BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



           ----------------------------------------------------------------- 
          |SENATE RULES COMMITTEE            |                        AB 300|
          |Office of Senate Floor Analyses   |                              |
          |1020 N Street, Suite 524          |                              |
          |(916) 651-1520         Fax: (916) |                              |
          |327-4478                          |                              |
           ----------------------------------------------------------------- 
           
                                           
                                    THIRD READING


          Bill No:  AB 300
          Author:   Perea (D)
          Amended:  9/6/13 in Senate
          Vote:     27 - Urgency

           
           SENATE ENERGY, UTIL. & COMMUNIC. COMMITTEE  :  6-0, 7/2/13
          AYES:  Padilla, Fuller, Cannella, Hill, Knight, Wright
          NO VOTE RECORDED:  Corbett, De León, DeSaulnier, Pavley, Wolk
           
          SENATE GOVERNANCE & FINANCE COMMITTEE  :  7-0, 8/21/13
          AYES:  Wolk, Knight, Beall, DeSaulnier, Emmerson, Hernandez, Liu

           SENATE APPROPRIATIONS COMMITTEE  :  7-0, 8/30/13
          AYES:  De León, Walters, Gaines, Hill, Lara, Padilla, Steinberg
           
          ASSEMBLY FLOOR  :  65-1, 6/6/13 - See last page for vote


            SUBJECT  :    Telecommunications:  prepaid mobile telephony  
                      services:  state surcharge and fees:  local charges  
                      collection

           SOURCE  :     CTIA  The Wireless Association


           DIGEST  :    This bill, on or after January 1, 2015 until January  
          1, 2018, changes the point of collection for prepaid mobile  
          services taxes (MTS) from service providers to retailers and  
          clarifies the imposition of tax directly on the consumer, as  
          opposed to the carrier.   

           Senate Floor Amendments  of 9/6/13 make both substantive and  
                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          2

          technical changes necessary to implement the tax imposed by this  
          bill by (1) requiring a seller that is a service provider not to  
          apply the prepaid MTS surcharge to lifeline customers when  
          prepaid service is purchased directly from that provider; and  
          (2) creating "bad debt" provisions for retailers subject to this  
          tax. 

           ANALYSIS  :    

          Existing law:

           1. Establishes the State Board of Equalization (BOE) with  
             duties that include administering tax and fee programs that  
             provide revenue for state and local government.

           2. Specifies procedures for BOE collection of fees and taxes  
             that fund programs administered by other state agencies,  
             including taxes and fees that retailers collect from  
             customers and remit to the BOE for transfer to another  
             agency.

           3. Establishes the Public Utilities Commission (PUC) to  
             regulate utilities, including telephone corporations, and  
             establishes the PUC Reimbursement Fee to be collected from  
             utility customers and remitted to the PUC to fund its  
             operations.

           4. Requires the PUC to administer several universal service  
             programs, to ensure that all customers have communications  
             service, funded by surcharges on intrastate communications  
             service.

           5. Requires the Public Safety Communications Office (PSCO)  
             within the Office of Emergency Services (OES, formerly within  
             the California Technology Agency) to administer the state's  
             911 emergency telephone system with funds derived from a  
             surcharge on intrastate communication service that providers  
             remit to the BOE, which transfers the funds to the PSCO.

           6. Authorizes cities and counties to collect User Utility Taxes  
             (UUTs) on utility and communications service that providers  
             collect from end users and remit to the BOE, which transfers  
             the funds to local agencies.


                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          3

           7. Establishes the Moore Universal Telephone Service Act which  
             establishes the Universal Lifeline Telephone Service program  
             in order to provide low-income households with access to  
             affordable basic residential telephone service. 

           8. States that existing decisions of the PUC exempt lifeline  
             services from the PUC's reimbursement fee and the six  
             end-user surcharges that fund the state's six universal  
             service programs.

