1. In order to ensure just, reasonable, and affordable rates for reasonably comparable essential local telecommunications services throughout the state, there is hereby established the "Universal Service Board" which shall consist of the members of the public service commission and the public counsel, and which shall be incorporated as a not-for-profit, public benefit corporation in the manner provided pursuant to chapter 355 , except as otherwise provided in this section. Consistent with rules adopted by the commission, the universal service board shall create a universal service fund. The universal service board shall supervise the management of the universal service fund. Funds deposited in the universal service fund are not state funds. The commission shall adopt rules governing the operations of the state universal service fund within three months of the adoption of the rules adopted by the Federal Communication Commission for the federal Universal Service Fund. Nothing in the rules adopted by the commission shall be inconsistent with the support mechanisms established for the federal Universal Service Fund, but the commission may adopt any additional definitions and standards it believes are necessary to preserve and advance universal service in the state of Missouri. The commission shall adopt rules governing the operations of the universal service fund and the operation of the universal service board. Meetings of the universal service board shall be open meetings pursuant to chapter 610 . The universal service board shall also retain an independent neutral fund administrator who will be responsible for the day-to-day operations of the universal service fund. The fund administrator shall be a fiduciary with trust company powers. The universal service board shall provide for periodic review of the fund administrator and the opportunity for selection of an alternate fund administrator no less frequently than every four years. The agency, individual, firm, partnership, or corporation that is selected by the commission as the neutral administrator of the universal service fund may neither contribute to nor receive disbursements from the universal service fund, except as provided in subsection 2 of this section. The administrator may not have any financial interest in a telecommunications company, as defined in section 386.020 . The commission shall cause the books and records of the universal service fund administrator to be independently audited on an annual basis. The independent audit shall be paid for from funds held in the universal service fund.
2. The commission shall adopt and enforce rules to be implemented by the universal service board, governing the system of funding and disbursing funds from the universal service fund in a manner that does not grant a preference or competitive advantage to any telecommunications company or subject a telecommunications company to prejudice or disadvantage. Funds from the universal service fund shall only be used:
(1) To ensure the provision of reasonably comparable essential local telecommunications service, as that definition may be updated by the commission by rule, throughout the state including high-cost areas, at just, reasonable and affordable rates;
(2) To assist low-income customers and disabled customers in obtaining affordable essential telecommunications services; and
(3) To pay the reasonable, audited costs of administering the universal service fund.
3. The universal service fund shall be funded through assessments on all telecommunications companies in the state which shall be based on Missouri jurisdictional telecommunications services revenue and other nondiscriminatory factors as determined by the commission. Such assessments shall be paid to the universal service board. A telecommunications company regulated under section 392.245 may, upon providing written notice to the commission, increase the maximum allowable prices for any or all of its telecommunications services except residential basic local telecommunications services above those maximum allowable prices otherwise established in section 392.245 by an amount not to exceed the amount required to recover fifty percent of its assessment under this section. Any increases in the maximum allowable prices for exchange access and basic local telecommunications services other than residential basic local telecommunications services shall be calculated to recover revenues in the same percentage as the revenues from such services bear to such company's total revenues for nonbasic, exchange access and basic local other than residential telecommunications services for the preceding twelve months. A telecommunications company regulated under section 392.245 may seek to have the remaining fifty percent of its assessment under this section included in its funding requirements under this section. The commission shall establish the level of the universal service fund funding requirement necessary to fund the purposes set forth in subsection 2 of this section. The universal service fund funding requirements shall be paid by the universal service board in accordance with procedures approved by the commission. A telecommunications company that fails to pay an assessment that is due and payable pursuant to this section may have its certificate revoked or be required to pay appropriate penalties under chapter 386 after notice and hearing.
4. To facilitate provision of essential local telecommunications service, the commission shall determine whether and to what extent any telecommunications company in the state providing essential local telecommunications service in any part of the state, shall be eligible to receive funding. Eligibility shall be determined as follows:
(1) A telecommunications company's eligibility to receive support for high-cost areas from the universal service fund shall be conditioned upon:
(a) The telecommunications company offering essential local telecommunications service, using its own facilities, in whole or in part, throughout an entire high-cost area and having carrier of last resort obligations in that high-cost area; and
(b) The telecommunications company charging a rate not in excess of that set by the commission for essential services in a particular geographic area; and
(2) A telecommunications company's eligibility to receive support to assist low-income customers and disabled customers shall be conditioned on the company's providing essential local telecommunications services to such customers pursuant to the discounted rate established by the commission for such customers. Distributions from the universal service fund shall be made by the universal service board in accordance with rules approved by the commission.
