LOCAL GOVERNMENT CODE


TITLE 9. PUBLIC BUILDINGS AND GROUNDS


SUBTITLE A. MUNICIPAL PUBLIC BUILDINGS AND GROUNDS


CHAPTER 283. MANAGEMENT OF PUBLIC RIGHT-OF-WAY USED BY TELECOMMUNICATIONS PROVIDER IN MUNICIPALITY


SUBCHAPTER A. GENERAL PROVISIONS


Sec. 283.001. STATE POLICY; PURPOSE. (a) It is the policy of this state to:

(1) encourage competition in the provision of telecommunications services;

(2) reduce the barriers to entry for providers of services so that the number and types of services offered by providers continue to increase through competition;

(3) ensure that providers of telecommunications services do not obtain a competitive advantage or disadvantage in their ability to obtain use of a public right-of-way within a municipality; and

(4) fairly reduce the uncertainty and litigation concerning franchise fees.

(b) It is also the policy of this state that municipalities:

(1) retain the authority to manage a public right-of-way within the municipality to ensure the health, safety, and welfare of the public; and

(2) receive from certificated telecommunications providers fair and reasonable compensation for the use of a public right-of-way within the municipality.

(c) The purpose of this chapter is to establish a uniform method for compensating municipalities for the use of a public right-of-way by certificated telecommunications providers that:

(1) is administratively simple for municipalities and telecommunications providers;

(2) is consistent with state and federal law;

(3) is competitively neutral;

(4) is nondiscriminatory;

(5) is consistent with the burdens on municipalities created by the incursion of certificated telecommunications providers into a public right-of-way; and

(6) provides fair and reasonable compensation for the use of a public right-of-way.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.002. DEFINITIONS. In this chapter:

(1) "Access line":

(A) means, unless the commission adopts a different definition under Section 283.003, a unit of measurement representing:

(i) each switched transmission path of the transmission media that is physically within a public right-of-way extended to the end-use customer's premises within the municipality, that allows the delivery of local exchange telephone services within a municipality, and that is provided by means of owned facilities, unbundled network elements or leased facilities, or resale;

(ii) each termination point or points of a nonswitched telephone or other circuit consisting of transmission media located within a public right-of-way connecting specific locations identified by, and provided to, the end-use customer for delivery of nonswitched telecommunications services within the municipality; or

(iii) each switched transmission path within a public right-of-way used to provide central office-based PBX-type services for systems of any number of stations within the municipality, and in that instance, one path shall be counted for every 10 stations served; and

(B) may not be construed to include interoffice transport or other transmission media that do not terminate at an end-use customer's premises or to permit duplicate or multiple assessment of access line rates on the provision of a single service.

(2) "Certificated telecommunications provider" means a person who has been issued a certificate of convenience and necessity, certificate of operating authority, or service provider certificate of operating authority by the commission to offer local exchange telephone service or a person who provides voice service.

(3) "Commission" means the Public Utility Commission of Texas.

(4) "Consumer price index" means the annual revised consumer price index for all urban consumers for Texas, as published by the Federal Bureau of Labor Statistics.

(5) "Local exchange telephone service" has the meaning assigned by Section 51.002, Utilities Code.

(6) "Public right-of-way" means the area on, below, or above a public roadway, highway, street, public sidewalk, alley, waterway, or utility easement in which the municipality has an interest. The term does not include the airwaves above a right-of-way with regard to wireless telecommunications.

(7) "Voice service" means voice communications services provided through wireline facilities located at least in part in the public right-of-way, without regard to the delivery technology, including Internet protocol technology. The term does not include voice service provided by a commercial mobile service provider as defined by 47 U.S.C. Section 332(d).

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2005, 79th Leg., 2nd C.S., Ch. 2 (S.B. 5), Sec. 28, eff. September 7, 2005.

