later than January 1, 2015, a telephone 39 utility is required to file tariffs as provided in 40 this section only for such wholesale services as may 41 be specified by the board. 42 3. Every rate, charge, rule , and regulation 43 contained in any filing made with the commission on or 44 prior to July 4, 1963, shall be effective as of such 45 date, subject, however, to investigation as herein 46 provided. If any such filing is made prior to the time 47 the commission prescribes rules as aforesaid, and if 48 such filing does not comply as to form or substance 49 with such rules, then the public utility which filed 50 -1- SF2195.3547 (1) 85 rn/nh 1/ 8 #1.

the same shall within a reasonable time after the 1 adoption of such rules make a new filing or filings 2 complying with such rules, which new filing or filings 3 shall be deemed effective as of July 4, 1963. 4 Sec. 5. Section 476.5, Code 2014, is amended to 5 read as follows: 6 476.5 Adherence to schedules —— discounts . 7 No public utility subject to rate regulation 8 shall directly or indirectly charge a greater or less 9 compensation for its services than that prescribed in 10 its tariffs, and no such public utility shall make or 11 grant any unreasonable preferences or advantages as to 12 rates or services to any person or subject any person 13 to any unreasonable prejudice or disadvantage. 14 Nothing in this section shall be construed to 15 prohibit any public utility furnishing communications 16 services from providing any service rendered by 17 it without charge or at reduced rate to any of its 18 active or retired officers, directors, or employees, 19 or such officers, directors or employees of other 20 public utilities furnishing communications services. 21 Provided, however, said service is for personal use, 22 and not for engaging in a business for profit. 23 Sec. 6. Section 476.6, subsection 9, Code 2014, is 24 amended by striking the subsection. 25 Sec. 7. Section 476.29, subsections 3 and 6, Code 26 2014, are amended to read as follows: 27 3. A certificate is transferable, subject to 28 approval of the board pursuant to section 476.20, 29 subsection 1 , and for purposes of a rate-regulated 30 local exchange utility shall be treated by the board 31 in the same manner as a reorganization pursuant to 32 sections 476.76 and 476.77 . 33 6. The certificate and tariffs approved by 34 the board are is the only authority required for 35 the utility to furnish land-line local telephone 36 service. However, to the extent not inconsistent with 37 this section , the power to regulate the conditions 38 required and manner of use of the highways, streets, 39 rights-of-way, and public grounds remains in the 40 appropriate public authority. 41 Sec. 8. Section 476.29, subsection 15, Code 2014, 42 is amended by striking the subsection. 43 Sec. 9. Section 476.72, subsections 4 and 5, Code 44 2014, are amended to read as follows: 45 4. “Public utility” includes only means a gas 46 or electric rate-regulated public utilities and 47 rate-regulated telephone utilities providing local 48 exchange telecommunication service utility . 49 5. “Utility business” means the generation or 50 -2- SF2195.3547 (1) 85 rn/nh 2/ 8

transmission of electricity or furnishing of gas or 1 furnishing electricity or furnishing rate-regulated 2 communications services to the public for compensation. 3 Sec. 10. Section 476.78, Code 2014, is amended to 4 read as follows: 5 476.78 Cross-subsidization prohibited. 6 A rate-regulated gas or electric public utility 7 shall not directly or indirectly include any costs or 8 expenses attributable to providing nonutility service 9 in regulated rates or charges. Except for contracts 10 existing as of July 1, 1996, a rate-regulated gas 11 or electric public utility or its affiliates shall 12 not use vehicles, service tools and instruments, 13 or employees, the costs, salaries, or benefits of 14 which are recoverable in the regulated rates for 15 electric service or gas service to install, service, 16 or repair residential or commercial gas or electric 17 heating, ventilating, or air conditioning systems, or 18 interior lighting systems and fixtures; or to sell 19 at retail heating, ventilating, air conditioning, 20 or interior lighting equipment. For the purpose of 21 this section , “commercial” means a place of business 22 primarily used for the storage or sale, at wholesale 23 or retail, of goods, wares, services, or merchandise. 24 Nothing in this section shall be construed to prohibit 25 a rate-regulated gas or electric public utility 26 from using its utility vehicles, service tools and 27 instruments, and employees to market systems, services, 28 and equipment, to light pilots, or to eliminate a 29 customer emergency or threat to public safety. 30 Sec. 11. Section 476.79, Code 2014, is amended to 31 read as follows: 32 476.79 Provision of nonutility service. 33 1. A rate-regulated gas or electric public utility 34 providing any nonutility service to its customers shall 35 keep and render to the board separate records of the 36 nonutility service. The board may provide for the 37 examination and inspection of the books, accounts, 38 papers, and records of the nonutility service, as 39 may be necessary, to enforce any provisions of this 40 chapter . 41 2. The board shall adopt rules which specify the 42 manner and form of the accounts relating to providing 43 nonutility services which the rate-regulated gas or 44 electric public utility shall maintain. 45 Sec. 12. Section 476.80, unnumbered paragraph 1, 46 Code 2014, is amended to read as follows: 47 A rate-regulated gas or electric public utility 48 which engages in a systematic marketing effort as 49 defined by the board, other than on an incidental or 50 -3- SF2195.3547 (1) 85 rn/nh 3/ 8

