1-1 By: Nelson, et al. S.B. No. 86
1-2 (In the Senate - Filed December 8, 1998; January 26, 1999,
1-3 read first time and referred to the Special Committee on Electric
1-4 Utility Restructuring; February 18, 1999, reported adversely, with
1-5 favorable Committee Substitute by the following vote: Yeas 6, Nays
1-6 0; February 18, 1999, sent to printer.)
1-7 COMMITTEE SUBSTITUTE FOR S.B. No. 86 By: Nelson
1-8 A BILL TO BE ENTITLED
1-9 AN ACT
1-10 relating to the protection of telecommunications and electric
1-11 services customers; providing penalties.
1-12 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-13 SECTION 1. Section 11.002, Utilities Code, is amended by
1-14 adding Subsection (c) to read as follows:
1-15 (c) Significant changes have occurred in the
1-16 telecommunications and electric power industries since the Public
1-17 Utility Regulatory Act was originally adopted. Changes in
1-18 technology and market structure have increased the need for minimum
1-19 standards of service quality, customer service, and fair business
1-20 practices to ensure high-quality service to customers and a healthy
1-21 marketplace where competition is permitted by law. It is the
1-22 purpose of this title to grant the Public Utility Commission of
1-23 Texas authority to make and enforce rules necessary to protect
1-24 customers of telecommunications and electric services consistent
1-25 with the public interest.
1-26 SECTION 2. Section 15.024, Utilities Code, is amended to
1-27 read as follows:
1-28 Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE.
1-29 (a) If the executive director determines that a violation has
1-30 occurred, the executive director may issue to the commission a
1-31 report that states the facts on which the determination is based
1-32 and the executive director's recommendation on the imposition of an
1-33 administrative penalty, including a recommendation on the amount of
1-34 the penalty.
1-35 (b) Not later than the 14th day after the date the report is
1-36 issued, the executive director shall give written notice of the
1-37 report to the person against whom the penalty may be assessed. The
1-38 notice may be given by certified mail. The notice must:
1-39 (1) include a brief summary of the alleged violation;
1-40 (2) state the amount of the recommended penalty; and
1-41 (3) inform the person that the person has a right to a
1-42 hearing on the occurrence of the violation, the amount of the
1-43 penalty, or both the occurrence of the violation and the amount of
1-44 the penalty.
1-45 (c) [A penalty may not be assessed under this section if the
1-46 person against whom the penalty may be assessed remedies the
1-47 violation before the 31st day after the date the person receives
1-48 the notice under Subsection (b). A person who claims to have
1-49 remedied an alleged violation has the burden of proving to the
1-50 commission that the alleged violation was remedied and was
1-51 accidental or inadvertent.]
1-52 [(d)] Not later than the 20th day after the date the person
1-53 receives the notice, the person may accept the determination and
1-54 recommended penalty of the executive director in writing or may
1-55 make a written request for a hearing on the occurrence of the
1-56 violation, the amount of the penalty, or both the occurrence of the
1-57 violation and the amount of the penalty.
1-58 (d) [(e)] If the person accepts the executive director's
1-59 determination and recommended penalty, the commission by order
1-60 shall approve the determination and impose the recommended penalty.
1-61 (e) [(f)] If the person requests a hearing or fails to
1-62 timely respond to the notice, the executive director shall set a
1-63 hearing and give notice of the hearing to the person. The hearing
1-64 shall be held by an administrative law judge of the State Office of
2-1 Administrative Hearings. The administrative law judge shall make
2-2 findings of fact and conclusions of law and promptly issue to the
2-3 commission a proposal for a decision about the occurrence of the
2-4 violation and the amount of a proposed penalty. Based on the
2-5 findings of fact, conclusions of law, and proposal for a decision,
2-6 the commission by order may find that a violation has occurred and
2-7 impose a penalty or may find that no violation occurred.
2-8 (f) [(g)] The notice of the commission's order shall be
2-9 given to the person as provided by Chapter 2001, Government Code,
2-10 and must include a statement of the right of the person to judicial
2-11 review of the order.
