79R14364 E
By: King of Parker H.B. No. 1779
Substitute the following for H.B. No. 1779:
By: King of Parker C.S.H.B. No. 1779
A BILL TO BE ENTITLED
AN ACT
relating to the continuation, administration, and operations of the
Public Utility Commission of Texas and the Office of Public Utility
Counsel.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. The heading to Subtitle A, Title 2, Utilities
Code, is amended to read as follows:
SUBTITLE A. GENERALLY [PROVISIONS] APPLICABLE PROVISIONS [TO ALL
UTILITIES]
SECTION 2. Sections 11.002(a) and (b), Utilities Code, are
amended to read as follows:
(a) This title is enacted to protect the public interest
inherent in the delivery of [rates and] services and deployment of
networks by telecommunications providers [public utilities]. The
purpose of this title is to establish an appropriate [a
comprehensive and adequate] regulatory system for communications
service [public utilities to assure rates, operations, and services
that are just] and network providers for [reasonable to] the
benefit of consumers [and to the utilities].
(b) Electric [Public] utilities traditionally are by
definition monopolies in the areas they serve. As a result, the
normal forces of competition that regulate prices in a free
enterprise society do not operate. Public agencies regulate utility
rates, operations, and services as a substitute for competition.
SECTION 3. Sections 11.003(1), (2), (3), (8), (10), (13),
(16), (19), (20), and (21), Utilities Code, are amended to read as
follows:
(1) "Affected person" means:
(A) a public utility, provider, or electric
cooperative affected by an action of a regulatory authority;
(B) a person whose [utility] service or rates are
affected by a proceeding before a regulatory authority; or
(C) a person who:
(i) is a competitor of a public utility or
provider with respect to a service delivered [performed] by the
utility or provider; or
(ii) wants to enter into competition with a
public utility or provider.
(2) "Affiliate" means:
(A) a person who directly or indirectly owns or
holds at least five percent of the voting securities of a public
utility or provider;
(B) a person in a chain of successive ownership
of at least five percent of the voting securities of a public
utility or provider;
(C) a corporation that has at least five percent
of its voting securities owned or controlled, directly or
indirectly, by a public utility or provider;
(D) a corporation that has at least five percent
of its voting securities owned or controlled, directly or
indirectly, by:
(i) a person who directly or indirectly
owns or controls at least five percent of the voting securities of a
public utility or provider; or
(ii) a person in a chain of successive
ownership of at least five percent of the voting securities of a
public utility or provider;
(E) a person who is an officer or director of a
public utility or provider or of a corporation in a chain of
successive ownership of at least five percent of the voting
securities of a public utility or provider; or
(F) a person determined to be an affiliate under
federal law or Section 11.006.
(3) "Allocation" means the division among
municipalities or among municipalities and unincorporated areas of
the plant, revenues, expenses, taxes, and reserves of an electric
[a] utility used to provide electric [public utility] service in a
municipality or for a municipality and unincorporated areas.
(8) "Counselor [Counsellor]" means the public utility
counsel.
(10) "Facilities" means all of the plant and equipment
of a public utility or provider, and includes the tangible and
intangible property, without limitation, owned, operated, leased,
licensed, used, controlled, or supplied for, by, or in connection
with the business of the public utility or provider.
(13) "Order" means all or a part of a final disposition
by a regulatory authority in a matter other than rulemaking,
without regard to whether the disposition is affirmative or
negative or injunctive or declaratory. The term includes:
(A) the issuance of a certificate or registration
[of convenience and necessity]; and
(B) the setting of a rate.
(16) "Rate" includes:
(A) any compensation, tariff, charge, fare,
toll, rental, or classification that is directly or indirectly
demanded, observed, charged, or collected by a public utility or
provider for a service, product, or commodity described in the
definition of utility in Section 31.002 or 51.002; and
(B) a rule, practice, or contract affecting the
compensation, tariff, charge, fare, toll, rental, or
classification.
(19) "Service" includes:
(A) basic local telecommunications service as
defined by Section 51.002;
(B) interexchange telecommunications service as
defined by Section 51.002;
(C) local exchange telephone service as defined
by Section 51.002;
(D) transmission service as defined by Section
31.002; and
(E) a service provided by a utility or electric
utility that is described in the definition of utility or electric
utility in Section 31.002 or 51.002 [has its broadest and most
inclusive meaning. The term includes any act performed, anything
supplied, and any facilities used or supplied by a public utility in
the performance of the utility's duties under this title to its
patrons, employees, other public utilities, an electric
cooperative, and the public. The term also includes the
interchange of facilities between two or more public utilities.
The term does not include the printing, distribution, or sale of
advertising in a telephone directory].
(20) "Test year" means the most recent 12 months,
beginning on the first day of a calendar or fiscal year quarter, for
which operating data for a public utility or provider are
available.
(21) "Trade association" means a nonprofit,
cooperative, and voluntarily joined association of business or
professional persons who are employed by public utilities, [or]
utility competitors, or providers to assist [the public utility
industry, a utility competitor, or the industry's or competitor's
employees] in dealing with mutual business or professional problems
and in promoting their common interest.
SECTION 4. Chapter 11, Utilities Code, is amended by adding
Sections 11.0042 and 11.0045 to read as follows:
Sec. 11.0042. DEFINITION OF AFFILIATE. (a) The term
"person" or "corporation" as used in the definition of "affiliate"
provided by Section 11.003(2) does not include:
(1) a broker or dealer registered under the Securities
Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as amended;
(2) a bank or insurance company as defined under the
Securities Exchange Act of 1934 (15 U.S.C. Section 78a et seq.), as
amended;
(3) an investment adviser registered under state law
or the Investment Advisers Act of 1940 (15 U.S.C. Section 80b-20 et
seq.);
(4) an investment company registered under the
Investment Company Act of 1940 (15 U.S.C. Section 80a-51 et seq.);
or
(5) an employee benefit plan, pension fund, endowment
fund, or other similar entity that may, directly or indirectly,
own, hold, or control five percent or more but not more than 15
percent of the voting securities of a public utility or the parent
corporation of a public utility if the entity did not acquire the
voting securities:
(A) for the purpose of or with the effect of
changing or influencing the control of the issuer of the
securities; or
(B) in connection with or as a participant in any
transaction that changes or influences the control of the issuer of
the securities.
