By Danburg                                             H.B. No. 552
         Line and page numbers may not match official copy.
         Bill not drafted by TLC or Senate E&E.
                                A BILL TO BE ENTITLED
 1-1                                   AN ACT
 1-2     relating to the protection of telecommunications and electric
 1-3     services  customers.
 1-4           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-5           SECTION 1.  Section 11.002, Utilities Code, is amended by
 1-6     adding  Subsection (c) to read as follows:
 1-7           (c)  Significant changes have occurred in the
 1-8     telecommunications and electric power industries since the Public
 1-9     Utility Regulatory Act was originally adopted.  Changes in
1-10     technology and market structure have increased the need for minimum
1-11     standards of service quality, customer service, and fair business
1-12     practices to ensure high-quality service to customers and a healthy
1-13     marketplace where competition is permitted by law.  It is the
1-14     purpose of this title to grant the Public Utility Commission of
1-15     Texas authority to make and enforce rules necessary to protect
1-16     customers of telecommunications and electric services consistent
1-17     with the public interest.
1-18           SECTION 2.  Section 15.024, Utilities Code, is amended to
1-19     read as follows:
1-20           Sec. 15.024.  ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE.
1-21     (a)  If the executive director determines that a violation has
 2-1     occurred, the executive director may issue to the commission a
 2-2     report that states the facts on which the determination is based
 2-3     and the executive director's recommendation on the imposition of an
 2-4     administrative penalty, including a recommendation on the amount of
 2-5     the penalty.
 2-6           (b)  Not later that the 14th day after the date the report is
 2-7     issued, the executive director shall give written notice of the
 2-8     report to the person against whom the penalty may be assessed.  The
 2-9     notice may be given by certified mail.  The notice must:
2-10                 (1)  include a brief summary of the alleged violation;
2-11                 (2)  state the amount of the recommended penalty; and
2-12                 (3)  inform the person that the person has a right to a
2-13     hearing on the occurrence of the violation, the amount of the
2-14     penalty, or both the occurrence of the violation and the amount of
2-15     the penalty.
2-16           (c)  [A penalty may not be assessed under this section if the
2-17     person against whom the penalty may be assessed remedies the
2-18     violation before the 31st day after the date the person receives
2-19     the notice under Subsection (b).  A person who claims to have
2-20     remedied an alleged violation has the burden of proving to the
2-21     commission that the alleged violation was remedied and was
2-22     accidental or inadvertent.]
2-23           [(d)]  Not later than the 20th day after the date the person
2-24     receives the notice, the person may accept the determination and
2-25     recommended penalty of the executive director in writing or may
 3-1     make a written request for a hearing on the occurrence of the
 3-2     violation, the amount of the penalty, or both the occurrence of the
 3-3     violation and the amount of the penalty.
 3-4           (d) [(e)]  If the person accepts the executive director's
 3-5     determination and recommended penalty, the commission by order
 3-6     shall approve the determination and impose the recommended penalty.
 3-7           (e) [(f)]  If the person requests a hearing or fails to
 3-8     timely respond to the notice, the executive director shall set a
 3-9     hearing and give notice of the hearing to the person.  The hearing
3-10     shall be held by an administrative law judge of the State Office of
3-11     Administrative Hearings.  The administrative law judge shall make
3-12     findings of fact and conclusions of law and promptly issue to the
3-13     commission a proposal for a decision about the occurrence of the
3-14     violation and the amount of a proposed penalty.  Based on the
3-15     findings of fact, conclusions of law, and proposal for a decision,
3-16     the commission by order may find that a violation has occurred and
3-17     impose a penalty or may find that no violation occurred.
3-18           (f) [(g)]  The notice of the commission's order shall be
3-19     given to the person as provided by Chapter 2001, Government Code,
3-20     and must include a statement of the right of the person to judicial
3-21     review of the order.
3-22           SECTION 3.  Subtitle A, Title 2, Utilities Code, is amended
3-23     by adding Chapter 17 to read as follows:
3-24                      CHAPTER 17.  CUSTOMER PROTECTION
3-25                      SUBCHAPTER A.  GENERAL PROVISIONS
 4-1           Sec. 17.001.  CUSTOMER PROTECTION POLICY.  (a)  The
 4-2     legislature finds that new developments in telecommunications
 4-3     services and the production and delivery of electricity, as well as
 4-4     changes in market structure, marketing techniques, and technology,
 4-5     make it essential that customers have safeguards against
 4-6     fraudulent, misleading, or deceptive business practices and against
 4-7     businesses that do not have the technical and financial resources
 4-8     to provide adequate service.
