TITLE 16.ECONOMIC REGULATION

Part 1. RAILROAD COMMISSION OF TEXAS

Chapter 13. REGULATIONS FOR COMPRESSED NATURAL GAS (CNG)

The Railroad Commission of Texas adopts amendments to §§13.2 - 13.4, 13.25, 13.35, 13.36, 13.38, 13.61 - 13.63, 13.67 - 13.70, 13.73, 13.75, 13.92 - 13.94, 13.102, 13.141, and 13.183, relating to Retroactivity; Definitions; CNG Report Forms; Filings Required for Stationary CNG Installations; Application for an Exception to a Safety Rule; Report of CNG Incident/Accident; Removal from CNG Service; Licenses, Related Fees, and Licensing Requirements; Insurance Requirements; Qualifications as Self-Insured; Changes in Ownership and/or Form of Dealership; Dealership Name Change; Registration and Transfer of CNG Transports and CNG Form 1004 Decal or Letter of Authority; Examination Requirements and Renewals; Other Fees for Employee Transfer; Franchise Tax Certification and Assumed Name Certificate; System Component Qualification; General; Location of Installations; Installation of Electrical Equipment; System Testing; and System Component Qualifications. The Commission also adopts the repeal of §13.80, relating to CNG Continuing Education Requirements, and new §13.80, relating to Requests for CNG Classes, without changes to the versions published in the March 17, 2006, issue of the Texas Register (31 TexReg 1847).

The Commission adopts the amendments in part as a result of House Bill (HB) 1162, 79th Legislature, Regular Session (2005). HB 1162 amended Texas Natural Resources Code, §116.034 to provide that the Commission may adopt rules establishing training and seminar attendance requirements for persons required or who wish to be licensed or registered to perform compressed natural gas (CNG) activities, but is not required to do so. Additional amendments to these rules are non-substantive and include changes in wording, punctuation, or organization to provide clarity and accuracy.

The specific rule affected by HB 1162 is §13.80, relating to CNG Continuing Education Requirements, which the Commission has repealed and replaced with new §13.80, Requests for CNG Classes. Previously, §13.80 provided for continuing education requirements for persons holding a CNG license and their representatives. In general, licensees and their representatives were to attend a continuing education class once every four years. Due to budget and staff limitations, the Commission has no CNG continuing education classes, and because as of January 2006 there are only 33 CNG licensees and about 85 CNG individual certificate holders, the Commission finds that its training and continuing education resources are more efficiently and effectively employed elsewhere.

The Commission offers training courses on CNG activities under the Commission's jurisdiction through the Alternative Fuels Research and Education Division (AFRED). Under the wording in new §13.80, requests for Commission staff to conduct a CNG class should be submitted to AFRED, which may schedule and conduct the class at its discretion. The non-refundable fee is $250 for a class where no overnight expenses are incurred by AFRED staff, or $500 if overnight expenses are incurred. AFRED may waive the fee in cases where the Commission recovers the cost of the class from another source, such as a grant.

The Commission adopts amendments to §13.70, relating to Examination Requirements and Renewals, to make the rule and procedures consistent with the same procedures for the Commission's liquefied petroleum gas (LP-gas) certification requirements. In addition, some of the amendments clarify that AFRED is the Commission division that offers the examinations, as shown in subsection (a)(4). In amendments to subsection (a)(5), AFRED will notify individuals of their examination results within 15 days, rather than 30 days of the date of the examination. The only change in the Table in §13.70 is the correction of the annual renewal fee amount, which is $25; the fee was changed in a previous rulemaking and the change make the table match the wording in subsection (d)(2). Other amendments in §13.70 correct references to AFRED and to the License and Permit Section of the Gas Services Division.

