BILL NUMBER: AB 300 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 25, 2013
AMENDED IN ASSEMBLY JUNE 3, 2013
AMENDED IN ASSEMBLY MAY 21, 2013
AMENDED IN ASSEMBLY APRIL 16, 2013
INTRODUCED BY Assembly Member Perea
FEBRUARY 12, 2013
An act to amend Sections 224.4 and 431 of, and to add Section 316
to, the Public Utilities Code, and to amend Sections 41020 and 41030
of, to add Part 21 (commencing with Section 42000) to, and to add
Part 21.1 (commencing with Section 42100) to, Division 2 of, the
Revenue and Taxation Code, relating to telecommunications, and
declaring the urgency thereof, to take effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
AB 300, as amended, Perea. Telecommunications: prepaid mobile
telephony services: state surcharge and fees: local charges
collection.
(1) The existing Emergency Telephone Users Surcharge Act generally
imposes a surcharge on amounts paid by every person in the state for
intrastate telephone service to provide revenues sufficient to fund
"911" emergency telephone system costs. Amounts are determined
annually by the Department of Technology, and upon collection are
paid to the State Board of Equalization on a monthly basis by the
telephone service supplier and are deposited into the State Treasury
to the credit of the State Emergency Telephone Number Account in the
General Fund, to be expended for limited purposes, including to pay
the Department of General Services for its costs in administration of
the "911" emergency telephone number system.
Under existing law, the Public Utilities Commission, or PUC, has
regulatory authority over public utilities, including telephone
corporations, and is authorized to fix just and reasonable rates and
charges for services provided by those public utilities. Existing law
establishes the Public Utilities Commission Utilities Reimbursement
Account and authorizes the PUC to annually determine a fee to be paid
by every public utility providing service directly to customers or
subscribers and subject to the jurisdiction of the PUC, except for a
railroad corporation. The PUC is required to establish the fee, with
the approval of the Department of Finance, to produce a total amount
equal to that amount established in the authorized PUC budget for the
same year, and an appropriate reserve to regulate public utilities,
less specified sources of funding. Existing law establishes the state'
s telecommunications universal service programs and authorizes the
PUC to impose charges for the purpose of funding those programs.
Pursuant to this authority, the PUC has established 6 end-user
surcharges to fund 6 universal service programs.
This bill would enact the Prepaid Mobile Telephony Service
Surcharge and Collection Act. The bill would
establish a prepaid MTS surcharge, as defined, based upon a
percentage of the sales price of each retail transaction that occurs
in this state for prepaid mobile telephony services, as defined. The
prepaid MTS surcharge would include the emergency telephone users
surcharge, as defined, and PUC surcharges, as defined. The bill would
require a seller, as defined, to collect the prepaid MTS surcharge,
as provided, from a prepaid consumer, as defined, and remit the
amounts collected to the State Board of Equalization pursuant to the
Fee Collection Procedures Law. The bill would require the board,
after deducting its administrative expenses, to deposit the amounts
collected for the emergency telephone users surcharge into the
Prepaid MTS 911 Account and to deposit the amounts collected for PUC
surcharges into the Prepaid MTS PUC Account in the Prepaid Mobile
Telephony Services Surcharge Fund, which the bill would establish in
the State Treasury. The bill would require the PUC to annually
compute the PUC's reimbursement fee and 6 universal service program
fees, to post notice of those fees on its Internet Web site and to
notify the State Board of Equalization of the amounts, which would be
adjusted, as specified, and together would be the PUC surcharges.
The bill would require the Department of Technology to annually
compute, as specified, the intrastate portion of the 911 surcharge to
be collected on prepaid mobile telephony services to post notice of
those charges and to notify the State Board of Equalization of the
amount, which would be the emergency telephone users surcharge. Local
charges would be computed pursuant to the Local Prepaid Mobile
Telephony Services Collection Act, discussed below.
Existing law defines mobile telephony services for purposes of the
Public Utilities Code.
This bill would revise that definition and incorporate that
definition for purposes of the Prepaid Mobile Telephony Service
Surcharge and Collection Act.
(2) Existing law generally provides that the legislative body of
any charter city may make and enforce all ordinances and regulations
with respect to municipal affairs, as provided, including, but not
limited to, a utility user tax in that municipality. Existing law
generally provides that the legislative body of a city may levy any
tax that may be levied by a charter city. Existing law further
provides that the board of supervisors of any county may levy a
utility user tax on the consumption of, among other things, telephone
service, in the unincorporated area of the county.
This bill would, on and after January 1, 2015, and before _____,
suspend the authority of a city, county, or city and county,
including any charter city, county, or city and county, to impose a
utility user tax on the consumption of prepaid communications service
at the rate specified in an ordinance adopted pursuant to existing
law, and would instead require the utility user tax rate to be
applied during that period under any ordinance to be at specified
tiered rates, to be collected and administered as prescribed in the
Prepaid Mobile Telephony Services Surcharge and
Collection Act. In addition, the bill would, on or after January 1,
2015, and before_____, suspend the authority of a city, county, or
city and county, including any charter city, county, or city and
county, to impose a charge, that applies to prepaid mobile telephony
service, on access to communication services or access to local "911"
emergency telephone systems, in the city, county, or city and county
at the rate as specified in an ordinance adopted pursuant to
existing law, and would instead require the charge rate to be applied
during that period under any ordinance to be at specified rates, to
be collected and administered as prescribed in the Prepaid Mobile
Telephony Services Surcharge and Collection Act.
This bill would specify that a change in a utility user tax rate or
access charge rate resulting from either the rate limitations or the
end of the suspension period is not subject to voter approval under
either statute or Article XIII C of the California Constitution. This
bill would require these local charges imposed by a city, county, or
a city and county be administered and collected by the State Board
of Equalization, deposited in the Local Charges for Prepaid Mobile
Telephony Services Fund, which this bill would create, and
transmitted to the city, county, or a city and county, as provided.
This bill would allow a consumer to rebut the presumed location of
a retail transaction for purposes of the collection of the local
charges by filing a claim and declaration under penalty of perjury.
By expanding the crime of perjury, this bill would impose a
state-mandated local program.
(3) The Fee Collection Procedures Law makes a violation of any
provision of the law, or of certain requirements imposed by the board
pursuant to the law, a crime.
By expanding the application of the Fee Collection Procedures Law,
the violation of which is a crime, this bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
(4) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 224.4 of the Public Utilities Code is amended
to read:
224.4. (a) "Mobile data service" means the delivery of nonvoice
information over a radio band licensed by the Federal Communications
Commission, to a mobile device and includes nonvoice information
communicated to a mobile telephony services handset, nonvoice
information communicated to handheld personal digital assistant (PDA)
devices and laptop computers, and mobile paging service carriers
offering services on pagers and two-way messaging devices. "Mobile
data service" includes mobile broadband service offering connectivity
over a radio band licensed by the Federal Communications Commission.
Unless specified to the contrary, "mobile data service" does not
include nonvoice information communicated through a wireless local
area network operating in the unlicensed radio bands, commonly known
as a "Wi-Fi" network.
(b) "Mobile paging service" means the transmission of coded radio
signals over a radio band licensed by the Federal Communications
Commission, for the purpose of activating specific small radio
receivers designed to be carried by a person and to give an aural,
visual, or tactile indication when activated.
(c) "Mobile satellite telephone service" means voice communication
to end users over a mobile satellite service involving the provision
of commercial mobile radio service, pursuant to Parts 20 and 25 of
Title 47 of the Code of Federal Regulations.
(d) "Mobile telephony service" means commercially available
interconnected mobile phone services that provide voice communication
access to the public switched telephone network (PSTN) by way of
mobile communication devices employing radiowave technology to
transmit calls, including cellular radiotelephone, broadband Personal
Communications Services (PCS), digital Specialized Mobile Radio
(SMR), or another radio band licensed by the Federal Communications
Commission. "Mobile telephony services" does not include mobile
satellite telephone services or mobile data services used exclusively
for the delivery of nonvoice information to a mobile device.
