(a) Purpose. The provisions of this section establish the administration of the Texas Universal Service Fund (TUSF).
(b) Programs included in the TUSF.
  (1) Section 26.403 of this title (relating to the Texas High Cost Universal Service Plan (THCUSP));
  (2) Section 26.404 of this title (relating to the Small and Rural Incumbent Local Exchange Company (ILEC) Universal Service Plan);
  (3) Section 26.406 of this title (relating to the Implementation of the Public Utility Regulatory Act §56.025);
  (4) Section 26.408 of this title (relating to Additional Financial Assistance (AFA));
  (5) Section 26.410 of this title (relating to Universal Service Fund Reimbursement for Certain IntraLATA Service);
  (6) Section 26.412 of this title (relating to Lifeline Service Program);
  (7) Section 26.414 of this title (relating to Telecommunications Relay Service (TRS));
  (8) Section 26.415 of this title (relating to Specialized Telecommunications Assistance Program (STAP));
  (9) Section 26.417 of this title (relating to Designation as Eligible Telecommunications Providers to Receive Texas Universal Service Funds (TUSF));
  (10) Section 26.418 of this title (relating to Designation of Common Carriers as Eligible Telecommunications Carriers to Receive Federal Universal Service Funds);
  (11) Section 26.420 of this title (relating to Administration of Texas Universal Service Fund (TUSF));
  (12) Section 26.421 of this title (relating to Designation of Eligible Telecommunications Providers to Provide Service to Uncertificated Areas);
  (13) Section 26.422 of this title (relating to Subsequent petitions for Service to Uncertificated Areas);
  (14) Section 26.423 of this title (relating to High Cost Universal Service Plan for Uncertificated Areas Where an Eligible Telecommunications Provider Volunteers to Provide Basic Local Telecommunications Service); and
  (15) Section 26.424 of this title (relating to Audio Newspaper Assistance Program).
(c) Responsibilities of the commission. The commission is the official governing agency for the TUSF, but may delegate the ministerial functions of TUSF administration to another entity (the TUSF administrator) through contractual agreement.
  (1) Monitoring, and supervising TUSF administration. The commission reserves the exclusive power to revise rules related to the operation and administration of the TUSF and to monitor and supervise such operation and administration.
  (2) Annual audit. The commission annually shall provide for an audit of the TUSF by an independent auditor. The costs of the audit are costs of the commission that are incurred in administering the TUSF, and therefore shall be reimbursed from the TUSF.
  (3) Inquiry into administration of the TUSF. The commission may, upon its own motion, upon the petition of the commission staff or the Office of Public Utility Counsel, initiate an inquiry into any aspect of the administration of the TUSF. Any other party may initiate a complaint proceeding pursuant to the commission's procedural rules.
  (4) Selection of the TUSF administrator.
    (A) The commission shall have the sole discretion in the selection of the TUSF administrator. The selection of the TUSF administrator shall be based on a competitive bidding process.
    (B) The TUSF administrator must meet the technical qualifications as provided in subsection (d)(1) of this section as well as other requirements as determined by the commission.
  (5) Contract term of the TUSF administrator. The commission shall determine the duration of the TUSF administrator's contract. Prior to expiration of the contract term, the commission may discharge the TUSF administrator of its duties upon 60-days written notice.
  (6) Audit STAP voucher payments and expenditures. The commission shall audit voucher payments and other expenditures made under the STAP program.
(d) TUSF administrator. The TUSF administrator serves at the discretion of the commission.
  (1) Technical requirements of the TUSF administrator. The TUSF administrator shall:
    (A) be neutral and impartial, not advocate specific positions to the commission in proceedings not related to the administration of the universal service support mechanisms, and not have a direct financial interest in the universal service support mechanisms established by the commission;
    (B) possess demonstrated technical capabilities, competence, and resources to perform the duties of the TUSF administrator as described in this section; and
    (C) be bonded or bondable.
  (2) Duties of the TUSF administrator. The TUSF administrator will administer the TUSF in accordance with the rules set forth in this section and in accordance with the guidelines established by the commission in its contract with the TUSF administrator. The TUSF administrator's general duties shall include, but not be limited to:
    (A) managing the daily operations and affairs of the TUSF in an efficient, fair and competitively neutral manner;
    (B) taking steps necessary to ensure that all eligible telecommunications providers (ETPs) are in compliance with the relevant sections of this title under which they are receiving universal service support;
    (C) calculating and collecting the proper assessment amount from every telecommunications provider and verifying that all telecommunications providers are in compliance with the Public Utility Regulatory Act §56.022;
    (D) disbursing the proper support amounts, ensuring that only eligible recipients receive funds, and verifying that all recipients are in compliance with the section or sections of this title under which they are eligible to receive support;
    (E) taking steps necessary, including audits, to ensure that all telecommunications providers that are subject to the TUSF assessment are accurately reporting required information;
    (F) taking steps necessary, including audits, to ensure that all recipients of TUSF funds are accurately reporting required information;
    (G) submitting periodic summary reports to the commission regarding the administration of the TUSF in accordance with specifications established by the commission;
    (H) notifying the commission of any telecommunications providers that are in violation of any of the requirements of this section, §26.417 of this title and any reporting requirements; and
    (I) performing other duties as determined by the commission.
(e) Determination of the amount needed to fund the TUSF.
  (1) Amount needed to fund the TUSF. The amount needed to fund the TUSF shall be composed of the following elements.
    (A) Costs of TUSF programs. The TUSF administrator shall compute and include the costs of the following TUSF programs:
      (i) Texas High Cost Universal Service Plan, §26.403 of this title;
      (ii) Small and Rural ILEC Universal Service Plan, §26.404 of this title;
      (iii) Implementation of the Public Utility Regulatory Act §56.025, §26.406 of this title;
      (iv) Additional Financial Assistance, §26.408 of this title;
      (v) Reimbursement for Certain IntraLATA Service, §26.410 of this title;
      (vi) Lifeline Service Program, §26.412 of this title;
      (vii) Telecommunications Relay Service, §26.414 of this title;
      (viii) Specialized Telecommunications Assistance Program (STAP), §26.415 of this title; and
      (ix) Audio Newspaper Assistance Program, §26.424 of this title.
    (B) Costs of implementation and administration of the TUSF. The TUSF implementation and administration costs shall include appropriate costs associated with the implementation and administration of the TUSF incurred by the commission (including the costs incurred by the TUSF administrator on behalf of the commission), and any costs incurred by the Texas Commission for the Deaf and Hard of Hearing caused by its administration of the Specialized Telecommunications Assistance Program (STAP) and the Telecommunications Relay Service programs.
    (C) Reserve for contingencies. The TUSF administrator shall establish a reserve for such contingencies as late payments and uncollectibles in an amount authorized by the commission.
  (2) Determination of amount needed. After the initial determination, the TUSF administrator shall determine, on a periodic basis, the amount needed to fund the TUSF. The determined amount shall be approved by the commission.
(f) Assessments for the TUSF.
Cont'd...