Commission on State Emergency Communications v. Tracfone Wireless, Inc.
343 S.W.3d 233
Tex. App.2011Background
- Texas Health & Safety Code chapter 771 designates the Commission as the state's emergency communications authority and imposes a 9-1-1 emergency service fee on each wireless connection under § 771.0711.
- Postpaid wireless customers receive monthly bills with the 9-1-1 fee; prepaid customers purchase airtime in advance and typically do not receive monthly bills.
- TracFone and Virgin Mobile paid the fee to the Comptroller during 2001–2003 and 2002–2005, respectively, and later sought refunds arguing the fee does not apply to prepaid connections.
- The Commission and Comptroller delayed refunds pending a SOAH contested case; SOAH issued a decision that the fee applies to prepaid connections, which the Commission adopted in its final order.
- The district court reversed, concluding the fee did not apply to prepaid wireless connections, prompting this de novo appeal.
- Texas Attorney General advised that the Commission determines applicability of the fee to a provider’s service, while the Comptroller handles refunds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does 771.0711(a) apply to prepaid wireless connections? | TracFone/ Virgin Mobile contend prepaid connections are outside the fee. | Commission argues fee applies to all wireless connections, regardless of prepaid/postpaid model. | Yes; § 771.0711(a) applies to all wireless connections, including prepaid. |
| Do the collection/amount provisions (771.0711(b), 771.073) show intent to exclude prepaid? | These provisions imply monthly billing, suggesting prepaid exclusions. | Statutory language allows collection in any manner; does not require monthly billing. | No; collection method does not exclude prepaid connections. |
| Does the term 'subscribers' exclude prepaid customers? | Prepaid customers are not periodical subscribers, so not within 'subscriber' term. | Legislature used 'subscribers' interchangeably with customers; inclusion is proper. | No; 'subscriber' is broad and includes prepaid customers. |
| Does § 771.0712 (2009) alter the interpretation of § 771.0711 as to prepaid? | § 771.0712 shows the prepaid regime was contemplated separately, implying § 771.0711 does not apply to prepaid. | Amendment addresses prepaid collection; does not negate § 771.0711's reach. | No; § 771.0712 clarifies/adjusts collection, not necessarily excluding prepaid from § 771.0711. |
| Do tax sourcing rules (Tax Code § 151.061) defeat the fee on prepaid connections? | Place of primary use may be outside Texas, defeating taxation under sourcing rules. | Sourcing rules regulate services, not connections; do not defeat the fee on connections. | No; sourcing rules do not negate the statutory fee on connections. |
Key Cases Cited
- First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627 (Tex. 2008) (upholds agency construction when reasonable and not contrary to statute)
- Railroad Comm'n v. Texas Citizens for a Safe Future & Clean Water, 336 S.W.3d 619 (Tex.2011) (gives deference to agency construction)
- Calvert v. Texas Pipe Line Co., 517 S.W.2d 777 (Tex.1974) (stricter construction when doubt remains after dominant rules)
- Upjohn Co. v. Rylander, 38 S.W.3d 600 (Tex.App.-Austin 2000) (interpretation of statute in context of whole act)
- Gables Realty L.P. v. Travis Cent. Appraisal Dist., 81 S.W.3d 869 (Tex.App.-Austin 2002) (interpretation with context; avoid absurd results)
- State v. Shumake, 199 S.W.3d 279 (Tex.2006) (statutory construction principles applied)