(b) For the purpose of determining whether a person is an
affiliate under Section 11.006(a)(3), the term "person" does not
include an entity that may, directly or indirectly, own, hold, or
control five percent or more but not more than 15 percent of the
voting securities of a public utility or the parent corporation of a
public utility if the entity did not acquire the voting securities:
(1) for the purpose of or with the effect of changing
or influencing the control of the issuer of the securities; or
(2) in connection with or as a participant in any
transaction that changes or influences the control of the issuer of
the securities.
(c) A report filed by an entity described by Subsection
(a)(5) or (b) with the Securities and Exchange Commission is
conclusive evidence of the entity's intent if the report confirms
that the voting securities were not acquired:
(1) for the purpose of or with the effect of changing
or influencing the control of the issuer of the securities; or
(2) in connection with or as a participant in any
transaction that changes or influences the control of the issuer of
the securities.
Sec. 11.0045. DEFINITION OF PROVIDER. In Subtitle A
"provider" means:
(1) a service provider; and
(2) a network provider.
SECTION 5. Section 11.006, Utilities Code, is amended to
read as follows:
Sec. 11.006. PERSON DETERMINED TO BE AFFILIATE. (a) The
commission may determine that a person is an affiliate for purposes
of this title if the commission after notice and hearing finds that
the person:
(1) actually exercises substantial influence or
control over the policies and actions of a public utility or
provider;
(2) is a person over which a public utility or provider
exercises the control described by Subdivision (1);
(3) is under common control with a public utility or
provider; or
(4) together with one or more persons with whom the
person is related by ownership or blood relationship, or by action
in concert, actually exercises substantial influence over the
policies and actions of a public utility or provider even though
neither person may qualify as an affiliate individually.
(b) For purposes of Subsection (a)(3), "common control with
a public utility or provider" means the direct or indirect
possession of the power to direct or cause the direction of the
management and policies of another, without regard to whether that
power is established through ownership or voting of securities or
by any other direct or indirect means.
SECTION 6. Chapter 11, Utilities Code, is amended by adding
Section 11.010 to read as follows:
Sec. 11.010. REPRESENTATION. (a) Except as provided by
Subsection (b), an individual who represents an entity in a
contested proceeding before the commission must be an attorney
licensed to practice law in this state or in another state.
(b) The commission may make an exception to Subsection (a)
based on the circumstances of a particular proceeding.
SECTION 7. Section 12.004, Utilities Code, is amended to
read as follows:
Sec. 12.004. REPRESENTATION BY [THE] ATTORNEY GENERAL. The
attorney general shall represent the commission in a matter before
a state court, a court of the United States, or a federal public
utility or service regulatory commission.
SECTION 8. Section 12.005, Utilities Code, is amended to
read as follows:
Sec. 12.005. APPLICATION OF SUNSET ACT. The Public Utility
Commission of Texas is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter or by Chapter 39, the commission is abolished and this
title expires September 1, 2011 [2005].
SECTION 9. Section 12.051(a), Utilities Code, is amended to
read as follows:
(a) The commission is composed of five [three]
commissioners appointed by the governor with the advice and consent
of the senate.
SECTION 10. Section 12.053(b), Utilities Code, is amended
to read as follows:
(b) A person is not eligible for appointment as a
commissioner if the person:
(1) at any time during the two years preceding
appointment[:
[(A)] personally served as an officer, director,
owner, employee, partner, or legal representative of a [public]
utility, provider, affiliate, or direct competitor of a [public]
utility or provider; [or]
(2) owns [(B) owned] or controls [controlled],
directly or indirectly, stocks or bonds of any class with a value of
$10,000 or more in a [public] utility, provider, affiliate, or
direct competitor of a [public] utility or provider; or
(3) [(2)] is not qualified to serve under Section
12.151, 12.152, or 12.153.
SECTION 11. Section 12.054(a), Utilities Code, is amended
to read as follows:
(a) It is a ground for removal from the commission if a
commissioner:
(1) does not have at the time of appointment or
maintain during service on the commission the qualifications
required by Section 12.053;
(2) violates a prohibition provided by Section 12.053
or by Subchapter D;
(3) cannot discharge the commissioner's duties for a
substantial part of the term for which the commissioner is
appointed because of illness or disability; [or]
(4) is absent from more than half of the regularly
scheduled commission meetings that the commissioner is eligible to
attend during a calendar year unless the absence is excused by
majority vote of the commission; or
(5) personally serves as an officer, director, owner,
employee, partner, or legal representative of a utility, provider,
affiliate, or direct competitor of a utility or provider.
SECTION 12. Section 12.059, Utilities Code, is amended by
adding Subsection (c) to read as follows:
(c) A person who is appointed to the commission is entitled
to reimbursement, as provided by the General Appropriations Act,
for the travel expenses incurred in attending the training program
regardless of whether the attendance at the program occurs before
or after the person qualifies for office.
SECTION 13. Section 12.102, Utilities Code, is amended to
read as follows:
Sec. 12.102. DUTIES OF EMPLOYEES. The commission shall
develop and implement policies that clearly separate [define] the
policymaking [respective] responsibilities of the commission and
the management responsibilities of the commission employees.
SECTION 14. Section 12.152(a), Utilities Code, is amended
to read as follows:
(a) A person is not eligible for appointment as a
commissioner or executive director of the commission if:
(1) the person serves on the board of directors of a
company that supplies fuel, utility-related services, or
utility-related products to a utility or provider [regulated or
unregulated electric or telecommunications utilities]; or
(2) the person or the person's spouse:
(A) is employed by or participates in the
management of a business entity or other organization that is
regulated by or receives funds from the commission;
(B) directly or indirectly owns or controls more
than a 10 percent interest or a pecuniary interest with a value
exceeding $10,000 in:
(i) a business entity or other organization
that is regulated by or receives funds from the commission; or
(ii) a utility, provider, affiliate, or
direct competitor of a[,] utility [supplier,] or provider [other
entity affected by a commission decision in a manner other than by
the setting of rates for that class of customer];
(C) uses or receives a substantial amount of
tangible goods, services, or funds from the commission, other than
compensation or reimbursement authorized by law for commission
membership, attendance, or expenses; or
(D) notwithstanding Paragraph (B), has an
interest in a mutual fund or retirement fund in which more than 10
percent of the fund's holdings at the time of appointment is in a
single utility, provider, affiliate, or direct [utility]
competitor of a[, or] utility or provider [supplier] in this state
and the person does not disclose this information to the governor,
senate, commission, or other entity, as appropriate.