Sec. 283.003. COMMISSION REVIEW. (a) Not later than September 1, 2002, the commission shall determine whether changes in technology, facilities, or competitive or market conditions justify a modification in the commission-established categories of access lines or, if necessary, the adoption of a definition of "access line" provided by this section. The commission may not begin a review authorized by this section before March 1, 2002.

(b) As part of the proceeding described by Subsection (a), and as necessary after that proceeding, the commission by rule may modify the definition of "access line" and the categories of access lines as necessary to ensure competitive neutrality and nondiscriminatory application and to maintain consistent levels of compensation, as annually increased by growth in access lines and consumer price index, as applicable, to the municipalities.

(c) After September 1, 2002, the commission, on its own motion, shall make the determination required by this section at least once every three years.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.004. APPLICATION. This chapter applies only to municipal regulations and fees imposed on and collected from certificated telecommunications providers.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.005. INFORMATION. (a) The commission may collect and compile any information from certificated telecommunications providers and municipalities as is necessary to implement this chapter.

(b) The commission shall maintain the confidentiality of the information described by Subsection (a) in accordance with Section 52.207, Utilities Code.

(c) Information provided to municipalities under this chapter shall be governed by confidentiality procedures established by the commission in compliance with Section 52.207, Utilities Code.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.006. FEE REQUIREMENT FOR USE OF RIGHT-OF-WAY. (a) Notwithstanding any other law, a certificated telecommunications provider that does not use a public right-of-way within the municipality may not be required to pay franchise fees, right-of-way fees or any other fee or other compensation, other than a fee or compensation excluded from the "base amount" under Section 283.053(a), directly to the municipality to provide local exchange telephone service in the municipality.

(b) This section does not affect the number of access lines counted and reported to the commission under Section 283.055.

(c) The commission shall adopt rules to determine the method of payment and to ensure that access line fees are paid on a competitively neutral and non-discriminatory basis by certificated telecommunications providers that provide more access lines than they purchase from an underlying provider of resold services or unbundled network elements.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

SUBCHAPTER B. RIGHT-OF-WAY FEES


Sec. 283.051. RIGHT-OF-WAY FEE. (a) Notwithstanding any other law, a certificated telecommunications provider that provides telecommunications services within a municipality is required to pay as compensation to a municipality for use of the public rights-of-way in the municipality only the amount determined by the commission under Section 283.055.

(b) This section does not affect the right of a municipality to initiate legal action against a certificated telecommunications provider that uses a public right-of-way to provide local exchange telephone service within a municipality and has not compensated the municipality in accordance with this chapter.

(c) Fees imposed under this chapter shall constitute "a municipal fee" or "municipal fees" within the meaning of the Utilities Code.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.052. EFFECT OF PAYMENT OF RIGHT-OF-WAY FEES TO MUNICIPALITY. (a) Subject to the requirements of Sections 283.056 and 283.057, a certificated telecommunications provider that complies with this chapter and commission orders issued under this chapter:

(1) may erect poles or construct conduit, cable, switches, and related appurtenances and facilities and excavate within a public right-of-way to provide telecommunications service; and

(2) is not subject to municipal franchise requirements.

(b) All use of a public right-of-way is nonexclusive and subject to Section 283.056.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.053. BASE AMOUNT. (a) In determining a municipality's "base amount" under this section, pole rental fees, special assessments, and taxes of any kind, including ad valorem or sales and use taxes, or other compensation not related to the use of a public right-of-way, are not included.

(b) For purposes of determining the amount of a municipality's right-of-way fee under Section 283.055, the "base amount" for a municipality not described by another subsection is the total amount of revenue received by the municipality in franchise, license, permit, and application fees and in-kind services or facilities from certificated telecommunications providers in 1998 within the boundaries of the municipality, including all newly annexed areas. The base amount prescribed under this subsection shall include the municipal fee rate escalation provisions and the value of in-kind services or facilities received in 1998 in accordance with Subsection (f) specifically prescribed in applicable agreements or ordinances effective or adopted by January 12, 1999, unless the governing body of the municipality elects otherwise. However, that additional compensation may not become part of the base amount before it becomes effective under the existing franchise agreement or ordinance.