SEC. 2. Section 316 is added to the Public Utilities Code, to
read:
316. (a) The commission shall annually, on or before October 1 of
each year, commencing October 1, 2014, compute a reimbursement fee
as a percentage of the sales price for prepaid mobile telephony
services, to be effective on January 1 of the following year and to
be collected and remitted pursuant to the Prepaid Mobile Telephony
Services Surcharge and Collection Act (Part 21
(commencing with Section 42000) of Division 2 of the Revenue and
Taxation Code). On or before October 15 of each year, commencing
October 15, 2014, the commission shall post notice of the
reimbursement fee on its Internet Web site and notify the State Board
of Equalization of this information.
(b) The commission shall annually, on or before October 1 of each
year, commencing October 1, 2014, compute the cumulative of the
telecommunications universal service surcharges as a percentage of
the sales price for prepaid mobile telephony services, to be
effective on January 1 of the following year and to be collected and
remitted pursuant to the Prepaid Mobile Telephony Services Surcharge
and Collection Act (Part 21 (commencing with
Section 42000) of Division 2 of the Revenue and Taxation Code). On or
before October 15 of each year, commencing October 15, 2014, the
commission shall post notice of the cumulative surcharge on its
Internet Web site and notify the State Board of Equalization of this
information.
(c) (1) This section does not restrict the commission's authority
to adjust reimbursement fees or universal service fees or require
that they only be adjusted once annually.
(2) In annually computing reimbursement fees and universal service
fees to be collected and remitted to the commission pursuant to this
section, the commission shall adjust the fees to account for any
past overcollection of fees from prepaid mobile telephony service
customers resulting from a reduction in fees made subsequent to
December 31 of the previous year.
(3) In annually computing reimbursement fees and universal service
fees to be collected and remitted to the commission pursuant to this
section, the commission may adjust the fees to account for any past
undercollection of fees from prepaid mobile telephony service
customers resulting from an increase in fees made subsequent to
December 31 of the previous year.
(4) If both upward and downward adjustments are made to
reimbursement fees and universal service fees subsequent to December
31, the commission may adjust how collections are deposited into the
reimbursement and universal service accounts so that overcollections
or undercollections are minimized.
(5) It is the intent of the Legislature that reimbursement fees
and universal service fees be applied, as much as possible, in a
competitively neutral manner that does not favor either prepaid or
postpaid payment for mobile telephony services, and that, over time,
collections of state charges from prepaid and postpaid mobile
telephony service customers balance out so that neither pay a
disproportionate amount.
(d) The commission shall have enforcement authority to ensure the
proper remittances over retail transactions, pursuant to the Prepaid
Mobile Telephony Services Surcharge and Collection
Act (Part 21 (commencing with Section 42000) of Division 2 of the
Revenue and Taxation Code), where the prepaid mobile telephony
services (Prepaid MTS) provider is also the seller. The
commission shall collaborate with the State Board of Equalization in
exercising its enforcement authority pursuant to this
subdivision.
SEC. 3. Section 431 of the Public Utilities Code is amended to
read:
431. (a) The commission shall annually determine a fee to be paid
by every electrical, gas, telephone, telegraph, water, sewer system,
and heat corporation and every other public utility providing
service directly to customers or subscribers and subject to the
jurisdiction of the commission other than a railroad, except as
otherwise provided in Article 2 (commencing with Section 421), for
common carriers and related businesses, and as otherwise provided in
Section 316, for prepaid mobile telephony service providers.
(b) The annual fee shall be established to produce a total amount
equal to that amount established in the authorized commission budget
for the same year, including adjustments for increases in employee
compensation, other increases appropriated by the Legislature, and an
appropriate reserve to regulate public utilities less the amount to
be paid from special accounts or funds pursuant to Section 402,
reimbursements, federal funds, and any other revenues, and the amount
of unencumbered funds from the preceding year.
(c) This article shall not apply to any electrical cooperative as
defined in Chapter 5 (commencing with Section 2776) of Part 2.
SEC. 4. Section 41020 of the Revenue and Taxation Code is amended
to read:
41020. (a) A surcharge is hereby imposed on amounts paid by every
person in the state for both of the following:
(1) Intrastate telephone communication service in this state. The
surcharge shall be applied to prepaid mobile telecommunications
services pursuant to the Prepaid Mobile Telephony Services Surcharge
and Collection Act (Part 21 (commencing with
Section 42000)), and the calculation of the intrastate portion of
charges for prepaid mobile telecommunications services shall be made
pursuant to paragraph (1) of subdivision (b) of Section 42010.
(2) VoIP service that provides access to the "911" emergency
system by utilizing the digits 9-1-1 by any service user in this
state commencing on January 1, 2009. The surcharge shall not apply to
charges for VoIP service where any point of origin or destination is
outside of this state.
(b) (1) Notwithstanding Section 41025, charges not subject to the
surcharge may be calculated by a service supplier based upon books
and records kept in the regular course of business, and, for purposes
of calculating the interstate revenue portion not subject to the
surcharge, a service supplier may also choose a reasonable and
verifiable method from the following:
(A) Books and records kept in the regular course of business.
(B) Traffic or call pattern studies representative of the service
supplier's business within California.
(C) For VoIP service only, the VoIP safe harbor factor established
by the FCC to be used to calculate the service supplier's
contribution to the federal Universal Service Fund. The FCC safe
harbor factor in effect for VoIP service on September 1 of each year
shall apply for the period of January 1 through December 31,
inclusive, of the next succeeding calendar year for purposes of this
method. At such time as the FCC establishes a safe harbor factor for
the federal Universal Service Fund for VoIP service that is greater
than 75 percent for interstate revenue or abolishes the safe harbor
factor applicable to VoIP service, this method shall become void and
of no effect, in which case a VoIP service supplier may use an
alternative method approved in advance by the board, which shall be
available to all VoIP service suppliers. The FCC safe harbor factor
applicable to VoIP service, as described in this subparagraph, is
used solely as a mechanism to calculate the charges not subject to
the surcharge for VoIP service and is not necessarily reflective of
the intrastate portion of VoIP service. The use of the FCC safe
harbor factor authorized by this subdivision shall not be interpreted
to permit application of any intrastate requirement, other than the
surcharge imposed under this part, upon VoIP service suppliers.
(2) Any method chosen by a service supplier shall remain in effect
for at least one calendar year.
(3) If a service supplier reasonably relies upon books and
records kept in the regular course of business or any documentation
that satisfies the reasonable and verifiable method, then the service
supplier's determination of the portion of the billed amount
attributable to services not subject to the surcharge shall be
rebuttably presumed to be correct. The service supplier's choice of
books and records or other method and surcharge billing practice
shall also be rebuttably presumed to be fair and legal business
practices.
(4) It is the intent of the Legislature that the provisions of
subparagraph (C) shall not be considered to be a precedent for the
application of the surcharge or any other tax or fee where a person
is required to collect a tax or fee imposed upon another.
(c) The surcharge imposed shall be at the rate of one-half of 1
percent of the charges made for such services to and including
November 1, 1982, and thereafter at a rate fixed pursuant to Article
2 (commencing with Section 41030).
(d) The surcharge shall be paid by the service user as hereinafter
provided.
(e) The surcharge imposed shall not apply to either of the
following:
(1) In accordance with the Mobile Telecommunications Sourcing Act
(Public Law 106-252), which is incorporated herein by reference, to
any charges for mobile telecommunications services billed to a
customer where those services are provided, or deemed provided, to a
customer whose place of primary use is outside this state. Mobile
telecommunications services shall be deemed provided by a customer's
home service provider to the customer if those services are provided
in a taxing jurisdiction to the customer, and the charges for those
services are billed by or for the customer's home service provider.