SECTION 15. Section 12.153, Utilities Code, is amended to
read as follows:
Sec. 12.153. RELATIONSHIP WITH TRADE ASSOCIATION. A person
may not serve as a commissioner or be a commission employee who is
employed in a "bona fide executive, administrative, or professional
capacity," as that phrase is used for purposes of establishing an
exemption to the overtime provisions of the federal Fair Labor
Standards Act of 1938 (29 U.S.C. Section 201 et seq.), [exempt from
the state's position classification plan or is compensated at or
above the amount prescribed by the General Appropriations Act for
step 1, salary group 17, of the position classification salary
schedule] if the person is:
(1) an officer, employee, or paid consultant of a
trade association; or
(2) the spouse of an officer, manager, or paid
consultant of a trade association.
SECTION 16. Sections 12.154(a), (b), (c), (d), (f), and
(h), Utilities Code, are amended to read as follows:
(a) During the period of service with the commission, a
commissioner or commission employee may not:
(1) have a pecuniary interest, including an interest
as an officer, director, partner, owner, employee, attorney, or
consultant, in:
(A) a [public] utility, provider, [or]
affiliate, or direct competitor of a utility or provider; or
(B) a person a significant portion of whose
business consists of furnishing goods or services to a utility,
provider, affiliate, or direct competitor of a utility or provider
[public utilities or affiliates];
(2) directly or indirectly own or control securities
in a [public] utility, provider, affiliate, or direct competitor of
a [public] utility or provider; or
(3) accept a gift, gratuity, or entertainment from:
(A) a [public] utility, provider, affiliate, or
direct competitor of a [public] utility or provider;
(B) a person a significant portion of whose
business consists of furnishing goods or services to [public]
utilities, providers, affiliates, or direct competitors of
[public] utilities or providers; or
(C) an agent, representative, attorney,
employee, officer, owner, director, or partner of a person
described by Paragraph (A) or (B).
(b) A commissioner or a commission employee may not directly
or indirectly solicit, request from, or suggest or recommend to a
[public] utility, provider, affiliate, or direct competitor of a
utility or provider or an agent, representative, attorney,
employee, officer, owner, director, or partner of a [public]
utility, provider, affiliate, or direct competitor of a utility or
provider the appointment to a position or the employment of a person
by the [public] utility, provider, [or] affiliate, or direct
competitor of a utility or provider.
(c) A person may not give or offer to give a gift, gratuity,
employment, or entertainment to a commissioner or commission
employee if that person is:
(1) a [public] utility, provider, affiliate, or direct
competitor of a [public] utility or provider;
(2) a person who furnishes goods or services to a
[public] utility, provider, affiliate, or direct competitor of a
[public] utility or provider; or
(3) an agent, representative, attorney, employee,
officer, owner, director, or partner of a person described by
Subdivision (1) or (2).
(d) A [public] utility, provider, affiliate, or direct
competitor of a [public] utility or provider or a person furnishing
goods or services to a [public] utility, provider, affiliate, or
direct competitor of a [public] utility or provider may not aid,
abet, or participate with a commissioner, commission employee, or
former commission employee in conduct that violates Subsection
(a)(3) or (c).
(f) It is not a violation of this section if a commissioner
or commission employee, on becoming the owner of stocks, bonds, or
another pecuniary interest in a [public] utility, provider,
affiliate, or direct competitor of a [public] utility or provider
otherwise than voluntarily, informs the commission and the attorney
general of the ownership and divests the ownership or interest
within a reasonable time.
(h) This section does not apply to a contract for a [public
utility] product or service from [or equipment for use of] a
[public] utility, provider, affiliate, or direct competitor of a
utility or provider [product] when a commissioner or commission
employee is acting as a consumer.
SECTION 17. Sections 12.155(a) and (c), Utilities Code, are
amended to read as follows:
(a) A commissioner, a commission employee, or an employee of
the State Office of Administrative Hearings involved in hearing
utility or provider cases may not:
(1) be employed by a [public] utility or provider that
was in the scope of the commissioner's or employee's official
responsibility while the commissioner or employee was associated
with the commission or the State Office of Administrative Hearings;
or
(2) represent a person before the commission or State
Office of Administrative Hearings or a court in a matter:
(A) in which the commissioner or employee was
personally involved while associated with the commission or State
Office of Administrative Hearings; or
(B) that was within the commissioner's or
employee's official responsibility while the commissioner or
employee was associated with the commission or State Office of
Administrative Hearings.
(c) The prohibition of Subsection (a)(2) applies while a
commissioner, commission employee, or employee of the State Office
of Administrative Hearings involved in hearing utility or provider
cases is associated with the commission or State Office of
Administrative Hearings and at any time after.
SECTION 18. Section 12.252, Utilities Code, is amended to
read as follows:
Sec. 12.252. COMMISSION AUTHORITY. The commission, after
notice and hearing, may require each utility or provider subject to
regulation under this title to make an effort to overcome the
underuse of historically underutilized businesses.
SECTION 19. Section 12.253, Utilities Code, is amended to
read as follows:
Sec. 12.253. REPORT REQUIRED. The commission shall require
each utility or provider subject to regulation under this title to
prepare and submit to the commission a comprehensive annual report
detailing its use of historically underutilized businesses.
SECTION 20. Section 13.002, Utilities Code, is amended to
read as follows:
Sec. 13.002. APPLICATION OF SUNSET ACT. The Office of
Public Utility Counsel is subject to Chapter 325, Government Code
(Texas Sunset Act). Unless continued in existence as provided by
that chapter, the office is abolished and this chapter expires
September 1, 2011 [2005].
