Amended  IN  Assembly  June 11, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 870

Introduced by Committee on Budget and Fiscal Review

January 10, 2018

An act relating to the Budget Act of 2018. An act to amend Section 8690.6 of the Government Code, and to amend Sections 41017, 41031, 41032, 41040, 41051, 41053, 41055, 41056, 41075, 41100, 41129, 41130, 41135, 41136, 41137, 41140, 41150, 42004, and 42010 of, to amend the heading of Article 2 (commencing with Section 41030) of Chapter 2 of Part 20 of Division 2 of, to amend and repeal Section 41025 of, to amend, repeal, and add Sections 41007, 41009, 41016.5, and 41020 of, to add Sections 41007.1, 41007.2, 41007.3, 41007.4, 41007.5, and 41028 to, to repeal Section 41033 of, and to repeal and add Sections 41004 and 41030 of, the Revenue and Taxation Code, relating to state emergencies, and making an appropriation therefor, to take effect immediately, bill related to the budget.


LEGISLATIVE COUNSEL'S DIGEST


SB 870, as amended, Committee on Budget and Fiscal Review. Budget Act of 2018. Disaster Response Emergency Operations Account: allocation of funds: notification: Emergency Telephone Users Surcharge Act.
(1) Existing law, the California Disaster Assistance Act, establishes, until January 1, 2019, the Disaster Response-Emergency Operations Account in the Special Fund for Economic Uncertainties and continuously appropriates its revenue for allocation by the Director of Finance to state agencies for disaster response operation costs incurred as a result of a proclamation by the Governor of a state of emergency. Existing law authorizes expenditure of those funds for activities that occur within 120 days after the proclamation.
This bill would delete the January 1, 2019, repeal date, would permit expenditure of those funds for an additional period, not to exceed 120 days, and would require notification to be provided to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house if it is anticipated that the continuation of activities beyond the 120-day period will be required, as specified.
By deleting the repeal date and by extending the 120-day limitation, this bill would authorize additional expenditure from a continuously appropriated account, thereby making an appropriation.
(2) The Emergency Telephone Users Surcharge Act generally imposes a surcharge on amounts paid by every person in the state for intrastate telephone communication service and VoIP service that provides access to the 911 emergency system. Under the act, the surcharge is imposed at a percentage rate not less than 0.5% nor more than 0.75% of those charges that the Office of Emergency Services annually estimates, pursuant to a specified formula, will produce sufficient revenue to fund the current fiscal year’s 911 costs, including the costs it expects to incur to plan, test, implement, and operate Next Generation 911 technology and services, as specified. Existing law requires the surcharge to be collected by a service supplier, and remitted to, and administered by, the California Department of Tax and Fee Administration. Existing law makes certain violations of the Emergency Telephone Users Surcharge Act a crime.
The Prepaid Mobile Telephony Service Surcharge Collection Act establishes a prepaid MTS surcharge, 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, that is imposed in lieu of any charges imposed pursuant to the Emergency Telephone Users Surcharge Act and specified Public Utility Commission surcharges. That act requires the prepaid MTS surcharge to be annually calculated by the California Department of Tax and Fee Administration by October 15 of each year, by using the emergency telephone user surcharge rate reported by the Office of Emergency Services and specified Public Utility Commission surcharges. The Prepaid Mobile Telephony Service Surcharge Collection Act requires, on and after January 1, 2016, and before January 1, 2020, the prepaid MTS surcharge imposed by that act on a prepaid consumer to be collected by a seller from each prepaid consumer at the time of each retail transaction in this state.
This bill would amend the Emergency Telephone Users Surcharge Act to instead impose, on and after January 1, 2019, a surcharge amount on the purchase of an access line in this state. This bill would impose a monthly surcharge amount per access line, at an amount not less than $0.20 but not greater than $0.80, based on the Office of Emergency Services’ estimate of the number of access lines to which the surcharge will be applied per month for a calendar year period that it estimates, pursuant to a specified formula, will produce sufficient revenue to fund the current fiscal year’s 911 costs.
This bill, on and after January 1, 2019, and before January 1, 2020, in lieu of the monthly surcharge imposed by this bill, would impose a surcharge paid for prepaid mobile telephony services, as part of the prepaid MTS surcharge imposed pursuant to the Prepaid Mobile Telephony Services Surcharge Collection Act, at the rate of 0.75% of the charges for mobile telecommunications services.
This bill, on and after January 1, 2020, would subject the purchase of prepaid mobile telephony services to the monthly surcharge imposed by this bill, to be paid by prepaid consumers and collected by sellers, as defined. This bill would require the Office of Emergency Services to determine an amount which is equivalent to the monthly surcharge rate imposed on the purchase of all other access lines in this state, as specified. The bill would require the surcharge to be remitted to, and administered by, the California Department of Tax and Fee Administration, in accordance with the Emergency Telephone Users Surcharge Act. By expanding the scope of crimes imposed by the Emergency Telephone Users Surcharge Act, this bill would impose a state-mandated local program.
Existing law requires amounts to be paid to the state pursuant to the Emergency Telephone Users Surcharge Act to be deposited into the State Emergency Telephone Number Account, and are required, upon appropriation by the Legislature, to be spent solely for specified purposes, including payment for the installation of, and ongoing expenses for, a basis system.
This bill would define a basis system to be 911 systems, including, but not limited to, Next Generation 911, and the subsequent technologies, and interfaces needed to deliver 911 voice and data information from the 911 caller to the emergency responder.
(3) 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.
(4) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
(5) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.

