Chapter 809 Oregon Laws 1999

Session Law

AN ACT

HB 3241

Relating to telecommunications utility affiliated interest; creating new provisions; amending ORS 759.385 and 759.390; and repealing ORS 759.394.

Be It Enacted by the People of the State of Oregon:

SECTION 1. ORS 759.385 is amended to read:

759.385. [Except as provided in ORS 759.394:]

(1) When any telecommunications utility doing business in this state enters into a contract with another corporation with relation to the construction, operation, maintenance or use of the property of said telecommunications utility in Oregon, or the use of the property of the other contracting party, or any part thereof, or for service, advice, engineering, financing, rentals, leasing or for any construction or management charges in respect of any such property, or for the purchase of property, materials or supplies, the proposed contract shall be filed with the Public Utility Commission for the investigation and approval when the telecommunications utility owns a majority of or controls directly or indirectly the voting stock of the other contracting corporations.

(2) Any such proposed contract shall be filed with the commission within 90 days of execution of the contract. The contract shall be deemed to be executed on the date the parties sign a written contract or on the date the parties begin to transact business under the contract, whichever date is earlier. The commission shall promptly investigate and act upon the contract in accordance with ORS 759.390 (3) and (6).

(3) In making such investigation the commission and accountants, examiners and agents, appointed by the commission for the purpose, shall be given free access to all books, books of account, documents, data and records of the telecommunications utility as well as of the corporation with which it is proposing to contract, which the commission may deem material to the investigation. The failure or refusal of either of the parties to the proposed contract to comply with this subsection is prima facie evidence that such contract is unfair, unreasonable and contrary to public interest, and is sufficient to justify a determination and finding of the commission to that effect, which has the same force and effect as any other determination or order of the commission.

(4) This section applies only to transactions in which the telecommunications utility's [annual] Oregon intrastate expenditure to the affiliate is more than [$25,000] $100,000 [in a calendar year].

SECTION 2. ORS 759.390 is amended to read:

759.390. [Except as provided in ORS 759.394:]

(1) When any telecommunications utility doing business in this state enters into any contract to make any payment, directly or indirectly, to any person or corporation having an affiliated interest, for service, advice, auditing, accounting, sponsoring, engineering, managing, operating, financing, legal or other services, or enter any charges therefor on its books, which shall be recognized as an operating expense or capital expenditure in any rate valuation or any other hearing or proceeding, the contract shall be filed with the Public Utility Commission within 90 days of execution of the contract. The contract shall be deemed to be executed on the date the parties sign a written contract or on the date the parties begin to transact business under the contract, whichever date is earlier.

(2) When any telecommunications utility doing business in this state shall enter into any contract, oral or written, with any person or corporation having an affiliated interest relating to the construction, operation, maintenance, leasing or use of the property of such telecommunications utility in Oregon, or the purchase of property, materials or supplies, which shall be recognized as the basis of an operating expense or capital expenditure in any rate valuation or any other hearing or proceeding, the contract shall be filed with the commission within 90 days of execution of the contract. The contract shall be deemed to be executed on the date the parties sign a written contract or on the date the parties begin to transact business under the contract, whichever date is earlier.

(3) When any such contract has been submitted to the commission, the commission promptly shall examine and investigate it. If, after such investigation, the commission determines that it is fair and reasonable and not contrary to the public interest, the commission shall enter findings and order to this effect and serve a copy thereof upon the telecommunications utility, whereupon any expenses and capital expenditures incurred by the telecommunications utility under the contract may be recognized in any rate valuation or other hearing or proceeding. If, after such investigation, the commission determines that the contract is not fair and reasonable in all its terms and is contrary to the public interest, the commission shall enter findings and order accordingly and serve a copy thereof upon the telecommunications utility, and, except as provided in subsection (4) of this section, it shall be unlawful to recognize the contract for the purposes specified in this section.

(4) When any such contract has been filed with the commission within 90 days of execution and the commission has not entered an order disapproving the contract under subsection (3) of this section, the commission shall not base its refusal to recognize any expenses or capital expenditures incurred under the contract in any rate valuation or other hearing or proceeding solely on the basis that such contract has not been approved under subsection (3) of this section.

(5) No telecommunications utility shall issue notes or loan its funds or give credit on its books or otherwise to any person or corporation having an affiliated interest, either directly or indirectly, without the approval of the commission.

(6) The action of the commission with respect to all the matters described in this section when submitted to the commission, shall be by findings and order to be entered within 90 days after the matter has been submitted to the commission for consideration, and the findings and order of the commission with respect to any of such matters shall be and remain in full force and effect, unless and until set aside by suit brought and prosecuted, as provided in ORS 756.580 to 756.610, and the telecommunications utility, or any other person or corporation affected by any such findings and order, may bring and prosecute such suit.

(7) This section applies only to transactions in which the telecommunications utility's [annual] Oregon intrastate expenditure to the affiliate is more than [$25,000] $100,000 [in a calendar year].

SECTION 3. (1) Except as provided in subsection (2) of this section, the filing of proposed contracts under ORS 759.385 and 759.390 shall constitute a telecommunications utility's sole reporting obligation under ORS 759.385 and 759.390 and the Public Utility Commission may not require a telecommunications utility to submit annual or other cumulative reports regarding such contracts, including contracts with affiliates of the utility.

(2) On April 1 of each year, every telecommunications utility shall file with the commission a list of affiliate contracts executed in the preceding year. The list shall consist of the names of the parties to the contracts, the dollar amounts of the contracts and the dates of execution of the contracts.

SECTION 4. Section 3 of this 1999 Act is added to and made a part of ORS 759.375 to 759.394.

SECTION 5. ORS 759.394 is repealed.

Approved by the Governor July 20, 1999

Filed in the office of Secretary of State July 20, 1999

Effective date October 23, 1999

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