 4-9           (b)  The purpose of this chapter is to establish customer
4-10     protection standards and confer on the commission authority to
4-11     adopt and enforce rules to protect customers from unfair,
4-12     deceptive, or anticompetitive practices.
4-13           Sec. 17.002.  DEFINITIONS.  In this chapter:
4-14                 (1)  "Billing agent" means any entity that submits
4-15     charges to the billing utility on behalf of itself or any provider
4-16     of a product or service.
4-17                 (2)  "Billing utility" means any telecommunications or
4-18     electric utility that issues a bill directly to a customer for any
4-19     telecommunications or electric product or service.
4-20                 (3)  "Certificated telecommunications utility" means a
4-21     telecommunications utility that has been granted either a
4-22     certificate of convenience and necessity, a certificate of
4-23     operating authority, or a service provider certificate of operating
4-24     authority.
4-25                 (4)  "Customer" means any person in whose name
 5-1     telephone or electric service is billed.
 5-2                 (5)  "Electric utility" has the meaning assigned by
 5-3     Section 31.002.
 5-4                 (6)  "Telecommunications utility" has the meaning
 5-5     assigned by Section 51.002.
 5-6           Sec. 17.003.  CUSTOMER AWARENESS.  (a)  The commission shall
 5-7     promote public awareness of changes in the electric and
 5-8     telecommunications markets, provide customers with information
 5-9     necessary to make informed choices about available options, and
5-10     ensure that customers have an adequate understanding of their
5-11     rights.
5-12           (b)  The commission shall compile a report on customer
5-13     service at least once each year showing such comparative customer
5-14     information from reports given to the commission as it deems
5-15     necessary.
5-16           (c)  The commission shall make and enforce rules to require a
5-17     certificated telecommunications utility or an electric utility to
5-18     give clear, uniform, and understandable information to customers
5-19     about rates, terms, services, customer rights, and other necessary
5-20     information as determined by the commission.
5-21           (d)  Customer awareness efforts shall be conducted in English
5-22     and Spanish  and any other language as necessary.
5-23           Sec. 17.004.  CUSTOMER PROTECTION STANDARDS.  (a)  All buyers
5-24     of telecommunications and electric services have the right  to:
5-25                 (1)  protection from unfair, misleading, or deceptive
 6-1     practices,  including protection from being billed for services
 6-2     that were not authorized or provided;
 6-3                 (2)  choice of a certificated telecommunications
 6-4     utility or an electric utility, where such choice is permitted by
 6-5     law, and to have that choice honored;
 6-6                 (3)  information in English and Spanish and any other
 6-7     language as  necessary concerning rates, key terms and conditions,
 6-8     and the environmental impact of certain production facilities;
 6-9                 (4)  protection from discrimination on the basis of
6-10     race, color, sex, nationality, religion, or marital status;
6-11                 (5)  impartial and prompt resolution of disputes with a
6-12     certificated telecommunications utility or an electric utility;
6-13                 (6)  privacy of customer consumption and credit
6-14     information;
6-15                 (7)  accuracy of metering and billing;
6-16                 (8)  bills presented in a clear, readable format and
6-17     easy-to-understand language;
6-18                 (9)  information in English and Spanish and any other
6-19     language as necessary concerning low-income assistance programs and
6-20     deferred payment plans; and
6-21                 (10)  other information or protections necessary to
6-22     ensure high-quality service to customers.
6-23           (b)  The commission shall adopt and enforce such rules as may
6-24     be necessary or appropriate to carry out this section, including
6-25     but not limited to rules for minimum service standards for a
 7-1     certificated telecommunications utility or an electric utility
 7-2     relating to customer deposits and the extension of credit,
 7-3     switching fees, levelized billing programs, termination of service,
 7-4     and quality of service.
 7-5           SUBCHAPTER B.  LICENSING, CERTIFICATION, REGISTRATION,
 7-6                         AND REPORTING REQUIREMENTS
 7-7           Sec. 17.051.  ADOPTION OF RULES.  (a)  The commission shall
 7-8     adopt rules relating to licensing, certification, registration, and
 7-9     reporting requirements for a certificated telecommunications
7-10     utility or an electric utility, as well as all telecommunications
7-11     utilities that are not dominant carriers, pay telephone providers,
7-12     qualifying facilities, exempt wholesale generators, and power
7-13     marketers.
7-14           (b)  The rules adopted under Subsection (a) shall be
7-15     consistent with and no less effective than federal law.
