S.F. 2195 Section 1. Section 476.4, Code 2014, is amended to read as 1 follows: 2 476.4 Tariffs filed. 3 1. Every public utility shall file with the board tariffs 4 showing the rates and charges for its public utility services 5 and the rules and regulations under which such services were 6 furnished, on April 1, 1963, which rates and charges shall be 7 subject to investigation by the board as provided in section 8 476.3 , and upon such investigation the burden of establishing 9 the reasonableness of such rates and charges shall be upon the 10 public utility filing the same. These filings shall be made 11 under such rules as the board may prescribe within such time 12 and in such form as the board may designate. In prescribing 13 rules and regulations with respect to the form of tariffs, 14 the board shall, in the case of public utilities subject to 15 regulation by any federal agency, give due regard to any 16 corresponding rules and regulations of such federal agency, to 17 the end that unnecessary duplication of effort and expense may 18 be avoided so far as reasonably possible. Each public utility 19 shall keep copies of its tariffs open to public inspection 20 under such rules as the board may prescribe. 21 2. No later than January 1, 2015, a telephone utility is 22 required to file tariffs as provided in this section only for 23 such wholesale services as may be specified by the board. 24 3. Every rate, charge, rule , and regulation contained in 25 any filing made with the commission on or prior to July 4, 26 1963, shall be effective as of such date, subject, however, to 27 investigation as herein provided. If any such filing is made 28 prior to the time the commission prescribes rules as aforesaid, 29 and if such filing does not comply as to form or substance with 30 such rules, then the public utility which filed the same shall 31 within a reasonable time after the adoption of such rules make 32 a new filing or filings complying with such rules, which new 33 filing or filings shall be deemed effective as of July 4, 1963. 34 Sec. 2. Section 476.29, subsections 3 and 6, Code 2014, are 35 -1- LSB 5301SV (2) 85 rn/nh 1/ 7

S.F. 2195 amended to read as follows: 1 3. A certificate is transferable, subject to approval of 2 the board pursuant to section 476.20, subsection 1 , and for 3 purposes of a rate-regulated local exchange utility shall be 4 treated by the board in the same manner as a reorganization 5 pursuant to sections 476.76 and 476.77 . 6 6. The certificate and tariffs approved by the board are 7 is the only authority required for the utility to furnish 8 land-line local telephone service. However, to the extent 9 not inconsistent with this section , the power to regulate the 10 conditions required and manner of use of the highways, streets, 11 rights-of-way, and public grounds remains in the appropriate 12 public authority. 13 Sec. 3. Section 476.72, subsections 4 and 5, Code 2014, are 14 amended to read as follows: 15 4. “Public utility” includes only means a gas or electric 16 rate-regulated public utilities and rate-regulated telephone 17 utilities providing local exchange telecommunication service 18 utility . 19 5. “Utility business” means the generation or transmission 20 of electricity or furnishing of gas or furnishing electricity 21 or furnishing rate-regulated communications services to the 22 public for compensation. 23 Sec. 4. Section 476.78, Code 2014, is amended to read as 24 follows: 25 476.78 Cross-subsidization prohibited. 26 A rate-regulated gas or electric public utility shall 27 not directly or indirectly include any costs or expenses 28 attributable to providing nonutility service in regulated 29 rates or charges. Except for contracts existing as of July 30 1, 1996, a rate-regulated gas or electric public utility or 31 its affiliates shall not use vehicles, service tools and 32 instruments, or employees, the costs, salaries, or benefits 33 of which are recoverable in the regulated rates for electric 34 service or gas service to install, service, or repair 35 -2- LSB 5301SV (2) 85 rn/nh 2/ 7