2-12 SECTION 3. Subtitle A, Title 2, Utilities Code, is amended
2-13 by adding Chapter 17 to read as follows:
2-14 CHAPTER 17. CUSTOMER PROTECTION
2-15 SUBCHAPTER A. GENERAL PROVISIONS
2-16 Sec. 17.001. CUSTOMER PROTECTION POLICY. (a) The
2-17 legislature finds that new developments in telecommunications
2-18 services and the production and delivery of electricity, as well as
2-19 changes in market structure, marketing techniques, and technology,
2-20 make it essential that customers have safeguards against
2-21 fraudulent, unfair, misleading, deceptive, or anticompetitive
2-22 business practices and against businesses that do not have the
2-23 technical and financial resources to provide adequate service.
2-24 (b) The purpose of this chapter is to establish customer
2-25 protection standards and confer on the commission authority to
2-26 adopt and enforce rules to protect customers from fraudulent,
2-27 unfair, misleading, deceptive, or anticompetitive practices.
2-28 (c) Nothing in this section shall be construed to abridge
2-29 customer rights set forth in commission rules in effect at the time
2-30 of the enactment of this chapter.
2-31 (d) This chapter does not limit in any way the
2-32 constitutional, statutory, and common law authority of the office
2-33 of the attorney general.
2-34 Sec. 17.002. DEFINITIONS. In this chapter:
2-35 (1) "Billing agent" means any entity that submits
2-36 charges to the billing utility on behalf of itself or any provider
2-37 of a product or service.
2-38 (2) "Billing utility" means any telecommunications
2-39 service provider or electric utility that issues a bill directly to
2-40 a customer for any telecommunications or electric product or
2-41 service.
2-42 (3) "Certificated telecommunications utility" means a
2-43 telecommunications utility that has been granted either a
2-44 certificate of convenience and necessity, a certificate of
2-45 operating authority, or a service provider certificate of operating
2-46 authority.
2-47 (4) "Customer" means any person in whose name
2-48 telephone or electric service is billed, including individuals,
2-49 governmental units at all levels of government, corporate entities,
2-50 and any other entity with legal capacity to be billed for telephone
2-51 or electric service.
2-52 (5) "Electric utility" has the meaning assigned by
2-53 Section 31.002.
2-54 (6) "Service provider" means any entity that offers a
2-55 product or service to a customer and that directly or indirectly
2-56 charges to or collects from a customer's bill an amount for the
2-57 product or service on a customer's local or long distance telephone
2-58 or electric utility bill.
2-59 (7) "Telecommunications utility" has the meaning
2-60 assigned by Section 51.002.
2-61 Sec. 17.003. CUSTOMER AWARENESS. (a) The commission shall
2-62 promote public awareness of changes in the electric and
2-63 telecommunications markets, provide customers with information
2-64 necessary to make informed choices about available options, and
2-65 ensure that customers have an adequate understanding of their
2-66 rights.
2-67 (b) The commission shall compile a report on customer
2-68 service at least once each year showing such comparative customer
2-69 information from reports given to the commission as it deems
3-1 necessary.
3-2 (c) The commission shall make and enforce rules to require a
3-3 certificated telecommunications utility or an electric utility to
3-4 give clear, uniform, and understandable information to customers
3-5 about rates, terms, services, customer rights, and other necessary
3-6 information as determined by the commission.
3-7 (d) Customer awareness efforts by the commission shall be
3-8 conducted in English and Spanish and any other language as
3-9 necessary.