          This bill will do all of the following:

          1.  Standard prepaid MTS surcharge  .  Changes the rate and method  
             of computation and collection of taxes and surcharges for  
             mobile pre-paid wireless services (MTS surcharge) in  
             California.  Specifically, aggregates the PUC User Fee, the  
             state's six universal service surcharges, and the 911  
             surcharge into one "prepaid MTS surcharge" that will be  
             determined by the PUC annually.  The PUC may adjust the  
             surcharges to account for any past overcollection or  
             undercollection from prepaid service in the previous year.   
             The PUC must prepare a public document explaining the  
             calculation of the fee.

          2.  Point of sale collection  .  Imposes taxes (MTS surcharge plus  
             local charges) directly on the consumer at the point of sale.  
              Specifically, a seller must collect the taxes from the  
             prepaid consumer at the time of the "retail transaction" as a  
             percentage of the retail sales price.  Requires the taxes to  
             be separately stated on an invoice, receipt, or other similar  
             document provided to the prepaid consumer, or otherwise  
             disclosed electronically to the prepaid consumer.  Defines a  
             "retail transaction" to mean "the purchase of prepaid mobile  
             telephony services, either alone or in combination with  
             mobile data or other services, from a seller for any purpose  
             other than resale in the regular course of business."

          3.  Surcharge liability  .  Imposes the MTS surcharge and local  
             charges on a prepaid consumer rather than the seller;  
             however, requires the seller to collect and remit the MTS  
             surcharge and local charges.  Any unreturned amounts the  
             seller represents and collects as the MTS surcharge and local  
             charges owed by the prepaid consumer that are not actually  
             owed constitutes a seller's debt to the state, or jointly to  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          4

             the state, for purposes of collection on behalf of, and to  
             the local jurisdiction imposing the charge, respectively.

             Provides that a seller that collects an amount that exceeds  
             the MTS surcharge and local charges owing may refund those  
             amounts to the prepaid consumer.  The seller may refund those  
             amounts whether or not it submits the overpayment to the BOE  
             and no corresponding credit or refund is secured. 

             Provides that every prepaid consumer is liable for the MTS  
             surcharge and local charges until paid to the state.   
             However, a prepaid consumer's payment to a registered seller  
             relieves the consumer from further liability.  Nothing in  
             this bill imposes any obligation upon a seller to take any  
             legal action to enforce the collection of the surcharge and  
             local charges imposed.

          4.  Vendor compensation  .  Provides that all retailers that sell  
             prepaid telephones shall receive 2% compensation of the MTS  
             surcharge and local charges for each sale.

          5.  Administration  .  Requires BOE to administer and collect the  
             MTS surcharge pursuant to the Fee Collection Procedures Law  
             (FCPL), which generally provides for BOE's administration of  
             fee programs.  Among other things, the FCPL provides for  
             collection, reporting, return, refund, and appeals  
             procedures, as well as BOE's authority to adopt regulations  
             related to the FCPL's administration and enforcement.  

             Authorizes BOE to prescribe and adopt tax administration and  
             enforcement regulations including, but not limited to,  
             collections, reporting, refunds, and appeals.  In addition,  
             this bill authorizes the BOE to prescribe, adopt, and enforce  
             any emergency regulations as necessary to implement this  
             bill.

             Requires BOE to:  

             A.    Establish procedures for a seller to document when a  
                sale is not a retail transaction.

             B.    Establish procedures for sharing specified MTS  
                surcharge collection information upon the request of the  
                PUC or OES.  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          5


             After registering with BOE, the MTS surcharge and local  
             charges is due and payable electronically to BOE quarterly on  
             or before the last day of the next month following each  
             calendar quarter.

          6.  911 surcharge rate  .  The surcharge rate established pursuant  
             to the 911 Surcharge Act as of October 1 of each year, will  
             be the surcharge rate established for intrastate telephone  
             communication service in this state, by dividing the costs  
             that OES estimates for the current fiscal year of 911 plans  
             approved, 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 intrastate portion of prepaid telephony  
             services, and VoIP service to which the surcharge will apply  
             for the next succeeding calendar year.  The surcharge rate  
             shall not be greater than 0.75% or less than 0.50%.  In  
             making its computation of the charges applicable to the  
             intrastate portion of prepaid mobile telephony services, OES  
             shall use the computation method developed by PUC.  The OES  
             must notify BOE of the surcharge amount collected and the  
             surcharge amount applicable by 
          October 15 of each year. 