(2) To any charges for VoIP service billed to a customer where
those services are provided to a customer whose place of primary use
of VoIP service is outside this state.
(f) For purposes of this section:
(1) "Charges for mobile telecommunications services" means any
charge for, or associated with, the provision of commercial mobile
radio service, as defined in Section 20.3 of Title 47 of the Code of
Federal Regulations, as in effect on June 1, 1999, or any charge for,
or associated with, a service provided as an adjunct to a commercial
mobile radio service, that is billed to the customer by or for the
customer's home service provider, regardless of whether individual
transmissions originate or terminate within the licensed service area
of the home service provider.
(2) "Customer" means (A) the person or entity that contracts with
the home service provider for mobile telecommunications services, or
with a VoIP service provider for VoIP service, or (B) if the end user
of mobile telecommunications services or VoIP service is not the
contracting party, the end user of the mobile telecommunications
service or VoIP service. This paragraph applies only for the purpose
of determining the place of primary use. The term "customer" does not
include (A) a reseller of mobile telecommunications service or VoIP
communication service, or (B) a serving carrier under an arrangement
to serve the mobile customer outside the home service provider's
licensed service area.
(3) "Home service provider" means the facilities-based carrier or
reseller with which the customer contracts for the provision of
mobile telecommunications services.
(4) "Licensed service area" means the geographic area in which the
home service provider is authorized by law or contract to provide
commercial mobile radio service to the customer.
(5) "Mobile telecommunications service" means commercial mobile
radio service, as defined in Section 20.3 of Title 47 of the Code of
Federal Regulations, as in effect on June 1, 1999.
(6) "Place of primary use" means the street address representative
of where the customer's use of the mobile telecommunications service
or VoIP service primarily occurs, that must be:
(A) The residential street address or the primary business street
address of the customer.
(B) With respect to mobile telecommunications service, within the
licensed service area of the home service provider.
(7) (A) "Reseller" means a provider who purchases
telecommunications services or VoIP service from another
telecommunications service provider or VoIP service and then resells
the services, or uses the services as a component part of, or
integrates the purchased services into, a mobile telecommunications
service or VoIP service.
(B) "Reseller" does not include a serving carrier with which a
home service provider arranges for the services to its customers
outside the home service provider's licensed service area.
(8) "Serving carrier" means a facilities-based carrier providing
mobile telecommunications service to a customer outside a home
service provider's or reseller's licensed area.
(9) "Taxing jurisdiction" means any of the several states, the
District of Columbia, or any territory or possession of the United
States, any municipality, city, county, township, parish,
transportation district, or assessment jurisdiction, or any other
political subdivision within the territorial limits of the United
States with the authority to impose a tax, charge, or fee.
(10) "VoIP service provider" means that provider of VoIP service
with whom the end user customer contracts for the provision of VoIP
services for the customer's own use and not for resale.
SEC. 5. Section 41030 of the Revenue and Taxation Code is amended
to read:
41030. (a) The Department of Technology shall determine annually,
on or before October 1, to be effective on January 1 of the
following year, a surcharge pursuant to subdivision (b) that it
estimates will produce sufficient revenue to fund the current fiscal
year's 911 costs.
(b) The surcharge shall be determined by dividing the costs
(including incremental costs) the Department of Technology estimates
for the current fiscal year of 911 plans approved pursuant to Section
53115 of the Government Code, less the available balance in the
State Emergency Telephone Number Account in the General Fund, by its
estimate of the charges for intrastate telephone communications
services, the interstate intrastate
portion of prepaid mobile telecommunications services, and VoIP
service to which the surcharge will apply for the period of January 1
to December 31, inclusive, of the next succeeding calendar year, but
in no event shall such surcharge rate in any year be greater than
three-quarters of 1 percent nor less than one-half of 1 percent. In
making its estimate of charges that are applicable to the intrastate
portion of prepaid mobile telecommunications services, the Department
of Technology shall multiply the surcharge by the inverse of the
interstate safe harbor percentage established by the Federal
Communications Commission for federal universal service contribution
purposes, consistent with the methodology to be used by the
board to calculate the prepaid MTS surcharge pursuant to
paragraph (1) of subdivision (b) of Section 42010.
(c) The Department of Technology shall notify the board of the
surcharge amount by October 15 of each year, commencing with October
15, 2014. The board shall utilize the surcharge amount to calculate
the emergency telephone users surcharge component of the prepaid MTS
surcharge pursuant to paragraph (1) of subdivision (b) and
subdivision (d) of Section 42010.
SEC. 6. Part 21 (commencing with Section 42000) is added to
Division 2 of the Revenue and Taxation Code, to read:
PART 21. Prepaid Mobile Telephony Services Surcharge
and Collection Act
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS
42000. This part shall be known, and may be cited, as the Prepaid
Mobile Telephony Services Surcharge and
Collection Act.
42002. The Legislature finds and declares all of the following:
(a) Maintaining effective and efficient communications services,
911 emergency systems, communications-related public policy programs
to promote universal service, and various local programs across the
state benefits all persons with access to the telecommunications
system.
(b) Providers of end-use communications services, including
providers of mobile voice telecommunications services, which the
Federal Communications Commission terms mobile telephony service, are
required to collect and remit communications taxes, fees, and
surcharges on various types of communication service revenues, as
provided by existing state or local law.
(c) Consumers purchase prepaid mobile telephony services at a wide
variety of retail locations and other distribution channels, as well
as through service providers.
(d) Prepaid mobile telephony services are an important and growing
segment of the communications industry. Prepaid mobile telephony
services are often the only means by which persons with low incomes
can obtain limited access to the telecommunications system.
(e) To ensure equitable contributions from end-use consumers of
postpaid and prepaid mobile telephony services in this state, there
should be standardization with respect to the method used to collect
communications taxes, fees, and surcharges from end-use consumers of
prepaid mobile telephony services.
(f) Prepaid mobile telephony services are frequently sold by a
third-party retailer that is not the provider of mobile telephony
services, and collecting taxes, fees, and surcharges from prepaid
consumers of mobile telephony services at the time of the retail
transaction is necessary and the most efficient and competitively
neutral means of collection.
(g) An equitable distribution mechanism is necessary to ensure
that utility user taxes and other telecommunication charges are
collected on behalf of cities and counties and are properly
distributed to those jurisdictions.
42004. For purposes of this part, the following terms have the
following meanings:
(a) "Board" means the State Board of Equalization.
(b) "Emergency telephone users surcharge" means surcharges
authorized pursuant to the Emergency Telephone Users Surcharge Act
(Part 20 (commencing with Section 41001)) to be collected from
prepaid consumers of mobile telephony services.
(c) "In this state" means within the exterior limits of the State
of California and includes all territory within those limits owned by
or ceded to the United States of America.
(d) "Local charges" means those charges described in subdivision
(a) of Section 42101.
(e) "Local jurisdiction" means or "local
agency" means a city, county, or city and county, which
includes a charter city, county, or city and county.
(f) "Mobile telephony service" and "mobile data service" have the
same meanings as defined in Section 224.4 of the Public Utilities
Code. "MTS" means mobile telephony service.
(g) "Person" includes any individual, firm, partnership, joint
venture, limited liability company, association, social club,
fraternal organization, corporation, estate, trust, business trust,
receiver, assignee for the benefit of creditors, trustee, trustee in
bankruptcy, syndicate, the United States, this state, any city,
county, city and county, municipality, district, or other political
subdivision of the state, or any other group or combination acting as
a unit.
(h) "Prepaid consumer" means a person who purchases prepaid mobile
telephony services in a retail transaction.