SECTION 21. Sections 13.003(a) and (c), Utilities Code, are
amended to read as follows:
(a) The office:
(1) shall assess the effect of [utility] rate changes
and other regulatory actions on residential consumers in this
state;
(2) shall advocate in the office's own name a position
determined by the counselor [counsellor] to be most advantageous to
a substantial number of residential consumers;
(3) may appear or intervene, as a party or otherwise,
as a matter of right on behalf of:
(A) residential consumers, as a class, in any
proceeding in which the counselor determines that residential
consumers are in need of representation [before the commission],
including an alternative dispute resolution proceeding; and
(B) small commercial consumers, as a class, in
any proceeding in which the counselor [counsellor] determines that
small commercial consumers are in need of representation, including
an alternative dispute resolution proceeding;
(4) may initiate or intervene as a matter of right or
otherwise appear in a judicial proceeding:
(A) that involves an action taken by an
administrative agency in a proceeding, including an alternative
dispute resolution proceeding, in which the counselor [counsellor]
is authorized to appear; or
(B) in which the counselor [counsellor]
determines that residential [electricity] consumers or small
commercial [electricity] consumers are in need of representation;
(5) is entitled to the same access as a party, other
than commission staff, to records gathered by the commission under
Section 14.204;
(6) is entitled to discovery of any nonprivileged
matter that is relevant to the subject matter of a proceeding or
petition before the commission;
(7) may represent [an individual] residential or small
commercial consumers, individually or as a class, [consumer] with
respect to any [the consumer's disputed] complaint concerning
electric or telecommunications [utility] services that is
unresolved before the commission; [and]
(8) may represent residential and small commercial
consumers, as a group or as a class, in any federal bankruptcy case
in which the counselor determines that electric or
telecommunications consumers in this state are in need of
representation; and
(9) may recommend legislation to the legislature that
the office determines would positively affect the interests of
residential and small commercial consumers.
(c) The appearance of the counselor [counsellor] in a
proceeding does not preclude the appearance of other parties on
behalf of residential or small commercial consumers. The counselor
[counsellor] may not be grouped with any other party.
SECTION 22. Subchapter A, Chapter 13, Utilities Code, is
amended by adding Sections 13.004, 13.005, and 13.006 to read as
follows:
Sec. 13.004. ALTERNATIVE DISPUTE RESOLUTION PROCEDURES.
(a) The counselor shall develop and implement a policy to encourage
the use of appropriate alternative dispute resolution procedures
under Chapter 2009, Government Code, to assist in the resolution of
internal disputes under the office's jurisdiction.
(b) The office's procedures relating to alternative dispute
resolution must conform, to the extent possible, to any model
guidelines issued by the State Office of Administrative Hearings
for the use of alternative dispute resolution by state agencies.
(c) The counselor shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for alternative dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the office.
Sec. 13.005. TECHNOLOGY POLICY. The counselor shall
implement a policy requiring the office to use appropriate
technological solutions to improve the office's ability to perform
its functions. The policy must ensure that the public is able to
interact with the office on the Internet.
Sec. 13.006. MANAGEMENT AUDIT. (a) The state auditor, in
coordination with the Legislative Budget Board, shall conduct a
management audit of the office to evaluate the office's performance
measures to determine the accuracy of calculations and whether the
measures accurately depict the impact of the office. The audit must
include an estimation of savings to residential and small
commercial consumers directly attributable to office participation
in proceedings.
(b) The state auditor must complete the audit required by
this section and deliver a report on the audit to the governor,
lieutenant governor, and speaker of the house of representatives
not later than August 1, 2006.
(c) This section expires September 1, 2006.
SECTION 23. Section 13.021, Utilities Code, is amended to
read as follows:
Sec. 13.021. APPOINTMENT; TERM. (a) The chief executive of
the office is the counselor [counsellor].
(b) The counselor [counsellor] is appointed by the governor
with the advice and consent of the senate.
(c) The appointment of the counselor [counsellor] shall be
made without regard to the race, color, disability, sex, religion,
age, or national origin of the appointee.
(d) The counselor [counsellor] serves a two-year term that
expires on February 1 of the final year of the term.
SECTION 24. Section 13.022, Utilities Code, is amended to
read as follows:
Sec. 13.022. QUALIFICATIONS. (a) The counselor
[counsellor] must:
(1) be licensed to practice law in this state;
(2) have demonstrated a strong commitment to and
involvement in efforts to safeguard the rights of the public; and
(3) possess the knowledge and experience necessary to
practice effectively in utility proceedings.
(b) A person is not eligible for appointment as counselor
[counsellor] if:
(1) the person or the person's spouse:
(A) is employed by or participates in the
management of a business entity or other organization that is
regulated by or receives funds from the commission;
(B) directly or indirectly owns or controls more
than a 10 percent interest or a pecuniary interest with a value
exceeding $10,000 in:
(i) a business entity or other organization
that is regulated by or receives funds from the commission or the
office; or
(ii) a utility competitor, utility
supplier, or other entity affected by a commission decision in a
manner other than by the setting of rates for that class of
customer;
(C) uses or receives a substantial amount of
tangible goods, services, or funds from the commission or the
office, other than compensation or reimbursement authorized by law
for service as counselor [counsellor] or for commission membership,
attendance, or expenses; or
(D) notwithstanding Paragraph (B), has an
interest in a mutual fund or retirement fund in which more than 10
percent of the fund's holdings is in a single utility, utility
competitor, or utility supplier in this state and the person does
not disclose this information to the governor, senate, or other
entity, as appropriate; or
(2) the person is not qualified to serve under Section
13.042.
(c) [A person required to register as a lobbyist under
Chapter 305, Government Code, because of the person's activities
for compensation on behalf of a profession related to the operation
of the commission or the office may not serve as counsellor.
[(d)] A person otherwise ineligible because of Subsection
(b)(1)(B) may be appointed and serve as counselor [counsellor] if
the person:
(1) notifies the attorney general and commission that
the person is ineligible because of Subsection (b)(1)(B); and
(2) divests the person or the person's spouse of the
ownership or control:
(A) before beginning service; or
(B) if the person is already serving, within a
reasonable time.