3-10 Sec. 17.004. CUSTOMER PROTECTION STANDARDS. (a) All buyers
3-11 of telecommunications and electric services are entitled to:
3-12 (1) protection from fraudulent, unfair, misleading,
3-13 deceptive, or anticompetitive practices, including protection from
3-14 being billed for services that were not authorized or provided;
3-15 (2) choice of a telecommunications service provider or
3-16 an electric utility, where such choice is permitted by law, and to
3-17 have that choice honored;
3-18 (3) information in English and Spanish and any other
3-19 language as the commission deems necessary concerning rates, key
3-20 terms and conditions, and the basis for any claim of environmental
3-21 benefits of certain production facilities;
3-22 (4) protection from discrimination on the basis of
3-23 race, color, sex, nationality, religion, or marital status;
3-24 (5) impartial and prompt resolution of disputes with a
3-25 certificated telecommunications utility or an electric utility and
3-26 disputes with a telecommunications service provider related to
3-27 unauthorized charges and switching of service;
3-28 (6) privacy of customer consumption and credit
3-29 information;
3-30 (7) accuracy of metering and billing;
3-31 (8) bills presented in a clear, readable format and
3-32 easy-to-understand language;
3-33 (9) information in English and Spanish and any other
3-34 language as the commission deems necessary concerning low-income
3-35 assistance programs and deferred payment plans; and
3-36 (10) other information or protections necessary to
3-37 ensure high-quality service to customers.
3-38 (b) The commission shall adopt and enforce such rules as may
3-39 be necessary or appropriate to carry out this section, including
3-40 but not limited to rules for minimum service standards for a
3-41 certificated telecommunications utility or an electric utility
3-42 relating to customer deposits and the extension of credit,
3-43 switching fees, levelized billing programs, and termination of
3-44 service. The commission may waive language requirements for good
3-45 cause.
3-46 (c) The commission shall request the comments of the office
3-47 of the attorney general in developing the rules that may be
3-48 necessary or appropriate to carry out this section.
3-49 (d) The commission shall coordinate its enforcement efforts
3-50 regarding the prosecution of fraudulent, misleading, and deceptive
3-51 business practices with the office of the attorney general in order
3-52 to ensure consistent treatment of specific alleged violations.
3-53 (e) Nothing in this section shall be construed to abridge
3-54 customer rights set forth in commission rules in effect at the time
3-55 of the enactment of this chapter.
3-56 Sec. 17.005. PROTECTIONS FOR CUSTOMERS OF MUNICIPALLY OWNED
3-57 UTILITIES. A municipally owned utility shall not be deemed to be a
3-58 "service provider" for purposes of Sections 17.156(b) and (e). The
3-59 governing body of a municipally owned utility shall adopt,
3-60 implement, and enforce rules which shall have the effect of
3-61 accomplishing the objectives set out in Sections 17.004(a) and (b)
3-62 and 17.102. The governing body of a municipally owned utility or
3-63 its designee shall perform the dispute resolution function provided
3-64 for by Section 17.157 for customers served within its certificated
3-65 service area.
3-66 SUBCHAPTER B. CERTIFICATION, REGISTRATION,
3-67 AND REPORTING REQUIREMENTS
3-68 Sec. 17.051. ADOPTION OF RULES. (a) The commission shall
3-69 adopt rules relating to certification, registration, and reporting
4-1 requirements for a certificated telecommunications utility or an
4-2 electric utility, as well as all telecommunications utilities that
4-3 are not dominant carriers, pay telephone providers, qualifying
4-4 facilities that are selling capacity into the wholesale or retail
4-5 market, exempt wholesale generators, and power marketers.
4-6 (b) The rules adopted under Subsection (a) shall be
4-7 consistent with and no less effective than federal law and shall
4-8 not require the disclosure of highly sensitive competitive or trade
4-9 secret information.
4-10 Sec. 17.052. SCOPE OF RULES. The commission shall have
4-11 authority to make and enforce rules to:
4-12 (1) require certification or registration with the
4-13 commission as a condition of doing business in this state;
4-14 (2) amend certificates or registrations to reflect
4-15 changed ownership and control;
4-16 (3) establish rules for customer service and
4-17 protection;
4-18 (4) suspend or revoke certificates or registrations
4-19 for repeated violations of this chapter or commission rules; and
4-20 (5) order disconnection of a pay telephone service
4-21 provider's pay telephones or revocation of certification or
4-22 registration for repeated violations of this chapter or commission
4-23 rules.