(i) "Prepaid mobile telephony services" means the right to utilize
a mobile device authorized by the Federal Communications Commission
for mobile telecommunications services or information services,
including the download of digital products delivered electronically,
content, and ancillary services, or both telecommunications services
and information services, that must be purchased in advance of usage
in predetermined units or dollars , with the right of usage
declining in a known amount . For these purposes,
"telecommunications service" and "information service" have the same
meanings as defined in Section 153 of Title 47 of the United States
Code.
(j) "Prepaid MTS provider" means a person that provides prepaid
mobile telephony services pursuant to a license issued by the Federal
Communications Commission.
(k) "Prepaid MTS surcharge" means a unitary
the surcharge that consists of the emergency telephone
users surcharge and the Public Utilities Commission surcharges, as
calculated pursuant to subdivision (b) of Section 42010 , that
is required to be collected by a seller from a prepaid
consumer .
(l) "Public Utilities Commission surcharges" means surcharges
authorized by the Public Utilities Commission to be billed and
collected from end-use consumers of wireless communications services,
and of which the commission provides the board with notice pursuant
to Section 316 of the Public Utilities Code, including:
(1) The California High-Cost Fund-A Administrative Committee Fund
program surcharge (Section 275.6 of the Public Utilities Code).
(2) The California High-Cost Fund-B Administrative Committee Fund
program surcharge (Section 739.3 of the Public Utilities Code).
(3) The Deaf and Disabled Telecommunications Program
Administrative Committee Fund surcharge (Section 2881 of the Public
Utilities Code).
(4) The California Teleconnect Fund Administrative Committee Fund
program surcharge (Section 280 of the Public Utilities Code).
(5) The California Advanced Services Fund program surcharge
(Section 281 of the Public Utilities Code).
(6) The Moore Universal Telephone Service Act (Article 8
(commencing with Section 871) of Chapter 4 of Part 1 of Division 1 of
the Public Utilities Code).
(7) Public Utilities Commission reimbursement fees imposed
pursuant to Chapter 2.5 (commencing with Section 401) of Part 1 of
Division 1 of the Public Utilities Code.
(m) "Retail transaction" means the purchase of prepaid mobile
telephony services, either alone or in combination with mobile data
services, from a seller for any purpose other than resale in the
regular course of business. For these purposes, a "purchase" means
any transfer of title or possession, exchange, or barter, conditional
or otherwise.
(n) "Seller" means a person that sells prepaid mobile telephony
service to a prepaid consumer person in a
retail transaction .
CHAPTER 2. THE PREPAID MOBILE TELEPHONY SERVICES SURCHARGE
42010. (a) (1) On and after January 1, 2015, a prepaid MTS
surcharge shall be imposed on each prepaid consumer and shall be
collected by a seller from each prepaid consumer at the time of each
retail transaction for prepaid mobile telephony services
in this state. The prepaid MTS surcharge shall be
collected imposed as a percentage of the
amount of each sales price of each
retail transaction that occurs in this state.
(2) The prepaid MTS surcharge shall be in lieu of any charges
imposed pursuant to the Emergency Telephone Users Surcharge Act (Part
20 (commencing with Section 41001)) and the Public Utilities
Commission surcharges for prepaid mobile telephony services.
(b) The prepaid MTS surcharge shall be annually calculated by the
board by no later than November 1 of each year commencing November 1,
2014, by adding the following:
(1) The surcharge rate established pursuant to Section 41030 as of
October 1 of each year, which shall be the surcharge rate
established for intrastate telephone communication service in this
state multiplied by the inverse of the interstate wireless safe
harbor percentage established by the Federal Communications
Commission for federal universal service contribution purposes, as
these percentages may be revised from time to time.
(2) The Public Utilities Commission surcharges, established by the
commission pursuant to Section 316 of the Public Utilities Code, as
of October 1 of each year, multiplied by the inverse of the
interstate wireless safe harbor percentage established by the Federal
Communications Commission for federal universal service contribution
purposes, as these percentages may be revised from time to time.
(c) (1) The board shall post, for each local jurisdiction, the
combined total of the rates of prepaid MTS surcharge and the rate or
rates of local charges, as calculated pursuant to Section 42012, that
each local jurisdiction has adopted, not later than December 1 of
each year, on its Internet Web site. The posted combined rate shall
be the rate that applies to all retail transactions during the
calendar year beginning January 1 following the posting.
(2) Notwithstanding paragraph (1), if a local agency notifies the
board pursuant to subdivision (b) of Section 42012 that the
posted rate is inaccurate or it no longer imposes a local
charge or local charges or that the rate of its
local charge or local charges has decreased
since the previous October 1 calculation, the board shall promptly
post a recalculated rate that is applicable to the jurisdiction of
that local agency. The seller shall not be required to implement the
changes any earlier than 60 days from the date on which the board
posts the new rate and provides written notification to the seller.
If the 60th day is not the first day of a month, then the seller
shall implement the changes on the first day of the month following
the month in which the 60th day occurs. Nothing in this section
modifies the notice obligations of Section 799 of the Public
Utilities Code. However, beginning January 1, 2015, the
notification and implementation requirements of paragraphs (5) and
(6) of subdivision (a) of Section 799 shall not apply to prepaid
mobile telephony services.
(3) A seller collecting the prepaid MTS surcharge and local
charges pursuant to this part and Part 21.2 (commencing with Section
42100) may rely upon the accuracy of the information posted on the
board's Internet Web site in collecting the state surcharge and local
charges.
(d) Except for amounts retained pursuant to subdivision (e), all
amounts of the prepaid MTS surcharge and local charges collected by
sellers shall be remitted to the board pursuant to Chapter 3
(commencing with Section 42020).
(e) A seller shall be permitted to deduct and retain an amount
equal to 3 percent of the amounts that are collected by the seller
from prepaid consumers for the prepaid MTS surcharge and local
charges.
(f) The amount of the combined prepaid MTS surcharge and local
charges shall be separately stated on an invoice, receipt, or other
similar document that is provided to the prepaid consumer of mobile
telephony services by the seller, or otherwise disclosed to the
prepaid consumer, at the time of the retail transaction.
(g) The prepaid MTS surcharge and any local charges are required
to be collected by a seller and any amount unreturned to the prepaid
consumer of mobile telephony services that is not owed as part of the
surcharge, but was collected from the prepaid consumer under the
representation by the seller that it was owed as part of the
surcharge, constitute debts owed by the seller to this state.
(h) A seller that has collected any amount of prepaid MTS
surcharge and local charges in excess of the amount of the surcharge
imposed by this part and actually due from a prepaid consumer may
refund that amount to the prepaid consumer, even though the surcharge
amount has already been paid over to the board and no corresponding
credit or refund has yet been secured. Any seller making a refund of
any charge to a prepaid consumer may repay therewith the amount of
the surcharge paid. The seller may claim credit for that overpayment
against the amount of surcharge imposed by this part that is due upon
any other quarterly return, provided the credit is claimed in a
return dated no later than three years from the date of overpayment.
(i) (1) Every prepaid consumer of mobile telephony services in
this state is liable for the prepaid MTS surcharge and any local
charges until they have been paid to this state, except that payment
to a seller registered under this part relieves the prepaid consumer
from further liability for the surcharge and local charges. Any
surcharge collected from a prepaid consumer that has not been
remitted to the board shall be a debt owed to the state by the person
required to collect and remit the surcharge. Any local charge
collected from a prepaid consumer that has not been remitted to the
board shall be a debt owed jointly to the state and to the local
jurisdiction imposing the local charge by the person required to
collect and remit the local charge. Nothing in this part shall impose
any obligation upon a seller to take any legal action to enforce the
collection of the surcharge or local charge imposed by this section.