SECTION 25. Section 13.023, Utilities Code, is amended to
read as follows:
Sec. 13.023. GROUNDS FOR REMOVAL. (a) It is a ground for
removal from office if the counselor [counsellor]:
(1) does not have at the time of taking office
[appointment] or maintain during service as counselor [counsellor]
the qualifications required by Section 13.022;
(2) is ineligible for service as counselor under
[violates a prohibition provided by] Section 13.022, 13.042, or
13.043; or
(3) cannot discharge the counselor's [counsellor's]
duties for a substantial part of the term for which the counselor
[counsellor] is appointed because of illness or disability.
(b) The validity of an action of the office is not affected
by the fact that the action is taken when a ground for removal of the
counselor [counsellor] exists.
(c) If an employee has knowledge that a potential ground for
removal of the counselor exists, the employee shall notify the next
highest ranking employee of the office, other than the counselor,
who shall then notify the governor and the attorney general that a
potential ground for removal exists.
SECTION 26. Section 13.024, Utilities Code, is amended to
read as follows:
Sec. 13.024. PROHIBITED ACTS. (a) The counselor
[counsellor] may not have a direct or indirect interest in a utility
company regulated under this title, its parent, or its subsidiary
companies, corporations, or cooperatives or a utility competitor,
utility supplier, or other entity affected in a manner other than by
the setting of rates for that class of customer.
(b) The prohibition under Subsection (a) applies during the
period of the counselor's [counsellor's] service.
SECTION 27. Section 13.041(a), Utilities Code, is amended
to read as follows:
(a) The counselor [counsellor] may employ lawyers,
economists, engineers, consultants, statisticians, accountants,
clerical staff, and other employees as the counselor [counsellor]
considers necessary to carry out this chapter.
SECTION 28. Section 13.042, Utilities Code, is amended to
read as follows:
Sec. 13.042. CONFLICT OF INTEREST [RELATIONSHIP WITH TRADE
ASSOCIATION]. (a) In this section, "Texas trade association"
means a cooperative and voluntarily joined statewide association of
business or professional competitors in this state designed to
assist its members and its industry or profession in dealing with
mutual business or professional problems and in promoting their
common interest.
(b) A person may not serve as counselor [counsellor] or be
an employee of the office employed in a "bona fide executive,
administrative, or professional capacity," as that phrase is used
for purposes of establishing an exemption to the overtime
provisions of the federal Fair Labor Standards Act of 1938 (29
U.S.C. Section 201 et seq.) [who is exempt from the state's position
classification plan or is compensated at or above the amount
prescribed by the General Appropriations Act for step 1, salary
group 17, of the position classification salary schedule] if the
person is:
(1) an officer, employee, or paid consultant of a
Texas trade association in the field of utilities; or
(2) the spouse of an officer, manager, or paid
consultant of a Texas trade association in the field of utilities.
(c) A person may not serve as counselor or act as the general
counsel to the office if the person is required to register as a
lobbyist under Chapter 305, Government Code, because of the
person's activities for compensation on behalf of a profession
related to the operation of the office.
SECTION 29. Section 13.044, Utilities Code, is amended to
read as follows:
Sec. 13.044. CAREER LADDER PROGRAM; PERFORMANCE
EVALUATIONS; MERIT PAY. (a) The counselor [counsellor] or the
counselor's [counsellor's] designee shall develop an intra-agency
career ladder program that addresses opportunities for mobility and
advancement for office employees. The program shall require
intra-agency postings of each position concurrently with any public
posting.
(b) The counselor [counsellor] or the counselor's
[counsellor's] designee shall develop a system of annual
performance evaluations that are based on documented employee
performance. Merit pay for office employees must be based on the
system established under this subsection.
SECTION 30. Section 13.045(a), Utilities Code, is amended
to read as follows:
(a) The counselor [counsellor] or the counselor's
[counsellor's] designee shall prepare and maintain a written policy
statement to ensure implementation of a program of equal employment
opportunity under which all personnel transactions are made without
regard to race, color, disability, sex, religion, age, or national
origin.
SECTION 31. Section 13.063, Utilities Code, is amended to
read as follows:
Sec. 13.063. ANNUAL REPORTS [REPORT]. (a) The office shall
prepare annually a complete and detailed written report accounting
for all funds received and disbursed by the office during the
preceding fiscal year. The annual report must meet the reporting
requirements applicable to financial reporting in the General
Appropriations Act.
(b) The office shall prepare annually a report on the
office's activities during the preceding year and submit the report
to the standing legislative committees that have jurisdiction over
the office, the house appropriations committee, the senate finance
committee, and the Sunset Advisory Commission. At a minimum, the
report must include:
(1) a list of the types of activities conducted by the
office and the time spent by the office on each activity;
(2) the number of hours billed by the office for
representing residential or small commercial consumers in
proceedings;
(3) the number of staff positions and the type of work
performed by each position; and
(4) the office's rate of success in representing
residential or small commercial consumers in appealing commission
decisions.
SECTION 32. Subchapter D, Chapter 13, Utilities Code, is
amended by adding Section 13.064 to read as follows:
Sec. 13.064. PUBLIC HEARING. (a) The office annually shall
conduct a public hearing to assist the office in developing a plan
of priorities and to give the public, including residential and
small commercial consumers, an opportunity to comment on the
office's functions and effectiveness.
(b) A public hearing held under this section is not subject
to Chapter 551, Government Code.
(c) The office shall file notice of a public hearing held
under this section with the secretary of state for publication in
the Texas Register.
SECTION 33. Section 14.001, Utilities Code, is amended to
read as follows:
Sec. 14.001. POWER TO REGULATE AND SUPERVISE. The
commission has the general power to regulate and supervise the
business of each [public] utility and provider within its
jurisdiction and to do anything specifically designated or implied
by this title that is necessary and convenient to the exercise of
that power and jurisdiction.
SECTION 34. Subchapter A, Chapter 14, Utilities Code, is
amended by adding Section 14.0025 to read as follows:
Sec. 14.0025. NEGOTIATED RULEMAKING AND ALTERNATIVE
DISPUTE RESOLUTION. (a) The commission shall develop and
implement a policy to encourage the use of:
(1) negotiated rulemaking procedures under Chapter
2008, Government Code, for the adoption of commission rules; and
(2) appropriate alternative dispute resolution
procedures under Chapter 2009, Government Code, to assist in the
resolution of internal and external disputes under the commission's
jurisdiction.
