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A bill to be entitled

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An act relating to storm cost recovery for small local

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exchange companies; amending s. 364.051, F.S.; providing

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an exception for a small local exchange company with

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regard to the evidentiary requirements of a cost recovery

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petition; creating s. 364.053, F.S.; providing legislative

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findings; providing that a small local exchange company

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may file a petition to recover actual gross intrastate

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costs and expenses for storm damage; providing that such

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costs and expenses may include, but are not limited to,

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capital expenses, labor, and material provided by the

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company or a third party and overhead and benefit

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allocations; requiring the Public Service Commission to

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authorize recovery regardless of the company's revenues,

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whether the costs and expenses were incurred or recovered

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as part of the company's normal operations, whether the

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costs and expenses are incremental or above the normal

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operating expenses, and whether they are capital costs;

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requiring the commission to determine the amount of costs

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and expenses by verifying documentation submitted by the

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company; requiring the commission to act on a company's

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petition within 90 days after filing; requiring the

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commission to offset the insurance proceeds relative to

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storm damage, the net cost of such insurance, and the

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amount in the company's storm-reserve fund; requiring the

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commission to authorize recovery up to a maximum charge

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per line item of 50 cents per month per customer line for

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no more than 12 months; requiring the commission to

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authorize the company to add an equal line-item charge per

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access line to customers' billing statements; requiring

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the commission to verify the amount collected and to order

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the company to refund any excess amounts; providing that a

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company may file only one petition in any 12-month period

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for the previous storm season; providing that the petition

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may cover damages from more than one storm; providing an

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effective date.

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Be It Enacted by the Legislature of the State of Florida:

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     Section 1.  Subsection (4) of section 364.051, Florida

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Statutes, is amended to read:

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364.051  Price regulation.--

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     (4)(a) Notwithstanding subsection (2), if a any local

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exchange telecommunications company that believes circumstances

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have substantially changed substantially to justify an any

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increase in the rates for basic local telecommunications

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services, it may petition the commission for a rate increase;

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however, but the commission shall grant the petition only after

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an opportunity for a hearing and a compelling showing of changed

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circumstances. Under part II of this chapter, the costs and

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expenses of any government program or project required in that

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part II may not be recovered under this subsection unless the

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costs and expenses are incurred in the absence of a bid and

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subject to carrier-of-last-resort obligations as provided for in

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part II. The commission shall act upon the petition within 120

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days after its filing.

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     (b)  For purposes of this section, evidence of damage

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occurring to the lines, plants, or facilities of a local exchange

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telecommunications company that is not a small local exchange

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telecommunications company as defined by s. 364.052 and is

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subject to the carrier-of-last-resort obligations, which damage

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is the result of a tropical system occurring after June 1, 2005,

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and named by the National Hurricane Center, constitutes a

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compelling showing of changed circumstances.

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     1.  A company may file a petition to recover its intrastate

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costs and expenses for relating to repairing, restoring, or

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replacing the lines, plants, or facilities damaged by a named

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tropical system.

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     2.  The commission shall verify the intrastate costs and

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expenses submitted by the company in support of its petition.

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     3.  The company must show and the commission shall determine

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whether the intrastate costs and expenses are reasonable under

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the circumstances for the named tropical system.

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     4.  A company having a storm-reserve fund may recover

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tropical-system-related costs and expenses from its customers

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only in excess of any amount available in the storm-reserve fund.

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     5. The commission may determine the amount of an any

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increase that the company may charge its customers, but the

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charge per line item may not exceed 50 cents per month per

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customer line for a period of not more than 12 months.

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     6.  The commission may order the company to add an equal

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line-item charge per access line to the billing statement of the

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company's retail basic local telecommunications service

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customers, its retail nonbasic telecommunications service

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customers, and, to the extent the commission determines

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appropriate, its wholesale loop unbundled network element

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customers. At the end of the collection period, the commission

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shall verify that the collected amount does not exceed the amount

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authorized by the order. If collections exceed the authorized

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ordered amount, the commission shall order the company to refund

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the excess.