(2) A credit shall be allowed against, but shall not exceed, the
prepaid MTS surcharge and local charges imposed on any prepaid
consumer of mobile telephony services by this part to the extent that
the prepaid consumer has paid emergency telephone users charges,
state utility regulatory commission fees, state universal service
charges, or local charges on the purchase to any other state,
political subdivision thereof, or the District of Columbia. The
credit shall be apportioned to the charges against which it is
allowed in proportion to the amounts of those charges.
42012. (a) A local agency that has enacted a local charge that is
applicable to prepaid mobile telephony service, or in the future
enacts a new or increased local charge, shall provide
enter into a contract with the board for the board to
perform the functions set forth in Section 42103 and that requires
the local agency to provide the board with written notice of
the amount of the local 911 charge, as set out in Section 42102.5, or
the applicable tiered rate for a utility user tax, as set out in
Section 42102, on or before December
September 1, commencing December
September 1, 2014, and for each year thereafter , and
that amount or rate shall be implemented by the sellers by no later
than April 1 of the subsequent year .
(b) For each notice contract
required in subdivision (a), the local agency shall provide a
certification to the board that its ordinance applies
its local charge to prepaid mobile telephony services and that
it the local agency agrees to
indemnify, and hold and save harmless, the board, its officers,
agents, and employees for any and all liability for damages that may
result from collection pursuant to the notice
contract required in subdivision (a).
(c) A local agency that has enacted local charges shall
immediately notify the board of any reduction or elimination of
charges that are applicable to prepaid mobile telephony services
pursuant to Section 42010 .
42014. (a) For purposes of this part, a retail transaction occurs
in the state under any of the following circumstances:
(1) The prepaid consumer makes the retail transaction in person at
a business location in the state (point-of-sale transaction).
(2) If paragraph (1) is not applicable, the prepaid consumer's
address is in the state (known-address transaction). A known-address
transaction occurs in the state under any of the following
circumstances:
(A) The retail sale involves shipping of an item to be delivered
to, or picked up by, the prepaid consumer at a location in the state.
(B) If the prepaid consumer's address is known by the seller to be
in the state, including if the seller's records maintained in the
ordinary course of business, indicate that the prepaid consumer's
address is in the state and the records are not made or kept in bad
faith.
(C) The prepaid consumer provides an address during consummation
of the retail transaction that is in the state, including an address
provided with respect to the payment instrument if no other address
is available and the address is not given in bad faith.
(D) The mobile telephone number is associated with a location in
this state.
(b) (1) A retail transaction shall occur at
only one location for purposes of determining local charges. If the
retail transaction is a point-of-sale transaction, the consumption
of, use of, or access to, the prepaid mobile telephony service shall
be presumed to be at that location. If
(2) If the retail transaction is
a known-address transaction, the location shall be as determined in
descending order beginning with subparagraph (A) of paragraph (2) of
subdivision (a), if subparagraph (A) of that paragraph is
inapplicable, then pursuant to subparagraph (B) of that paragraph, if
both subparagraphs (A) and (B) of that paragraph are inapplicable,
then subparagraph (C) of that paragraph, and if subparagraphs (A),
(B), and (C) of that paragraph are inapplicable, then subparagraph
(D) of that paragraph. In a known-address transaction, the
consumption of, use of, or access to, the prepaid mobile telephony
service shall be presumed to be at the known-address.
(c) (1) The board may make software available to sellers to enable
a seller to match the location of a retail transaction to the
applicable prepaid MTS surcharge amount and local charges.
(2)
(c) (1) A seller that relies in
good faith on geographical information provided
by the board to match the location of a point-of-sale
transaction to the applicable prepaid MTS surcharge amount and local
charges, collects that amount from the prepaid consumer, and remits
the amount to the board in compliance with this part, shall not be
liable for any additional MTS surcharge or local charges and shall
not be required to refund any amounts collected and paid to the board
to the prepaid consumer.
(3)
(2) For a known-address transaction, the seller may
collect the prepaid MTS surcharge and local charges that
corresponds correspond to the five digit postal
ZIP Code of the prepaid consumer's address. A seller that relies in
good faith on information provided by the board to match the five
digit postal ZIP Code of the prepaid consumer's address to the
applicable prepaid MTS surcharge and local charges amount, collects
that amount from the prepaid consumer, and remits the amount to the
board in compliance with this part, shall not be liable for any
additional MTS surcharge or local charges and shall not be required
to refund any amounts collected and paid to the board to the
prepaid consumer. If the five digit postal ZIP Code of the prepaid
consumer's address corresponds to more than one local charge and the
amount collected and remitted to the board corresponds to one of the
local charges that is applicable to that ZIP Code, the seller shall
not be liable for any additional local charges and shall not be
required to refund any local charges collected and paid to
the board to the prepaid consumer , even if the five digit
postal ZIP Code of the prepaid consumer's address that the seller
uses corresponds to more than one local charge .
(4) A local agency may request the board to correct an error in
the geocoding of a seller with a physical location within that local
agency by submitting in writing a declaration of the correction,
which is also signed by the local agency that is improperly receiving
the local charge due to the error. Any correction request must be
submitted on or before December 1, commencing December 1, 2014, and
for each year thereafter, any correction shall be implemented by the
sellers no later than April 1 of the subsequent year. For past errors
in excess of ____, the board shall make appropriate adjustments to
the future payments of the two affected local agencies to account for
those errors. For purposes of this paragraph, "geocoding" means
matching a postal ZIP code of a prepaid customer's address to the
applicable prepaid MTS surcharge and local charges.
42016. The prepaid MTS surcharge and local charges are imposed on
the prepaid consumer of mobile telephony services and not on the
seller or on any prepaid MTS provider, except that the seller shall
collect and remit all collected of
the prepaid MTS surcharges and local charges pursuant to this
part and Part 21.1 (commencing with Section 42100).
42018. (a) If prepaid mobile telephony services are sold with
one or more other products a mobile telephony
service communication device, commonly termed a cellular telephone,
for a single, nonitemized price, then the prepaid MTS surcharge
and local charges shall apply to the entire nonitemized price unless
the seller elects to apply the surcharge and local charges to either
of the following:
(1) If the purchase price for the prepaid mobile telephony
services component of the bundled charge is disclosed to the prepaid
consumer on a receipt, invoice, or other written documentation
provided to the prepaid consumer , the prepaid MTS surcharge
and local charges may be calculated based upon that amount.
(2) If the seller can identify the portion of the bundled price
that is attributable to supplying the
prepaid mobile telephony services by reasonable and verifiable
standards from its books and records that are kept in the regular
course of business for other purposes, including nontax purposes, the
prepaid MTS surcharge and local charges may be calculated based upon
that amount.
(b) If a minimal amount of prepaid mobile telephony service is
sold for a single, nonitemized price with a mobile telephony service
communications device , commonly termed a cellular
telephone, the seller may elect not to apply the prepaid
MTS surcharge or local charges to the transaction. For these
purposes, a service allotment denominated as 10 minutes or less, or
five dollars ($5) or less, is a minimal amount.
CHAPTER 3. ADMINISTRATION
42020. (a) (1) The board shall administer
and collect the prepaid MTS surcharge imposed by this part
pursuant to the Fee Collection Procedures Law (Part 30 (commencing
with Section 55001)). For purposes of this part, the references in
the Fee Collection Procedures Law to "fee" shall include the prepaid
MTS surcharge imposed by this part, and references to "feepayer"
shall include a person required to pay the surcharge imposed by this
part, which includes the seller, who shall be required to register
with the board. The audit, refund, and appeal procedures of
the Fee Collection Procedures Law (Part 30 (commencing with Section
55001)) shall apply to the collection and remittance of the prepaid
MTS surcharge.