4-24 Sec. 17.053. REPORTS. The commission may require a
4-25 telecommunications service provider or an electric utility to
4-26 submit reports to the commission concerning any matter over which
4-27 it has authority under this chapter.
4-28 SUBCHAPTER C. CUSTOMER'S RIGHT TO CHOICE
4-29 Sec. 17.101. POLICY. It is the policy of this state that
4-30 all customers are protected from the unauthorized switching of a
4-31 telecommunications service provider or an electric utility selected
4-32 by the customer to provide service.
4-33 Sec. 17.102. RULES RELATING TO CHOICE. The commission shall
4-34 adopt and enforce rules that:
4-35 (1) ensure that customers are protected from deceptive
4-36 practices employed in obtaining authorizations of service and in
4-37 the verification of provider-initiated change orders, including but
4-38 not limited to negative option marketing, sweepstakes, and contests
4-39 that cause customers to unknowingly change their telecommunications
4-40 service provider or electric utility;
4-41 (2) provide for clear, easily understandable
4-42 identification, on the first page of each nonelectronic bill sent
4-43 to a customer, of all telecommunications service providers or
4-44 electric utilities submitting charges on the bill;
4-45 (3) ensure that every service provider submitting
4-46 charges on the bill is clearly and easily identified on the bill
4-47 along with its services, products, and charges;
4-48 (4) require a telecommunications service provider or
4-49 an electric utility to maintain records of nonpublic
4-50 customer-specific information that may be used to establish that
4-51 the customer authorized a change in service for 24 months;
4-52 (5) provide that unauthorized changes in service be
4-53 remedied at no cost to the customer within a period established by
4-54 the commission;
4-55 (6) require refunds or credits with interest to the
4-56 customer in the event of an unauthorized change; and
4-57 (7) provide for penalties for violations of commission
4-58 rules adopted under this section, including but not limited to
4-59 fines and revocation of certificates or registrations, thereby
4-60 denying the certificated telecommunications utility or the electric
4-61 utility the right to provide service in this state.
4-62 SUBCHAPTER D. PROTECTION AGAINST UNAUTHORIZED CHARGES
4-63 Sec. 17.151. REQUIREMENTS FOR SUBMITTING CHARGES. (a) A
4-64 service provider or billing agent may submit charges for a product
4-65 or service to be billed on a customer's telephone or electric bill
4-66 only if:
4-67 (1) the service provider offering the product or
4-68 service has thoroughly informed the customer of the product or
4-69 service being offered, including all associated charges, and has
5-1 explicitly informed the customer that the associated charges for
5-2 the product or service will appear on the customer's telephone or
5-3 electric bill;
5-4 (2) the customer has clearly and explicitly consented
5-5 to obtain the product or service offered and to have the associated
5-6 charges appear on the customer's telephone or electric bill and the
5-7 consent has been verified as provided by Subsection (b); and
5-8 (3) the service provider offering the product or
5-9 service and any billing agent for the service provider:
5-10 (A) has provided the customer with a toll-free
5-11 telephone number the customer may call and an address to which the
5-12 customer may write to resolve any billing dispute and to answer
5-13 questions; and
5-14 (B) has contracted with the billing utility to
5-15 bill for products and services on the billing utility's bill; the
5-16 contract must include the service provider's name, business
5-17 address, and business telephone number and shall be maintained as
5-18 provided by Subsection (c).
5-19 (b) The customer consent required by Subsection (a)(2) must
5-20 be verified by the service provider offering the product or service
5-21 by authorization from the customer in the manner prescribed by the
5-22 commission. A record of the customer consent, including
5-23 verification, must be maintained by the service provider offering
5-24 the product or service for a period of at least 24 months
5-25 immediately after the consent and verification have been obtained.
5-26 (c) The contract required by Subsection (a)(3)(B) shall be
5-27 maintained by the billing utility for as long as the billing for
5-28 such products and services continues and for the 24 months
5-29 immediately following the permanent discontinuation of such
5-30 billing.
