HB998: HB998 Public utilities; authorize certain Tier 2 local exchange companies to elect to become subject to rate of return regulation

Georgia regulates local phone companies in different ways. Larger companies (Tier 1) and most smaller companies (Tier 2) have been able to choose an alternative regulation system for their rates instead of traditional rate of return regulation, which sets rates based on a utility's costs and allowed profit. This bill lets a defined group of smaller, unaffiliated Tier 2 companies elect, by August 1, 2026, to switch to rate of return regulation instead, and it locks them out of switching back to alternative regulation until August 1, 2031. The bill also changes the Universal Access Fund, which helps offset the cost of providing basic phone service in areas where it is expensive to do so. It extends the window for certain reimbursements through 2040, requires companies seeking money from the fund to submit detailed, unredacted financial reports, caps total fund distributions at $50 million per year starting July 1, 2026, and requires the Public Service Commission to file a public report on the fund every two years starting December 31, 2026.

• Allows eligible Tier 2 local exchange companies not affiliated with a nationwide carrier serving more than 50,000 access lines to elect rate of return regulation by August 1, 2026, instead of the alternative regulation system.
• Bars any company that makes that election from switching back to alternative regulation before August 1, 2031.
• Extends the deadline for certain Universal Access Fund reimbursements tied to switched access rate reductions from a prior cutoff to December 31, 2040.
• Requires companies seeking Universal Access Fund reimbursement to submit unredacted audited financial reports for themselves and their parent company.
• Caps total Universal Access Fund distributions at $50 million per fund year starting July 1, 2026, with proportional cuts if requests exceed that cap.
• Requires the Public Service Commission to submit a public report on the Universal Access Fund's finances and operations every two years, starting December 31, 2026.

Smaller, independent Tier 2 local telephone companies in Georgia that are not affiliated with large nationwide carriers, the Georgia Public Service Commission, which administers these rules, and consumers who pay into or whose phone service is subsidized by the Universal Access Fund.

The bill gives certain small phone companies a one-time chance to move to a different rate-setting method that ties their prices more closely to actual costs, and it puts a firm ceiling on how much money can be paid out of the state fund that helps keep local phone service affordable in costly-to-serve areas.

• Section 1 amends O.C.G.A. § 46-5-165 to let eligible Tier 2 local exchange companies elect rate of return regulation by August 1, 2026, and bars switching back before August 1, 2031.
• Section 1 defines an 'eligible Tier 2 local exchange company' as one not affiliated with a provider serving more than 50,000 access lines nationwide and responsible for basic local exchange service.
• Section 3 amends O.C.G.A. § 46-5-167 to extend the deadline for certain fund distributions for expenses incurred through December 31, 2040.
• Section 3 requires companies seeking fund reimbursement to submit unredacted audited financial reports, including for their parent company.
• Section 3 caps total Universal Access Fund distributions at $50 million per fund year beginning July 1, 2026, applied only to costs incurred on or after that date, with pro rata reductions if exceeded.
• Section 3 requires the Public Service Commission to report on the fund's contributions, disbursements, access lines served, and other financial details every two years starting December 31, 2026.
• Section 4 repeals 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

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