By:  Nelson                                             S.B. No. 86
         99S0018/1                           
                                A BILL TO BE ENTITLED
                                       AN ACT
 1-1     relating to the protection of telecommunications and electric
 1-2     services customers.
 1-3           BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
 1-4           SECTION 1.  Section 11.002, Utilities Code, is amended by
 1-5     adding Subsection (c) to read as follows:
 1-6           (c)  Significant changes have occurred in the
 1-7     telecommunications and electric power industries since the Public
 1-8     Utility Regulatory Act was originally adopted.  Changes in
 1-9     technology and market structure have increased the need for minimum
1-10     standards of service quality, customer service, and fair business
1-11     practices to ensure high-quality service to customers and a healthy
1-12     marketplace where competition is permitted by law.  It is the
1-13     purpose of this title to grant the Public Utility Commission of
1-14     Texas authority to make and enforce rules necessary to protect
1-15     customers of telecommunications and electric services consistent
1-16     with the public interest.
1-17           SECTION 2.  Section 15.024, Utilities Code, is amended to
1-18     read as follows:
1-19           Sec. 15.024.  ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE.
1-20     (a)  If the executive director determines that a violation has
1-21     occurred, the executive director may issue to the commission a
1-22     report that states the facts on which the determination is based
1-23     and the executive director's recommendation on the imposition of an
1-24     administrative penalty, including a recommendation on the amount of
 2-1     the penalty.
 2-2           (b)  Not later than the 14th day after the date the report is
 2-3     issued, the executive director shall give written notice of the
 2-4     report to the person against whom the penalty may be assessed.  The
 2-5     notice may be given by certified mail.  The notice must:
 2-6                 (1)  include a brief summary of the alleged violation;
 2-7                 (2)  state the amount of the recommended penalty; and
 2-8                 (3)  inform the person that the person has a right to a
 2-9     hearing on the occurrence of the violation, the amount of the
2-10     penalty, or both the occurrence of the violation and the amount of
2-11     the penalty.
2-12           (c)  [A penalty may not be assessed under this section if the
2-13     person against whom the penalty may be assessed remedies the
2-14     violation before the 31st day after the date the person receives
2-15     the notice under Subsection (b).  A person who claims to have
2-16     remedied an alleged violation has the burden of proving to the
2-17     commission that the alleged violation was remedied and was
2-18     accidental or inadvertent.]
2-19           [(d)]  Not later than the 20th day after the date the person
2-20     receives the notice, the person may accept the determination and
2-21     recommended penalty of the executive director in writing or may
2-22     make a written request for a hearing on the occurrence of the
2-23     violation, the amount of the penalty, or both the occurrence of the
2-24     violation and the amount of the penalty.
2-25           (d) [(e)]  If the person accepts the executive director's
2-26     determination and recommended penalty, the commission by order
 3-1     shall approve the determination and impose the recommended penalty.
 3-2           (e) [(f)]  If the person requests a hearing or fails to
 3-3     timely respond to the notice, the executive director shall set a
 3-4     hearing and give notice of the hearing to the person.  The hearing
 3-5     shall be held by an administrative law judge of the State Office of
 3-6     Administrative Hearings.  The administrative law judge shall make
 3-7     findings of fact and conclusions of law and promptly issue to the
 3-8     commission a proposal for a decision about the occurrence of the
 3-9     violation and the amount of a proposed penalty.  Based on the
3-10     findings of fact, conclusions of law, and proposal for a decision,
3-11     the commission by order may find that a violation has occurred and
3-12     impose a penalty or may find that no violation occurred.
3-13           (f) [(g)]  The notice of the commission's order shall be
3-14     given to the person as provided by Chapter 2001, Government Code,
3-15     and must include a statement of the right of the person to judicial
3-16     review of the order.
3-17           SECTION 3.  Subtitle A, Title 2, Utilities Code, is amended
3-18     by adding Chapter 17 to read as follows:
3-19                      CHAPTER 17.  CUSTOMER PROTECTION
3-20                      SUBCHAPTER A.  GENERAL PROVISIONS
3-21           Sec. 17.001.  CUSTOMER PROTECTION POLICY.  (a)  The
3-22     legislature finds that new developments in telecommunications
3-23     services and the production and delivery of electricity, as well as
3-24     changes in market structure, marketing techniques, and technology,
3-25     make it essential that customers have safeguards against
3-26     fraudulent, misleading, or deceptive business practices and against
 4-1     businesses that do not have the technical and financial resources
 4-2     to provide adequate service.