(2) Notwithstanding Article 1.1 (commencing with Section 55050) of
Chapter 3 of Division 2 of the Revenue and Taxation Code, any person
required, or that elects, to remit amounts due under Part 1
(commencing with Section 6001) of Division 2 of the Revenue and
Taxation Code by electronic funds transfer pursuant to Article 1.2
(commencing with Section 6479.3) shall remit assessment amounts due
under this section by electronic funds transfer.
(b) (1) The board may prescribe, adopt, and enforce regulations
relating to the administration and enforcement of this part,
including, but not limited to, collections, reporting, refunds, and
appeals.
(2) The board may prescribe, adopt, and enforce any emergency
regulations as necessary to implement this part. Any emergency
regulation prescribed, adopted, or enforced pursuant to this section
shall be adopted in accordance with Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code, and, for purposes of that chapter, including Section 11349.6 of
the Government Code, the adoption of the regulation is an emergency
and shall be considered by the Office of Administrative Law as
necessary for the immediate preservation of the public peace, health
and safety, and general welfare.
(c) The board shall establish procedures to be utilized by a
seller to document that a sale is not a retail transaction.
(d) The board shall establish procedures for sharing of
information, other than information protected under Section 19542,
related to the collection of the prepaid MTS surcharge upon the
request of the Public Utilities Commission or the Department of
Technology.
42021. The board shall establish remittance schedules and methods
for the prepaid MTS surcharge that utilize existing methods
established under the Sales and Use Tax Law (Part 1 (commencing with
Section 6001)), including all of the following:
(a) The prepaid MTS surcharge, minus the amount retained by the
seller pursuant to subdivision (e) of Section 42010, is due and
payable to the board quarterly on or before the last day of the month
next succeeding each quarterly period.
(b) On or before the last day of the month following each
quarterly period of three months, a return for the preceding
quarterly period shall be filed using electronic media with the
board.
(c) Returns shall be authenticated in a form or pursuant to
methods as may be prescribed by the board.
42022. Every seller shall register with the board. The board
shall establish a method for registration of sellers under this part
that utilizes the existing registration process for a seller's permit
established pursuant to Section 6066 of the Sales and Use Tax Law
(Part 1 (commencing with Section 6001)). Every application for
registration shall be made upon a form prescribed by the board and
shall set forth the name under which the applicant transacts or
intends to transact business, the location of its place or places of
business, and such other information as the board may require. An
application for registration shall be authenticated in a form or
pursuant to methods as may be prescribed by the board.
42023. (a) The Prepaid Mobile Telephony Services Surcharge Fund
is hereby created in the State Treasury. The Prepaid MTS 911 Account
and the Prepaid MTS PUC Account are hereby created in the fund. The
Prepaid Mobile Telephony Services Surcharge Fund shall consist of all
surcharges, interest, penalties, and other amounts collected and
paid to the board pursuant to this part, less a deduction in an
amount not to exceed 2 percent of the collected amounts to refund and
reimburse the board for expenses incurred in the administration and
collection of the prepaid MTS surcharge.
(b) All moneys in the Prepaid Mobile Telephony Services Surcharge
Fund attributable to the prepaid MTS surcharge shall be deposited as
follows:
(1) That portion of the prepaid MTS surcharge that is for the
emergency telephone users surcharge shall be deposited into the
Prepaid MTS 911 Account.
(2) That portion of the prepaid MTS surcharge that is for the
Public Utilities Commission surcharges shall be deposited into the
Prepaid MTS PUC Account.
(c) Moneys in the Prepaid MTS 911 Account and the Prepaid MTS PUC
Account may be appropriated by the Legislature only for the purposes
for which the moneys were collected. All moneys collected pursuant to
this part shall be allocated only to the entities specified in this
section and shall not be used for any other purpose, including, but
not limited to, loans, transfers, or uses for any other purpose,
funds, or account.
(d) The Local Charge for Prepaid Mobile Telephony Services Fund is
hereby created in the State Treasury. The Utility User Tax Account
and the Local 911 Charges Account are hereby created in the fund.
SEC. 7. Part 21.1 (commencing with Section 42100) is added to
Division 2 of the Revenue and Taxation Code, to read:
PART 21.1. Local Prepaid Mobile Telephony Services Collection
Act
42100. (a) This part shall be known and may be cited as the Local
Prepaid Mobile Telephony Services Collection Act.
(b) The Legislature finds and declares all of the following:
(1) Maintaining effective and efficient communications services,
911 emergency systems, communications-related public policy programs
to promote universal service, and various local programs across the
state benefit all persons with access to the telecommunications
system.
(2) Providers of end-use communications services, including
providers of mobile voice telecommunications services, which the
Federal Communications Commission terms mobile telephony service, are
required to collect and remit utility users taxes and local 911 or
access charges (local charges) imposed by over 150 cities and
counties in California on end-users of such mobile telephony
services, as required by existing state or local law.
(3) Local charges on telecommunication services represent an
important source of tax revenue for many cities and counties, and are
used to pay for such essential governmental services as public
safety, streets, parks, libraries, senior centers, and many more.
(4) Prepaid mobile telephony services are an important and growing
segment of the communications industry. Prepaid mobile telephony
services, unlike postpaid mobile telephony services, are frequently
sold by a third-party retailer that is not the provider of mobile
telephony services, and collecting local charges from prepaid
consumers of mobile telephony services at the time of the retail
transaction is necessary and the most efficient and competitively
neutral means for the collection of those local charges.
(5) The collection of prepaid mobile telephony services by
third-party retailers and the remittance of those local charges to
the board involves administrative costs and responsibilities that are
unique to prepaid mobile telephony services, and therefore justify
unique reimbursement and tax rate simplification measures, which are
fair and reasonable.
(b)
(c) It is a matter of statewide concern that the local
charges for local prepaid mobile telephony services be collected in a
uniform manner in order for the collection to be fair and uniform on
a statewide basis.
(d) It is the intention of the Legislature that this part shall
preempt the provisions pertaining to the rate and collection
methodology contained in all local ordinances, rules, or regulations
concerning the imposition of a local charge upon the consumption of
prepaid mobile telephony services.
42101. For purposes of this part, all of the following
definitions shall apply:
(a) "Local charge" means the utility user taxes as described in
Section 42102, and charges for access to communication services or to
local "911" emergency telephone systems, as described in Section
42102.5.
(b) "Prepaid mobile telephony services" has the same meaning as
that term is defined in the Prepaid Mobile Telephony Services
Surcharge and Collection Act (Part 21 (commencing
with Section 42000)).
42101.5. On and after January 1, 2015, and before ____, a local
charge imposed on the consumption of prepaid mobile telephony
services shall be collected from the prepaid consumer at the same
time and in the same manner as the prepaid MTS surcharge is collected
under Part 21 (commencing with Section 42000), in lieu of collection
of those local charges by the city, county, or city and county,
including a charter city, county, or city and county. Through
and including December 31, 2014, a prepaid MTS provider may elect to
remit the local charge based on the tax rate of Section 42102 to the
approp riate local taxing jurisdiction, and those
remittances shall be deemed to be in full compliance with the local
ordinance imposing a local charge on prepaid mobile
telephony service.
42102. (a) Notwithstanding any other law, on and after January 1,
2015, and before _____, the authority of a city, county, or city and
county, which includes a charter city, county, or city and county,
to impose a utility user tax rate on the consumption of prepaid
mobile telephony service in the city, county, or city and county at
the rate as specified in an ordinance authorized pursuant to Section
7284.2 or any other law is suspended, and the utility user tax rate
to be applied instead during the period under any ordinance as so
adopted is the applicable of the following:
(1) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of less than 1.5 percent, the rate shall be 0
percent.
(2) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 1.5 percent or more but less than 2.5 percent,
the rate shall be 1.5 percent.
(3) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 2.5 percent or more but less than 3.5 percent,
the rate shall be 2.5 percent.
