BILL NUMBER: AB 1050 AMENDED
BILL TEXT
AMENDED IN SENATE SEPTEMBER 8, 2011
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MAY 10, 2011
AMENDED IN ASSEMBLY APRIL 25, 2011
AMENDED IN ASSEMBLY MARCH 31, 2011
INTRODUCED BY Assembly Member Ma
FEBRUARY 18, 2011
An act to add and repeal Section 41127.9
Section 316 to the Public Utilities Code, and to add Part 21
(commencing with Section 42000) 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 1050, as amended, Ma. Telecommunications: prepaid mobile
telephony services: taxes and fees.
The
(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. 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, 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 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 commission 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 commission, except
for a railroad corporation. The commission 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
commission 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 commission to impose charges for
the purpose of funding those programs.
This bill would require the State Board of Equalization to convene
a working group by March 1, 2012, to develop recommendations for an
equitable and uniform method of collecting state and locally
authorized communications taxes, fees, and surcharges from prepaid
communications end-use consumers. The bill would require the working
group to report its recommendations by April 30, 2013. The bill would
require that the working group include stakeholder representatives,
including representatives from the commission, the California
Technology Agency, local government entities, law enforcement
agencies, mobile telephony service providers, retailers, and consumer
groups. Pursuant to existing law, the bill would repeal these
requirements on January 1, 2016.
This bill would enact the Prepaid Wireless Surcharge Collection
Act. The bill would establish a prepaid communications charge, 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 communications charge would include
a state component, as defined, and if a local government has adopted
utility user taxes or other specified charges that are otherwise
applicable to prepaid mobile telephony services and the retail
transaction occurs within that jurisdiction, a local component. The
bill would state the intent of the Legislature to develop a method
whereby a seller is required to collect the local component. The bill
would require a seller, as defined, to collect the prepaid
communications charge from a consumer and remit the amounts collected
to the State Board of Equalization pursuant to the Fee Collection
Procedures Law. The bill would require the board to remit that
portion of the state component collected pursuant to the Emergency
Telephone Users Surcharge Act to the California Technology Agency and
remit the balance of the state component, minus certain
administrative costs incurred by the board, to the Public Utilities
Commission. The bill would require the State Board of Equalization to
remit the local component, if applicable, to the local government.
The bill would require the Public Utilities Commission to annually
compute the commission's reimbursement fee and specified
telecommunications 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.
(2) This bill would declare that it is to take effect immediately
as an urgency statute.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 316 is added to the
Public Utilities Code , to read:
316. (a) The commission shall annually, on or before December 31,
compute a reimbursement fee to be collected and remitted to the
commission pursuant to the Prepaid Wireless Surcharge Collection Act
(Part 21 (commencing with Section 42000) of Division 2 of the Revenue
and Taxation Code). On or before January 15 of the following year,
the commission shall post notice of the fee on its Internet Web site
and notify the State Board of Equalization of this information.
(b) The commission shall annually, on or before December 31,
compute the telecommunications universal service fees to be collected
and remitted to the commission pursuant to the Prepaid Wireless
Surcharge Collection Act (Part 21 (commencing with Section 42000) of
Division 2 of the Revenue and Taxation Code). On or before January 15
of the following year, the commission shall post notice of the fee
on its Internet Web site and notify the State Board of Equalization
of this information. In computing the telecommunications universal
service fees, the commission shall consider the degree to which
persons who utilize prepaid mobile telephony services benefit from
the state's programs to advance universal service and adjust those
fees downward to the extent the commission determines that persons
who purchase prepaid services derive a lower benefit from the state's
universal service programs than do subscribers of a
telecommunications service plan.
(c) A seller collecting prepaid communications charges pursuant to
Part 21 (commencing with Section 42000) of Division 2 of the Revenue
and Taxation Code may rely upon the accuracy of the information
posted on the commission's Internet Web site in collecting those
charges.