The Commission adopts other amendments that are non-substantive and result in no changes to current requirements or procedures. In §13.2, the Commission deletes a reference to the former LP-Gas Section. In §13.3, relating to Definitions, the Commission adopts a new definition for "AFRED." The Commission deletes definitions for "auxiliary engine" and "filled by pressure" because those terms are not used in Chapter 13. The Commission adds the definition of "Company representative"; the wording matches the definition of the same term in the liquefied natural gas (LNG) rules. The Commission changes the definition of "dispensing station" to "dispensing area or dispensing installation," which are the terms actually used in the chapter. The Commission deletes the definition of "Division" because CNG activities are divided among the AFRED, Gas Services, and Safety Divisions; in each substantive rule that refers to "a division," the specific division is noted. The Commission adds a definition of "pressure filled" to replace the definition for "filled by pressure," which the Commission deletes. The remaining amendments adopted in this rule renumber the unchanged definitions as necessary.

Amendments in §13.4, relating to CNG Report Forms, delete an outdated reference to a Commission section.

The Commission adopts amendments in §§13.25, 13.35, 13.36, 13.38, 13.61 - 13.63, 13.67 - 13.69, 13.75, 13.92 - 13.94, 13.102, 13.141, and 13.183 to correct citations to other rules, chapters, or agencies; correct the Commission division or office; make the rule wording consistent with the Commission's LP-gas or LNG rules; and update the Tables to the current formats used by the Commission in other rules. The Commission adopts minor changes in the table in §13.62, such as a revised title, correction of the name of the Texas Workforce Commission, deletion of some obsolete references, and the combination of the text in subsections (k) and (l) into a single subsection (k) and the deletion of subsection (l) to eliminate redundant wording. In §13.63, the Commission deletes one table because it duplicates a table in §13.62 and is unnecessary; and combines the text of subsections (g)and (h) into a single subsection (g) and deletes subsection (h)to eliminate redundant wording. The Commission adopts changes in the tables in §§13.93, 13.94, and 13.102 to change the titles, make some minor formatting changes, and correct spelling.

In §13.73, relating to Other Fees for Employee Transfers, the Commission corrects the title of the rule and adds a reference to AFRED and deletes the requirement that the CNG Form 1016A be received by the Commission within a specific time.

The Commission received no comments on the proposal.

Subchapter A. SCOPE AND DEFINITIONS

16 TAC §§13.2 - 13.4

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602762

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter B. GENERAL RULES FOR COMPRESSED NATURAL GAS (CNG) EQUIPMENT QUALIFICATIONS

16 TAC §§13.25, 13.35, 13.36, 13.38

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602763

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter C. CLASSIFICATION, REGISTRATION, AND EXAMINATION

16 TAC §§13.61 - 13.63, 13.67 - 13.70, 13.73, 13.75, 13.80

The Commission adopts the amendments and new section under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602764

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


16 TAC §13.80

The Commission adopts the repeal under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602765

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter D. CNG COMPRESSION, STORAGE, AND DISPENSING SYSTEMS

16 TAC §§13.92 - 13.94, 13.102

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602766

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter E. ENGINE FUEL SYSTEMS

16 TAC §13.141

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602767

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter F. RESIDENTIAL FUELING FACILITIES

16 TAC §13.183

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §116.012 and §116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602768

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Chapter 14. REGULATIONS FOR LIQUEFIED NATURAL GAS (LNG)

The Railroad Commission of Texas adopts amendments to §§14.2007, 14.2010, 14.2019, 14.2020, 14.2034, 14.2043, 14.2049, 14.2052, and 14.2310, relating to Definitions; LNG Report Forms; Certification Requirements; Employee Transfers; Self-Insurance Requirements; Temporary Installations; Report of LNG Incident/Accident; Application for an Exception to a Safety Rule; and Emergency Refueling. The Commission also adopts the repeal of §14.2021, relating to LNG Continuing Education Requirements, and new §14.2021, relating to Requests for LNG Classes, without changes to the versions published in the March 17, 2006, issue of the Texas Register (31 TexReg 1858).