5. In local exchange areas subject to competition for essential local telecommunications service, the incumbent local exchange telecommunications company shall be designated as a carrier of last resort for essential local telecommunications service. The commission may, consistent with section 214(e)(2) of the federal Telecommunications Act of 1996, after notice and hearing, designate one or more additional carriers of last resort for any exchange or other area designated by the commission upon a finding that such designation is in the public interest. In exchanges where the commission has designated more than one carrier of last resort, the commission may permit a local exchange telecommunications company to relinquish such obligation, consistent with section 214(e)(4) of the federal Telecommunications Act of 1996, upon a finding that at least one carrier of last resort will continue to serve that area. In local exchange areas not subject to competition for essential local telecommunications service, the incumbent local exchange telecommunications company shall continue to act as the carrier of last resort.
6. In determining whether, and to what extent, universal service fund funding is required to facilitate provision of essential local telecommunications service, the commission shall:
(1) Determine the definition of essential local telecommunications service no later than three months after the adoption of the essential local exchange telecommunications service definition for the federal Universal Service Fund, and consider revision of the definition on a periodic basis not to exceed every three years thereafter, with the goal that every citizen of this state shall have access to a wider range of services, that are reasonably comparable between urban and rural areas, at rates that are reasonably comparable between urban and rural areas;
(2) Upon request from an eligible telecommunications company for assistance from the universal service fund for a high-cost area, determine if the high-cost area qualifies for assistance from the universal service fund. The commission shall review its determination that a high-cost area qualifies for assistance from the universal service fund no less frequently than once every five years;
(3) Determine for each requesting, eligible local exchange telecommunications company, by high-cost area, the costs of providing essential local telecommunications services in those high-cost areas and establish support payments necessary to such companies to ensure just, reasonable and affordable rates for essential telecommunications service. The commission shall review such support payments no less frequently than once every five years; provided, however, that if the commission adopts a different definition of essential local telecommunications service, pursuant to subdivision (1) of this subsection, then the commission shall review and adjust accordingly the previously authorized support payments in order to ensure just, reasonable and affordable rates for essential telecommunications service, as revised by commission rule. In determining and reviewing such support payments, the commission shall ensure that no telecommunications company receives more or less support than necessary to further the purposes established in subsection 2 of this section;
(4) Establish a standard to determine whether and to what extent particular end-user customers, without regard to location within the state, may be eligible for assistance in paying for essential local telecommunications service.
7. The commission shall arrange for the time and place for the initial organizational meeting of the universal service board.
8. The universal service board shall submit to the commission a plan of operation. After notice and hearing, the commission shall approve the plan of operation, provided that it does not grant a preference or competitive advantage to any telecommunications company or subject a telecommunications company to prejudice or disadvantage. In its plan, the universal service board shall establish procedures for the handling and accounting of assets and establish procedures for the collection of assessments from all telecommunications companies to provide for universal service payments and for administrative expenses.
9. The universal service board shall have authority to:
(1) Enter into contracts as are necessary or proper to carry out the provisions of this section; and
(2) Sue or be sued, including taking any legal actions necessary or proper for recovery of any assessments.
10. No member of the universal service board shall be civilly liable, either jointly or separately, as a result of any act, omission or decision in performance of the member's duties as specifically required by this section. Such immunity shall not attach for any intentional or reckless act affecting the property or rights of any person.
11. Nothing in this section shall require the commission, the universal service board, the universal service fund administrator, or any other person or agency to take any actions that are inconsistent with federal statutes, administrative rules, or court decisions concerning provision of essential local telecommunications service.
12. The commission and the universal service board may do all things necessary and convenient to implement and administer the universal service fund.
13. In the event of a Federal Communications Commission order, rule or policy announced no later than December 31, 1997, pursuant to section 254(a)(2) of the federal Telecommunications Act of 1996, the effect of which is to change the federal Universal Service Fund revenues of an incumbent local exchange telecommunications company, the commission shall either increase the maximum allowable prices for basic local telecommunications service or increase the company's recovery from the state universal service fund or a combination thereof to replace the reasonably projected change in revenues. The commission shall review the continuing need for such revenues in its periodic reviews pursuant to subdivision (3) * of subsection 6 of this section.