SEC. 2. Part 21 (commencing with Section 42000) is
added to Division 2 of the Revenue and Taxation Code
, to read:
PART 21. PREPAID WIRELESS SURCHARGE COLLECTION ACT
CHAPTER 1. GENERAL PROVISIONS AND DEFINITIONS
42000. This part shall be known, and may be cited, as the Prepaid
Wireless Surcharge Collection Act.
42002. The Legislature finds and declares all of the following:
(a) Maintaining effective and efficient telecommunications
services, 911 emergency systems, telecommunications-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) Under existing law, end-use communications taxes, fees, and
surcharges, including the Emergency Telephone Users Surcharge Act
(Part 20 (commencing with Section 41001)), telecommunications
universal service surcharges, local 911 emergency system surcharges,
and utility user taxes are important funding mechanisms to assist
state and local governments with the deployment of a variety of
important services and programs to the citizens of this state.
(c) Providers of end-use 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.
(d) Under existing law, there is a method for collecting
communications taxes, fees, and surcharges from postpaid
communications end-use consumers. However, there is no method for
collecting communications taxes, fees, and surcharges from prepaid
end-use consumers.
(e) Consumers purchase prepaid communications services at a wide
variety of retail locations and other distribution channels, as well
as through service providers.
(f) Prepaid communications services are an important and growing
segment of the communications industry. Prepaid communications
services are often the only means by which persons with low incomes
can obtain limited access to the telecommunications system.
(g) To ensure equitable contributions from end-use consumers of
postpaid and prepaid communications services, there should be
standardization with respect to the method used to collect
communications taxes, fees, and surcharges from end-use consumers of
prepaid communications services.
42004. For purposes of this part, the following terms have the
following meanings:
(a) "Communications charge" means any and all state and locally
authorized taxes, fees, and surcharges that are applicable to mobile
telephony services, including each of the following:
(1) Surcharges authorized pursuant to the Emergency Telephone
Users Surcharge Act (Part 20 (commencing with Section 41001)) that
are applicable to mobile telephony services.
(2) Charges authorized by the Public Utilities Commission to be
collected from end-use customers of mobile telephony services,
including:
(A) The California High-Cost Fund-A Administrative Committee Fund
program surcharge (Section 275.6 of the Public Utilities Code).
(B) The California High-Cost Fund-B Administrative Committee Fund
program surcharge (Section 739.3 of the Public Utilities Code).
(C) The Deaf and Disabled Telecommunications Program
Administrative Committee Fund surcharge (Section 2881 of the Public
Utilities Code).
(D) The California Teleconnect Fund Administrative Committee Fund
program surcharge (Section 280 of the Public Utilities Code).
(E) The California Advanced Services Fund program surcharge
(Section 281 of the Public Utilities Code).
(F) 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).
(G) Public Utilities Commission reimbursement fees collected
pursuant to Chapter 2.5 (commencing with Section 401) of Part 1 of
Division 1 of the Public Utilities Code.
(3) Local 911 or access line taxes, fees, or surcharges that are
applicable to mobile telephony services.
(4) Local utility user taxes that are applicable to mobile
telephony services.
(b) "Consumer" means a person who purchases prepaid mobile
telephony services in a retail transaction.
(c) "Local component" means those items included in paragraphs (3)
and (4) of subdivision (a), for a retail transaction, as defined in
subdivision (h).
(d) "Mobile telephony service" and "mobile data service" have the
same meanings as defined in Section 224.4 of the Public Utilities
Code.
(e) "Prepaid communications charge" means a communications charge
that is required to be collected by a seller from a consumer in the
amount established pursuant to Chapter 2 (commencing with Section
42010).
(f) "Prepaid mobile telephony services" means a purchase of the
right to utilize mobile telephony services, either alone or in
combination with mobile data services, that is paid for in advance
and is sold in predetermined units or dollars of which the number
declines with use in a known amount.
(g) "Provider" means a person or corporation that provides prepaid
mobile telephone services pursuant to a license issued by the
Federal Communications Commission.