             Requires OES to prepare a summary of the calculation of the  
             proposed surcharge and make it available on its Internet  
             site.  The summary shall contain the prior year's revenues to  
             fund 911 costs, projected expenses and revenues from all  
             sources, and the rationale for adjustments to the surcharge.

          7.  PUC end-user surcharges  .  Requires the PUC to compute,  
             commencing October 1, 2014: 

              A.    A reimbursement fee as a percentage of the sales price  
                for prepaid mobile telephony services.

              B.    The cumulative of the telecommunications universal  
                service surcharges as a percentage of the sales price for  
                prepaid mobile telephony services. 

             Does not restrict the PUC's authority to adjust the  
             reimbursement fees or universal service fees or require that  
             they only be adjusted once annually. 

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          6


             Provides the PUC with enforcement authority "to ensure the  
             proper remittance over retail transactions" where the prepaid  
             MTS provider is also the seller.  However, the PUC must  
             collaborate with BOE in the exercise of its enforcement  
             authority. 

          8.  MTS surcharge calculation  .  Requires BOE to calculate the MTS  
             surcharge rate annually, no later than November 1 each year  
             commencing in 2014, by combining the state 911 surcharge  
             rate, all the end user PUC rates, and the PUC reimbursement  
             fee. 

          9.  Standard local charges  .  Creates statewide uniformity for  
             UUTs assessed on prepaid mobile phone services, stating it is  
             the intention of the Legislature that this part shall preempt  
             the provisions pertaining to the tax or charge rate, base,  
             and method of collection contained in all local ordinances,  
             rules, or regulation concerning the imposition of a local  
             charge upon the consumption of prepaid mobile telephone  
             services, to the extent those provisions are inconsistent  
             with the provisions, as specified.  It is not the intent of  
             the Legislature to otherwise preempt, limit, or affect the  
             general authority of local jurisdictions to impose a utility  
             user tax, local 911 charge, or any other local charges.
           
             Provides that the any local taxes, pursuant to the eight  
             rates in this bill, must be paid at the same time and in the  
             same manner as that described in the "point of sale"  
             provisions, provided that on or before September 1, 2014, the  
             local agency enters into a contract with the BOE.   
             Notwithstanding any other law, on and after January 1, 2015,  
             the bill would replace all UUTs with the eight rates in this  
             bill.

             Parallels the local sales and use tax collection (Bradley  
             Burns, transactions and use tax) in prescribing how locals  
             shall contract with BOE.  Specifically, the local agency must  
             certify to BOE:  

             A.    That its ordinance applies its local charge to prepaid  
                MTS and that the local agency agrees to indemnify, and  
                hold harmless BOE for any and all liability for damages  
                that may result from collection pursuant to the contract. 

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          7


             B.    The amount of the local 911 charge or the applicable  
                tiered rate for a utility user tax. 

             States that if a local agency increases its local charge, the  
             local agency must provide BOE with written notice of the  
             increased local charge on or before December 1st, with  
             collection of the local charge to commence April 1 of the  
             next calendar year. If the local charge is no longer  
             accurate, no longer imposed, or has decreased, the local  
             agency must notify the BOE, who must promptly post the  
             recalculated rate. 

          10.  Total taxes  .  Requires BOE to post on its Internet Web site,  
             no later than each December 1, the combined total of the  
             rates of the MTS surcharge and the rate or rates of local  
             charges for each local jurisdiction.  The posted combined  
             rate applies to all retail transactions during the calendar  
             year beginning April 1 following the posting. 

