DAR File No. 40553

Public Service Commission, Administration

Section R746-360-4

Application of Fund Surcharges to Customer Billings

Notice of Proposed Rule

(Amendment)

DAR File No.: 40553
Filed: 06/28/2016 03:59:09 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

During 2016, revenues into the Utah Universal Service Fund have declined to a point where they are no longer sufficient to cover the current monthly distributions from the fund. The Public Service Commission solicited written comments on options to address the funding deficiency and held a technical conference on the topic. In addition, the Public Utilities, Energy, and Technology Interim Committee of the Utah Legislature has held a hearing on the topic. Following all of the feedback received in written comments and at the technical conference, and noting that the legislative committee has expressed interest in more fundamental changes to the Utah Universal Service Fund, this rule change is intended to function as an interim solution to address the current funding deficiency in the least disruptive way possible, and to allow time for the Utah Legislature to consider other changes to the fund.

Summary of the rule or change:

The surcharge is currently 1% of billed intrastate retail rates. As of 10/01/2016, the surcharge will be 1.65% of billed intrastate retail rates. This increased surcharge is intended as an interim solution to keep the Utah Universal Service Fund solvent, while pending legislative review of the funding mechanism.

State statutory or constitutional authorization for this rule:

• Section 54-3-1
• Section 54-7-25
• Section 54-8b-15
• Section 54-4-1
• Section 54-7-26

Anticipated cost or savings to:

the state budget:

Increasing the surcharge will increase the balance of the Utah Universal Service Fund, which is created by statute. The revenues to which the surcharge applies are in constant flux; therefore, the exact dollar amount of the increase cannot be calculated. The increase is necessary in order to keep the fund solvent.

local governments:

Local governments are not required to pay, collect, or administer the surcharge. Therefore, no fiscal impact will accrue to local governments.

small businesses:

Small businesses that are required to pay the surcharge as part of a telecommunications bill will be required to increase that payment by 65%. The Public Service Commission of Utah does not have data from which to calculate the dollar amount of the increase for each affected small businesses. As an example, a company that pays $100 per month for telephone service currently pays $1 per month into the fund. When this rule change becomes effective, such company will pay $1.65 per month. In addition, small businesses that provide intrastate retail telephone service will be required to change their billing in order to charge an increased amount each month. Some computer programming will be required with attendant costs. Those costs will vary and, therefore, cannot be estimated by the Commission. It is anticipated that the costs will be minimal and well within each company's budgeted overhead for regulatory compliance and information technology.

persons other than small businesses, businesses, or local governmental entities:

Persons that are required to pay the surcharge as part of a telecommunications bill will be required to increase that payment by 65%. The Public Service Commission of Utah does not have data from which to calculate the dollar amount of the increase for each person. As an example, a person that pays $100 per month for telephone service currently pays $1 per month into the fund. When this rule change becomes effective, such person will pay $1.65 per month.

Compliance costs for affected persons:

To comply, persons that are required to pay the surcharge will increase the monthly payment by 65%. The actual dollar amount paid by each affected person will vary and cannot be estimated. In addition, telecommunications providers will change their billing to charge an increased amount. The costs for the associated computer programming will vary and cannot be estimated.

Comments by the department head on the fiscal impact the rule may have on businesses:

As described in the rule summary, this surcharge change is necessary to maintain current distribution levels from the Utah Universal Service Fund and will function as an interim solution to allow the Utah Legislature to give a more comprehensive evaluation to broader issues related to the fund.

Thad LeVar, Commission Chair

The full text of this rule may be inspected, during regular business hours, at the Office of Administrative Rules, or at:

Public Service Commission
Administration
HEBER M WELLS BLDG
160 E 300 S
SALT LAKE CITY, UT 84111-2316

Direct questions regarding this rule to:

• Sheri Bintz at the above address, by phone at 801-530-6714, by FAX at 801-530-6796, or by Internet E-mail at sbintz@utah.gov
• Jennie Jonsson at the above address, by phone at 801-530-6763, by FAX at , or by Internet E-mail at jjonsson@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

08/15/2016

This rule may become effective on:

08/22/2016

Authorized by:

Jennie Jonsson, Administrative Law Judge

R746. Public Service Commission, Administration.

R746-360. Universal Public Telecommunications Service Support Fund.

R746-360-4. Application of Fund Surcharges to Customer Billings.

A. Commencement of Surcharge Assessments -- Commencing June 1, 1998, end-user surcharges shall be the source of revenues to support the fund. Surcharges will be applied to intrastate retail rates, and shall not apply to wholesale services.

B. Surcharge Based on a Uniform Percentage of Retail Rates -- The retail surcharge shall be a uniform percentage rate, determined and reviewed annually by the Commission and billed and collected by all retail providers.

C. Surcharge -- The surcharge to be assessed [shall equal]is as follows:

1. through September 30, 2016, 1 percent of billed intrastate retail rates ; and

2. beginning October 1, 2016, 1.65 percent of billed intrastate retail rates.

 

KEY: public utilities, telecommunications, universal service fund

Date of Enactment or Last Substantive Amendment: [July 8, 2015]2016

Notice of Continuation: November 13, 2013

Authorizing, and Implemented or Interpreted Law: 54-3-1; 54-4-1; 54-7-25; 54-7-26; [ 54-8b-12; ]54-8b-15