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AN ACT
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relating to state-issued certificates of franchise authority to |
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provide cable service and video service. |
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BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: |
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SECTION 1. Subsection (a), Section 66.003, Utilities Code, |
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is amended to read as follows: |
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(a) An entity or person seeking to provide cable service or |
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video service in this state [after September 1, 2005,] shall file an |
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application for a state-issued certificate of franchise authority |
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with the commission as required by this section. An entity |
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providing cable service or video service under a franchise |
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agreement with a municipality is not subject to this subsection |
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with respect to such municipality until the franchise agreement is |
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terminated under Section 66.004 or until the franchise agreement |
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expires[, except as provided by Section 66.004]. |
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SECTION 2. Section 66.004, Utilities Code, is amended by |
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amending Subsections (a), (c), and (f) and adding Subsections |
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(b-1), (b-2), and (b-3) to read as follows: |
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(a) A cable service provider or a video service provider |
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that currently has or had previously received a franchise to |
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provide cable service or video service with respect to such |
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municipalities is not eligible to seek a state-issued certificate |
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of franchise authority under this chapter as to those |
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municipalities until the expiration date of the existing franchise |
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agreement, except as provided by Subsections (b), (b-1), (b-2), |
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(b-3), and (c). |
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(b-1) Beginning September 1, 2011, a cable service provider |
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or video service provider in a municipality with a population of |
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less than 215,000 that was not allowed to or did not terminate a |
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municipal franchise under Subsection (b) may elect to terminate not |
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less than all unexpired franchises in municipalities with a |
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population of less than 215,000 and seek a state-issued certificate |
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of franchise authority for each area served under a terminated |
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municipal franchise by providing written notice to the commission |
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and each affected municipality before January 1, 2012. A municipal |
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franchise is terminated on the date the commission issues a |
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state-issued certificate of franchise authority to the provider for |
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the area served under that terminated franchise. |
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(b-2) A cable service provider or video service provider in |
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a municipality with a population of at least 215,000 may terminate a |
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municipal franchise in that municipality in the manner described by |
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Subsection (b-1) if: |
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(1) the cable service provider or video service |
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provider is not the incumbent cable service provider in that |
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municipality; and |
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(2) the incumbent cable service provider received a |
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state-issued certificate of franchise authority from the |
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commission before September 1, 2011. |
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(b-3) A municipality with a population of at least 215,000 |
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may enter into an agreement with any cable service provider in the |
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municipality to terminate a municipal cable franchise before the |
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expiration of the franchise. To the extent that the mutually agreed |
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on terms and conditions for early termination of the unexpired |
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municipal cable franchise conflict with a provision of this |
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chapter, the agreed on terms and conditions control. |
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(c) A cable service provider [that serves fewer than 40
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percent of the total cable customers in a municipal franchise area
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and] that elects under Subsection (b), (b-1), or (b-2) to terminate |
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an existing municipal franchise is responsible for remitting to the |
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affected municipality before the 91st day after the date the |
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municipal franchise is terminated any accrued but unpaid franchise |
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fees due under the terminated franchise. If the cable service |
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provider has credit remaining from prepaid franchise fees, the |
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provider may deduct the amount of the remaining credit from any |
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future fees or taxes it must pay to the municipality, either |
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directly or through the comptroller. |
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(f) Except as provided in this chapter, nothing in this |
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chapter is intended to abrogate, nullify, or adversely affect in |
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any way the contractual rights, duties, and obligations existing |
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and incurred by a cable service provider or a video service provider |
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before the date a franchise expires or the date a provider |
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terminates a franchise under Subsection (b-1) or (b-2), as |
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applicable, [enactment of this chapter,] and owed or owing to any |
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private person, firm, partnership, corporation, or other entity |
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including without limitation those obligations measured by and |
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related to the gross revenue hereafter received by the holder of a |
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state-issued certificate of franchise authority for services |
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provided in the geographic area to which such prior franchise or |
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permit applies. All liens, security interests, royalties, and |
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other contracts, rights, and interests in effect on September 1, |
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2005, or the date a franchise is terminated under Subsection (b-1) |
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or (b-2) shall continue in full force and effect, without the |
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necessity for renewal, extension, or continuance, and shall be paid |