The Commission adopts the amendments in part as a result of House Bill (HB) 1162, 79th Legislature, Regular Session (2005). HB 1162 amended Texas Natural Resources Code, §116.034, to provide that the Commission may adopt rules establishing training and seminar attendance requirements for persons required or who wish to be licensed or registered to perform liquefied natural gas (LNG) activities, but is not required to do so. Additional amendments to these rules are non-substantive and include changes in wording, punctuation, or organization to provide clarity and accuracy.

The specific rule affected by HB 1162 is §14.2021, relating to LNG Continuing Education Requirements, which the Commission has repealed and replaced with new §14.2021, Requests for LNG Classes. Previously, §14.2021 provided for continuing education requirements for persons holding an LNG license or their representatives. In general, licensees and their representatives were to attend a continuing education class once every four years. Due to budget and staff limitations, the Commission has no LNG continuing education classes, and because as of January 2006 there are only nine LNG licensees and about 41 individual LNG certificate holders, the Commission finds that its training and continuing education resources are more efficiently and effectively employed elsewhere. In addition, most LNG licensees are large companies with highly trained staff, as required by the technology used in LNG installations.

The Commission offers training courses on LNG activities under the Commission's jurisdiction through the Alternative Fuels Research and Education Division (AFRED). Under the wording in new §14.2021, requests for Commission staff to conduct an LNG class should be submitted to AFRED, which may schedule and conduct the class at its discretion. The non-refundable fee is $250 for a class where no overnight expenses are incurred by AFRED staff, or $500 if overnight expenses are incurred. AFRED may waive the fee in cases where the Commission recovers the cost of the class from another source, such as a grant.

The Commission adopts amendments to §14.2019, relating to Certification Requirements, to make the rule and procedures consistent with the same procedures for the Commission's liquefied petroleum gas (LP-gas) certification requirements. In addition, some of the amendments clarify that AFRED is the Commission division that offers the examinations, as indicated by the amendments in subsection (a)(4). In subsection (a)(5), AFRED will notify individuals of their examination results within 15 days, rather than 30 days of the date of the examination. The only change in the Table in §14.2019 is the deletion of the row referring to the Category 35 course of instruction, which is no longer offered.

The Commission adopts other amendments that are non-substantive and result in no changes to current requirements or procedures. In §14.2007, relating to Definitions, the Commission adopts a new definition for "AFRED." The Commission deletes the definitions for "Administrative Procedure Act," "primary component," "PSF," "PSI," "PSIA," "right-of-way," and "TEMA" because those terms are not used in Chapter 14. The Commission amends the definition of "company representative" to delete the reference to "courses" because there are no required LNG courses. The Commission deletes the definition of "division" because LNG activities are divided among AFRED, the Gas Services Division, and the Safety Division; in each substantive rule that refers to "a division," the specific division is noted. The Commission amends the definition of "final approval" to replace the reference to "the Commission" with "a division." The Commission amends the definitions for "licensed," "licensee," and "tentative approval" to change "the Commission" to "the Gas Services Division" to be more specific. The remaining amendments in this rule renumber the unchanged definitions as necessary.

Amendments in §14.2010, relating to LNG Report Forms, change the order of two forms so that the form numbers are in numerical order.

In §14.2020, relating to Employee Transfers, the Commission adds a reference to AFRED and deletes the requirement that the LNG Form 2016A be received by the Commission within a specific time.

The Commission amends §14.2034(g) to update and correct the citation to the Texas Workers' Compensation Act.

In §14.2043, relating to Temporary Installations, in subsections (b), (c), and (g), the Commission adopts amendments to identify the pertinent division, rather than referring generally to "the Commission." In subsection (h), "Pipeline Safety Section" is now "Safety Division."

Amendments in §§14.2049, 14.2052, and 14.2310, relating to Report of LNG Incident/Accident; Application for an Exception to a Safety Rule; and Emergency Refueling, respectively, provide specific references to the Safety and Gas Services Divisions for clarity.

The Commission received no comments on the proposal.