          11.  Retail sale location  .  To account for internet sales, this  
             bill prescribes various ways that a sale occurs in the state,  
             both an in-store purchase and:  if the consumer's address is  
             in this state (known-address transaction).  A consumer's  
             address is in this state under any one 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.    The prepaid consumer's address is known by the seller  
                to be in the state.  The consumer's address is considered  
                to be "known by the seller" 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. 


                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          8

              D.    The mobile telephone number associates with a location  
                in this state. 

          12.  Transaction location  .  For a known-address transaction, this  
             bill allows the seller to collect the MTS surcharge and local  
             charges that corresponds to the prepaid consumer's five digit  
             postal ZIP Code. 

             Discharges a seller from any additional MTS surcharge or  
             local charges and also relieves the seller from refunding  
             amounts collected and remitted to BOE if:

              A.    A seller relies in good faith on BOE-provided retail  
                location information to match either a point-of-sale  
                transaction location, or the five digit postal ZIP Code of  
                the prepaid consumer's known-address, to the applicable  
                MTS surcharge and local charges amount.

              B.    A seller collects that amount from the prepaid  
                consumer. 

              C.    A seller remits the amount to BOE in compliance, as  
                specified.

             Discharges the seller from any additional local charges, and  
             relieves the seller from refunding amounts collected and  
             remitted, if the seller, with due diligence and in good  
             faith, relies on credible information to match the prepaid  
             consumer's five digit postal ZIP code to the correct local  
             charge, even if the ZIP code corresponds to more than one  
             local charge in a known-address transaction.

          13.  Miscellaneous provisions  .  The MTS surcharge applies to the  
             entire price where prepaid mobile telephony services are sold  
             in combination with mobile data services or any other  
             services or products for a single price except if:  

                   The prepaid MTS is sold with a cellular telephone and  
                the purchase price for the prepaid mobile telephony  
                services component is separately disclosed to the consumer  
                on a receipt, invoice, or other written electronic  
                documentation provided to the prepaid consumer, the  
                prepaid MTS surcharge and local charge apply only to the  
                prepaid mobile telephony services amount.

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          9


                   A minimal prepaid MTS amount is sold in a single,  
                non-itemized bundled price with a cellular telephone; the  
                seller may elect not to apply the surcharge or local  
                charge.  For these purposes, a minimal amount includes a  
                service allotment denominated as 10 minutes or less, or $5  
                or less. 

          14.  Revenues  .  States that BOE must deposit the funds as follows:

              A.    The 911 surcharge portion of the MTS surcharge would  
                be deposited into the Prepaid MTS 911 Account, which this  
                bill creates in the MTS Surcharge Fund.

              B.    The PUC surcharges portion of the MTS surcharge would  
                be deposited into the Prepaid MTS PUC Account, which this  
                bill also creates in the MTS Surcharge Fund.

          15.  Local Act administration  .  Requires BOE to perform all  
             functions incident to the collection of the local charges of  
             a city or county.  In addition, BOE must collect the local  
             charges in the same manner as the MTS surcharge, as  
             specified.  Those limitations, for which the city or county  
             is responsible, include:

              A.    Defending any claim regarding the validity of the  
                ordinance in its application to prepaid MTS.

              B.    Interpreting any provision of the ordinance, as  
                specified.

              C.    Responding to specified customer claims for refund.

              D.    Certifying that the city or county ordinance applies  
                the local charge to prepaid MTS and agrees to indemnify  
                and hold harmless BOE, its officers, agents, and employees  
                for any and all liability for damages that may result from  
                collection of the local charge.

              E.    Reallocation of local charges as a result of  
                correcting errors relating to the location of the point of  
                sale of a seller, or the known address of a consumer, for  
                up to two past quarters from the date of knowledge.


                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          10

             Applies existing disclosure laws to any third party contract,  
             and prohibits contingent fee arrangements as payment for  
             services rendered.

             Provides for a double collection of charges in 2015 by  
             allowing the simultaneous collection of the following:

              A.    The PUC surcharge. 
              B.    The state 911 surcharge. 
              C.    The new total tax, which includes the state 911  
                surcharge, all PUC surcharges, and would be remitted to  
                the BOE.