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and performed by the holder of a state-issued certificate of |
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franchise authority, and shall apply as though the revenue |
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generated by the holder of a state-issued certificate of franchise |
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authority continued to be generated pursuant to the permit or |
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franchise issued by the prior local franchising authority or |
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municipality within the geographic area to which the prior permit |
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or franchise applies. It shall be a condition to the issuance and |
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continuance of a state-issued certificate of franchise authority |
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that the private contractual rights and obligations herein |
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described continue to be honored, paid, or performed to the same |
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extent as though the cable service provider continued to operate |
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under its prior franchise or permit, for the duration of such |
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state-issued certificate of franchise authority and any renewals or |
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extensions thereof, and that the applicant so agrees. Any person, |
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firm, partnership, corporation, or other entity holding or claiming |
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rights herein reserved may enforce same by an action brought in a |
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court of competent jurisdiction. |
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SECTION 3. Subsection (b), Section 66.005, Utilities Code, |
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is amended to read as follows: |
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(b) The franchise fee payable under this section is to be |
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paid quarterly, within 45 days after the end of the quarter for the |
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preceding calendar quarter. Each payment shall be accompanied by a |
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summary explaining the basis for the calculation of the fee. A |
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municipality may review the business records of the cable service |
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provider or video service provider to the extent necessary to |
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ensure compensation in accordance with Subsection (a), provided |
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that the municipality may only review records that relate to the |
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48-month period preceding the date of the last franchise fee |
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payment. Each party shall bear the party's own costs of the |
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examination. A municipality may, in the event of a dispute |
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concerning compensation under this section, bring an action in a |
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court of competent jurisdiction. |
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SECTION 4. Section 66.006, Utilities Code, is amended to |
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read as follows: |
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Sec. 66.006. IN-KIND CONTRIBUTIONS TO MUNICIPALITY. |
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(a) Until the expiration or termination of the incumbent cable |
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service provider's agreement, the holder of a state-issued |
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certificate of franchise authority shall pay a municipality in |
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which it is offering cable service or video service the same cash |
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payments on a per subscriber basis as required by the incumbent |
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cable service provider's franchise agreement. All cable service |
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providers and all video service providers shall report quarterly to |
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the municipality the total number of subscribers served within the |
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municipality. The amount paid by the holder of a state-issued |
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certificate of franchise authority shall be calculated quarterly by |
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the municipality by multiplying the amount of cash payment under |
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the incumbent cable service provider's franchise agreement by a |
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number derived by dividing the number of subscribers served by a |
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video service provider or cable service provider by the total |
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number of video or cable service subscribers in the municipality. |
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Such pro rata payments are to be paid quarterly to the municipality |
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within 45 days after the end of the quarter for the preceding |
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calendar quarter. |
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(b) On the expiration or termination of the incumbent cable |
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service provider's agreement, the holder of a state-issued |
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certificate of franchise authority shall pay a municipality in |
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which it is offering cable service or video service one percent of |
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the provider's gross revenues, as defined by this chapter, or at the |
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municipality's election, the per subscriber fee that was paid to |
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the municipality under the expired or terminated incumbent cable |
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service provider's agreement, in lieu of in-kind compensation and |
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grants. Payments under this subsection shall be paid in the same |
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manner as outlined in Section 66.005(b). |
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(c) All fees paid to municipalities under this section are |
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paid in accordance with 47 U.S.C. Sections 531 and 541(a)(4)(B) and |
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may be used by the municipality as allowed by federal law; further, |
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these payments are not chargeable as a credit against the franchise |
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fee payments authorized under this chapter. |
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(c-1) The holder of a state-issued certificate of franchise |
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authority shall include with a fee paid to a municipality under this |
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section a statement identifying the fee. |
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(c-2) A municipality that receives fees under this section: |
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(1) shall maintain revenue from the fees in a separate |
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account established for that purpose; |
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(2) may not commingle revenue from the fees with any |
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other money; |
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(3) shall maintain a record of each deposit to and |
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disbursement from the separate account, including a record of the |
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payee and purpose of each disbursement; and |
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(4) may not spend revenue from the fees except |
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directly from the separate account. |
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(d) The following services shall continue to be provided by |
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the cable provider that was furnishing services pursuant to its |