(c) The base amount for a municipality located in a county with a population of less than 25,000 or a municipality that either did not have an effective franchise agreement or ordinance on January 12, 1999, or was not in existence on that date shall be, at the election of the governing body of the municipality, equal to:

(1) an amount not greater than the statewide average fee per line for each category of access line of the certificated telecommunications provider with the greatest number of access lines in that municipality, multiplied by the total number of access lines in each category located within the boundaries of the municipality on December 31, 1998, for a municipality in existence on that date, or on the date of incorporation for a municipality incorporated after that date;

(2) an amount not greater than the base amount determined for a similarly sized municipality in the same or an adjacent county in which the certificated telecommunications provider with the greatest number of access lines in the municipality is the same for each municipality; or

(3) the total amount of revenue received by the municipality in franchise, license, permit, and application fees from all certificated telecommunications providers in 1998.

(d) The base amount for a municipality that was involved in litigation relating to franchise fees with one or more certificated telecommunications providers during any part of 1998 and that, not later than December 1, 1999, repeals any ordinance subject to dispute in the litigation, voluntarily dismisses with prejudice any claims in the litigation for compensation, and agrees to waive any potential claim for compensation under any franchise agreement or ordinance expired or in existence on September 1, 1999, is equal to, at the municipality's election:

(1) an amount not to exceed the state average access line rate on a per category basis for the certificated telecommunications provider with the greatest number of access lines in that municipality multiplied by the total number of access lines located within the boundaries of the municipality on December 31, 1998, including any newly annexed areas; or

(2) an amount not to exceed 21 percent of the total sales and use tax revenue received by the municipality pursuant to Chapter 321, Tax Code. The amount does not include sales and use taxes collected under:

(A) Chapter 451, 452, 453, or 454, Transportation Code, for a mass transit authority;

(B) Chapter 504 or 505;

(C) Chapters 334 and 335, Local Government Code; or

(D) Chapters 321, 322, and 323, Tax Code, for a special district, including health service, crime control, hospital, and emergency service districts.

(e) A litigating municipality electing to dismiss with prejudice its claims in the litigation and repealing any ordinance subject to dispute in the litigation does not, by making the election, waive any defenses it may have to claims by other parties to the litigation. A municipality in litigation relating to franchise fees with one or more certificated telecommunications providers during any part of 1998 that does not make an effective election under Subsection (d) shall be governed by Subsection (b).

(f) For the purpose of determining the base amount, in-kind services or facilities provided to municipalities under existing franchise agreements or ordinances by certificated telecommunications providers shall be valued at one percent of the total 1998 revenue from franchise, permit, license, and application fees paid to the municipality under all applicable telecommunications franchise agreements or ordinances, unless a municipality can establish before the commission that those services or facilities received by the municipality had a greater value in 1998.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Amended by:

Acts 2007, 80th Leg., R.S., Ch. 885 (H.B. 2278), Sec. 3.18, eff. April 1, 2009.

Sec. 283.054. EXISTING FRANCHISE AGREEMENTS AND ORDINANCES. (a) Except as otherwise provided by this chapter, this chapter does not affect the validity of a franchise agreement or ordinance with a certificated telecommunications provider executed before January 12, 1999. A municipality may continue to enforce a franchise agreement or ordinance and to collect franchise fees and other charges under that franchise agreement or ordinance until the date on which the agreement or ordinance expires by its own terms or is terminated in accordance with the terms of this section. A provider may elect to terminate a franchise agreement or obligations under an existing ordinance as of the effective date of the right-of-way fee rates adopted in accordance with the commission's rules adopted under this chapter. A provider terminating a franchise agreement or obligations under an existing ordinance under this section shall become governed by this chapter on the date of termination. A termination under this subsection does not affect the calculation of the municipality's base amount under Section 283.053. A certificated telecommunications provider electing to terminate an existing franchise agreement or obligations under an ordinance under this section shall provide notice to the commission and the affected municipality not later than December 1, 1999.