S.F. 2195 residential or commercial gas or electric heating, ventilating, 1 or air conditioning systems, or interior lighting systems 2 and fixtures; or to sell at retail heating, ventilating, 3 air conditioning, or interior lighting equipment. For the 4 purpose of this section , “commercial” means a place of business 5 primarily used for the storage or sale, at wholesale or retail, 6 of goods, wares, services, or merchandise. Nothing in this 7 section shall be construed to prohibit a rate-regulated gas 8 or electric public utility from using its utility vehicles, 9 service tools and instruments, and employees to market systems, 10 services, and equipment, to light pilots, or to eliminate a 11 customer emergency or threat to public safety. 12 Sec. 5. Section 476.79, Code 2014, is amended to read as 13 follows: 14 476.79 Provision of nonutility service. 15 1. A rate-regulated gas or electric public utility 16 providing any nonutility service to its customers shall keep 17 and render to the board separate records of the nonutility 18 service. The board may provide for the examination and 19 inspection of the books, accounts, papers, and records of 20 the nonutility service, as may be necessary, to enforce any 21 provisions of this chapter . 22 2. The board shall adopt rules which specify the manner and 23 form of the accounts relating to providing nonutility services 24 which the rate-regulated gas or electric public utility shall 25 maintain. 26 Sec. 6. Section 476.80, unnumbered paragraph 1, Code 2014, 27 is amended to read as follows: 28 A rate-regulated gas or electric public utility which 29 engages in a systematic marketing effort as defined by the 30 board, other than on an incidental or casual basis, to promote 31 the availability of nonutility service from the public 32 utility shall make available at reasonable compensation on a 33 nondiscriminatory basis to all persons engaged primarily in 34 providing the same competitive nonutility services in that area 35 -3- LSB 5301SV (2) 85 rn/nh 3/ 7

S.F. 2195 all of the following services to the same extent utilized by 1 the public utility in connection with its nonutility services: 2 Sec. 7. Section 476.81, Code 2014, is amended to read as 3 follows: 4 476.81 Audit required. 5 The board may periodically retain a nationally or regionally 6 recognized independent auditing firm to conduct an audit of 7 the nonutility services provided by a rate-regulated gas or 8 electric public utility subject to the provisions of section 9 476.80 . A nonutility service audit shall not be conducted more 10 frequently than every three years, unless ordered by the board 11 for good cause. The cost of the audit shall be paid by the 12 public utility to the independent auditing firm and shall be 13 included in its regulated rates and charges, unless otherwise 14 ordered by the board for good cause after providing the public 15 utility the opportunity for a hearing on the board’s decision. 16 Sec. 8. Section 476.83, Code 2014, is amended to read as 17 follows: 18 476.83 Complaints. 19 Any person may file a written complaint with the board 20 requesting that the board determine compliance by a 21 rate-regulated gas or electric public utility with the 22 provisions of section 476.78 , 476.79 , or 476.80 , or any validly 23 adopted rules to implement these sections. Upon the filing 24 of a complaint, the board may promptly initiate a formal 25 complaint proceeding and give notice of the proceeding and the 26 opportunity for hearing. The formal complaint proceeding may 27 be initiated at any time by the board on its own motion. The 28 board shall render a decision in the proceeding within ninety 29 days after the date the written complaint was filed, unless 30 additional time is requested by the complainant. 31 Sec. 9. Section 476.101, subsections 1, 8, and 10, Code 32 2014, are amended to read as follows: 33 1. A certificate of public convenience and necessity to 34 provide local telephone service shall not be interpreted as 35 -4- LSB 5301SV (2) 85 rn/nh 4/ 7

