BILL NUMBER: AB 2545 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 17, 2010
AMENDED IN SENATE JUNE 22, 2010
INTRODUCED BY Assembly Member De La Torre
FEBRUARY 19, 2010
An act to add Section 41127.9 to the Revenue and Taxation Code,
relating to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
AB 2545, as amended, De La Torre. Emergency Telephone
Users Surcharge Act: prepaid mobile telecommunications service.
Prepaid communications services: taxes: fees:
surcharges: report.
Existing provisions of the Warren-911-Emergency Assistance Act
establish the number "911" as the primary emergency telephone number
of use in the state. The existing Emergency Telephone Users Surcharge
Act generally imposes a surcharge on amounts paid by every person in
the state for intrastate telephone service that is imposed at a
percentage rate, not less than 0.5% nor more than 0.75% as annually
estimated to provide revenues sufficient to fund "911" emergency
telephone system costs for the current fiscal year. Surcharge amounts
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. Under
Under existing law, the Public Utilities Commission
(PUC) has regulatory authority over public utilities, including
telephone corporations, except to the extent regulation of commercial
mobile radio service is preempted by federal regulation.
This bill would require the PUC to open proceedings or
expand the scope of existing proceedings to determine an equitable
manner for collection of the surcharge from users of prepaid mobile
telecommunications services, and would require the PUC to advise the
board of its determination , within 60 days of the
effective date of the bill, to conduct a public process to
consult with, and hear comments from, interested parties, as
described, for the purpose of developing recommendations for an
equitable and uniform method of collecting state and local
communications taxes, fees, and surcharges from prepaid
communications end-user consumers, and to report those
recommendations to the Legislature.
This bill would also make legislative findings and declarations
regarding equitable contributions to the funding of 911
systems state and local communications services and
programs by consumers of prepaid mobile
telecommunications communications services.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. (a) The Legislature finds and declares
all of the following:
(1) Maintaining effective and efficient telecommunications
services, 911 systems, and telecommunications-related public policy
programs across the state benefits all citizens.
(2) Communications taxes, fees, and surcharges, including the
Emergency Telephone Users Surcharge, state public policy program
surcharges, and local 911 fees and utility user taxes are important
funding mechanisms to assist state and local governments with the
deployment of a variety of important communications services and
programs to the citizens of this state.
(3) Prepaid communications services are an important and growing
segment of the communications industry.
(4) Providers of communications services 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.
(5) Under existing law there is a method for collecting
communications taxes, fees, and surcharges from postpaid
communications end-user consumers. However, there is no uniform
method for collecting communications taxes, fees, and surcharges from
prepaid end-user consumers.
(6) Consumers purchase prepaid communications services at a wide
variety of retail locations and other distribution channels, as well
as through service providers.
(7) To ensure equitable contributions to the funding of state and
local communications services and programs from end-user consumers of
prepaid communications services, there should be standardization
with respect to the method used to collect communications taxes,
fees, and surcharges from end-user consumers of prepaid
communications services.
(b) It is the intent of the Legislature in enacting this act to
provide for an interested parties process under the direction of the
Public Utilities Commission to develop recommendations for an
equitable and uniform method of collecting communications taxes,
fees, and surcharges from end-user consumers of prepaid
communications services. Because collection and administration of
communications taxes, fees, and surcharges falls within the
jurisdiction of multiple state and local public entities, and
establishing a uniform method of collecting these taxes, fees, and
surcharges from prepaid communications end-user consumers could
significantly affect a variety of industry sectors, it is the intent
of the Legislature that the interested parties process include
regularly scheduled meetings with, and opportunities to comment from,
stakeholders, including representatives from affected government
entities and industry sectors.
SEC. 2. Section 41127.9 is added to the
Revenue and Taxation Code , to read:
41127.9. (a) No later than 60 days after the effective date of
the act adding this section, the Public Utilities Commission shall
conduct a public process for the purpose of developing
recommendations for an equitable and uniform method of collection for
state and local government imposed communications taxes, fees, and
surcharges from prepaid communications end-user consumers. This
process shall consist of regularly scheduled meetings and shall
provide a reasonable opportunity to comment on oral and written
recommendations before they become final. The Public Utilities
Commission shall report its recommendations to the Legislature no
later than 18 months from the date upon which the interested parties
process has convened.
(b) (1) For the purposes of this section, "communications taxes,
fees, and surcharges" means any and all taxes, fees, and surcharges
on communications services imposed or authorized by the state or a
local government, including, but not limited to, all of the
following:
(A) The State Emergency Telephone Users Surcharge (SETUS).