(h) "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.
(i) "Seller" means a person or corporation that sells prepaid
mobile telephony service to a consumer.
(j) "State component" means those portions of the prepaid
communications charge that are collected and remitted for state
services, specifically those items included in paragraphs (1) and (2)
of subdivision (a).
CHAPTER 2. THE PREPAID COMMUNICATIONS CHARGE
42010. (a) There is hereby imposed upon end-use consumers a
prepaid communications charge that consists of the state component
and the local component, if applicable, to be collected at the time
of the retail transaction based upon a percentage of the sales price
of each retail transaction that occurs in this state.
(b) Beginning ____, the state component of the prepaid
communications charge shall be collected by each seller from the
consumer for each retail transaction that occurs in the state. The
board shall annually post on its Internet Web site the amount of the
state component, to include those amounts determined by the Public
Utilities Commission pursuant to Section 316 of the Public Utilities
Code and those amounts to be collected pursuant to the Emergency
Telephone Users Surcharge Act (Part 20 (commencing with Section
41001)). The board shall post those amounts on its Internet Web site
not less than ____ days prior to the date on which those amounts
shall go into effect as the new amount of the state component.
(c) It is the intent of the Legislature to develop a method for
sellers to also collect a local component if the retail transaction
occurs within a local governmental jurisdiction that has elected to
impose such a charge, or more than one such charge.
(d) The amount of the prepaid communications charge shall be
separately stated on an invoice, receipt, or other similar document
that is provided to the consumer by the seller or otherwise disclosed
to the consumer. The seller may, but is not required to, separately
provide the state component and local component of the prepaid
communications charge.
42012. For purposes of this chapter, a retail transaction occurs
in this state, and within a local governmental jurisdiction of the
state, under any of the following circumstances:
(a) The consumer makes the retail transaction in person at a
business location in the state or local jurisdiction.
(b) If subdivision (a) is not applicable, the product is delivered
to the consumer by mail or other form of shipping to an address in
the state that the consumer supplies to the seller for purposes of
mailing or shipping.
(c) If neither subdivision (a) nor (b) is applicable, the seller's
records, maintained in the ordinary course of business, indicate
that the consumer's address is in the state and the records are not
made or kept in bad faith.
(d) If subdivisions (a), (b), and (c) are not applicable, the
consumer gives an address in the state during consummation of the
sale, including the consumer's payment instrument if no other address
is available, and the address is not given in bad faith.
(e) If subdivisions (a), (b), (c), and (d) are not applicable, the
calling number for the mobile telephony service communications
device is associated with an area code located in California.
42014. The prepaid communications charge is the liability of the
consumer and not of the seller or of any provider, except that the
seller shall be liable to remit all prepaid communications charges
that the seller collects from consumers pursuant to Chapter 3
(commencing with Section 42020), including all charges that the
seller is deemed to collect where the amount of the charge has not
been separately stated on an invoice, receipt, or other similar
document provided to the consumer by the seller.
42016. (a) If prepaid mobile telephony services are sold with one
or more other products for a single, nonitemized price, then the
prepaid communications charge shall apply to the entire nonitemized
price unless the seller elects to apply the charge 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
consumer, the prepaid communications charge shall be calculated based
upon that amount.
(2) If the seller can identify the portion of the bundled price
that is attributable to supplying 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 communications charge shall 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 communications charge 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) All prepaid communications charges collected by
sellers shall be remitted to the board pursuant to the Fee Collection
Procedures Law (Part 30 (commencing with Section 55001)). Not later
than ____, the board shall establish registration and payment
procedures for sellers consistent with the Fee Collection Procedures
Law.
(b) A seller shall be permitted to deduct and retain ____ percent
of the prepaid communications charges that are collected by the
seller from consumers.
(c) The audit and appeal procedures of the Fee Collection
Procedures Law (Part 30 (commencing with Section 55601)) shall apply
to the collection and remittance of prepaid communications charges.