             Beginning January 1, 2016, only the new total tax will be  
             collected until January 1, 2018, when all provisions of this  
             bill will be repealed.

          16.States that the purchase in a retail transaction in this  
             state of prepaid mobile telephony services, either alone or  
             in combination with mobile data or other services, by a  
             consumer is exempt from the prepaid MTS surcharge if all of  
             the following apply:

             A.    The prepaid consumer is certified as eligible for the  
                state lifeline program or federal lifeline program.

             B.    The seller is authorized to provide lifeline service  
                under the state lifeline program or federal lifeline  
                program.

             C.    The exemption is applied only to the amount paid for  
                the portion of the prepaid mobile telephony service that  
                the lifeline program specifies is exempt from the  
                surcharges and fees that comprise the prepaid MTS  
                surcharge.

           Background
           
          Telephone service traditionally has been provided on a postpaid  
          basis where customers get a monthly bill for calls made and  
          services received during the previous month.  Under prepaid  
          service, in contrast, customers pay in advance for a  
          predetermined amount of calling minutes, typically loaded onto a  
          calling card or directly onto a mobile phone, with options to  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          11

          reload once the available minutes are exhausted. 

          According to industry estimates, prepaid wireless is an  
          expanding multi-billion dollar business nationally, with nearly  
          a quarter of the nation's 300 million wireless consumers  
          currently using prepaid service.  Prepaid service is popular for  
          "backup" phones kept in the car for emergencies and "starter"  
                                                                                phones for children so it is easy to control usage, and is an  
          attractive option for low-income customers unable to afford a  
          long-term contract or pass a credit check.  Lack of a long-term  
          contract is making prepaid service increasingly popular for all  
          wireless customers.

          About 30% of prepaid service is sold directly by a provider to a  
          customer, ether online, over the phone, or otherwise.  The other  
          70% is sold through retailers such as grocery stores and big-box  
          stores, to which providers sell prepaid cards on a wholesale  
          national basis, typically not knowing in which state the cards  
          will be sold or the service used. 

           Statewide fees and surcharges  .  Existing law imposes a fee on  
          intrastate communications service to support the state 911  
          system administered by PSCO, a fee to pay for the PUC's  
          operations, and six separate surcharges to pay for the following  
          state universal service programs administered by PUC:

              California High Cost Fund A (0.4%)  .  This Fund provides a  
             source of supplemental revenues to 14 small local exchange  
             carriers for the purpose of minimizing any rate disparity  
             between rural and metropolitan areas.

              California High Cost Fund B (0.3%)  .  This Fund provides  
             subsidies to carriers of last resort to provide basic local  
             telephone service to residential customers in high-cost areas  
             that certain carriers currently service, as specified.  The  
             Fund keeps basic telephone service affordable to meet the  
             PUC's universal service goal.

              Deaf and Disabled Telecommunications Program (0.2%)  .  The  
             PUC implemented three telecommunications programs for  
             California residents who are deaf, hearing impaired, or  
             disabled.

              California Teleconnect Fund (0.59%)  .  Another program  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          12

             established by the PUC to meet universal service goals.  This  
             Fund provides a 50% discount on selected telecommunication  
             services to qualifying schools, libraries, government-owned  
             and operated hospitals and health clinics, and  
             community-based organizations.

              California Advanced Services Fund (0.164%)  .  A two-year  
             program that ran from January 1, 2008 to January 1, 2010, to  
             provide grants to "telephone corporations" to fund unserved  
             and underserved areas with broadband services. The program  
             was extended beyond January 1, 2013, pursuant to SB 1040  
             (Padilla, Chapter 317, Statutes of 2010), which also  
             established two new program elements:  the Rural and Urban  
             Regional Broadband Consortia Account and the Broadband  
             Infrastructure Revolving Loan Account.

              Lifeline Telephone Service (1.15%)  . This program provides  
             discounted basic telephone (landline) services to eligible  
             California households.