casual basis, to promote the availability of nonutility 1 service from the public utility shall make available at 2 reasonable compensation on a nondiscriminatory basis 3 to all persons engaged primarily in providing the same 4 competitive nonutility services in that area all of 5 the following services to the same extent utilized by 6 the public utility in connection with its nonutility 7 services: 8 Sec. 13. Section 476.81, Code 2014, is amended to 9 read as follows: 10 476.81 Audit required. 11 The board may periodically retain a nationally or 12 regionally recognized independent auditing firm to 13 conduct an audit of the nonutility services provided by 14 a rate-regulated gas or electric public utility subject 15 to the provisions of section 476.80 . A nonutility 16 service audit shall not be conducted more frequently 17 than every three years, unless ordered by the board for 18 good cause. The cost of the audit shall be paid by the 19 public utility to the independent auditing firm and 20 shall be included in its regulated rates and charges, 21 unless otherwise ordered by the board for good cause 22 after providing the public utility the opportunity for 23 a hearing on the board’s decision. 24 Sec. 14. Section 476.83, Code 2014, is amended to 25 read as follows: 26 476.83 Complaints. 27 Any person may file a written complaint with the 28 board requesting that the board determine compliance by 29 a rate-regulated gas or electric public utility with 30 the provisions of section 476.78 , 476.79 , or 476.80 , or 31 any validly adopted rules to implement these sections. 32 Upon the filing of a complaint, the board may promptly 33 initiate a formal complaint proceeding and give notice 34 of the proceeding and the opportunity for hearing. The 35 formal complaint proceeding may be initiated at any 36 time by the board on its own motion. The board shall 37 render a decision in the proceeding within ninety days 38 after the date the written complaint was filed, unless 39 additional time is requested by the complainant. 40 Sec. 15. Section 476.96, Code 2014, is amended to 41 read as follows: 42 476.96 Definitions. 43 As used in section 476.95 , this section , and 44 sections 476.97 through 476.102 476.100 and 476.101 , 45 unless the context otherwise requires: 46 1. “Basic communications service” includes at 47 a minimum, basic local telephone service, switched 48 access, 911 and E-911 services, and dual party relay 49 service. The board is authorized to classify by rule 50 -4- SF2195.3547 (1) 85 rn/nh 4/ 8

at any time, any other two-way switched communications 1 services as basic communications services consistent 2 with community expectations and the public interest. 3 2. “Basic local telephone service” means the 4 provision of dial tone access and usage, for the 5 transmission of two-way switched communications within 6 a local exchange area, including, but not limited to, 7 the following: 8 a. Residence service and business services, 9 including flat rate or local measured service, private 10 branch exchange trunks, trunk type hunting services, 11 direct inward dialing, and the network access portion 12 of central office switched exchange service. 13 b. Extended area service. 14 c. Touch tone service when provided separately. 15 d. Call tracing. 16 e. Calling number blocking on either a per call or 17 a per line basis. 18 f. Local exchange white pages directories. 19 g. Installation and repair of local network access. 20 h. Local operator services, excluding directory 21 assistance. 22 i. Toll service blocking and 1-900 and 1-976 access 23 blocking. 24 3. 1. “Competitive local exchange service provider” 25 means any person, including a municipal utility, that 26 provides local exchange services, other than a local 27 exchange carrier or a nonrate-regulated wireline 28 provider of local exchange services under an authorized 29 certificate of public convenience and necessity within 30 a specific geographic area described in maps filed with 31 and approved by the board as of September 30, 1992. 32 4. “Interim number portability” means one or more 33 mechanisms by which a local exchange customer at a 34 particular location may change the customer’s local 35 exchange services provider without any change in the 36 local exchange customer’s telephone number, while 37 experiencing as little loss of functionality as is 38 feasible using available technology. 39 5. 2. “Local exchange carrier” means any person 40 that was the incumbent and historical rate-regulated 41 wireline provider of local exchange services or any 42 successor to such person that provides local exchange 43 services under an authorized certificate of public 44 convenience and necessity within a specific geographic 45 area described in maps filed with and approved by the 46 board as of September 30, 1992. 47 6. “Nonbasic communications services” means all 48 communications services subject to the board’s 49 jurisdiction which are not deemed either by statute or 50 -5- SF2195.3547 (1) 85 rn/nh 5/ 8

