SB 126 — INCREASE RURAL SERVICE FUND ALLOCATIONS

SENATE BILL 126 57TH LEGISLATURE -STATEOFNEWMEXICO- FIRST SESSION, 2025 INTRODUCED BY Michael Padilla 6 8 10 AN ACT RELATING TO TELECOMMUNICATIONS;

INCREASING THE CAP e t 17 ON OBLIGATIONS OF THE STATE RURAL UNIVERSAL SERVICE FUND PLUS w l n d 18 ADMINISTRATIVE EXPENSES AND A PRUDENT FUND BALANCE FROM THIRTY = = 19 a l MILLION DOLLARS ($30,000,000) TO FORTY MILLION DOLLARS i a e r 20 ($40,000,000).

a t m m 21 d r e 22 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

c e s k 23 SECTION 1.

Section 63-9H-6 NMSA 1978 (being Laws 1999, e a n b 24 Chapter 295, Section 6, as amended) is amended to read:

u [ "63-9H-6.

STATE RURAL UNIVERSAL SERVICE FUND-- .229250.2 ESTABLISHMENT.-- A.

As used in this section, "universal service" means basic local exchange service, comparable retail alternative services at affordable rates, service pursuant to a SB 126 Page 1 low-income telephone assistance plan and broadband internet access service to unserved and underserved areas as determined by the commission.

The fund shall be financed by a surcharge on intrastate retail public telecommunications services to be determined by the commission, excluding services provided pursuant to a low-income telephone assistance plan billed to end-user customers by a telecommunications carrier, and e t 17 excluding all amounts from surcharges, gross receipts taxes, w l n d 18 excise taxes, franchise fees and similar charges.

For the = = 19 a l purpose of funding the fund, the commission has the authority i a e r 20 to apply the surcharge on intrastate retail public a t m m 21 telecommunications services provided by telecommunications d r e 22 carriers, including commercial mobile radio services and voice c e s k 23 over internet protocol services, at a competitively and e a n b 24 technologically neutral rate or rates to be determined by the u [ commission.

The commission may establish the surcharge as a .229250.2 - 2 - percentage of intrastate retail public telecommunications services revenue or as a fixed amount applicable to each communication connection.

Such surcharges shall be competitively and SB 126 Page 2 technologically neutral.

or to Native American customers e t 17 who reside on tribal or pueblo land.

w l n d 18 C.

The fund shall be competitively and = = 19 a l technologically neutral, equitable and nondiscriminatory in its i a e r 20 collection and distribution of funds, portable between eligible a t m m 21 telecommunications carriers and additionally shall provide a d r e 22 specific, predictable and sufficient support mechanism as c e s k 23 determined by the commission that ensures universal service in e a n b 24 the state.

u [ D.

.229250.2 - 3 - (1) establish eligibility criteria for participation in the fund consistent with federal law that ensure the availability of universal service at affordable rates.

(2) provide for the collection of the surcharge on a competitively neutral basis and for the SB 126 Page 3 administration and disbursement of money from the fund;

and (5) establish affordability benchmark rates for local residential and business services that shall be e t 17 utilized in determining the level of support from the fund.

w l n d 18 The process for determining subsequent adjustments to the = = 19 a l benchmark shall be established through a rulemaking.

i a e r 20 E.

All incumbent telecommunications carriers and a t m m 21 competitive carriers already designated as eligible d r e 22 telecommunications carriers for the fund shall be eligible for c e s k 23 participation in the fund.

All other carriers that choose to e a n b 24 become eligible to receive support from the fund may petition u [ the commission to be designated as an eligible .229250.2 - 4 - telecommunications carrier for the fund.

(2) the unique advantages and disadvantages SB 126 Page 4 of the competitor's service offering;

The rules shall enumerate the appropriate uses of fund support and any restrictions on the use of fund support e t 17 by eligible telecommunications carriers.

The rules shall w l n d 18 require that an eligible telecommunications carrier receiving = = 19 a l support from the fund pursuant to Subsection K, L, M or N of i a e r 20 this section must expend no less than sixty percent of the a t m m 21 support it receives to deploy and maintain broadband internet d r e 22 access services in rural areas of the state.

The rules also c e s k 23 shall provide for annual reporting by eligible e a n b 24 telecommunications carriers verifying that the reporting u [ carrier continues to meet the requirements for designation as .229250.2 - 5 - an eligible telecommunications carrier for purposes of the fund and is in compliance with the commission's rules, including the provisions regarding use of support from the fund.

The commission shall, upon implementation of the fund, select a neutral third-party administrator to collect, administer and disburse money from the fund under the supervision and control of the commission pursuant to SB 126 Page 5 established criteria and rules promulgated by the commission.

e t 17 provided, however, that nothing in this section shall be w l n d 18 construed as granting any authority to the commission to impose = = 19 a l the surcharge on or otherwise regulate broadband internet i a e r 20 access services.

a t m m 21 I.

The commission shall ensure that intrastate d r e 22 switched access charges are equal to interstate switched access c e s k 23 charges established by the federal communications commission as e a n b 24 of January 1, 2006.

Nothing in this section shall preclude the u [ commission from considering further adjustments to intrastate .229250.2 - 6 - switched access charges based on changes to interstate switched access charges.

To ensure that providers of intrastate retail communications service contribute to the fund and to further ensure that the surcharge determined pursuant to Subsection B of this section to be paid by the end-user customer will be held to a minimum, the commission shall adopt rules, or take SB 126 Page 6 other appropriate action, to require all such providers to participate in a plan to ensure accurate reporting.

(1) the annual percentage change in the number e t 17 of access lines served by the incumbent local exchange carriers w l n d 18 receiving such support for the prior calendar year, as compared = = 19 a l to base year 2014;

and i a e r 20 (2) changes in the affordability benchmark a t m m 21 rates that have occurred since 2014.

d r e 22 L.

Notwithstanding the provisions of Subsection K c e s k 23 of this section, the annual amount of access reduction support e a n b 24 payments for an eligible incumbent local exchange carrier in u [ 2024, 2025 and 2026 shall be equal to the annual access .229250.2 - 7 - reduction support payments for that eligible incumbent local exchange carrier for the year 2023.

SB 126 Page 7 (1) an eligible incumbent telecommunications carrier that is not eligible for funding pursuant to rate rebalancing in Subsection K of this section and that has been previously authorized pursuant to Subsection N of this section for need-based support may apply for ongoing fund support;

provided that an eligible telecommunications carrier receiving fund support pursuant to this subsection shall not offer basic local e t 17 exchange residential and business services at rate levels lower w l n d 18 than the rates for such services charged by any of the = = 19 a l comparable carriers used for the determination of the level of i a e r 20 support;

a t m m 21 (3) the commission shall act upon a request d r e 22 for ongoing fund support within one hundred twenty days of the c e s k 23 filing of the request;