 4-3           (b)  The purpose of this chapter is to establish customer
 4-4     protection standards and confer on the commission authority to
 4-5     adopt and enforce rules to protect customers from unfair,
 4-6     deceptive, or anticompetitive practices.
 4-7           Sec. 17.002.  DEFINITIONS.  In this chapter:
 4-8                 (1)  "Billing agent" means any entity that submits
 4-9     charges to the billing utility on behalf of itself or any provider
4-10     of a product or service.
4-11                 (2)  "Billing utility" means any telecommunications or
4-12     electric utility that issues a bill directly to a customer for any
4-13     telecommunications or electric product or service.
4-14                 (3)  "Certificated telecommunications utility" means a
4-15     telecommunications utility that has been granted either a
4-16     certificate of convenience and necessity, a certificate of
4-17     operating authority, or a service provider certificate of operating
4-18     authority.
4-19                 (4)  "Customer" means any person in whose name
4-20     telephone or electric service is billed.
4-21                 (5)  "Electric utility" has the meaning assigned by
4-22     Section 31.002.
4-23                 (6)  "Telecommunications utility" has the meaning
4-24     assigned by Section 51.002.
4-25           Sec. 17.003.  CUSTOMER AWARENESS.  (a)  The commission shall
4-26     promote public awareness of changes in the electric and
 5-1     telecommunications markets, provide customers with information
 5-2     necessary to make informed choices about available options, and
 5-3     ensure that customers have an adequate understanding of their
 5-4     rights.
 5-5           (b)  The commission shall compile a report on customer
 5-6     service at least once each year showing such comparative customer
 5-7     information from reports given to the commission as it deems
 5-8     necessary.
 5-9           (c)  The commission shall make and enforce rules to require a
5-10     certificated telecommunications utility or an electric utility to
5-11     give clear, uniform, and understandable information to customers
5-12     about rates, terms, services, customer rights, and other necessary
5-13     information as determined by the commission.
5-14           (d)  Customer awareness efforts shall be conducted in English
5-15     and Spanish and any other language as necessary.
5-16           Sec. 17.004.  CUSTOMER PROTECTION STANDARDS.  (a)  All buyers
5-17     of telecommunications and electric services have the right to:
5-18                 (1)  protection from unfair, misleading, or deceptive
5-19     practices, including protection from being billed for services that
5-20     were not authorized or provided;
5-21                 (2)  choice of a certificated telecommunications
5-22     utility or an electric utility, where such choice is permitted by
5-23     law, and to have that choice honored;
5-24                 (3)  information in English and Spanish and any other
5-25     language as necessary concerning rates, key terms and conditions,
5-26     and the environmental impact of certain production facilities;
 6-1                 (4)  protection from discrimination on the basis of
 6-2     race, color, sex, nationality, religion, or marital status;
 6-3                 (5)  impartial and prompt resolution of disputes with a
 6-4     certificated telecommunications utility or an electric utility;
 6-5                 (6)  privacy of customer consumption and credit
 6-6     information;
 6-7                 (7)  accuracy of metering and billing;
 6-8                 (8)  bills presented in a clear, readable format and
 6-9     easy-to-understand language;
6-10                 (9)  information in English and Spanish and any other
6-11     language as necessary concerning low-income assistance programs and
6-12     deferred payment plans; and
6-13                 (10)  other information or protections necessary to
6-14     ensure high-quality service to customers.
6-15           (b)  The commission shall adopt and enforce such rules as may
6-16     be necessary or appropriate to carry out this section, including
6-17     but not limited to rules for minimum service standards for a
6-18     certificated telecommunications utility or an electric utility
6-19     relating to customer deposits and the extension of credit,
6-20     switching fees, levelized billing programs, termination of service,
6-21     and quality of service.
6-22           SUBCHAPTER B.  LICENSING, CERTIFICATION, REGISTRATION,
6-23                         AND REPORTING REQUIREMENTS
6-24           Sec. 17.051.  ADOPTION OF RULES.  (a)  The commission shall
6-25     adopt rules relating to licensing, certification, registration, and
6-26     reporting requirements for a certificated telecommunications
 7-1     utility or an electric utility, as well as all telecommunications
 7-2     utilities that are not dominant carriers, pay telephone providers,
 7-3     qualifying facilities, exempt wholesale generators, and power
 7-4     marketers.
 7-5           (b)  The rules adopted under Subsection (a) shall be
 7-6     consistent with and no less effective than federal law.