(b) The commission's procedures relating to alternative
dispute resolution must conform, to the extent possible, to any
model guidelines issued by the State Office of Administrative
Hearings for the use of alternative dispute resolution by state
agencies.
(c) The commission shall designate a trained person to:
(1) coordinate the implementation of the policy
adopted under Subsection (a);
(2) serve as a resource for any training needed to
implement the procedures for negotiated rulemaking or alternative
dispute resolution; and
(3) collect data concerning the effectiveness of those
procedures, as implemented by the commission.
SECTION 35. Section 14.008(a), Utilities Code, is amended
to read as follows:
(a) Except as otherwise provided by this title, this [This]
title does not restrict the rights and powers of a municipality to
grant or refuse a franchise to use the streets and alleys in the
municipality or to make a statutory charge for that use.
SECTION 36. Section 14.058, Utilities Code, is amended to
read as follows:
Sec. 14.058. FEES FOR ELECTRONIC ACCESS TO INFORMATION.
The fees charged by the commission for electronic access to
information that is stored in the system established by the
commission using funds from the Texas Public Finance Authority and
approved by the Department of Information Resources shall be
established:
(1) by the commission in consultation with the Texas
Building and Procurement [General Services] Commission; and
(2) in an amount reasonable and necessary to retire
the debt to the Texas Public Finance Authority associated with
establishing the electronic access system.
SECTION 37. Subchapter B, Chapter 14, Utilities Code, is
amended by adding Section 14.059 to read as follows:
Sec. 14.059. TECHNOLOGY POLICY. The commission shall
implement a policy requiring the commission to use appropriate
technological solutions to improve the commission's ability to
perform its functions. The policy must ensure that the public is
able to interact with the commission on the Internet.
SECTION 38. Section 14.101(d), Utilities Code, is amended
to read as follows:
(d) This section does not apply to:
(1) the purchase of a unit of property for
replacement;
(2) an addition to the facilities of a public utility
by construction; [or]
(3) transactions that facilitate unbundling, asset
valuation, minimization of ownership or control of generation
assets, or other purposes consistent with Chapter 39;
(4) transactions of or relating to:
(A) an electing company under Chapter 58 or 59;
or
(B) a company holding a certificate of operating
authority or a service provider certificate of operating authority
on August 31, 2005; or
(5) transactions that are reported to or reviewed by a
federal agency, another state, or another state agency.
SECTION 39. Subchapter B, Chapter 15, Utilities Code, is
amended by adding Section 15.0205 to read as follows:
Sec. 15.0205. DEFINITION. In this subchapter, "person"
includes a municipally owned utility and an electric cooperative
for the purposes of enforcing compliance with and providing
penalties for violations of Sections 39.151(j) and 39.157(a).
SECTION 40. Section 15.023, Utilities Code, is amended by
amending Subsections (b) and (c) and adding Subsections (d), (e),
and (f) to read as follows:
(b) Except as otherwise provided by this title, the [The]
penalty for a violation may be in an amount not to exceed $10,000
[$5,000]. Each day a violation continues or occurs is not a
separate violation for purposes of imposing a penalty, except as
otherwise provided by this title. Each settlement interval in the
wholesale electric market during which a violation continues or
occurs is not a separate violation for purposes of imposing a
penalty.
(c) The commission by rule shall establish a classification
system for violations that includes a range [The amount] of [an]
administrative penalties that may be assessed for each class of
violation [penalty shall be] based on:
(1) the seriousness of the violation, including:
(A) the nature, circumstances, extent, and
gravity of a prohibited act; and
(B) the hazard or potential hazard created to the
health, safety, or economic welfare of the public;
(2) the economic harm to property or the environment
caused by the violation;
(3) the history of previous violations;
(4) the amount necessary to deter future violations;
(5) efforts to correct the violation; and
(6) any other matter that justice may require,
including the amount of a penalty imposed on a similarly situated
person.
(d) The classification system established under Subsection
(c) shall provide that the penalty for a violation may exceed
$10,000 only if the violation is included in the highest class of
violations in the classification system.
(e) Notwithstanding the classification system established
under Subsection (c), a person regulated under this title who
wilfully and knowingly violates this title or a rule or order
adopted under this title may be assessed a penalty included in the
range of penalties that may be assessed for the highest class of
violations in the classification system.
(f) The commission may not initiate the process for
assessing an administrative penalty after the second anniversary of
the later of:
(1) the date on which the violation occurred; or
(2) the date on which the commission knew that the
violation occurred.
SECTION 41. Section 15.024, Utilities Code, as amended by
Chapters 1212 and 1579, Acts of the 76th Legislature, Regular
Session, 1999, is reenacted and amended to read as follows:
Sec. 15.024. ADMINISTRATIVE PENALTY ASSESSMENT PROCEDURE.
(a) If the executive director contends [determines] that a
violation has occurred, the executive director shall [may] issue to
the commission a report that states the facts on which the
contention [determination] is based, including whether service to
an end-user consumer is the basis of the contention, and the
executive director's recommendation on the imposition of an
administrative penalty, including a recommendation on the amount of
the penalty.
(b) Not later than the 14th day after the date the report is
issued, the executive director shall give written notice of the
report to the person against whom the penalty may be assessed. The
notice shall be given by certified mail, return receipt requested.
The notice must:
(1) include a brief summary of the alleged violation;
(2) state whether service to an end-user consumer is
the basis of the alleged violation, including instruction or
information on how to contact the end-user consumer;
(3) state the amount of the recommended penalty,
including the reasons why that penalty is recommended, considering
the classification system created under Section 15.023; and
(4) [(3)] inform the person that the person has a
right to a hearing on the occurrence of the violation, the amount of
the penalty, or both the occurrence of the violation and the amount
of the penalty.
(c) A penalty may not be assessed under this section if the
person against whom the penalty may be assessed remedies the
violation before the 31st day after the date the person receives the
notice under Subsection (b). A person who claims to have remedied
an alleged violation has the burden of proving to the commission
that the alleged violation was remedied and was accidental or
inadvertent. This subsection does not apply to a violation of
Chapter [17,] 55[,] or 64.