          All of these fees are assessed as a percentage of a customer's  
          intrastate service, calls or data sent within the state of  
          California.  These state and local surcharges are easily  
          determined and collected for post-paid service and included on  
          customer bills after the service is used.  With prepaid service,  
          neither providers nor retailers selling prepaid service know in  
          advance how many minutes will be intrastate calls or whether  
          they will be made within the city or county where the  
          transaction occurs.  For prepaid service sold at retail, there  
          is no direct billing relationship between the user and the  
          provider. 

           Local fees and surcharges  .  Local 911 fees and UUTs are assessed  
          on telephony service provided within the jurisdiction of the  
          city or county imposing the tax. UUTs range up to 11%, but not  
          all cities and counties impose them.  About 100 cities have  
          utility tax ordinances imposing charges on prepaid service at  
          about 35 different rates.  Currently, with respect to prepaid  
          service, local fees and UUTs remain largely unpaid. 

           Current collection of surcharges on prepaid service  .  Given  
          growing customer demand for prepaid service, and lack of a  
          convenient way to determine intrastate use and bill prepaid  
          customers, the wireless industry has advocated nationwide a  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          13

          point-of-sale collection methodology with model legislation  
          endorsed in 2009 by the National Conference of State  
          Legislatures.  According to this bill's sponsor, CTIA, 31 states  
          have adopted point-of-sale legislation based on the model  
          statute, although none of these other states has multiple  
          surcharges like California.  Most of the other states have only  
          a state 911 fee, with a few also having local 911 fees.  
          Point-of-sale legislation has been introduced in California  
          since 2009 but failed passage.

          TracFone is the nation's, and California's, largest provider of  
          prepaid wireless service and provides only prepaid service,  
          unlike other carriers that offer both postpaid and prepaid  
          wireless service.  In 2003, TracFone sought clarification  
          through PUC staff about whether PUC fees and surcharges apply to  
          its service.  TracFone claims to have relied on staff indicating  
          that it was exempt.  The PUC opened a formal investigation  
          against TracFone in 2009, and in November 2011 issued a decision  
          concluding that TracFone is a telephone corporation subject to  
          its jurisdiction and is required to pay PUC fees and surcharges  
          (D.12-02-032).  In March 2013, a state appellate court denied  
          TracFone's petition for review of that decision.  A second phase  
          of the PUC's proceeding is pending to determine the amount  
          TracFone owes in past due fees and surcharges and whether a  
          penalty is appropriate.  Staff is seeking $12 to $20 million in  
          unpaid surcharges and fees, plus interest and penalties.

          As a result of this proceeding, according to the PUC, TracFone  
          and all other prepaid providers are now collecting and remitting  
          all necessary state surcharges and fees from their postpaid and  
          prepaid customers.  All telecommunications carriers, postpaid  
          and prepaid, calculate and report universal service surges  
          online using the Telecommunications and User Fees Filing System  
          and remit the owned monies to the PUC.  The PUC maintains that  
          it "intentionally does not prescribe any collection method for  
          any kind of wireless service, leaving carriers complete  
          discretion to implement the method that best meets their  
          business needs," which may include embedding the surcharges and  
          fees into the rates for service. 

          Because California has authority to impose surcharges only on  
          communications within its state borders, a customer's intrastate  
          minutes of use must be estimated in connection with certain  
          services.  The Federal Communication Commission allows for three  

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          14

          different methods to make this allocation, including books and  
          records (actual data), traffic studies, or a "safe harbor"  
          estimates that about 63% of service revenues is for intrastate  
          calling and 37% interstate.  AB 841 (Buchanan, 2011), which  
          required VoIP providers to pay state universal service program  
          surcharges, endorsed these same three methods for determining  
          intrastate VoIP service subject to the surcharge.  TracFone,  
          which has about 35% of California's prepaid market share,  
          currently remits surcharges based on a "books and records"  
          methodology that shows that 84% of revenues are a result of  
          intrastate calls.