 7-7           Sec. 17.052.  SCOPE OF RULES.  The commission shall have
 7-8     authority to make and enforce rules to:
 7-9                 (1)  require licensing by or certification or
7-10     registration with the commission as a condition of doing business
7-11     in this state;
7-12                 (2)  amend licenses, certificates, or registrations to
7-13     reflect changed terms and conditions of service or ownership;
7-14                 (3)  establish service quality and reliability
7-15     standards and rules for customer service and protection;
7-16                 (4)  suspend or revoke licenses, certificates, or
7-17     registrations for repeated violations of this chapter or commission
7-18     rules; and
7-19                 (5)  order disconnection of a pay telephone service
7-20     provider's pay telephones or revocation of licensing,
7-21     certification, or registration for repeated violations of this
7-22     chapter or commission rules.
7-23           Sec. 17.053.  REPORTS.  The commission may require a
7-24     certificated telecommunications utility or an electric utility to
7-25     submit reports to the commission concerning any matter over which
7-26     it has authority under this chapter.
 8-1                  SUBCHAPTER C.  CUSTOMER'S RIGHT TO CHOICE
 8-2           Sec. 17.101.  POLICY.  It is the policy of this state that
 8-3     all customers are protected from the unauthorized switching of a
 8-4     certificated telecommunications utility or an electric utility
 8-5     selected by the customer to provide service.
 8-6           Sec. 17.102.  RULES RELATING TO CHOICE.  The commission shall
 8-7     adopt and enforce rules that:
 8-8                 (1)  ensure that customers are protected from deceptive
 8-9     practices to obtain authorizations of service and in the
8-10     verification of provider-initiated change orders, including but not
8-11     limited to negative option marketing, sweepstakes, and contests
8-12     that cause customers to unknowingly change their certificated
8-13     telecommunications utility or electric utility;
8-14                 (2)  provide for clear, easily understandable
8-15     identification on the first page of each bill sent to a customer of
8-16     all certificated telecommunications utilities or electric utilities
8-17     submitting charges on the bill;
8-18                 (3)  ensure that every person, corporation, or
8-19     telecommunications or electric utility submitting charges on the
8-20     bill is clearly and easily identified on the bill along with its
8-21     services, products, and charges;
8-22                 (4)  require a certificated telecommunications utility
8-23     or an electric utility to maintain records of nonpublic
8-24     customer-specific information that may be used to establish that
8-25     the customer authorized a change in service;
8-26                 (5)  provide that unauthorized changes in service be
 9-1     remedied at no cost to the customer within a period established by
 9-2     the commission;
 9-3                 (6)  require refunds or compensation to the customer in
 9-4     the event of an unauthorized change; and
 9-5                 (7)  provide for penalties, including but not limited
 9-6     to fines and revocation of licenses, certificates, or
 9-7     registrations, thereby denying the certificated telecommunications
 9-8     utility or the electric utility the right to provide service in
 9-9     this state.
9-10           SUBCHAPTER D.  PROTECTION AGAINST UNAUTHORIZED CHARGES
9-11           Sec. 17.151.  REQUIREMENTS FOR SUBMITTING CHARGES.  (a)  A
9-12     person, corporation, telecommunications or electric utility, or
9-13     billing agent may submit charges for any product or service to be
9-14     billed on any customer's telephone or electric bill only if:
9-15                 (1)  the person, corporation, or telecommunications or
9-16     electric utility offering the product or service has thoroughly
9-17     informed the customer of the product or service being offered,
9-18     including all associated charges, and has explicitly informed the
9-19     customer that the associated charges for the product or service
9-20     will appear on the customer's telephone or electric bill;
9-21                 (2)  the customer has clearly and explicitly consented
9-22     to obtain the product or service offered and to have the associated
9-23     charges appear on the customer's telephone or electric bill and the
9-24     consent has been verified and recorded as provided by Subsection
9-25     (b); and
9-26                 (3)  the person, corporation, or telecommunications or
 10-1    electric utility offering the product or service and any billing
 10-2    agent for such person, corporation, or telecommunications or
 10-3    electric utility:
 10-4                      (A)  has provided the customer with a toll-free
 10-5    telephone number the customer may call and an address to which the
 10-6    customer may write to resolve any billing dispute and to answer
 10-7    questions;
 10-8                      (B)  has provided the billing utility with its
 10-9    name, business address, business telephone number, and a list with
10-10    accurate descriptions of the products and services for which it
10-11    intends to charge on any customer's telephone or electric bill so
10-12    that any product or service being billed can clearly and easily be
10-13    identified and explained; and
10-14                      (C)  has obtained the billing utility's written
10-15    consent to bill for a product or service on the billing utility's
10-16    bill, which written consent shall be maintained as provided by
10-17    Subsection (c).