(d) Not later than the 60th [20th] day after the date the
person receives the notice, the person may accept or agree not to
contest the contention [determination] and recommended penalty of
the executive director in writing or may make a written request for
a hearing on the occurrence of the violation, the amount of the
penalty, or both the occurrence of the violation and the amount of
the penalty.
(e) If the person accepts, agrees not to contest, or fails
to timely respond to the notice of the executive director's
contention [determination] and recommended penalty, the commission
by order shall approve the contention [determination] and impose
the recommended penalty.
(f) If the person requests a hearing [or fails to timely
respond to the notice], the executive director shall set a hearing
and give notice of the hearing to the person. The hearing shall be
held in accordance with Subchapter B, Chapter 14. If a hearing is
conducted by [an administrative law judge of] the State Office of
Administrative Hearings, the [. The] administrative law judge
shall make findings of fact and conclusions of law and promptly
issue to the commission a proposal for a decision about the
occurrence of the violation and the amount of a proposed penalty.
Based on the findings of fact, conclusions of law, and proposal for
a decision, the commission by order may find that a violation has
occurred and impose a penalty or may find that no violation
occurred.
(g) The notice of the commission's order shall be given to
the person as provided by Chapter 2001, Government Code, and must
include a statement of the right of the person to judicial review of
the order.
SECTION 42. Section 15.027(c), Utilities Code, is amended
to read as follows:
(c) The executive director may delegate any power or duty
relating to an administrative penalty given the executive director
by this subchapter to the deputy [a person designated by the]
executive director.
SECTION 43. Section 15.032, Utilities Code, is amended by
amending Subsection (b) and adding Subsection (c) to read as
follows:
(b) Except as provided by Subsection (c), a [A] suit for the
recovery of a penalty does not:
(1) bar or affect the recovery of any other penalty; or
(2) bar a criminal prosecution or an action for civil
damages against any person.
(c) An action for civil damages may not be brought against a
person if the commission has acted under Section 39.151(j) or
39.157(a) to address the conduct that is the subject of the proposed
action for civil damages.
SECTION 44. Section 15.033, Utilities Code, is amended to
read as follows:
Sec. 15.033. DISPOSITION OF CERTAIN AMOUNTS [FINES AND
PENALTIES]. (a) A fine or penalty collected under this title,
other than a [fine or penalty collected in a criminal proceeding or
a] penalty collected under Section 15.027(a), shall be paid to the
commission.
(b) Notwithstanding any other law, a disgorgement or refund
amount collected under Section 39.151(j) or 39.157(a) shall be paid
to the independent organization certified by the commission under
Section 39.151 for distribution according to commission order.
SECTION 45. Sections 15.051(a) and (b), Utilities Code, are
amended to read as follows:
(a) An affected person may complain to the regulatory
authority in writing setting forth an act or omission by a [public]
utility or provider in violation or claimed violation of a law that
the regulatory authority has jurisdiction to administer or of an
order, ordinance, or rule of the regulatory authority.
(b) The commission shall keep for a reasonable period
information about each complaint filed with the commission that the
commission has authority to resolve. The information shall
include:
(1) the date the complaint is received;
(2) the name of the complainant;
(3) the subject matter of the complaint;
(4) a record of each person contacted in relation to
the complaint;
(5) a summary of the results of the review or
investigation of the complaint; and
(6) if the commission took no action on the complaint,
an explanation of the reason the complaint was closed without
action.
SECTION 46. The heading to Subchapter A, Chapter 16,
Utilities Code, is amended to read as follows:
SUBCHAPTER A. ASSESSMENT ON [PUBLIC] UTILITIES, RETAIL ELECTRIC
PROVIDERS, ELECTRIC COOPERATIVES, AND PROVIDERS
SECTION 47. Section 16.001, Utilities Code, is amended to
read as follows:
Sec. 16.001. ASSESSMENT ON [PUBLIC] UTILITIES, RETAIL
ELECTRIC PROVIDERS, ELECTRIC COOPERATIVES, AND PROVIDERS. (a) To
defray the expenses incurred in the administration of this title,
an assessment is imposed on each [public] utility, retail electric
provider, provider, and electric cooperative within the
jurisdiction of the commission that serves the ultimate consumer[,
including each interexchange telecommunications carrier].
(b) An assessment under this section may not exceed [is
equal to] one-sixth of one percent of the [public utility's, retail
electric provider's, or electric cooperative's] gross receipts from
services over which the commission has jurisdiction, including a
service for which a provider receives interconnection under Chapter
60 [rates charged to the ultimate consumer in this state].
(c) Each utility and provider [An interexchange
telecommunications carrier that does not provide local exchange
telephone service] may collect the fee imposed under this section
as an additional item separately stated on the customer bill as
"public utility commission gross receipts assessment."
SECTION 48. Section 16.002(b), Utilities Code, is amended
to read as follows:
(b) A [public] utility, retail electric provider, provider,
or electric cooperative may instead make quarterly payments due
August 15, November 15, February 15, and May 15.
SECTION 49. Section 33.123(d), Utilities Code, is amended
to read as follows:
(d) Not later than the 120th day after the date the
commission enters its final order, the municipality shall assess a
onetime surcharge on a per capita basis among residential
ratepayers who reside outside the municipality to pay the
reasonable consultant and legal costs approved by the counselor
[counsellor]. The municipality shall reimburse the appellants for
incurred costs not later than the 90th day after the date the
commission enters its final order.
SECTION 50. Section 39.262(c), Utilities Code, is amended
to read as follows:
(c) After January 10, 2004, at a schedule and under
procedures to be determined by the commission, each transmission
and distribution utility, its affiliated retail electric provider,
and its affiliated power generation company shall jointly file to
finalize stranded costs under Subsections (h) and (i) and reconcile
those costs with the estimated stranded costs used to develop the
competition transition charge in the proceeding held under Section
39.201. Any resulting difference shall be applied to the
nonbypassable delivery rates of the transmission and distribution
utility, except that at the utility's option, any or all of the
amounts recovered under this section [remaining stranded costs] may
be securitized under Subchapter G.