Vote: MAJORITY2/3   Appropriation: NOYES   Fiscal Committee: NOYES   Local Program: NOYES  

The people of the State of California do enact as follows:


SECTION 1.

 Section 8690.6 of the Government Code is amended to read:

8690.6.
 (a) The Disaster Response-Emergency Operations Account is hereby established in the Special Fund for Economic Uncertainties. Notwithstanding Section 13340, moneys in the account are continuously appropriated, subject to the limitations specified in subdivisions (c) (b), (c), and (d), without regard to fiscal years, for allocation by the Director of Finance to state agencies for disaster response operation costs incurred by state agencies as a result of a proclamation by the Governor of a state of emergency, as defined in subdivision (b) of Section 8558. For the purposes of this section, disaster response operations costs are defined as those that are immediate and necessary to deal with an ongoing or emerging crisis. These allocations may be for activities that occur within 120 days after a proclamation of emergency by the Governor.
(b) Funds shall be allocated from the account subject to the conditions of this section and upon notification by the Director of Finance to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house.
(c) Notwithstanding subdivision (b), the Director of Finance shall, before the expiration of the 120-day period, provide notification to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house if it is anticipated that the continuation of activities beyond the initial 120-day period will be required. The notification shall include the estimated additional amount of time required and the reasons for the additional time. Extensions shall not exceed 120 days past the initial 120-day period.

(b)

(d) It is the intent of the Legislature that the Disaster Response-Emergency Operations Account have an unencumbered balance of one million dollars ($1,000,000) at the beginning of each fiscal year. If this account requires additional moneys to meet claims against the account, the Director of Finance may transfer moneys from the Special Fund for Economic Uncertainties to the account in an amount sufficient to pay the amount of the claims that exceed the unencumbered balance in the account.

(c)Funds shall be allocated from the account subject to the conditions of this section and upon notification by the Director of Finance to the Chairperson of the Joint Legislative Budget Committee and the chairpersons of the fiscal committees in each house.

(d)

(e) Notwithstanding any other law, authorizations for acquisitions, relocations, and environmental mitigations related to activities, as described in subdivision (a), shall be authorized pursuant to this section. However, these funds shall be authorized only for needs that are a direct consequence of the proclaimed emergency if failure to undertake the project may interrupt essential state services or jeopardize public health or safety. In addition, any acquisition accomplished under this subdivision shall comply with any otherwise applicable law, except as provided in the first sentence of this subdivision.

(e)

(f) Funds allocated under this section shall not be used to supplant federal funds otherwise available in the absence of state financial relief.

(f)

(g) The amount of financial assistance provided to an individual, business, or governmental entity under this section, or pursuant to any other program of state-funded disaster assistance, shall be deducted from sums received in payment of damage claims asserted against the state, its agents, or employees, for causing or contributing to the effects of the proclaimed disaster.

(g)

(h) Any public entity administering disaster assistance to individuals shall not receive funds under this section unless it administers that assistance pursuant to the following criteria:
(1) All applications, forms, and other written materials presented to persons seeking assistance shall be available in English and in the same language as that used by the major non-English-speaking group within the disaster area.
(2) Bilingual staff who reflect the demographics of the disaster area shall be available to applicants.

(h)

(i) Notwithstanding any other law, funds in the Disaster Response-Emergency Operations Account shall not be expended for conditions in the state’s prisons, medical facilities, or youth correctional facilities resulting solely from the action or inaction of the Department of Corrections and Rehabilitation in administering those facilities.

(i)This section shall remain in effect only until January 1, 2019, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2019, deletes or extends that date.

SEC. 2.

 Section 41004 of the Revenue and Taxation Code is repealed.
41004.

“Board” means the State Board of Equalization.

SEC. 3.

 Section 41004 is added to the Revenue and Taxation Code, to read:

41004.
 “Department” means the California Department of Tax and Fee Administration.

SEC. 4.

 Section 41007 of the Revenue and Taxation Code is amended to read:

41007.
 (a) “Service supplier” shall mean both of the following:
(1) A person supplying intrastate telephone communication services to a service user in this state pursuant to California intrastate tariffs and providing access to the “911” emergency system by utilizing the digits 9-1-1.
(2) A person supplying Voice over Internet Protocol (VoIP) service to a service user in this state and providing access to the “911” emergency system by utilizing the digits 9-1-1.
(b) On and after January 1, 1988, “service supplier” also includes a person supplying intrastate telephone communication services for whom the Public Utilities Commission, by rule or order, modifies or eliminates the requirement for that person to prepare and file California intrastate tariffs.
(c) This section shall become inoperative on January 1, 2019, and shall be repealed as of that date.