7-16           Sec. 17.052.  SCOPE OF RULES.  The commission shall have
7-17     authority to make and enforce rules to:
7-18                 (1)  require licensing by or certification or
7-19     registration with the commission as a condition of doing business
7-20     in this state;
7-21                 (2)  amend licenses, certificates, or registrations to
7-22     reflect changed terms and conditions of service or ownership;
7-23                 (3)  establish service quality and reliability
7-24     standards and rules for customer service and protection;
7-25                 (4)  suspend or revoke licenses, certificates, or
 8-1     registrations for repeated violations of this chapter or commission
 8-2     rules; and
 8-3                 (5)  order disconnection of a pay telephone service
 8-4     provider's pay telephones or revocation of licensing,
 8-5     certification, or registration for repeated violations of this
 8-6     chapter or commission rules.
 8-7           Sec. 17.053.  REPORTS.  The commission may require a
 8-8     certificated telecommunications utility or an electric utility to
 8-9     submit reports to the commission concerning any matter over which
8-10     it has authority under this chapter.
8-11                  SUBCHAPTER C.  CUSTOMER'S RIGHT TO CHOICE
8-12           Sec. 17.101  POLICY.  It is the policy of this state that all
8-13     customers are protected from the unauthorized switching of a
8-14     certificated telecommunications utility or an electric utility
8-15     selected by the customer to provide service.
8-16           Sec. 17.102.  RULES RELATING TO CHOICE.  The commission shall
8-17     adopt and enforce rules that:
8-18                 (1)  ensure that customers are protected from deceptive
8-19     practices to obtain authorizations of service and in the
8-20     verification of provider-initiated change orders, including but not
8-21     limited to negative option marketing, sweepstakes, and contests
8-22     that cause customers to unknowingly change their certificated
8-23     telecommunications utility or electric utility;
8-24                 (2)  provide for clear, easily understandable
8-25     identification on the first page of each bill sent to a customer of
 9-1     all certificated telecommunications utilities or electric utilities
 9-2     submitting charges on the bill;
 9-3                 (3)  ensure that every person, corporation, or
 9-4     telecommunications or electric utility submitting charges on the
 9-5     bill is clearly and easily identified on the bill along with its
 9-6     services, products, and charges;
 9-7                 (4)  require a certificated telecommunications utility
 9-8     or an electric utility to maintain records of nonpublic
 9-9     customer-specific information that may be used to establish that
9-10     the customer authorized a change in service;
9-11                 (5)  provide that unauthorized changes in service be
9-12     remedied at no cost  to the customer within a period established by
9-13     the commission;
9-14                 (6)  require funds or compensation to the customer in
9-15     the event of an unauthorized change; and
9-16                 (7)  provide for penalties, including but not limited
9-17     to fines and revocation of licenses, certificates, or
9-18     registrations, thereby denying the certificated telecommunications
9-19     utility or the electric utility the right to provide service in
9-20     this state.
9-21            SUBCHAPTER D. PROTECTION AGAINST UNAUTHORIZED CHARGES
9-22           Sec. 17.151.  REQUIREMENTS FOR SUBMITTING CHARGES.  (a)  A
9-23     person, corporation, telecommunications or electric utility, or
9-24     billing agent may submit charges for any product or service to be
9-25     billed on any customer's telephone or electric bill only if:
 10-1                (1)  the person, corporation, or telecommunications or
 10-2    electric utility offering the product or service has thoroughly
 10-3    informed the customer of the product or service being offered,
 10-4    including all associated charges, and has explicitly informed the
 10-5    customer that the associated charges for the product or service
 10-6    will appear on the customer's telephone or electric bill;
 10-7                (2)  the customer has clearly and explicitly consented
 10-8    to obtain the product or service offered and to have the associated
 10-9    charges appear on the customer's telephone or electric bill and the
10-10    consent has been verified and recorded as provided by Subsection
10-11    (b); and
10-12                (3)  the person, corporation, or telecommunications or
10-13    electric utility offering the product or service and any billing
10-14    agent for such person, corporation, or telecommunications or
10-15    electric utility:
10-16                      (A)  has provided the customer with a toll-free
10-17    telephone number the customer may call and an address to which the
10-18    customer may write to resolve any billing dispute and to answer
10-19    questions;
10-20                      (B)  has provided the billing utility with its
10-21    name, business address, business telephone number, and a list with
10-22    accurate descriptions of the products and services for which it
10-23    intends to charge on any customer's telephone or electric bill so
10-24    that any product or service being billed can clearly and easily be
10-25    identified and explained; and
 11-1                      (C)  has obtained the billing utility's written
 11-2    consent to bill for a product or service on the billing utility's
 11-3    bill, which written consent shall be maintained as provided by
 11-4    Subsection (c).