SECTION 51. Section 39.301, Utilities Code, is amended to
read as follows:
Sec. 39.301. PURPOSE. The purpose of this subchapter is to
enable utilities to use securitization financing to recover
regulatory assets, all other amounts determined under Section
39.262, and any amounts being recovered under a competition
transition charge determined as a result of a proceeding under
Section 39.201 or 39.262. It is the policy of this state to
encourage electric utilities and transmission and distribution
utilities to use securitization financing [stranded costs,]
because this type of debt will lower the carrying costs of the
assets relative to the costs that would be incurred using
conventional utility financing methods. The proceeds of the
transition bonds shall be used solely for the purposes of reducing
the amount of recoverable regulatory assets and other amounts
[stranded costs], as determined by the commission in accordance
with this chapter, through the refinancing or retirement of utility
debt or equity. The commission shall ensure that securitization
provides tangible and quantifiable benefits to ratepayers, greater
than would have been achieved absent the issuance of transition
bonds. The commission shall ensure that the structuring and
pricing of the transition bonds result in the lowest transition
bond charges consistent with market conditions and the terms of the
financing order. The amount securitized may not exceed the present
value of the revenue requirement over the life of the proposed
transition bond associated with the regulatory assets or stranded
costs sought to be securitized. The present value calculation
shall use a discount rate equal to the proposed interest rate on the
transition bonds.
SECTION 52. Section 39.302(4), Utilities Code, is amended
to read as follows:
(4) "Qualified costs" means 100 percent of an electric
utility's regulatory assets and 75 percent of its recoverable costs
determined by the commission under Section 39.201 and any remaining
amounts [stranded costs] determined under Section 39.262 together
with the costs of issuing, supporting, and servicing transition
bonds and any costs of retiring and refunding the electric
utility's existing debt and equity securities in connection with
the issuance of transition bonds. The term includes the costs to
the commission of acquiring professional services for the purpose
of evaluating proposed transactions under Section 39.201 and this
subchapter.
SECTION 53. Sections 39.303(a) and (b), Utilities Code, are
amended to read as follows:
(a) The commission shall adopt a financing order, on
application of a utility to recover the utility's regulatory assets
and other amounts determined [eligible stranded costs] under
Section 39.201 or 39.262, on making a finding that the total amount
of revenues to be collected under the financing order is less than
the revenue requirement that would be recovered over the remaining
life of the stranded costs using conventional financing methods and
that the financing order is consistent with the standards in
Section 39.301.
(b) The financing order shall detail the amount of
regulatory assets and other amounts [stranded costs] to be
recovered and the period over which the nonbypassable transition
charges shall be recovered, which period may not exceed 15 years.
SECTION 54. The following provisions of the Utilities Code
are repealed:
(1) Section 11.008;
(2) Section 15.003(c);
(3) Section 15.028;
(4) Section 15.030;
(5) Section 15.052; and
(6) Chapter 17.
SECTION 55. (a) Promptly after this Act takes effect, the
Public Utility Commission of Texas shall conduct a comprehensive
review of the reporting requirements relating to
telecommunications providers that are prescribed by statute or
commission rules to determine the necessity for the required
reports.
(b) In conducting the review, the Public Utility Commission
of Texas shall:
(1) solicit input and assistance from interested
parties;
(2) establish criteria for when and in what manner the
information included in a report will be used;
(3) ensure that information included in a report is
not duplicative of information included in a different report;
(4) eliminate a report required by rule that the
commission determines is unnecessary; and
(5) change the requirements relating to a report the
commission determines is necessary to make the reporting process
more efficient.
(c) The Public Utility Commission of Texas shall conclude
the review required by this section not later than September 1,
2006, and shall report to the legislature in the biennial report
required by Section 52.006, Utilities Code, on the results of the
review. The report must include:
(1) the results of the review and the actions the
commission has taken to amend commission rules to reflect the
results of the review; and
(2) recommendations on any legislation the commission
determines is necessary or appropriate to eliminate or change
reporting requirements prescribed by statute.
SECTION 56. Promptly after this Act takes effect, the
governor shall appoint two additional members to the Public Utility
Commission of Texas. Of those members, the governor shall
designate one to serve a term expiring September 1, 2009, and one to
serve a term expiring January 1, 2011. Until all appointees have
taken office, a quorum of the commission is a majority of the number
of members who are qualified.
SECTION 57. The repeal by this Act of Section 15.003(c),
Utilities Code, does not apply to a suit commenced before the
effective date of the repeal. A suit commenced before the effective
date of the repeal is governed by the law as it existed immediately
before the effective date of the repeal, and that law is continued
in effect for that purpose.
SECTION 58. The repeal by this Act of Sections 15.028 and
15.030, Utilities Code, does not apply to a violation of those
sections that occurs before the effective date of the repeal. A
violation that occurs before the effective date of the repeal is
governed by the law as it existed immediately before the effective
date of the repeal, and that law is continued in effect for that
purpose.
SECTION 59. The change in law made by this Act relating to
qualifications and eligibility to serve as chief executive of or to
be employed with the office of public utility counsel applies only
to a person appointed or employed after the effective date of this
Act. The chief executive or an employee of the office of public
utility counsel who is serving or employed on the effective date of
this Act is governed by the law as it existed immediately before the
effective date of this Act, and the former law is continued in
effect for that purpose.
SECTION 60. The change in law made by this Act relating to
qualifications and eligibility to serve as a commissioner or to be
employed with the Public Utility Commission of Texas applies only
to a commissioner or employee appointed or employed after the
effective date of this Act. A commissioner or employee of the
Public Utility Commission of Texas who is serving or employed on the
effective date of this Act is governed by the law as it existed
immediately before the effective date of this Act, and the former
law is continued in effect for that purpose.
SECTION 61. The changes in law made by this Act to Sections
15.023 and 15.024, Utilities Code, apply only to a violation
committed on or after the effective date of this Act. A violation
committed before the effective date of this Act is governed by the
law in effect when the violation was committed, and the former law
is continued in effect for that purpose.
SECTION 62. This Act takes effect September 1, 2005.