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     7.  In order to qualify for filing a petition under this

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paragraph, a company with 1 million or more access lines, but

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fewer than 3 million access lines, must have tropical-system-

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related costs and expenses exceeding $1.5 million, and a company

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with 3 million or more access lines must have tropical-system-

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related costs and expenses of $5 million or more. A company with

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fewer than 1 million access lines is not required to meet a

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minimum damage threshold in order to qualify to file a petition

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under this paragraph.

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     8.  A company may file only one petition for storm recovery

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in a any 12-month period for the previous storm season; however,

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but the petition application may cover damages from more than one

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named tropical system.

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This paragraph is not intended to adversely affect the

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commission's consideration of a any petition for an increase in

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basic rates to recover costs related to storm damage which was

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filed before the effective date of this act.

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     Section 2.  Section 364.053, Florida Statutes, is created to

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read:

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     364.053 Storm cost recovery for small local exchange

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telecommunications companies.--

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     (1) The Legislature finds that small local exchange

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telecommunications companies as defined by s. 364.052 have

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substantial obligations as universal service providers and

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carriers of last resort while providing basic local exchange

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telecommunications services to rural areas. The Legislature

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further finds that small local exchange telecommunications

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companies must fulfill such obligations without the customer

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base, revenue streams, and economies of scale to offset the costs

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associated with damages caused by a named tropical system.

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Furthermore, the Legislature finds that authorizing and assuring

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cost recovery for damages caused by a named tropical system will

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increase the likelihood of promptly restoring service to the

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public, thus promoting the public health and safety and lowering

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the overall costs of repairing, restoring, or replacing the

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lines, plants, or facilities damaged by a named tropical system.

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     (2) For purposes of this section and s. 364.051(4)(a),

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evidence of damage occurring to the lines, plants, or facilities

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of a small local exchange telecommunications company that is

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subject to the carrier-of-last resort obligations, which is the

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result of a tropical system occurring after June 1, 2005, and

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named by the National Hurricane Center, constitutes a compelling

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showing of changed circumstances.

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     (a) A small local exchange telecommunications company that

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has elected price cap regulation under s. 364.051 may file a

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petition to recover its actual gross intrastate costs and

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expenses for repairing, restoring, or replacing the lines,

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plants, or facilities damaged by a named tropical system,

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including, but not limited to, capital expenses, labor, and

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materials provided by the company or a third party, and overhead

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and benefit allocations under 42 C.F.R. part 32. The company

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shall recover such costs and expenses regardless of:

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     1. The company's revenues, including, but not limited to,

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revenues from the Federal Universal Service Fund;

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     2. Whether the company incurred or recovered such costs and

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expenses as part of its normal operations;

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     3. Whether such costs and expenses are incremental or above

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the company's normal operating expenses; and

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     4. Whether such costs and expenses are capital costs.

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     (b) The commission shall determine the amount of intrastate

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costs and expenses by verifying the amounts contained in

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invoices, bills, or other appropriate documentation submitted by

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the company in support of its petition. The commission shall act

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upon the petition within 90 days after its filing.

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     (c) The commission shall offset from recovery:

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     1. The amount of insurance proceeds, if any, minus the cost

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of such insurance, directly attributable to the repairs,

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restoration, and replacement of lines, plants, or facilities

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damaged by a named tropical system; and

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     2. The amount, if any, available in a storm-reserve fund

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approved by the commission.

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     (d) The commission shall authorize recovery of the

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company's actual gross intrastate costs and expenses for

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repairing, restoring, or replacing the lines, plants, or

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facilities damaged by a named tropical storm up to a maximum

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charge per line item of 50 cents per month per customer line for

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a period of not more than 12 months.

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     (e) The commission shall authorize the company to add an

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equal line-item charge per access line to the billing statement

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of the company's retail basic local telecommunications service

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customers, retail nonbasic telecommunications service customers,

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resale basic local telecommunications service customers, and, to

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the extent the commission determines appropriate, its wholesale

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looped unbundled network element customers. At the end of the

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collection period, the commission shall verify that the collected

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amount does not exceed the amount authorized by the order. If

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collections exceed the authorized amount, the commission shall

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order the company to refund the excess.

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     (f) A company may file only one petition for storm cost

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recovery in any 12-month period for the previous storm season;

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however, the petition may cover damages from more than one named

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tropical system.

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     Section 3.  This act shall take effect July 1, 2008.