(d) The board shall establish procedures to be utilized by a
seller to document that a sale is not a retail transaction.
(e) Within 30 days of receipt, and after deducting an amount not
to exceed ____ percent of the collected prepaid communications
charges retained by the board to reimburse its direct costs of
administering the collection and remittance of prepaid communications
charges, the board shall pay all remitted prepaid communications
charges as follows:
(1) The state component shall be remitted as follows:
(A) To the California Technology Agency, that portion of the state
component collected pursuant to the Emergency Telephone Users
Surcharge Act (Part 20 (commencing with Section 41001)).
(B) To the Public Utilities Commission, that portion of the state
component collected for those charges authorized by the commission
identified in paragraph (2) of subdivision (a) of Section 42004.
(2) The local component shall be remitted to the local government.
SEC. 3. 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 collection mechanism as soon as possible by
which state and local charges can be 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.
SECTION 1. The Legislature finds and declares
all of the following:
(a) Maintaining effective and efficient telecommunications
services, 911 emergency systems, telecommunications-related public
policy programs to promote universal service, and various local
programs across the state benefits all citizens.
(b) Under existing law, communications taxes, fees, and
surcharges, including the Emergency Telephone Users Surcharge Act,
telecommunications universal service surcharges, local 911 emergency
system surcharges, and utility user taxes are important funding
mechanisms to assist state and local governments with the deployment
of a variety of important services and programs to the citizens of
this state.
(c) 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.
(d) Under existing law, there is a method for collecting
communications taxes, fees, and surcharges from postpaid
communications end-use consumers. However, there is no method for
collecting communications taxes, fees, and surcharges from prepaid
end-use consumers.
(e) Consumers purchase prepaid communications services at a wide
variety of retail locations and other distribution channels, as well
as through service providers.
(f) Prepaid communications services are an important and growing
segment of the communications industry.
(g) To ensure equitable contributions from end-use consumers of
postpaid and prepaid communications services, there should be
standardization with respect to the method used to collect
communications taxes, fees, and surcharges from end-use consumers of
prepaid communications services.
SEC. 2. Section 41127.9 is added to the Revenue
and Taxation Code, to read:
41127.9. (a) The State Board of Equalization shall convene a
working group, by March 1, 2012, to develop recommendations for an
equitable and uniform method of collecting state and locally
authorized communications taxes, fees, and surcharges from prepaid
communications end-use consumers. The working group shall report to
the Legislature with its recommendations by April 30, 2013. The
working group shall include stakeholder representatives, including,
but not limited to, representatives from the Public Utilities
Commission, the California Technology Agency, local government
entities, law enforcement agencies, mobile telephony service
providers, retailers, and consumer groups.
(b) For the purposes of this section, "communications taxes, fees,
and surcharges" means any and all state and locally authorized
taxes, fees, and surcharges on communications services, including,
but not limited to:
(1) Surcharges authorized pursuant to the Emergency Telephone
Users Surcharge Act (Part 20 (commencing with Section 41001)).
(2) Charges authorized by the Public Utilities Commission,
including:
(A) The California High Cost Fund-A program surcharge (Section
275.6, Public Utilities Code).
(B) The California High Cost Fund-B program surcharge (Section
739.3, Public Utilities Code).
(C) The Deaf and Disabled Telecommunications Program surcharge
(Section 2881 and following, Public Utilities Code).
(D) The California Teleconnect Administrative Committee program
surcharge (Section 280, Public Utilities Code).
(E) The California Advanced Services Fund program surcharge
(Section 281, Public Utilities Code).
(F) 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).
(G) Public Utilities Commission reimbursement fees collected
pursuant to Chapter 2.5 (commencing with Section 401) of Part 1 of
Division 1 of the Public Utilities Code.
(3) Local 911 or access line taxes, fees, or surcharges.
(4) Local utility user taxes.
(c) (1) The report to be submitted pursuant to subdivision (a)
shall be submitted in compliance with Section 9795 of the Government
Code.
(2) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2016.