(b) If a franchise agreement or obligations under an ordinance in a municipality expire or are terminated under Subsection (a) before the commission has determined the amounts to be paid to a municipality, the affected certificated telecommunications providers operating in the municipality shall continue paying at the rates required under the terms of the expired agreement or ordinance until the commission's determination and the certificated telecommunications provider's implementation of appropriate rates under this chapter.

(c) During the period in which a franchise agreement or ordinance described by Subsection (a) is in effect, a certificated telecommunications provider not subject to an existing franchise agreement or ordinance that wants to construct facilities to offer telecommunications services in the municipality shall pay right-of-way fees that are competitively neutral and non-discriminatory, consistent with the charges of the most recent agreement or ordinance between the municipality and the certificated telecommunications provider serving the largest number of access lines within the municipality. The provider shall pay those fees for the duration of that agreement or ordinance or until the right-of-way fees established by commission rule take effect. If the existing franchise agreement or ordinance contains a provision requiring in-kind services or facilities, the certificated telecommunications provider not subject to an existing franchise agreement or ordinance shall pay an amount equal to an additional one percent of its total fees under the applicable agreement or ordinance in lieu of any in-kind services or facilities, if any, that otherwise are required under the terms of the existing franchise agreement or ordinance. However, the municipality may not require a certificated telecommunications provider to provide any services or facilities without compensation or at below-market rates for the right to use a public right-of-way or to provide telecommunications services in the municipality. On request of the certificated telecommunications provider not subject to an existing franchise agreement or ordinance, the commission shall convert the compensation under the existing franchise agreement or ordinance to a fee per access line on a competitively neutral and non-discriminatory basis, and the certificated telecommunications provider may elect to pay the municipality on a fee per access line basis rather than the manner of compensation provided under the existing franchise agreement or ordinance.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.055. DETERMINATION OF FEES BY COMMISSION. (a) Not later than November 1, 1999, the commission shall establish not more than three categories of access lines for statewide use.

(b) Not later than March 1, 2000, the commission shall establish:

(1) for each municipality, rates per access line by category for the use of the rights-of-way in that municipality; and

(2) the statewide average of those rates per access line by category for each certificated telecommunications provider, if necessary.

(c) The rates when applied to the total number of access lines by category in the municipality shall be equal to the base amount.

(d) Not later than December 1, 1999, a municipality that wants to effect an allocation of the base amount over specific access line categories to be assessed rates shall notify the commission of the desired allocation. The commission shall establish an allocation of the base amount over the categories of access lines if a municipality does not file its proposed allocation by December 1, 1999. A municipality may request a modification of the commission's allocation not more than once every 24 months by notifying the commission and all affected certificated telecommunications providers in September of that year that the municipality wants to change the allocation for the next calendar year. A municipality's allocation shall be implemented unless, on complaint by an affected certificated telecommunications provider, the commission determines that the allocation is not just and reasonable, is not competitively neutral, or is discriminatory.

(e) Rates imposed under this section and the allocation among certificated telecommunications providers must be exercised in a competitively neutral manner, may not unduly impair competition, must be non-discriminatory, and must comply with state and federal law. The commission shall determine the applicable rates for each municipality for each category, taking into account the allocation under Subsection (d) and the type, use, and function of access lines.

(f) Certificated telecommunications providers shall pay to the municipality a quarterly amount calculated monthly based on the access line rates established by the commission under this section and the number of access lines as reflected in the reports filed under Subsection (j). The providers shall make the quarterly payment not later than 45 days after the end of the quarter.

(g) Beginning 24 months after the date the commission establishes rates per access line, the commission shall annually adjust the rates per access line for each municipality by an amount equal to one-half the annual change, if any, in the consumer price index. At that time, the commission shall provide each certificated telecommunications provider and municipality with the adjusted monthly rates for each category of access line.