(4) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 3.5 percent or more but less than 4.5 percent,
the rate shall be 3.5 percent.
(5) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 4.5 percent or more but less than 5.5 percent,
the rate shall be 4.5 percent.
(6) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 5.5 percent or more but less than 6.5 percent,
the rate shall be 5.5 percent.
(7) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 6.5 percent or more but less than 7.5 percent,
the rate shall be 6.5 percent.
(8) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 7.5 percent or more but less than 9 percent,
the rate shall be 7.5 percent.
(9) In the case of a city, county, or city and county that has
adopted an ordinance to impose a utility user tax on the consumption
of prepaid communication services in the city, county, or city and
county at the rate of 9 percent or more, the rate shall be 9 percent.
(b) Subdivision (a) is a self-executing provision that operates
without regard to any decision or act on the part of any city,
county, or city and county. A change in a utility user tax rate
resulting from either the suspension of, or the termination of the
suspension of, a utility user rate adopted by a city, county, or city
and county set forth in subdivision (a) is not subject to voter
approval under either statute or Article XIII C of the California
Constitution.
(c) Notwithstanding subdivision (a), a city, county, or city and
county may levy, increase, or extend a utility user tax at any rate
on the consumption of communication services, including a utility
user tax on the consumption of prepaid mobile telephony service,
except that during the period on and after January 1, 2015, and
before ____, any utility user tax rate on prepaid mobile telephony
service under any ordinance as so adopted shall be the applicable
rate specified in subdivision (a).
(d) On and after January 1, 2015, and before ____, this part shall
be all of the following:
(1) The exclusive method for both of the following:
(A) Collecting the local utility user taxes, local 911 charges,
and any other local charges imposed on customers using prepaid
communication services.
(B) Defining the scope of the tax or charge.
(2) The substitution for the utility user tax rate set out in the
local ordinance with the applicable tiered rate as established by the
Legislature. This part shall not preempt, limit, or affect the
general authority of local jurisdictions to impose a utility user
tax, local 911 charge, or any other local charges.
42102.5. (a) Notwithstanding any other law, on and after January
1, 2015, and before _____, the authority of a city, county, or city
and county, which includes a charter city, county, or city and
county, to impose a charge, that applies to prepaid mobile telephony
service, for access to communication services or access to local "911"
emergency telephone systems in the city, county, or city and county
at the rate as specified in an ordinance is suspended, and the rate
to be applied instead during that period under any ordinance as so
adopted is the applicable of the following:
(1) In the case of a city, county, or city and county that has
adopted an ordinance to impose a charge, that applies to prepaid
mobile telephony service, for access to communication services or
access to local "911" emergency telephone systems in the city,
county, or city and county at the rate of less than ____ dollars
($____) per month per access line, including any adjustments for
inflation, the rate shall be 0 percent.
(2) In the case of a city, county, or city and county that has
adopted an ordinance to impose a charge, that applies to prepaid
mobile telephony service, for access to communication services or
access to local "911" emergency telephone systems in the city,
county, or city and county at the rate of ____ dollars ($____) per
month per access line, including any adjustments for inflation, or
more but less than ____ dollars ($____) per month per access line,
including any adjustments for inflation, the rate shall be the
percentage obtained by dividing ____ by fifty, rounded up to the
nearest one-tenth of 1 percent.
(b) Subdivision (a) is a self-executing provision that operates
without regard to any decision or act on the part of any city,
county, or city and county. A change in an access charge rate
resulting from either the suspension of, or the termination of the
suspension of, a charge adopted by a city, county, or city and county
set forth in subdivision (a) is not subject to voter approval under
either statute or Article XIII C of the California Constitution.
(c) Notwithstanding subdivision (a), a city, county, or city and
county may levy, increase, or extend a charge at any rate, that
applies to prepaid mobile telephony services, for access to
communication services or access to local "911" emergency telephone
systems in the city, county, or city and county, except that during
the period on and after January 1, 2015, and before ____, any charge
on prepaid mobile telephony service under any ordinance as so adopted
shall be the applicable rate specified in subdivision (a).
42103. (a) The board shall perform all functions incident to the
administration and collection of the local charges
of a city, county, or a city and county, and shall collect and
administer the local charges in the manner as
prescribed for the collection and administration
of the prepaid MTS surcharge in the Prepaid Mobile Telephony Services
Surcharge and Collection Act (Part 21 (commencing with Section
42000)), subject to the limitations set forth in subdivisions (d),
(e), and (f) of this section, and subdivision (a) of Section
42105 .
(b) All local charges collected by the board shall be deposited in
the Local Charges for Prepaid Mobile Telephony Services Fund
which is hereby created by subdivision (d) of Section
42023 in the State Treasury , and shall be held
in trust for the local taxing jurisdiction, and shall not be used for
any other purpose. Local charges shall consist of all taxes,
charges, interest, penalties, and other amounts collected and paid to
the board, less a deduction in an amount not to exceed 2 percent of
the collected amounts to refund and reimburse the board for expenses
incurred in the administration and collection of the local charges.
The board shall transmit the funds to the local jurisdictions
periodically as promptly as feasible. The transmittals required under
this section shall be made at least once in each calendar quarter.
The board shall furnish a quarterly statement indicating the amounts
paid and withheld.
(c) The board shall prescribe and adopt rules and regulations as
may be necessary or desirable for the administration and collection
of local charges and the distribution of the local charges collected.
(d) The board's audit duties under this part shall be limited to
verification that the seller complied with paragraphs (2) and (3) of
subdivision (c) of Section 42014.
(e) The board may contract with a third party, pursuant to Section
55303, but for purposes of this part, solely in connection with the
following board duties:
(1) To allocate and transmit collected local charges in the
Prepaid Mobile Telephony Services Surcharge Fund pursuant to
subdivision (b) to the appropriate local jurisdictions.
(2) To audit proper collection and remittance of the local charge
pursuant to subdivision (d).
(3) To respond to requests from sellers, customers, boards, and
others regarding issues pertaining to local charges that are within
the scope of the board's duties.
(f) For purposes of this part, any third-party contract under
subdivision (e) shall be subject to the following limitations:
(1) Any third party shall, to the same extent as the board, be
subject to subdivision (b) of Section 55381, relating to unlawful
disclosures.
(2) No third-party contract shall provide, in whole or in part, in
any manner a contingent fee arrangement as payment for services
rendered. For purposes of this section, "contingent fee" includes,
but is not limited to, a fee that is based on a percentage of the tax
liability reported on a return, a fee that is based on a percentage
of the taxes owed, or a fee that depends on the specific tax result
attained.
(3) The board shall not perform or contract with any third party
to perform any duty under subdivision (e) if the same duty has
previously been or is currently being performed by the board
individually or pursuant to another third-party contract for the same
ordinance, tiered rate, audit, refund claim, or local charge request
in the same tax period.
42105. (a) The city, county, or city and county that has adopted
an ordinance to impose a charge that applies to prepaid mobile
telephony service shall be solely responsible for:
(1) Defending any claim regarding the validity of the ordinance in
its application to prepaid mobile telephony service.
(2) Interpreting any provision of the ordinance, except to the
extent specifically superseded by this statute.
(3) Responding to claims for refund, including claims of exemption
under the ordinance.
(b) A consumer may rebut the presumed location of the retail
transaction, as provided in subdivision (b) of Section 42014, by
filing a claim and declaration under penalty of perjury on a form
established by the city or county clerk of the local jurisdiction
indicating the actual location of the retail sale. The claim shall be
processed in accordance with the provisions of the local ordinance
that allows the claim to be filed. A customer that is exempt from the
local charge under the local ordinance may file a claim for a refund
from the local jurisdiction in accordance with the refund provisions
of the local ordinance.