10-18          (b)  The customer consent required by Subsection (a)(2) must
10-19    be verified by the person, corporation, or telecommunications or
10-20    electric utility offering the product or service by authorization
10-21    from the customer in the manner prescribed by the commission.  A
10-22    record of the customer consent, including verification, must be
10-23    maintained by the person, corporation, or telecommunications or
10-24    electric utility offering the product or service and any billing
10-25    agent for such person, corporation, or telecommunications or
10-26    electric utility for a period of at least 12 months immediately
 11-1    after the consent and verification have been obtained.
 11-2          (c)  The record of the billing utility's written consent
 11-3    required by Subsection (a)(3)(C) shall be maintained by:
 11-4                (1)  the person, corporation, or telecommunications or
 11-5    electric utility offering the product or service;
 11-6                (2)  any billing agent for the person, corporation, or
 11-7    telecommunications or electric utility under Subdivision (1); and
 11-8                (3)  the billing utility for as long as the billing for
 11-9    such product or service continues and for the 12 months immediately
11-10    following the permanent discontinuation for such billing.
11-11          (d)  A person, corporation, or telecommunications or electric
11-12    utility, other than the billing utility, offering a product or
11-13    service to be charged on a customer's telephone or electric bill
11-14    and any billing agent for such person, corporation, or
11-15    telecommunications or electric utility shall not use any negative
11-16    option marketing, sweepstakes, contests, or other techniques that
11-17    cause customers to unknowingly subscribe to a service or purchase a
11-18    product.
11-19          Sec. 17.152.  RESPONSIBILITIES OF A BILLING UTILITY.  (a)  If
11-20    a customer's telephone or electric bill is charged for any product
11-21    or service without proper customer consent or verification, the
11-22    billing utility, upon its knowledge or notification of any
11-23    unauthorized charge, shall promptly, but in no event later than 45
11-24    days after such knowledge or notification of such charge:
11-25                (1)  cease to charge the customer for such unauthorized
11-26    product or service;
 12-1                (2)  remove any unauthorized charge from the customer's
 12-2    bill;
 12-3                (3)  refund or credit to the customer, with interest,
 12-4    all money that has been paid by the customer for any unauthorized
 12-5    charge;
 12-6                (4)  upon the customer's request, provide the customer
 12-7    with all billing records related to any unauthorized charge within
 12-8    10 business days of the removal of the unauthorized charge from the
 12-9    customer's bill; and
12-10                (5)  maintain for at least 12 months a record of every
12-11    customer who has experienced any unauthorized charge for a product
12-12    or service on the customer's telephone or electric bill.
12-13          (b)  A record required by Subsection (a)(5) shall contain for
12-14    each unauthorized charge:
12-15                (1)  the name of the person, corporation, or
12-16    telecommunications or electric utility that offered the product or
12-17    service;
12-18                (2)  any affected telephone numbers or addresses;
12-19                (3)  the date the customer requested that the billing
12-20    utility remove the unauthorized charge;
12-21                (4)  the date the unauthorized charge was removed from
12-22    the customer's telephone or electric bill; and
12-23                (5)  the date any money that the customer paid for the
12-24    unauthorized charges was refunded or credited to the customer.
12-25          (c)  A billing utility shall not:
12-26                (1)  disconnect or terminate telecommunications or
 13-1    electric service to any customer who disputes a billing charge
 13-2    pursuant to this section; or
 13-3                (2)  file an unfavorable credit report against a
 13-4    customer who has disputed charges under this section unless the
 13-5    dispute is ultimately resolved against the customer.
 13-6          Sec. 17.153.  RECORDS OF DISPUTED CHARGES.  (a)  Every
 13-7    person, corporation, or telecommunications or electric utility
 13-8    shall maintain a record of every disputed charge for a product or
 13-9    service placed on a customer's bill.
13-10          (b)  The record required under Subsection (a) shall contain
13-11    for every disputed charge:
13-12                (1)  any affected telephone numbers or addresses;
13-13                (2)  the date the customer requested that the billing
13-14    utility remove the unauthorized charge;
13-15                (3)  the date the unauthorized charge was removed from
13-16    the customer's telephone or electric bill; and
13-17                (4)  the date any money that the customer paid for the
13-18    unauthorized charges was refunded or credited to the customer.