(h) On an annual basis, an affected municipality may provide notice to the commission to decline all or any portion of any increase in the per category access line rates.

(i) A certificated telecommunications provider may not be required to remit a right-of-way fee to a municipality on those access lines that have been resold, leased, or otherwise provided to another certificated telecommunications provider, if the underlying certificated telecommunications provider supplying those services or facilities has been furnished with adequate proof that the provider of services to the end-use customer will directly remit to the municipality a right-of-way fee based on those access lines.

(j) On a quarterly basis, each certificated telecommunications provider shall file a report with the commission that shows the number of access lines, including access lines by category, that the provider has within each municipality at the end of each month of the quarter. The provider shall include with the report a certified statement from an authorized officer or duly authorized representative of the provider stating that the information contained in the report is true and correct to the best of the officer's or representative's knowledge and belief after inquiry. On request and subject to the confidentiality protections of Section 283.005, each certificated telecommunications provider shall provide each affected municipality with a copy of the report required by this subsection.

(k) On request of the commission and to the extent available, the report required by Subsection (j) shall specifically identify access lines that are provided by means of resold services or unbundled facilities to another certificated telecommunications provider who is not an end-use customer and the identity of the certificated telecommunications providers obtaining the resold services or unbundled facilities to provide services to end-use customers. A provider may not include in its monthly count of access lines and is not required to remit a right-of-way fee to the municipality on access lines that are resold, leased, or otherwise provided to another certificated telecommunications provider if the provider receives adequate proof that the provider leasing or purchasing the access lines will include the access lines in its monthly count and remit payment on those access lines to the municipality.

(l) The commission may use a report required under Subsection (j) only to verify the number of access lines that serve premises within the municipality.

(m) Notwithstanding any other provision of this chapter, payment by a certificated telecommunications provider that complies with the terms of an unexpired franchise agreement or right-of-way ordinance that applies to the provider satisfies the payment attributable to the provider required by this chapter.

(n) A municipality may not demand or require from a certificated telecommunications provider services, facilities, or goods without compensation or at below-market rates.

(o) A certificated telecommunications provider shall, to the extent required, implement commission established access line rates not later than the 90th day after the date the commission establishes the access line rates under this chapter.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.056. MUNICIPAL AUTHORIZATIONS; PROHIBITION ON OTHER FEES AND CHARGES. (a) A municipality may not require a certificated telecommunications provider to:

(1) pay any compensation other than the fee authorized by Section 283.055, including an application, permit, excavation, or inspection fee, for the right to use a public right-of-way to provide telecommunications services in the municipality; or

(2) provide any services or facilities for the right to use a public right-of-way or to provide telecommunications services in the municipality.

(b) Notwithstanding any other law or any other provision of this chapter, a municipality may require the issuance of a construction permit without cost to a certificated telecommunications provider locating facilities in or on public rights-of-way within the municipality. The terms of the permit shall be consistent with construction permits issued to other persons excavating in a public right-of-way.

(c) A municipality may exercise those police power-based regulations in the management of a public right-of-way that apply to all persons within the municipality. A municipality may exercise police power-based regulations in the management of the activities of certificated telecommunications providers within a public right-of-way only to the extent that they are reasonably necessary to protect the health, safety, and welfare of the public. Police power-based regulation of certificated telecommunications providers may not include activities that are governed by this chapter or are within the sole business discretion of the certificated telecommunications provider. In addition, any police power-based regulation must be competitively neutral and may not be unreasonable or discriminatory. A municipality specifically may not impose regulations on certificated telecommunications providers that are not authorized by this chapter, including:

(1) requirements that particular business offices be located in the municipality;

(2) requirements for filing reports and documents with the municipality that are not required by state law to be filed with the municipality and that are not related to the use of a public right-of-way;

(3) inspection of a provider's business records except to the extent necessary to conduct an authorized review of the provider to ensure compliance with the access line reporting requirements of this chapter if commenced within 90 days after the filing of a certificated telecommunications provider's report of access lines; and

(4) approval of transfers of ownership or control of a provider's business, except that a municipality may require that a provider maintain current point of contact information and provide notice of a transfer within a reasonable time.