S.F. 2195 conveying a monopoly, exclusive privilege, or franchise. A 1 competitive local exchange service provider shall not be 2 subject to the requirements of this chapter , except that a 3 competitive local exchange service provider shall obtain a 4 certificate of public convenience and necessity pursuant 5 to section 476.29 , file tariffs, notify affected customers 6 prior to any rate increase, file reports, information, and 7 pay assessments pursuant to section 476.2, subsection 4 , and 8 sections 476.9 , 476.10 , 476.16 , 476.102 , and 477C.7 , and shall 9 be subject to the board’s authority with respect to adequacy 10 of service, interconnection, discontinuation of service, civil 11 penalties, and complaints. If, after notice and opportunity 12 for hearing, the board determines that a competitive local 13 exchange service provider possesses market power in its local 14 exchange market or markets, the board may apply such other 15 provisions of this chapter to a competitive local exchange 16 service provider as it deems appropriate. 17 8. Any person may file a written complaint with the 18 board requesting the board to determine compliance by a 19 local exchange carrier with the provisions of sections 20 476.96 through 476.100 , 476.102 , and this section , or any 21 board rules implementing those sections. Upon the filing 22 of such complaint, the board may promptly initiate a formal 23 complaint proceeding and give notice of the proceeding and the 24 opportunity for hearing. The formal complaint proceeding may 25 be initiated at any time by the board on its own motion. The 26 board shall render a decision in the proceeding within ninety 27 days after the date the written complaint was filed. The 28 board, for good cause shown, may extend the deadline for acting 29 upon the complaint for an additional period not to exceed 30 thirty days. 31 10. In a proceeding associated with the granting of a 32 certificate under section 476.29 , approving maps and tariffs 33 for competitive local exchange providers provided for in 34 this section , or in resolving a complaint filed pursuant 35 -5- LSB 5301SV (2) 85 rn/nh 5/ 7

S.F. 2195 to subsection 8 and proceedings under 47 U.S.C. § 251 – 1 254, the board shall allocate the costs and expenses of the 2 proceedings to persons identified as parties in the proceeding 3 who are engaged in or who seek to engage in providing 4 telecommunications services or other persons identified as 5 participants in the proceeding. The funds received for the 6 costs and the expenses shall be remitted to the treasurer of 7 state for deposit in the department of commerce revolving fund 8 created in section 546.12 as provided in section 476.10 . 9 Sec. 10. Section 477.9A, Code 2014, is amended to read as 10 follows: 11 477.9A Deregulated services. 12 1. A telegraph or telephone company whose services are 13 deregulated by the board under section 476.1D may use public 14 notice as a means of conveying terms and conditions to 15 customers where identification of those customers is infeasible 16 or impractical. Public notice may also be used to convey 17 changes in terms and conditions, other than price increases or 18 limitations of liability, to all other customers, but only if 19 those customers were put on notice that this means would be 20 used to convey subsequent changes. Notwithstanding section 21 477.7 , when services are deregulated by the board under section 22 476.1D , a telegraph or telephone company, in any contract, 23 agreement, or by means of public notice, may reasonably limit 24 its liability under section 477.7 in the course of providing 25 the deregulated communications services to its customers, 26 except for acts of willful misconduct. However, this section 27 does not allow a greater limitation on liability than exists in 28 any contract or approved tariff as of the effective date of the 29 deregulation of the services. 30 2. A telephone company whose services are subject to 31 regulation by the board with respect to terms and conditions, 32 but not rates, shall give notice of rate changes to customers. 33 EXPLANATION 34 The inclusion of this explanation does not constitute agreement with 35 -6- LSB 5301SV (2) 85 rn/nh 6/ 7

S.F. 2195 the explanation’s substance by the members of the general assembly. 1 This bill modifies provisions applicable to 2 telecommunications regulation under the authority of the Iowa 3 utilities board. 4 The bill provides that tariff requirements applicable to 5 public utilities showing the rates and charges for their 6 services shall, with regard to telephone utilities, no later 7 than January 1, 2015, apply only for wholesale services as 8 may be specified by the board. Several references to tariffs 9 applying to nonwholesale services are deleted consistent 10 with this new provision. The bill also deletes references 11 to rate-regulated local exchange utilities with regard to 12 the transferability of a certificate of public convenience 13 and necessity, and with regard to public utility affiliate 14 disclosure, and makes conforming changes consistent with this 15 modification. 16 The bill provides that the current 90-day time frame for 17 board action regarding local exchange carrier compliance 18 complaint decisions may be extended by the board for good cause 19 shown for an additional period not to exceed 30 days. 20 Finally, the bill provides that a telephone company whose 21 services are subject to board regulation with respect to terms 22 and conditions, but not rates, shall give notice of rate 23 changes to customers. 24 -7- LSB 5301SV (2) 85 rn/nh 7/ 7