5-31 (d) A service provider, other than the billing utility,
5-32 offering a product or service to be charged on a customer's
5-33 telephone or electric bill and any billing agent for the service
5-34 provider shall not use any fraudulent, unfair, misleading,
5-35 deceptive, or anticompetitive marketing practice to obtain
5-36 customers, including the use of negative option marketing,
5-37 sweepstakes, and contests.
5-38 (e) This section does not apply to customer-initiated
5-39 transactions for which the service provider has appropriate
5-40 documentation.
5-41 Sec. 17.152. RESPONSIBILITIES OF A BILLING UTILITY. (a) If
5-42 a customer's telephone or electric bill is charged for any product
5-43 or service without proper customer consent or verification, the
5-44 billing utility, upon its knowledge or notification of any
5-45 unauthorized charge, shall promptly, but in no event later than 45
5-46 days after such knowledge or notification of such charge:
5-47 (1) cease to charge the customer for such unauthorized
5-48 product or service;
5-49 (2) remove any unauthorized charge from the customer's
5-50 bill;
5-51 (3) refund or credit to the customer all money that
5-52 has been paid by the customer for any unauthorized charge; if the
5-53 unauthorized charge is not adjusted within three billing cycles,
5-54 interest shall be paid on the amount of the unauthorized charge;
5-55 (4) upon the customer's request, provide the customer
5-56 with all billing records under its control related to any
5-57 unauthorized charge within 10 business days of the removal of the
5-58 unauthorized charge from the customer's bill; and
5-59 (5) maintain for at least 24 months a record of every
5-60 customer who has experienced any unauthorized charge for a product
5-61 or service on the customer's telephone or electric bill and who has
5-62 notified the billing utility of the unauthorized charge.
5-63 (b) A record required by Subsection (a)(5) shall contain for
5-64 each unauthorized charge:
5-65 (1) the name of the service provider that offered the
5-66 product or service;
5-67 (2) any affected telephone numbers or addresses;
5-68 (3) the date the customer requested that the billing
5-69 utility remove the unauthorized charge;
6-1 (4) the date the unauthorized charge was removed from
6-2 the customer's telephone or electric bill; and
6-3 (5) the date any money that the customer paid for the
6-4 unauthorized charges was refunded or credited to the customer.
6-5 (c) A billing utility shall not:
6-6 (1) disconnect or terminate telecommunications or
6-7 electric service to any customer for nonpayment of an unauthorized
6-8 charge; or
6-9 (2) file an unfavorable credit report against a
6-10 customer who has not paid charges the customer has alleged were
6-11 unauthorized unless the dispute regarding the unauthorized charge
6-12 is ultimately resolved against the customer. However, the customer
6-13 shall remain obligated to pay any charges that are not in dispute,
6-14 and this subsection does not apply to those undisputed charges.
6-15 Sec. 17.153. RECORDS OF DISPUTED CHARGES. (a) Every
6-16 service provider shall maintain a record of every disputed charge
6-17 for a product or service placed on a customer's bill.
6-18 (b) The record required under Subsection (a) shall contain
6-19 for every disputed charge:
6-20 (1) any affected telephone numbers or addresses;
6-21 (2) the date the customer requested that the billing
6-22 utility remove the unauthorized charge;
6-23 (3) the date the unauthorized charge was removed from
6-24 the customer's telephone or electric bill; and
6-25 (4) the date action was taken to refund or credit to
6-26 the customer any money that the customer paid for the unauthorized
6-27 charges.
6-28 (c) The record required by Subsection (a) shall be
6-29 maintained for at least 24 months following the completion of all
6-30 steps required by Section 17.152(a).
6-31 Sec. 17.154. NOTICE. (a) A billing utility shall provide
6-32 notice of a customer's rights under this section in the manner
6-33 prescribed by the commission.