(d) In the exercise of its lawful regulatory authority, a municipality shall promptly process each valid and administratively complete application of a certificated telecommunications provider for any permit, license, or consent to excavate, set poles, locate lines, construct facilities, make repairs, affect traffic flow, obtain zoning or subdivision regulation approvals, or for other similar approvals, and shall make every reasonable effort to not delay or unduly burden that provider in the timely conduct of its business.

(e) If there is an emergency necessitating response work or repair, a certificated telecommunications provider may begin that repair or emergency response work or take any action required under the circumstances, provided that the certificated telecommunications provider notifies the affected municipality as promptly as possible after beginning the work and later acquires any approval required by a municipal ordinance applicable to emergency response work.

(f) The compensation paid under this chapter is in lieu of any permit, license, approval, inspection, or other similar fee or charge, including all general business license fees customarily assessed by a municipality for the use of a public right-of-way against persons operating telecommunications-related businesses. The compensation paid under this chapter constitutes full compensation to a municipality for all of a certificated telecommunications provider's facilities located within a public right-of-way, including interoffice transport and other transmission media that do not terminate at an end-use customer's premises, even though those types of lines are not used in the calculation of the compensation. This chapter may not be construed to affect the ad valorem taxation of a certificated telecommunications provider's facilities or to permit the ad valorem taxation of a certificated telecommunication provider's occupancy of a public right-of-way.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.057. INDEMNITY. (a) Certificated telecommunications providers shall indemnify and hold the municipality and its officers and employees harmless against any and all claims, lawsuits, judgments, costs, liens, losses, expenses, fees (including reasonable attorney's fees and costs of defense), proceedings, actions, demands, causes of action, liability, and suits of any kind and nature, including personal or bodily injury (including death), property damage, or other harm for which recovery of damages is sought that is found by a court of competent jurisdiction to be caused solely by the negligent act, error, or omission of the certificated telecommunications provider, any agent, officer, director, representative, employee, affiliate, or subcontractor of the certificated telecommunications provider, or their respective officers, agents, employees, directors, or representatives, while installing, repairing, or maintaining facilities in a public right-of-way. The indemnity provided by this subsection does not apply to any liability resulting from the negligence of the municipality, its officers, employees, contractors, or subcontractors. If a certificated telecommunications provider and the municipality are found jointly liable by a court of competent jurisdiction, liability shall be apportioned comparatively in accordance with the laws of this state without, however, waiving any governmental immunity available to the municipality under state law and without waiving any defenses of the parties under state law. This section is solely for the benefit of the municipality and certificated telecommunications provider and does not create or grant any rights, contractual or otherwise, to any other person or entity.

(b) A certificated telecommunications provider or municipality shall promptly advise the other in writing of any known claim or demand against the certificated telecommunications provider or the municipality related to or arising out of the certificated telecommunications provider's activities in a public right-of-way.

(c) Municipalities with franchise agreements or ordinances applicable to certificated telecommunications providers in effect under a general-use ordinance adopted before January 12, 1999, and after July 1, 1998, and having 1.3 million access lines or more within the municipality on September 1, 1999, may continue to enforce the indemnity provision contained in those franchise agreements or ordinances until the earlier of the date the franchise agreements or ordinances expire or December 31, 2003. A certificated telecommunications provider providing access lines in a municipality described by this subsection is also subject to the indemnity provided by this section.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.

Sec. 283.058. ADDITIONAL COMMISSION JURISDICTION. The commission shall have the jurisdiction over municipalities and certificated telecommunications providers necessary to enforce this chapter and to ensure that all other legal requirements are enforced in a competitively neutral, non-discriminatory, and reasonable manner.

Added by Acts 1999, 76th Leg., ch. 840, Sec. 1, eff. Sept. 1, 1999.