BILL ANALYSIS �
AB 1050
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Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 1050 (Ma) - As Amended: May 10, 2011
Policy Committee:
UtilitiesVote:13-0
Revenue and Taxation 9-0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill:
1)Requires, upon an appropriation for this purpose, that the
Board of Equalization (BOE), convene a stakeholder 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 pre-paid end-use consumers, and to report its
recommendations to the Legislature by April 1, 2013.
2)Defines "communications taxes, fees, and surcharges" to
include:
a) Surcharges authorized under the Emergency Telephone
Users Surcharge Act.
b) Charges authorized by the Public Utilities Commission
(PUC), including:
c) Local 911 or access line taxes, fees, or surcharges.
d) Local utility user taxes.
i. The California High Cost Fund-A program
surcharge.
ii. The California High Cost Fund-B program
surcharge.
iii. The Deaf and Disabled Telecommunications
Program surcharge.
iv. The California Teleconnect Administrative
Committee program surcharge.
v. The California Advanced Services Fund program
surcharge.
AB 1050
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vi. The Moore Universal Telephone Service Act;
and,
vii. PUC reimbursement fees, which fund the PUC
operating costs.
FISCAL EFFECT
Costs should be absorbable for each of the agencies to
participate in the working group, which besides the BOE is to
include the PUC and the California Technology Agency, in
addition to local government and law enforcement entities,
mobile telephony service providers, retailers, and consumers.
Given the absorbable costs for the working group and the
development of recommendations, the bill does not need to be
subject to an appropriation, as it is now.
COMMENTS
1)Purpose . According to the author, "Recently, there has been a
growing demand for prepaid wireless services, where consumers
pay for services (i.e. minutes) "pay-as-you-go," without
entering into contracts. Around 80% of prepaid services are
purchased from traditional retailers, such as grocery stores,
drug stores, and big-box stores, rather than directly from a
carrier. Since most prepaid customers do not have a direct
relationship with a carrier, and do not enter into a contract
with a monthly bill, there is no statewide mechanism to
collect the same communications taxes and fees from prepaid
wireless customers that are currently collected from postpaid
wireless services."
As a result, state and local governments have no reliable
means for ensuring collection of these revenues, and thus lose
revenues for important services and programs.
This bill, sponsored by the Cellular Telecommunications
Industry Association, seeks to alleviate the hurdles of
assessing surcharges on prepaid wireless communication
services by developing a uniform statewide collection
mechanism.
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2)BOE Concerns . The BOE, citing its involvement in only one of
the state's telephone communications tax programs and lack of
expertise or opinion regarding the other state and local
surcharges, does not believe it should be charged with the
responsibility of convening this working group.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081