6-34 (b) Notice of a customer's rights must be provided by mail
6-35 to each residential and business customer within 60 days of the
6-36 effective date of this section or by inclusion in the publication
6-37 of the telephone directory next following the effective date of
6-38 this section. In addition, each billing utility shall send the
6-39 notice to new customers at the time service is initiated or to any
6-40 customer at that customer's request.
6-41 Sec. 17.155. PROVIDING COPY OF RECORDS. A billing utility
6-42 shall provide a copy of records maintained under the requirements
6-43 of Sections 17.152, 17.153, and 17.154 to the commission staff upon
6-44 request.
6-45 Sec. 17.156. VIOLATIONS. (a) If the commission finds that
6-46 a billing utility has engaged in a violation of this subchapter,
6-47 the commission has the authority to implement penalties and other
6-48 enforcement actions pursuant to Chapter 15.
6-49 (b) If the commission finds that any other service provider
6-50 or billing agent subject to the provisions of this subchapter has
6-51 engaged in violations of this subchapter or has knowingly provided
6-52 false information to the commission on matters subject to this
6-53 subchapter, the commission may enforce the provisions of Chapter 15
6-54 against the service provider or billing agent as if it were
6-55 regulated by the commission.
6-56 (c) Neither the authority granted under this section nor any
6-57 other provision of this subchapter shall be construed to grant the
6-58 commission jurisdiction to regulate service providers or billing
6-59 agents who are not otherwise subject to commission regulation,
6-60 other than as specifically provided by this chapter.
6-61 (d) If the commission finds that a billing utility
6-62 repeatedly violates this subchapter, the commission may, if such
6-63 action is consistent with the public interest, suspend, restrict,
6-64 or revoke the registration or certificate of the telecommunications
6-65 service provider or electric utility, thereby denying the
6-66 telecommunications service provider or electric utility the right
6-67 to provide service in this state.
6-68 (e) If the commission finds that a service provider or
6-69 billing agent has repeatedly violated any provision of this
7-1 subchapter, the commission may order the billing utility to
7-2 terminate billing and collection services for that service provider
7-3 or billing agent.
7-4 (f) Nothing in this subchapter shall be construed to
7-5 preclude a billing utility from taking action on its own to
7-6 terminate or restrict its billing and collection services.
7-7 Sec. 17.157. DISPUTES. (a) The commission is authorized to
7-8 resolve disputes between a customer and a certificated
7-9 telecommunications utility or an electric utility.
7-10 (b) In exercising its authority under Subsection (a), the
7-11 commission may:
7-12 (1) order a certificated telecommunications utility or
7-13 an electric utility to produce information or records;
7-14 (2) require that all contracts, bills, and other
7-15 communications from a certificated telecommunications utility or an
7-16 electric utility display a working toll-free telephone number that
7-17 customers may call with complaints and inquiries;
7-18 (3) require a certificated telecommunications utility
7-19 or an electric utility to refund or credit overcharges or
7-20 unauthorized charges with interest if the certificated
7-21 telecommunications utility or the electric utility has failed to
7-22 comply with commission rules or a contract with the customer;
7-23 (4) order appropriate relief to ensure that a
7-24 customer's choice of a telecommunications service provider or an
7-25 electric utility that encompasses a geographic area in which more
7-26 than one provider has been certificated is honored;
7-27 (5) require the continuation of service to a
7-28 residential or small commercial customer while a dispute is pending
7-29 regarding charges the customer has alleged were unauthorized; and
7-30 (6) investigate an alleged violation.
7-31 (c) The commission shall adopt procedures for the resolution
7-32 of disputes in a timely manner, which in no event shall exceed 60
7-33 days.
7-34 SECTION 4. The importance of this legislation and the
7-35 crowded condition of the calendars in both houses create an
7-36 emergency and an imperative public necessity that the
7-37 constitutional rule requiring bills to be read on three several
7-38 days in each house be suspended, and this rule is hereby suspended,
7-39 and that this Act take effect and be in force from and after its
7-40 passage, and it is so enacted.
7-41 * * * * *