 11-5          (b)  The customer consent required by Subsection (a) (2) must
 11-6    be verified by the person, corporation, or telecommunications or
 11-7    electric utility offering the product or service by authorization
 11-8    from the customer in the manner prescribed by the commission.  A
 11-9    record of the customer consent, including verification, must be
11-10    maintained by the person, corporation, or telecommunications or
11-11    electric utility offering the product or service and any billing
11-12    agent for such person, corporation, or telecommunications or
11-13    electric utility for a period of at least 12 months immediately
11-14    after the consent and verification have been obtained.
11-15          (c)  The record of the billing utility's written consent
11-16    required by Subsection (a)(3)(C) shall be maintained by:
11-17                (1)  the person, corporation, or telecommunications or
11-18    electric utility offering the product or service;
11-19                (2)  any billing agent for the person, corporation, or
11-20    telecommunications or electric utility under Subdivision (1); and
11-21                (3)  the billing utility for as long as the billing for
11-22    such product or service continues and for the 12 months immediately
11-23    following the permanent discontinuation for such billing.
11-24          (d)  A person, corporation, or telecommunications or electric
11-25    utility, other than the billing utility, offering a product or
 12-1    service to be charged on a customer's telephone or electric bill
 12-2    and any billing agent for such person, corporation, or
 12-3    telecommunications or electric utility shall not use any negative
 12-4    option marketing, sweepstakes, contests, or other techniques that
 12-5    cause customers to unknowingly subscribe to a service or purchase a
 12-6    product.
 12-7          Sec. 17.152.  RESPONSIBILITIES OF A BILLING UTILITY.  (a) If
 12-8    a customer's telephone or electric bill is charged for any product
 12-9    or service without proper customer consent or verification, the
12-10    billing utility, upon its knowledge or notification of any
12-11    unauthorized charge, shall promptly, but in no event later than 45
12-12    days after such knowledge or notification of such charge:
12-13                (1)  cease to charge the customer for such unauthorized
12-14    product or  service;
12-15                (2)  remove any unauthorized charge from the customer's
12-16    bill;
12-17                (3)  refund or credit to the customer, with interest,
12-18    all money that has been paid by the customer for any unauthorized
12-19    charge;
12-20                (4)  upon the customer's request, provide the customer
12-21    with all billing records related to any unauthorized charge within
12-22    10 business days of the removal of the unauthorized charge from the
12-23    customer's bill; and
12-24                (5)  maintain for at least 12 months a record of every
12-25    customer who has experienced any unauthorized charge for a product
 13-1    or service on the customer's telephone or electric bill.
 13-2          (b)  A record required by Subsection (a)(5) shall contain for
 13-3    each unauthorized charge:
 13-4                (1)  the name of the person, corporation, or
 13-5    telecommunications or electric utility that offered the product or
 13-6    service;
 13-7                (2)  any affected telephone numbers or addresses;
 13-8                (3)  the date the customer requested that the billing
 13-9    utility remove the unauthorized charge;
13-10                (4)  the date the unauthorized charge was removed from
13-11    the customer's telephone or electric bill; and
13-12                (5)  the date any money that the customer paid for the
13-13    unauthorized charges was refunded or credited to the customer.
13-14          (c)  A billing utility shall not:
13-15                (1)  disconnect or terminate telecommunications or
13-16    electric service to any customer who disputes a billing charge
13-17    pursuant to this section; or
13-18                (2)  file an unfavorable credit report against a
13-19    customer who has disputed charges under this section unless the
13-20    dispute is ultimately resolved against the customer.
13-21          Sec. 17.153.  RECORDS OF DISPUTED CHARGES.   (a) Every
13-22    person, corporation, or telecommunications or electric utility
13-23    shall maintain a record of every disputed charge for a product or
13-24    service placed on a customer's bill.
13-25          (b)  The record required under Subsection (a) shall contain
 14-1    for every disputed charge:
 14-2                (1)  any affected telephone numbers or addresses;
 14-3                (2)  the date the customer requested that the billing
 14-4    utility remove the unauthorized charge;
 14-5                (3)  the date the unauthorized charge was removed from
 14-6    the customer's telephone or electric bill; and
 14-7                (4)  the date any money that the customer paid for the
 14-8    unauthorized charges was refunded or credited to the customer.