(B) The California High Cost Fund-A (CHCF-A) Administrative
Committee Fund Surcharge.
(C) The California High Cost Fund-B (CHCF-B) Administrative
Committee Fund Surcharge.
(D) The California Advanced Services Fund (CASF) Surcharge.
(E) The California Teleconnect Fund (CTF) Surcharge.
(F) The Deaf and Disabled Telecommunications Program (DDTP)
Surcharge.
(G) The Public Utilities Commission Reimbursement Account (PUCRA)
Surcharge.
(H) The Universal Lifeline Telephone Service (ULTS) Surcharge.
(I) Any 911 tax, fee, or surcharge.
(J) Any local utility users tax imposed by a local government.
(2) For purposes of this section, "prepaid communications"
includes both prepaid calling card telephone service and prepaid
wireless service.
(c) The Public Utilities Commission shall provide notification of,
and an invitation to participate in, the interested parties process
established in this section to interested parties, including, but not
limited to, a representative or representatives of all of the
following:
(1) The State Board of Equalization.
(2) The State Chief Information Officer.
(3) The Controller.
(4) The Department of Finance.
(5) Local governments.
(6) Local law enforcement agencies.
(7) The wireless, wireline, and cable communications industries,
including the CTIA-The Wireless Association, the California
Communications Association, and the California Cable and
Telecommunications Association.
(8) Taxpayers and general industry, including the California
Taxpayers' Association and the California Chamber of Commerce.
(9) The retail industry, including the California Retailers
Association.
(10) Consumer representatives and consumer advocacy organizations,
including the Utility Reform Network and the Division of Ratepayer
Advocates.
(11) Any other public or private entities as deemed appropriate by
the Public Utilities Commission.
(d) The interested parties process and development of
recommendations shall include, but shall not be limited to,
consideration of all of the following:
(1) The mechanism for collection of communications taxes, fees,
and surcharges.
(2) The point of collection of communications taxes, fees, and
surcharges.
(3) The appropriate entity or entities to collect the
communications taxes, fees, and surcharges and distribute the
revenues to the appropriate account.
(4) The costs of administration for state government, local
governments, and industry sectors.
(5) The date or dates on which the recommendations should take
effect.
(e) (1) A report to be submitted pursuant to subdivision (a) shall
be submitted in compliance with Section 9795 of the Government Code.
(2) The requirement for submitting a report imposed under
subdivision (a) is inoperative on September 1, 2016, pursuant to
Section 10231.5 of the Government Code.
SECTION 1. (a) The Legislature finds and
declares the following:
(1) Maintaining effective and efficient 911 systems across the
state benefits all citizens.
(2) 911 fees imposed upon consumers of communications services
that have the ability to dial 911 are an important funding mechanism
to assist state and local governments with the deployment of enhanced
911 services to the citizens of this state.
(3) Prepaid mobile telecommunications services are an important
segment of the communications industry and should bear an equitable
part of the responsibility for the funding of the 911 system.
(4) Consumers purchase prepaid mobile telecommunications services
at a wide variety of retail locations and other distribution
channels, as well as through service providers.
(5) To ensure equitable contributions to the funding of 911
systems from consumers of prepaid mobile telecommunications services,
there should be clarity and standardization with respect to the
collection and payment obligations of 911 surcharges for prepaid
mobile telecommunications services.
(6) Current law also requires several public purpose surcharges
and user fees to be collected from end users and remitted to the
Public Utilities Commission.
(7) The Public Utilities Commission has the body of experience and
comparative advantage over the State Board of Equalization regarding
the collection of surcharges for prepaid communications services.
SEC. 2. Section 41127.9 is added to the Revenue
and Taxation Code, to read:
41127.9. (a) The Public Utilities Commission shall open
proceedings or expand the scope of existing proceedings to determine
an equitable manner for collection of the surcharge from users of
prepaid mobile telecommunications services. The commission shall
advise the State Board of Equalization of its determination.
(b) For purposes of this section, all of the following shall
apply:
(1) "Prepaid mobile telecommunications service" means a
telecommunications service or product that must be paid for in
advance that provides the right to utilize mobile telecommunications
service and that is sold in predetermined units or dollars of which
the number declines with use in a known amount.
(2) "Mobile telecommunications service" means commercial mobile
radio service, as defined in Section 20.3 of Title 47 of the Code of
the Federal Regulations, as in effect on June 1, 1999.