           Prior Legislation
           
          AB 1050 (Ma, 2012) would have required a point-of-sale  
          collection of state and local surcharges on prepaid service  
          somewhat similar to this bill.  The bill died in the Senate  
          Governance and Finance Committee.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

             BOE estimates that it would incur annual costs of at least  
             $9 million to $11 million (special funds) to administer and  
             collect the new tax beginning in 2014-15 not including  
             certain costs yet to be determined. 

             PUC estimates annual costs of $350,000 for four permanent  
             positions.  The PUC would also need approximately $250,000 in  
             start-up costs in 2014-15. 

             This bill permits MTS sellers to retain 2% of collected  
             surcharges for reimbursement of costs.  The annual cost would  
             be $800,000 to $1 million.

             Unknown annual costs to OES to determine the state 911  
             system surcharge.

             Additional revenues of approximately $40.3 million in 2015  
             for the double-collection of surcharges (one collection  
             directly from the consumer and one collection remitted by the  
             carrier).

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          15


             Annual costs, likely in the hundreds of thousands of  
             dollars, from the General Fund and various special funds to  
             the state as a user of telephony services.

           SUPPORT  :   (Verified  9/9/13)

          CTIA - The Wireless Association (source)
          AFSCME
          AT&T
          Boost
          California Communications Association
          California Fire Chiefs Association 
          California Hispanic Chambers of Commerce
          California Professional Firefighters 
          California State Association of Counties 
          California's Independent Telephone Companies
          Chambers of Commerce Alliance of Ventura and Santa Barbara  
          Counties
          Cities of Burbank, Cathedral City, Culver City, Glendale,  
            Lakewood, Lynwood, Modesto, Montclair, Palm Springs,   
            Pasadena, Rancho Cordova, Redwood City, Sacramento, Salinas,  
            San Luis Obispo, Santa Ana, Santa Barbara, Santa Monica, and  
            Selma
          City and County of San Francisco
          Fresno Chamber of Commerce
          Greater Bakersfield Chamber of Commerce
          Lancaster Chamber of Commerce
          Los Angeles Chamber of Commerce
          Muni Services
          San Francisco Chamber of Commerce
          South Bay Association of Chambers of Commerce
          Sprint
          T-Mobile
          Torrance Chamber of Commerce
          TracFone Wireless
          US Cellular
          Valley Industry and Commerce Association
          Verizon
          Virgin Mobile

           OPPOSITION  :    (Verified  9/9/13)

          California Grocers Association

                                                                CONTINUED





                                                                     AB 300
                                                                     Page  
          16

          Public Utilities Commission
          Consumer Federation of California
          Division of Ratepayer Advocates
          The Greenlining Institute
          The Utility Reform Network

           ASSEMBLY FLOOR  :  65-1, 6/6/13
          AYES:  Achadjian, Alejo, Allen, Atkins, Bigelow, Blumenfield,  
            Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian  
            Calderon, Campos, Chau, Conway, Cooley, Dahle, Daly,  
            Dickinson, Eggman, Fong, Frazier, Beth Gaines, Garcia, Gatto,  
            Gomez, Gonzalez, Gorell, Grove, Hagman, Hall, Harkey, Roger  
            Hernández, Jones, Jones-Sawyer, Levine, Linder, Lowenthal,  
            Maienschein, Mansoor, Melendez, Mitchell, Morrell, Mullin,  
            Muratsuchi, Nazarian, Nestande, Olsen, Pan, Patterson, Perea,  
            V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Stone, Ting,  
            Wagner, Waldron, Weber, Wieckowski, Wilk, Williams, John A.  
            Pérez
          NOES:  Donnelly
          NO VOTE RECORDED:  Ammiano, Bloom, Chávez, Chesbro, Fox, Gordon,  
            Gray, Holden, Logue, Medina, Salas, Skinner, Yamada, Vacancy

          JG:k  9/9/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

                                   ****  END  ****


















                                                                CONTINUED