 14-9          (c)  The record required by Subsection (a) shall be
14-10    maintained for at least 12 months following the completion of all
14-11    steps required by Section 17.152(a).
14-12          Sec. 17.154.  NOTICE.  (a)  A billing utility shall provide
14-13    notice of a customer's rights under this section in the manner
14-14    prescribed by the commission.
14-15          (b)  Notice of a customer's rights must be provided by mail
14-16    to each residential and business customer within 60 days of the
14-17    effective date of this section.  In addition, each billing utility
14-18    shall send the notice to new customers at the time service is
14-19    initiated or to any customer at that customer's request.
14-20          Sec. 17.155.  PROVIDING COPY OF RECORDS.  A billing utility
14-21    shall provide a copy of records maintained under the requirements
14-22    of Sections 17.152, 17.153, and 17.154 to the commission staff upon
14-23    request.
14-24          Sec. 17.156.  VIOLATIONS.  (a)  If the commission finds that
14-25    a billing utility has engaged in a violation of this subchapter,
 15-1    the commission has the authority to implement penalties and other
 15-2    enforcement actions pursuant to Chapter 15.
 15-3          (b)  If the commission finds that any other person,
 15-4    corporation, entity, or billing agent subject to the provisions of
 15-5    this subchapter has engaged in violations of this subchapter or has
 15-6    knowingly provided false information to the commission on matters
 15-7    subject to this subchapter, the commission may enforce the
 15-8    provisions of Chapter 15 against the person, corporation, entity,
 15-9    or billing agent as if it were regulated by the commission.
15-10          (c)  Neither the authority granted under this section nor any
15-11    other provision of this subchapter shall be construed to grant the
15-12    commission jurisdiction to regulate persons, corporations,
15-13    entities, or billing agents who are not otherwise subject to
15-14    commission regulation, other than as specifically provided by this
15-15    chapter.
15-16          (d)  If the commission finds that a billing utility
15-17    repeatedly violates this subchapter, the commission may, if such
15-18    action is consistent with the public interest, suspend, restrict,
15-19    or revoke the registration or certificate of the telecommunications
15-20    or electric utility, thereby denying the telecommunications or
15-21    electric utility the right to provide service in this state.
15-22          (e)  If the commission finds that a person, corporation,
15-23    entity, or billing agent has repeatedly violated any provision of
15-24    this subchapter, the commission may order the billing utility to
15-25    terminate billing and collection services for that person,
 16-1    corporation, entity, or billing agent.
 16-2          (f)  Nothing in this subchapter shall be construed to
 16-3    preclude a billing utility from taking action on its own to
 16-4    terminate or restrict its billing and collection services in order
 16-5    to protect its customers from abuse.
 16-6          Sec. 17.157.  DISPUTES.  (a)  The commission is authorized to
 16-7    resolve disputes between a customer and a certificated
 16-8    telecommunications utility or an electric utility.
 16-9          (b)  In exercising its authority under Subsection (a), the
16-10    commission may:
16-11                (1)  order a certificated telecommunications utility or
16-12    an electric utility to produce information or records;
16-13                (2)  require that all contracts, bills, and other
16-14    communications from a certificated telecommunications utility or an
16-15    electric utility display a working toll-free telephone number that
16-16    customers may call with complaints and inquiries;
16-17                (3)  require a certificated telecommunications utility
16-18    or an electric utility to refund overcharges or unauthorized
16-19    charges or make other restitution where the certificated
16-20    telecommunications utility or the electric utility has failed to
16-21    comply with commission rules or a contract with the customer;
16-22                (4)  order appropriate relief to ensure that a
16-23    customer's choice of a certificated telecommunications utility or
16-24    an electric utility that encompasses a geographic area in which
16-25    more than one provider has been certified is honored and to
 17-1    compensate the customer for any financial loss that results from a
 17-2    failure to honor the customer's selection of a certificated
 17-3    telecommunications utility or an electric utility; and
 17-4                (5)  require the continuation of service to a
 17-5    residential or small commercial customer while a dispute is
 17-6    pending.
 17-7          SECTION 4.  The importance of this legislation and the
 17-8    crowded condition of the calendars in both houses create an
 17-9    emergency and an imperative public necessity that the
17-10    constitutional rule requiring bills to be read on three several
17-11    days in each house be suspended, and this rule is hereby suspended,
17-12    and that this Act take effect and be in force from and after its
17-13    passage, and it is so enacted.