(a) Dominant certificated telecommunications utility (DCTU).
  (1) Credit requirements for permanent residential applicants.
    (A) A DCTU may require a residential applicant for local telecommunications service to establish and maintain satisfactory credit as a condition of providing service.
      (i) Establishment of credit or payment of a deposit shall not relieve any customer from complying with the DCTU's requirements for prompt payment of bills.
      (ii) The creditworthiness of spouses established during the last 12 months of shared service prior to their divorce will be equally applied to both spouses for 12 months immediately after their divorce.
    (B) A residential applicant can demonstrate satisfactory credit using one of the criteria listed in clauses (i) - (iv) of this subparagraph.
      (i) Payment record. The residential applicant:
        (I) has been a customer of any DCTU for residential local telecommunications service within the last two years;
        (II) is not delinquent in payment of any residential DCTU service;
        (III) during the last 12 consecutive months of service was not late in paying a bill more than once and did not have service disconnected for nonpayment; and
        (IV) upon request, shall receive a letter of credit history from the applicant's previous DCTU. DCTUs are required to keep payment history for two years after termination of service to a customer.
      (ii) Other means. The residential applicant demonstrates a satisfactory credit rating by appropriate means, including, but not limited to, the production of:
        (I) generally accepted credit history;
        (II) letters of credit reference;
        (III) the names of credit references which may be quickly and inexpensively contacted by the utility; or
        (IV) ownership of substantial equity that is easily liquidated.
      (iii) Senior applicant. The residential applicant is 65 years of age or older and does not have an outstanding residential service account balance incurred within the last two years with a DCTU.
      (iv) Victim of family violence: The residential applicant has been determined to be a victim of family violence as defined in Texas Family Code §71.004, by a family violence center as defined in Texas Human Resources Code §51.002, by treating medical personnel, by law enforcement personnel, by the Office of a Texas District Attorney or County Attorney, by the Office of the Attorney General, or by a grantee of the Texas Equal Access to Justice Foundation. This determination shall be evidenced by submission of a certification letter developed by the Texas Council on Family Violence.
    (C) The DCTU may require the applicant to pay a deposit only if the applicant does not demonstrate satisfactory credit using the criteria in subparagraph (B) of this paragraph.
  (2) Credit requirements for non-residential applicants. The DCTU may require a non-residential applicant to pay a deposit if the applicant's credit for service has not been demonstrated satisfactorily to the DCTU.
  (3) Credit requirements for temporary or seasonal service and for weekend residences. The DCTU may establish credit policy and deposit requirements to reasonably protect it against the assumed risk for temporary or seasonal service or service to a weekend residence, as long as the policy and requirements are applied in a uniform and nondiscriminatory manner. The DCTU shall return deposits according to guidelines set out in paragraph (11) of this subsection.
  (4) Initial deposits.
    (A) A residential applicant or customer who is required to pay an initial deposit may provide the DCTU with a written letter of guarantee instead of paying a cash deposit.
    (B) A DCTU shall not require an initial deposit from an existing customer unless the customer was late paying a bill more than once during the last 12 months of service or had service disconnected for nonpayment. The customer may be required to pay this initial deposit within ten days after issuance of a written disconnection notice that requests such deposit. Instead of an initial deposit, the customer may pay the total amount due on the current bill by the due date of the bill, provided the customer has not exercised this option in the previous 12 months.
  (5) Additional deposits.
    (A) During the first 12 months of service, the DCTU may request an additional deposit if the customer's actual usage:
      (i) is at least three times estimated usage (or three times average usage of the three most recent bills);
      (ii) exceeds $150; and
      (iii) exceeds 150% of the security held.
    (B) A DCTU may also require an additional deposit if:
      (i) actual billings of a residential customer are at least twice the amount of the estimated billings after two billing periods;
      (ii) actual billings of a non-residential customer are at least twice the amount of the estimated billings; and
      (iii) a suspension or disconnection notice was issued for the account within the previous 12 months.
    (C) A DCTU may require an additional deposit be paid within ten days after issuing written notice of suspension or disconnection and requesting an additional deposit.
    (D) Instead of an additional deposit, a residential customer may elect to pay the total amount due on the current bill by the due date of the bill, provided the customer has not exercised this option in the previous 12 months.
    (E) The DCTU may disconnect service if the additional deposit or the current usage payment is not paid within ten days of request provided a written suspension or disconnection notice has been issued to the customer. A suspension or disconnection notice may be issued concurrently with the written request for the additional deposit or current usage payment.
  (6) Amount of deposit. When a DCTU requires a deposit:
    (A) The total of all deposits, initial and additional, shall not exceed an amount equivalent to one-sixth of the estimated annual billing, except as provided in §26.29 of this title (relating to Prepaid Local Telephone Service).
    (B) The estimated annual billings shall not include charges that are not in a DCTU's tariff.
    (C) For residential applicants and customers:
      (i) estimated annual billings:
        (I) shall not include long distance charges from other service providers;
        (II) may include charges for tariffed local telecommunications services;
        (III) may include charges for intraLATA toll only if the DCTU or its affiliate is providing this service to the customer; and
        (IV) may include charges for interLATA toll only if the DCTU or its affiliate is providing this service to the customer.
      (ii) the deposit amount related to local telecommunications service and long distance service shall be separately identified.
      (iii) the deposit amount related only to basic local telecommunications service may be required as a condition for providing basic local telecommunications services.
    (D) For non-residential applicants and customers, estimated annual billings may include long distance charges only when the DCTU bills those charges.
  (7) Interest on deposits.
    (A) Each DCTU requiring deposits shall pay interest, compounded annually, on these deposits. The annual rate shall be at least equal to that set by the commission on or before December 1 of the preceding calendar year, pursuant to Texas Utilities Code Annotated §183.003 (relating to Rate of Interest).
      (i) If a deposit is refunded within 30 days of receipt, no interest payment is required.
      (ii) If the utility keeps the deposit more than 30 days, payment of interest shall be made retroactive to the date of deposit.
    (B) Payment of the interest to the customer shall be made annually, if requested by the customer, or at the time the deposit is returned or credited to the customer's account.
    (C) The deposit shall draw interest until the date it is returned or credited to the customer's account.
  (8) Notification to applicants and customers. When a deposit is required, the DCTU shall explain to applicants or customers the terms and conditions related to deposits and refunds.
  (9) Records of deposits. The DCTU shall:
    (A) Keep records to show:
      (i) the name and address of each depositor;
      (ii) the amount and date of the deposit; and
Cont'd...