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municipal cable franchise [until January 1, 2008, or] until the |
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expiration or termination [term] of the franchise [was to expire,
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whichever is later,] and thereafter as provided in Subdivisions (1) |
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and (2) below: |
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(1) institutional network capacity, however defined |
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or referred to in the municipal cable franchise but generally |
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referring to a private line data network capacity for use by the |
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municipality for noncommercial purposes, shall continue to be |
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provided at the same capacity as was provided to the municipality |
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prior to the date of expiration or [the] termination, provided that |
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the municipality will compensate the provider for the actual |
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incremental cost of the capacity; and |
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(2) cable services to community public buildings, such |
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as municipal buildings and public schools, shall continue to be |
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provided to the same extent provided immediately prior to the date |
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of the termination. On [Beginning on January 1, 2008, or] the |
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expiration or termination of the franchise agreement, [whichever is
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later,] a provider that provides the services may deduct from the |
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franchise fee to be paid to the municipality an amount equal to the |
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actual incremental cost of the services if the municipality |
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requires the services after that date. Such cable service |
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generally refers to the existing cable drop connections to such |
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facilities and the tier of cable service provided pursuant to the |
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franchise at the time of the expiration or termination. |
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SECTION 5. Subsections (c) and (h), Section 66.009, |
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Utilities Code, are amended to read as follows: |
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(c) If a municipality did not have the maximum number of PEG |
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access channels as of September 1, 2005, as provided by |
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Subdivisions (1) and (2) based on the municipality's population on |
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that date, the cable service provider or video service provider |
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shall furnish at the request of the municipality: |
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(1) up to three PEG channels for a municipality with a |
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population of at least 50,000; and |
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(2) up to two PEG channels for a municipality with a |
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population of less than 50,000. |
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(h) Where technically feasible, the holder of a |
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state-issued certificate of franchise authority that is not an |
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incumbent cable service provider and an incumbent cable service |
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provider, including an incumbent cable service provider that holds |
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a state-issued certificate of franchise authority issued under |
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Section 66.004(b-1), shall use reasonable efforts to interconnect |
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their cable or video systems for the purpose of providing PEG |
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programming. Interconnection may be accomplished by direct cable, |
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microwave link, satellite, or other reasonable method of |
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connection. The holder [Holders] of a state-issued certificate of |
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franchise authority and the incumbent cable service provider |
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[providers] shall negotiate in good faith, and the incumbent cable |
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service provider [providers] may not withhold interconnection of |
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PEG channels. |
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SECTION 6. (a) A municipality that received fees described |
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by Subsection (c), Section 66.006, Utilities Code, before September |
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1, 2011, shall, on September 1, 2011, transfer any fees that have |
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not been disbursed to a separate account as required by Subsection |
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(c-2), Section 66.006, Utilities Code, as added by this Act. |
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(b) The change in law made by this Act in adding Subdivision |
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(3), Subsection (c-2), Section 66.006, Utilities Code, applies only |
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to transfers, deposits, and disbursements made on or after the |
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effective date of this Act. A transfer, deposit, or disbursement |
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made before the effective date of this Act is governed by the law in |
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effect on the date the transfer, deposit, or disbursement was made, |
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and the former law is continued in effect for that purpose. |
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SECTION 7. This Act takes effect September 1, 2011. |
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______________________________ |
______________________________ |
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President of the Senate |
Speaker of the House |
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I hereby certify that S.B. No. 1087 passed the Senate on |
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April 6, 2011, by the following vote: Yeas 26, Nays 5; |
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May 17, 2011, Senate refused to concur in House amendment and |
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requested appointment of Conference Committee; May 24, 2011, House |
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granted request of the Senate; May 28, 2011, Senate adopted |
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Conference Committee Report by the following vote: Yeas 28, |
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Nays 3. |
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______________________________ |
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Secretary of the Senate |
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I hereby certify that S.B. No. 1087 passed the House, with |
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amendment, on May 12, 2011, by the following vote: Yeas 145, |
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Nays 1, two present not voting; May 24, 2011, House granted request |
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of the Senate for appointment of Conference Committee; |
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May 28, 2011, House adopted Conference Committee Report by the |
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following vote: Yeas 146, Nays 0, two present not voting. |
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______________________________ |
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Chief Clerk of the House |
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Approved: |
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______________________________ |
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Date |
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______________________________ |
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Governor |