BILL NUMBER: AB 1050 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 7, 2012
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 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.
(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 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 , after
deducting its administrative expenses, 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) 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.
(2)
(3) 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: no yes .
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.
(c) (1) Nothing in this section restricts the commission's
authority to adjust reimbursement fees or universal service fees or
requires 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
disportionate amount.
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)
(d) Consumers purchase prepaid communications services
at a wide variety of retail locations and other distribution
channels, as well as through service providers.
(f)
(e) 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)
(f) 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 telephony 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) A seller collecting prepaid communications charges pursuant to
this part may rely upon the accuracy of the information posted on
the board's Internet Web site in collecting those charges.
(d)
(e) 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. 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. 3. SEC. 4. 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 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.