Report Title:

Non-facilities Based Telecommunications; Exemption

Description:

Exempts non-facilities based resellers of telecommunications services from the prior PUC approval process for long-term financing.

HOUSE OF REPRESENTATIVES

H.B. NO.

2435

TWENTY-SECOND LEGISLATURE, 2004

 

STATE OF HAWAII

 


 

A BILL FOR AN ACT

 

RELATING TO AN EXEMPTION FOR NON-FACILITIES BASED COMPETITIVE LOCAL EXCHANGE TELECOMMUNICATIONS PROVIDERS FROM STATUTORY FINANCING REQUIREMENTS.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

SECTION 1. The Legislature finds that the purpose of the public utilities commission of the State is, in part, to regulate those business activities that, absent any regulation, would function as monopolies to the detriment of the public. Where monopolistic conditions might otherwise exist, it is in the public interest that government regulate aspects of business activity, such as entry into the market, rates, tariffs, stock offerings, and other matters.

The public utilities commission regulates telecommunications services, such as those provided by facilities based and non-facilities based competitive local exchange carriers. In its regulation, the public utilities commission sets rates for facilities based carriers that are intended to provide a reasonable return on investment (i.e., rate of return regulation). However, the legislature finds that non-facilities based competitive local exchange carriers are inherently subjected to competition and rely on the facilities based carriers to provide infrastructure for their services. The rates charged for the services of non-facilities based competitive local exchange carriers are based on market conditions. Public interest will be served if long-term financing applications for such carriers are not subject to an agency approval process because carriers will be able to transfer savings to the public with better service at cheaper rates.

The purpose of this Act is to exempt non-facilities based resellers of telecommunications services from seeking prior approval for long-term financing.

SECTION 2. Section 269-17, Hawaii Revised Statutes, is amended to read as follows:

"269-17 Issuance of securities. A public utility corporation may, on securing the prior approval of the public utilities commission, and not otherwise, issue stocks and stock certificates, bonds, notes, and other evidences of indebtedness, payable at periods of more than twelve months after the date thereof, for the following purposes and no other, namely: for the acquisition of property or for the construction, completion, extension, or improvement of or addition to its facilities or service, or for the discharge or lawful refunding of its obligations or for the reimbursement of moneys actually expended from income or from any other moneys in its treasury not secured by or obtained from the issue of its stocks or stock certificates, or bonds, notes, or other evidences of indebtedness, for any of the aforesaid purposes except maintenance of service, replacements, and substitutions not constituting capital expenditure in cases where the corporation has kept its accounts for such expenditures in such manner as to enable the commission to ascertain the amount of moneys so expended and the purposes for which the expenditures were made, and the sources of the funds in its treasury applied to the expenditures. As used herein, "property" and "facilities", mean property and facilities used in all operations of a public utility corporation whether or not included in its public utility operations or rate base. A public utility corporation may not issue securities to acquire property or to construct, complete, extend or improve or add to its facilities or service if the commission determines that the proposed purpose will have a material adverse effect on its public utility operations.

All stock and every stock certificate, and every bond, note, or other evidence of indebtedness of a public utility corporation not payable within twelve months, issued without an order of the commission authorizing the same, then in effect, shall be void.

This section shall only apply to a non-facilities based reseller of partially and/or fully competitive telecommunications services, who, only holds commission authority to provide partially and/or fully competitive telecommunications services in the State on a resale basis through the use of property or facilities owned, maintained, or provided by another telecommunications carrier."

SECTION 3. New statutory material is underscored.

SECTION 4. This Act shall take effect upon its approval.

INTRODUCED BY:

_____________________________

BY REQUEST