Subchapter A. GENERAL APPLICABILITY AND REQUIREMENTS

16 TAC §§14.2007, 14.2010, 14.2019 - 14.2021, 14.2034, 14.2043, 14.2049, 14.2052

The Commission adopts the amendments, repeal, and new section under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §§116.012 and 116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602756

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


16 TAC §14.2021

The Commission adopts the repeal under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §§116.012 and 116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602757

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Subchapter D. GENERAL RULES FOR LNG FUELING FACILITIES

16 TAC §14.2310

The Commission adopts the amendments under Texas Natural Resources Code, §116.012, which authorizes the Commission to adopt rules and standards relating to liquefied natural gas activities to protect the health, welfare, and safety of the general public; and §116.034, as amended by HB 1162, 79th Legislature, Regular Session (2005).

Statutory authority: Texas Natural Resources Code, §§116.012 and 116.034.

Cross-reference to statute: Texas Natural Resources Code, Chapter 116.

Issued in Austin, Texas, on May 16, 2006.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602758

Mary Ross McDonald

Managing Director

Railroad Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 17, 2006

For further information, please call: (512) 475-1295


Part 2. PUBLIC UTILITY COMMISSION OF TEXAS

Chapter 28. SUBSTANTIVE RULES APPLICABLE TO CABLE AND VIDEO SERVICE PROVIDERS

Subchapter B. PROVISIONS RELATING TO APPLICATION FOR A STATE-ISSUED CERTIFICATE OF FRANCHISE AUTHORITY

16 TAC §28.6

The Public Utility Commission of Texas (commission) adopts new Chapter 28, Substantive Rules Applicable to Cable and Video Service Providers and new §28.6 relating to State-Issued Certificate of Franchise Authority (CFA) Certification Criteria with changes to the proposed text as published in the March 24, 2006, issue of the Texas Register (31 TexReg 2353). This rule is necessary to implement the provisions of the Public Utility Regulatory Act (PURA), Chapter 66, §§66.001 - 66.004. The proposed new §28.6 establishes the certification criteria for a state-issued CFA to provide cable and/or video services in the state and sets forth certain reporting requirements of CFA holders as well. Sections 28.1 - 28.5 will be proposed at a later date. This new section is adopted under Project Number 32171.

The commission received comments on the proposed new rule from the Texas Cable and Telecommunications Association (TCTA), AT&T Texas (AT&T), and Verizon Southwest (Verizon).

Description of the Service Area Footprint

TCTA stated that that in order to give effect to the legislature's intent to prohibit discrimination by a provider of cable or video services, the service area description submitted by a CFA applicant should be sufficiently detailed so that the anti-discrimination prohibition in the statute can be properly interpreted and enforced. TCTA suggested that the "Description of the Service Area Footprint to be served" as proposed in §28.6 be revised to specifically require a map of the proposed service area footprint, which it suggests will be a more precise description of a service area.

Commission response

The commission notes that the rule as proposed requires that the description of the franchise area be clear and complete, which may include a map. However, the commission does not agree with TCTA's suggestion that only maps will make the description of a service area footprint sufficiently clear and complete. Such a requirement could unintentionally limit the service area footprint. While the maps provide a description of a city boundary as a snapshot at the time of the application, any future expansion of the city boundary might not be covered in the certification. However, if an applicant requests the city limits of a certain city in the description of its service area, any expansion to the city limits would also be included.

The commission concludes that requiring maps as the only means for a clear and complete description of the franchise area may in fact result in a limitation of service coverage in those instances where a city expands its boundary at a future date. Therefore, the commission declines to adopt TCTA's suggestion to modify the proposed subsection of the rule and adopts the subsection as published.

Records Requirement

AT&T and Verizon contended that subsection (i), which requires records retention for 24 months may conflict with the retention periods mandated by federal law in 47 CFR §76.1703, and §76.1713, both of which require a retention period of one year. Both parties also objected that the proposed 10-day turnaround time for the production of records requested by staff could be unreasonably short. Verizon contended that that the commission lacks the authority under PURA Chapter 66 to establish such requirement. It stated that if the intention of this subsection is to help ensure the Companies' compliance with laws governing cable and video service, that courts of competent jurisdiction rather than the commission enforce the rules under PURA. Both parties requested that subsection (i) be omitted.