13-19          (c)  The record required by Subsection (a) shall be
13-20    maintained for at least 12 months following the completion of all
13-21    steps required by Section 17.152(a).
13-22          Sec. 17.154.  NOTICE.  (a)  A billing utility shall provide
13-23    notice of a customer's rights under this section in the manner
13-24    prescribed by the commission.
13-25          (b)  Notice of a customer's rights must be provided by mail
13-26    to each residential and business customer within 60 days of the
 14-1    effective date of this section.  In addition, each billing utility
 14-2    shall send the notice to new customers at the time service is
 14-3    initiated or to any customer at that customer's request.
 14-4          Sec. 17.155.  PROVIDING COPY OF RECORDS.  A billing utility
 14-5    shall provide a copy of records maintained under the requirements
 14-6    of Sections 17.152, 17.153, and 17.154 to the commission staff upon
 14-7    request.
 14-8          Sec. 17.156.  VIOLATIONS.  (a)  If the commission finds that
 14-9    a billing utility has engaged in a violation of this subchapter,
14-10    the commission has the authority to implement penalties and other
14-11    enforcement actions pursuant to Chapter 15.
14-12          (b)  If the commission finds that any other person,
14-13    corporation, entity, or billing agent subject to the provisions of
14-14    this subchapter has engaged in violations of this subchapter or has
14-15    knowingly provided false information to the commission on matters
14-16    subject to this subchapter, the commission may enforce the
14-17    provisions of Chapter 15 against the person, corporation, entity,
14-18    or billing agent as if it were regulated by the commission.
14-19          (c)  Neither the authority granted under this section nor any
14-20    other provision of this subchapter shall be construed to grant the
14-21    commission jurisdiction to regulate persons, corporations,
14-22    entities, or billing agents who are not otherwise subject to
14-23    commission regulation, other than as specifically provided by this
14-24    chapter.
14-25          (d)  If the commission finds that a billing utility
14-26    repeatedly violates this subchapter, the commission may, if such
 15-1    action is consistent with the public interest, suspend, restrict,
 15-2    or revoke the registration or certificate of the telecommunications
 15-3    or electric utility, thereby denying the telecommunications or
 15-4    electric utility the right to provide service in this state.
 15-5          (e)  If the commission finds that a person, corporation,
 15-6    entity, or billing agent has repeatedly violated any provision of
 15-7    this subchapter, the commission may order the billing utility to
 15-8    terminate billing and collection services for that person,
 15-9    corporation, entity, or billing agent.
15-10          (f)  Nothing in this subchapter shall be construed to
15-11    preclude a billing utility from taking action on its own to
15-12    terminate or restrict its billing and collection services in order
15-13    to protect its customers from abuse.
15-14          Sec. 17.157.  DISPUTES.  (a)  The commission is authorized to
15-15    resolve disputes between a customer and a certificated
15-16    telecommunications utility or an electric utility.
15-17          (b)  In exercising its authority under Subsection (a), the
15-18    commission may:
15-19                (1)  order a certificated telecommunications utility or
15-20    an electric utility to produce information or records;
15-21                (2)  require that all contracts, bills, and other
15-22    communications from a certificated telecommunications utility or an
15-23    electric utility display a working toll-free telephone number that
15-24    customers may call with complaints and inquiries;
15-25                (3)  require a certificated telecommunications utility
15-26    or an electric utility to refund overcharges or unauthorized
 16-1    charges or make other restitution where the certificated
 16-2    telecommunications utility or the electric utility has failed to
 16-3    comply with commission rules or a contract with the customer;
 16-4                (4)  order appropriate relief to ensure that a
 16-5    customer's choice of a certificated telecommunications utility or
 16-6    an electric utility that encompasses a geographic area in which
 16-7    more than one provider has been certified is honored and to
 16-8    compensate the customer for any financial loss that results from a
 16-9    failure to honor the customer's selection of a certificated
16-10    telecommunications utility or an electric utility; and
16-11                (5)  require the continuation of service to a
16-12    residential or small commercial customer while a dispute is
16-13    pending.
16-14          SECTION 4.  The importance of this legislation and the
16-15    crowded condition of the calendars in both houses create an
16-16    emergency and an imperative public necessity that the
16-17    constitutional rule requiring bills to be read on three several
16-18    days in each house be suspended, and this rule is hereby suspended,
16-19    and that this Act take effect and be in force from and after its
16-20    passage, and it is so enacted.