(c) In connection with any actions or claims relating to or
arising from the invalidity of a local tax ordinance, in whole or in
part, the seller shall not be liable to any customer as a consequence
of collecting the tax. In the event a local jurisdiction is ordered
to refund the tax, it shall be the sole responsibility of the local
jurisdiction to refund the tax. In any action seeking to enjoin
collection of a local charge by a seller, in any action
seeking declaratory relief concerning a local charge, in any action
seeking a refund of a local charge, or in any action seeking to
otherwise invalidate a local charge, the sole necessary party
defendant in the action shall be the local jurisdiction on whose
behalf the local charge is collected, and the seller collecting the
local charge shall not be named as a party in the action.
42106. (a) For purposes of this section:
(1) "Quarterly local charges" means the total amount of local
charges transmitted by the board to a city, county, or city and
county for a calendar quarter.
(2) "Refund" means the amount of local charges deducted by the
board from a city's, county's, or city and county's quarterly local
charges in order to pay the city's, county's, or city and county's
share of a local charge refund due to one taxpayer.
(3) "Offset portion" means that portion of the refund which
exceeds the greater of fifty thousand dollars ($50,000) or 20 percent
of the city's, county's, or city and county's quarterly local
charges.
(b) Except as provided in subdivision (c), if the board has
deducted a refund from a city's, county's, or city and county's
quarterly local charges which includes an offset portion, then the
following provisions apply:
(1) Within three months after the board has deducted an offset
portion, the city, county, or city and county may request the board
to transmit the offset portion to the city, county, or city and
county.
(2) As promptly as feasible after the board receives the city's,
county's, or city and county's request, the board shall transmit to
the city, county, or city and county the offset portion as part of
the board's periodic transmittal of local charges.
(3) The board shall thereafter deduct a pro rata share of the
offset portion from future transmittals of local charges to the city,
county, or city and county over a period to be determined by the
board, but not less than two calendar quarters and not more than
eight calendar quarters, until the entire amount of the offset
portion has been deducted.
(c) The board shall not transmit the offset portion of the refund
to the city, county, or city and county if that transmittal would
reduce or delay either the board's payment of the refund to the
taxpayer or the board's periodic transmittals of local charges to
other cities, counties, or city and county.
42107. The city, county, or city and county shall pay to the
board its costs of preparation to administer the collection of local
charges. The city, county, or city and county shall pay such costs
monthly as incurred and billed by the board. The costs include all
preparatory costs, including costs of developing procedures,
programming for data processing, developing and adopting appropriate
regulations, designing and printing of forms, developing instructions
for the board's staff and for taxpayers, and other necessary
preparatory costs which shall include the board's direct and indirect
costs as specified by Section 11256 of the Government Code. Any
disputes as to the amount of preparatory costs incurred shall be
resolved by the Director of Finance, and his or her decision shall be
final. The maximum amount of all preparatory costs to be paid by the
city, county, or city and county shall not, in any event, exceed
____ thousand dollars ($____).
42108. (a) There shall be no recovery from the state for the
imposition of any unconstitutional or otherwise invalid local charge
that is collected pursuant to this part.
(b) If a final and nonappealable decision of a court of competent
jurisdiction determines that a local charge is unconstitutional or
otherwise invalid, the city, the county, or the city and county, as
the case may be, shall transfer to the board the revenues derived
from the unconstitutional or invalid local charge necessary to
reimburse claimants for the unconstitutional or invalid local charge
paid, including interest allowed under Section 6907. The board shall
deposit these revenues in a segregated impound account in the Prepaid
Mobile Telephony Services Surcharge Fund, and shall administer any
refunds necessitated in accordance with the Fee Collection Procedures
Law (Part 30 (commencing with Section 55001)).
42109. The board shall annually prepare a report showing the
amount of both reimbursed and unreimbursed costs incurred by it in
administering the collection of local charges pursuant to this part.
42110. (a) Notwithstanding Section 55381, it is unlawful for any
person, other than an officer or employee of a county, city and
county, city, or district, who obtains access to information
contained in, or derived from, prepaid mobile telephony services
surcharge and local charge records of the board pursuant to
subdivision (b), to retain that information after that person's
contract with the county, city and county, city, or district has
expired.
(b) (1) When requested by resolution of the legislative body of
any county, city and county, city, or district, the board shall
permit any duly authorized officer or employee of the county, city
and county, city, or district, or other person designated by that
resolution, to examine all of the prepaid mobile telephony services
surcharge and local charge records of the board pertaining to the
ascertainment of those prepaid mobile telephony services surcharge
and local charges to be collected for the county, city and county,
city, or district by the board pursuant to contract entered into
between the board and the county, city and county, city, or district
pursuant to this part. Except as otherwise provided in this section,
this subdivision does not allow any officer, employee, or other
person authorized or designated by a county, city and county, city,
or district to examine any sales or transactions and use tax records
of any taxpayer. The costs that are incurred by the board in
complying with a request made pursuant to this subdivision shall be
deducted by the board from those revenues collected by the board on
behalf of the county, city and county, city, or district making the
request.
(2) The resolution of the legislative body of the county, city and
county, city, or district shall certify that any person designated
by the resolution, other than an officer or employee, meets all of
the following conditions:
(A) Has an existing contract with the county, city and county,
city, or district to examine those prepaid mobile telephony services
surcharge and local charge records.
(B) Is required by that contract to disclose information contained
in, or derived from, those prepaid mobile telephony services
surcharge and local charge records only to an officer or employee of
the county, city and county, city, or district who is authorized by
the resolution to examine the information.
(C) Is prohibited by that contract from performing consulting
services for a retailer during the term of that contract.
(D) Is prohibited by that contract from retaining the information
contained in, or derived from, those prepaid mobile telephony
services surcharge and local charge records, after that contract has
expired.
(3) Information obtained by examination of board records pursuant
to this subdivision shall be used only for purposes related to the
collection of the prepaid mobile telephony services surcharge and
local charges by the board pursuant to the contract, or for purposes
related to other governmental functions of the county, city and
county, city, or district set forth in the resolution.
(c) If the board believes that any information obtained pursuant
to subdivision (b) has been disclosed to any person not authorized or
designated by the resolution of the legislative body of the county,
city and county, city, or district, or has been used for purposes not
permitted by subdivision (b), the board may impose conditions on
access to its local charge records that the board considers
reasonable, in order to protect the confidentiality of those records.
(d) Predecessors, successors, receivers, trustees, executors,
administrators, assignees, and guarantors, if directly interested,
may be given information as to the items included in the measure and
amounts of any unpaid local charges or amounts of local charges
required to be collected, interest, and penalties.
SEC. 8. No inference shall be drawn from the enactment of this act
with respect to any remittance requirements of a prepaid MTS
provider pursuant to the law as it existed prior to the enactment of
this act. Additionally, nothing in this act shall affect any
remittance requirements of a prepaid MTS provider for any service
other than prepaid mobile telephony services. Nothing in this act
shall affect the federal remittance requirements of a prepaid MTS
provider.
SEC. 9. It is the intent of the Legislature that the remittance
obligations of a prepaid MTS provider shall continue to remain
subject to the law existing prior to the effective date of this act
until, pursuant to this act, those obligations are changed as of
January 1, 2015. However, the law existing prior to the
effective date of this act shall remain applicable for each of the
following:
(a) The collection of surcharges, the liability for which accrued
prior to January 1, 2015.
(b) The making of any refunds and the effecting of any credits.
(c) The disposition of money collected.
(d) The commencement of any action or proceeding pursuant to this
part.
SEC. 10. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.
SEC. 11. This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:
In order to provide a standardized collection mechanism as soon as
possible by which state and local charges are collected from
end-users of prepaid mobile telephony services, thereby permitting
needed financial support for programs necessary to serve the public
or telecommunications users, it is necessary that this act take
effect immediately.