Commission response

The commission in part concurs but in part disagrees with both AT&T and Verizon. The commission agrees that two years for record retention purposes and 10 business days for records production are not necessary in the circumstances presented here for the reasons described below. The two-year record retention requirement has been changed to 12 months, consistent with federal regulations. The 10-day production requirement has been changed to 21 days, consistent with other commission record production rules. However, the commission does not agree that subsection (i) be omitted, as requested by AT&T and Verizon.

The commission is charged with certain enforcement responsibilities in Chapter 66 of PURA ( e.g. , §66.014) and could well find it necessary to make a request of a service provider for various records. Moreover, the commission, in §66.017, has been directed to conduct a joint interim study with the telecommunications competitiveness legislative oversight committee regarding, inter alia , "the transition from local franchise authority to state-issued authority, including methods to maintain current municipal revenue streams, including franchise fees and in-kind contributions; continuation of public, educational, and government access channels; and build-out requirements; and . . . other relevant issues." (§66.017(a)(3),(4).) The commission, again, might well find it necessary to make a request of service providers for assorted records. Another factor militating in favor of retaining subsection (i) is the requirement that applicants for a CFA provide an affidavit affirming various elements set forth in 66.003. The commission might be constrained to request records of the applicant in certain circumstances. For these reasons, the commission has not deleted subsection (i) from the rule as adopted.

All comments, including any not specifically referenced herein, were fully considered by the commission. In adopting this section, the commission makes other minor modifications for the purpose of clarifying its intent.

This new Chapter 28, Substantive Rules Applicable to Cable and Video Service Providers and new §28.6 relating to State-issued Certificate of Franchise Authority Certification Criteria is adopted under the Public Utility Regulatory Act, Texas Utilities Code Annotated §14.002 (Vernon 1998, Supplement 2005) (PURA) which provides the commission with the authority to make and enforce rules reasonably required in the exercise of its powers and jurisdiction and specifically, PURA Chapter 66, §§66.001 - 66.004 which requires that the commission establish the criteria for granting the state-issued Certificate of Franchise Authority to an entity to provide cable and/or video services in the state of Texas.

Cross Reference to Statutes: Public Utility Regulatory Act §14.002, §14.052, and Chapter 66, §§66.001 - 66.004.

§28.6.State-Issued Certificate of Franchise Authority (CFA) Certification Criteria.

(a) Scope and purpose. This section applies to the commission's certification of persons and entities to provide cable and/or video service as holders of a state-issued certificate of franchise authority (CFA), as established in the Public Utility Regulatory Act (PURA), Chapter 66, §§66.001 - 66.004.

(b) Application for CFA. An entity or person seeking to provide cable and/or video service in this state shall file an application for a CFA with the commission as provided in subsection (e) of this section.

(c) Eligibility to file application.

(1) A cable service provider or a video service provider that currently has or had previously received a municipal franchise to provide cable service or video service is not eligible to seek a CFA to provide service in that municipality until the expiration date of the existing franchise agreement for such municipality.

(2) A cable service provider or a video service provider that currently has or had previously received a municipal franchise to provide cable service or video service may file an application for a CFA to provide service in such municipality no earlier than 17 business days before the expiration of the municipal franchise provided that the application requests issuance of the CFA after the expiration of the municipal franchise.

(3) For purposes of this subsection a cable service provider or video service provider will be deemed to have or have had a franchise to provide cable service or video service in a specific municipality if any affiliates or successor entity of the cable or video provider has or had a franchise agreement granted by that specific municipality. The terms "affiliates or successor entity" in this subsection include but are not limited to any entity receiving, obtaining, or operating under a municipal cable or video franchise through merger, sale, assignment, restructuring, or any other type of transaction.

(d) Procedure for reviewing CFA applications.