by rule to be basic communications services, including 1 any service offered by the local exchange carrier 2 for the first time after July 1, 1995. A service is 3 not considered new if it constitutes the bundling, 4 unbundling, or repricing of an already existing 5 service. Consistent with community expectations and 6 the public interest, the board may reclassify by rule 7 as nonbasic those two-way switched communications 8 services previously classified by rule as basic. 9 7. “Provider number portability” means the 10 capability of a local exchange customer to change 11 the customer’s local exchange services provider 12 at the customer’s same location without any change 13 in the local exchange customer’s telephone number, 14 while preserving the full range of functionality 15 that the customer currently experiences. “Provider 16 number portability” includes the equal availability 17 of information concerning the local exchange provider 18 serving the number to all carriers, and the ability 19 to deliver traffic directly to that provider without 20 having first to route traffic to the local exchange 21 carrier or otherwise use the services, facilities, or 22 capabilities of the local exchange carrier to complete 23 the call, and without the dialing of additional digits 24 or access codes. 25 Sec. 16. Section 476.101, subsections 1, 8, and 10, 26 Code 2014, are amended to read as follows: 27 1. A certificate of public convenience and 28 necessity to provide local telephone service shall 29 not be interpreted as conveying a monopoly, exclusive 30 privilege, or franchise. A competitive local 31 exchange service provider shall not be subject to 32 the requirements of this chapter , except that a 33 competitive local exchange service provider shall 34 obtain a certificate of public convenience and 35 necessity pursuant to section 476.29 , file tariffs, 36 notify affected customers prior to any rate increase, 37 file reports, information, and pay assessments pursuant 38 to section 476.2, subsection 4 , and sections 476.9 , 39 476.10 , 476.16 , 476.102 , and 477C.7 , and shall be 40 subject to the board’s authority with respect to 41 adequacy of service, interconnection, discontinuation 42 of service, civil penalties, and complaints. If, 43 after notice and opportunity for hearing, the board 44 determines that a competitive local exchange service 45 provider possesses market power in its local exchange 46 market or markets, the board may apply such other 47 provisions of this chapter to a competitive local 48 exchange service provider as it deems appropriate. 49 8. Any person may file a written complaint with the 50 -6- SF2195.3547 (1) 85 rn/nh 6/ 8

board requesting the board to determine compliance by a 1 local exchange carrier with the provisions of sections 2 476.96 , through 476.100 , and 476.102 , and this section , 3 or any board rules implementing those sections. Upon 4 the filing of such complaint, the board may promptly 5 initiate a formal complaint proceeding and give notice 6 of the proceeding and the opportunity for hearing. The 7 formal complaint proceeding may be initiated at any 8 time by the board on its own motion. The board shall 9 render a decision in the proceeding within ninety days 10 after the date the written complaint was filed. The 11 board, for good cause shown, may extend the deadline 12 for acting upon the complaint for an additional period 13 not to exceed thirty days. 14 10. In a proceeding associated with the granting 15 of a certificate under section 476.29 , approving 16 maps and tariffs for competitive local exchange 17 providers provided for in this section , or in resolving 18 a complaint filed pursuant to subsection 8 and 19 proceedings under 47 U.S.C. §251 – 254, the board shall 20 allocate the costs and expenses of the proceedings 21 to persons identified as parties in the proceeding 22 who are engaged in or who seek to engage in providing 23 telecommunications services or other persons identified 24 as participants in the proceeding. The funds received 25 for the costs and the expenses shall be remitted to the 26 treasurer of state for deposit in the department of 27 commerce revolving fund created in section 546.12 as 28 provided in section 476.10 . 29 Sec. 17. Section 476.101, subsections 4, 5, and 6, 30 Code 2014, are amended by striking the subsections. 31 Sec. 18. Section 477.9A, Code 2014, is amended to 32 read as follows: 33 477.9A Deregulated services. 34 1. A telegraph or telephone company whose services 35 are deregulated by the board under section 476.1D 36 may use public notice as a means of conveying terms 37 and conditions to customers where identification of 38 those customers is infeasible or impractical. Public 39 notice may also be used to convey changes in terms and 40 conditions, other than price increases or limitations 41 of liability, to all other customers, but only if those 42 customers were put on notice that this means would be 43 used to convey subsequent changes. Notwithstanding 44 section 477.7 , when services are deregulated by the 45 board under section 476.1D , a telegraph or telephone 46 company, in any contract, agreement, or by means of 47 public notice, may reasonably limit its liability 48 under section 477.7 in the course of providing the 49 deregulated communications services to its customers, 50 -7- SF2195.3547 (1) 85 rn/nh 7/ 8

except for acts of willful misconduct. However, 1 this section does not allow a greater limitation on 2 liability than exists in any contract or approved 3 tariff as of the effective date of the deregulation of 4 the services. 5 2. A telephone company whose services are subject 6 to regulation by the board with respect to terms and 7 conditions, but not rates, shall give notice of rate 8 changes to customers. 9 Sec. 19. REPEAL. Sections 476.4A, 476.97, and 10 476.99, Code 2014, are repealed. > 11 2. Title page, by striking lines 1 through 3 12 and inserting < An Act relating to matters under the 13 purview of the utilities division of the department of 14 commerce. > 15 ______________________________ WATTS of Dallas -8- SF2195.3547 (1) 85 rn/nh 8/ 8 #2.