HB 998: Public utilities; authorize certain Tier 2 local exchange companies to elect to become subject to rate of return regulation

Georgia regulates local phone companies (called local exchange companies) in different ways depending on their size and how they choose to be regulated. This bill changes the rules in Georgia's telecommunications law (O.C.G.A. Title 46, Chapter 5, Article 4). It lets certain small, independent phone companies, called Tier 2 companies, that are not affiliated with a large national provider, choose to switch to rate of return regulation, a system where regulators set rates based on a company's actual costs, by notifying the Public Service Commission by August 1, 2026. Once a company makes that choice, it cannot switch back to the alternative regulation system until August 1, 2031. The bill also caps total payouts from the Universal Access Fund, which reimburses phone companies for the cost of providing basic service in areas where it is not profitable, at $50 million per year starting with costs incurred on or after July 1, 2026. Companies seeking money from the fund must now submit unredacted audited financial reports. The commission must also file a public report every other year on the fund's finances and how many phone lines it supports.

• Allows small, independent Tier 2 local exchange companies not affiliated with a large national provider to elect rate of return regulation, a system based on actual costs, by notifying the Public Service Commission by August 1, 2026.
• Bars a company that makes that election from switching to the alternative regulation system again until August 1, 2031.
• Removes the old 20 year time limit on certain Universal Access Fund reimbursements to Tier 2 companies under rate of return regulation.
• Caps total Universal Access Fund distributions at $50 million per year for costs incurred on or after July 1, 2026, with proportional cuts if requests exceed that amount.
• Requires companies seeking fund reimbursement to submit unredacted audited financial reports, including for their parent companies, and bars reimbursement for costs incurred after December 31, 2040.
• Requires the Public Service Commission to file a public report every two years on the fund's contributions, payouts, audits, and the number of phone lines it supports.

Small, independent Tier 2 local exchange (phone) companies in Georgia and their customers, larger Tier 1 phone companies operating under a separate regulatory track, the Georgia Public Service Commission, and Georgia consumers who pay into the Universal Access Fund through their phone bills to subsidize rural service.

The changes affect how much money flows to phone companies serving harder-to-reach parts of Georgia and how long that support can last, which can influence whether basic phone service stays affordable and available in rural areas, while also capping the total public cost of that subsidy each year.

• Section 1 adds a new subsection (e) to O.C.G.A. § 46-5-165 letting eligible Tier 2 companies elect rate of return regulation by August 1, 2026, with a lock-in against switching back until August 1, 2031.
• Section 2 repeals an outdated 2010 election deadline for Tier 2 companies in O.C.G.A. § 46-5-166 that has already expired.
• Section 3 removes the prior 20 year cap on certain Universal Access Fund distributions and instead imposes a $50 million aggregate annual cap starting with costs incurred on or after July 1, 2026.
• Section 3 requires companies seeking fund reimbursement to submit unredacted audited financial reports for themselves and their parent companies, and ends reimbursement for costs incurred after December 31, 2040.
• Section 3 requires the commission to report every two years, starting December 31, 2026, to the Governor, Lieutenant Governor, and House Speaker on the fund's finances, distributions, and supported access lines.
• Section 4 repeals any conflicting laws.

1. 2026-05-12Effective Date 2026-07-01
2. 2026-05-12Act 636
3. 2026-05-12House Date Signed by Governor (House)
4. 2026-04-06House Sent to Governor (House)
5. 2026-03-18Senate Passed/Adopted (Senate)
6. 2026-03-18Senate Third Read (Senate)
7. 2026-03-16Senate Read Second Time (Senate)
8. 2026-03-12Senate Committee Favorably Reported (Senate)

• Rob Leverett (R, HD-123)Primary sponsor
• Beth Camp (R, HD-135)
• Alan Powell (R, HD-033)
• Rick Jasperse (R, HD-011)
• Al Williams (D, HD-168)
• Chuck Efstration (R, HD-104)
• Max Burns (R, SD-023)

1. PassedHouse voteFebruary 12, 2026

   159 yea, 2 nay (4 not voting, 10 absent)

   Passage: House Vote #508

2. PassedSenate voteMarch 18, 2026

   31 yea, 21 nay (2 not voting, 0 absent)

   Shall The Ruling Of The Chair Be Sustained: Senate Vote #730

3. PassedSenate voteMarch 18, 2026

   31 yea, 20 nay (3 not voting, 0 absent)

   Motion For The Previous Question: Senate Vote #731

4. PassedSenate voteMarch 18, 2026

   50 yea, 2 nay (1 not voting, 1 absent)

   Passage: Senate Vote #732

• telecommunications regulation
• rural phone service
• Universal Access Fund
• public utilities
• Georgia Public Service Commission