(1) The commission shall notify an applicant for CFA whether the application is complete before the 15th business day after the application was submitted.

(2) The commission shall issue a CFA before the 17th business day after the application, including the requisite affidavit, has been filed if the commission finds the application to be complete and sufficient.

(e) Standards for granting franchise authority to CFA applicants. An applicant for a CFA shall submit a completed Application for State Issued Certificate of Franchise Authority, which shall include the following items:

(1) An affidavit signed by an officer or general partner of the applicant affirming the following:

(A) the applicant has filed or will timely file with the Federal Communications Commissions (FCC) all forms that the FCC requires from entities seeking to provide cable or video services in Texas;

(B) the applicant agrees to comply with all applicable federal and state statutes and regulations;

(C) the applicant agrees to comply with all applicable municipal regulations regarding the use and occupation of public rights-of-way in the delivery of the cable and/or video service, including the police powers of the municipalities in which the service is delivered;

(D) all statements made in the Application for State Issued Certificate of Franchise Authority are true and correct.

(2) A description of the service area footprint to be served. Service areas may be an entire municipality or a portion thereof and may include incorporated areas as well as unincorporated areas. Acceptable service area descriptions include properly labeled maps that clearly define the service area using city/municipality limits, county boundaries, metes and bounds, subdivisions, and/or other geographic areas with distinct boundaries.

(3) The street address and telephone number of the applicant's principal place of business.

(4) The name, addresses, and telephone numbers of an authorized representative, a regulatory contact, and an emergency contact.

(5) The names of the applicant's principal executive officers.

(f) Name(s) on CFA.

(1) All cable and/or video services provided under a CFA shall be provided in the name under which certification was granted by the commission. The requested name(s) must be registered with the proper authorities to conduct business in Texas ( i.e. , the Texas Secretary of State with the exception of sole proprietorships that are registered with the county in the requested service area), and may not be deceptive, misleading, vague, inappropriate, or duplicative of an existing CFA holder.

(2) The holder of the CFA may request commission approval to add, delete or change the name(s) on the franchise authority in accordance with subsection (g)(4) of this section.

(g) Amendments, terminations and transfers of a CFA.

(1) Termination of CFA. A CFA may be terminated by the certificate holder by submitting written notice to the commission. The CFA Termination Notice shall be filed with the commission in the project number established by staff for that purpose.

(2) Transfer of ownership/control. A CFA is fully transferable to any successor in interest to the entity to which the CFA was originally granted. The successor in interest shall file a written notice of transfer with the commission and the relevant municipality within 14 business days of the completion of such transfer. The notice to the commission shall be in the form of an application to amend the existing CFA and shall contain the information described in subsection (e) of this section.

(3) Expansion of service area footprint. Changes to the description of the existing service area footprint shall be accomplished by filing an application to amend the existing CFA with the commission prior to any such change.

(4) Name changes. The holder of the CFA may request commission approval to add, delete, or change the name(s) on the CFA by filing with the commission an application to amend its CFA.

(h) Reporting requirements.

(1) All CFA holders shall notify the commission of changes in company contact information within 14 business days of any such change.

(2) Every CFA holder shall file with this commission a copy of any order or ruling issued by a court of competent jurisdiction that either modifies or revokes its CFA or makes it ineligible to hold a CFA within 14 business days of the issuance of such order or ruling.

(i) Records requirements. A franchise holder shall maintain a copy of records required by applicable federal or state laws and regulations for a period of not less than 12 months. Upon commission staff request, the franchise holder shall provide an accurate and complete copy of any such records no later than 21 business days after the date of such request.

This agency hereby certifies that the adoption has been reviewed by legal counsel and found to be a valid exercise of the agency's legal authority.

Filed with the Office of the Secretary of State on May 16, 2006.

TRD-200602761

Adriana A. Gonzales

Rules Coordinator

Public Utility Commission of Texas

Effective date: June 5, 2006

Proposal publication date: March 24, 2006

For further information, please call: (512) 936-7223