SEC. 5.

 Section 41007 is added to the Revenue and Taxation Code, to read:

41007.
 (a) “Service supplier” shall mean a person supplying an access line to a service user in this state.
(b) This section shall become operative on January 1, 2019.

SEC. 6.

 Section 41007.1 is added to the Revenue and Taxation Code, to read:

41007.1.
 “Access line” shall mean any of the following:
(a) A wireline communications service line.
(b) A wireless communications service line.
(c) A VoIP service line, as defined by Section 41016.5 as added by the act adding this section.

SEC. 7.

 Section 41007.2 is added to the Revenue and Taxation Code, to read:

41007.2.
 (a) “Wireline communications service” shall mean a local exchange service provided at a physical location in this state that allows the user to make an outbound communication to the 911 emergency communications system.
(b) For the purposes of the surcharge imposed by Chapter 2 (commencing with Section 41020):
(1) A wireline communications service access line does not include a direct inward dialing number, extension, or other similar feature that routes an inbound call and cannot provide access to the 911 emergency communications system.
(2) The number of surcharges imposed shall not exceed the total number of concurrent outbound calls that can be placed to the emergency communications system at a single point of time.
(c) This definition shall apply only to this part.

SEC. 8.

 Section 41007.3 is added to the Revenue and Taxation Code, to read:

41007.3.
 (a) “Wireless communications service line” shall mean both of the following:
(1) A mobile telecommunications service provided to an end user with a place of primary use in this state that allows the end user to make an outbound communication to the 911 emergency communications system.
(2) Prepaid mobile telephony service.
(b) For the purposes of the surcharge imposed by Chapter 2 (commencing with Section 41020), not more than one surcharge may be imposed per mobile telephone number assigned to an end user of mobile telecommunications service.
(c) This definition shall apply only to this part.

SEC. 9.

 Section 41007.4 is added to the Revenue and Taxation Code, to read:

41007.4.
  “Purchase” means any transfer of title or possession, exchange, or barter, conditional or otherwise.

SEC. 10.

 Section 41007.5 is added to the Revenue and Taxation Code, to read:

41007.5.
 For purposes of this part, all of the following definitions shall apply:
(a) “Prepaid consumer” means a service user who purchases prepaid mobile telephony services in a retail transaction.
(b) “Prepaid mobile telephony services” means the right to utilize a mobile device for mobile telecommunications services or information services, including the download of digital products delivered electronically, content, and ancillary services, or both telecommunications services and information services, that must be purchased in advance of usage in predetermined units or dollars. For these purposes, “telecommunications service” and “information service” have the same meanings as defined in Section 153 of Title 47 of the United States Code.
(c) “Retail transaction” means 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.
(d) “Seller” means a person that sells prepaid mobile telephony service to a person in a retail transaction.

SEC. 11.

 Section 41009 of the Revenue and Taxation Code is amended to read:

41009.
  (a)  “Service user” means any person using intrastate telephone communication services or VoIP service in this state who is required to pay a surcharge under the provisions of this part.
(b) This section shall become inoperative on January 1, 2019, and shall be repealed as of that date.

SEC. 12.

 Section 41009 is added to the Revenue and Taxation Code, to read:

41009.
 (a) “Service user” means any person that purchases an access line in this state who is required to pay a surcharge under the provisions of this part.
(b) This section shall become operative on January 1, 2019.

SEC. 13.

 Section 41016.5 of the Revenue and Taxation Code is amended to read:

41016.5.
 (a) “VoIP service” means any service that satisfies the requirements set forth in paragraph (1) and (2).
(1) Does all of the following:
(A) Enables real-time, two-way voice communication that originates from and terminates to the user’s location using Internet Protocol (IP) or any successor protocol.
(B) Requires a broadband connection from the user’s location.
(C) Permits users, generally, to receive calls that originate on the public switched telephone network and to terminate calls to the public switched telephone network.
(2) Does at least one of the following:
(A) Requires Internet protocol-compatible customer premises equipment (CPE).
(B) When necessary, is converted to or from transmission control protocol (TCP)/IP by the service user’s service supplier before or after being switched by the public switched telephone network.
(C) Is a service that the Federal Communications Commission (FCC) has affirmatively required to provide 911 or E911 service.
(b) This definition shall only apply to this part.
(c) This section shall become inoperative on January 1, 2019, and shall be repealed as of that date.

SEC. 14.

 Section 41016.5 is added to the Revenue and Taxation Code, to read:

41016.5.
 (a) “VoIP service” means any service that satisfies the requirements set forth in paragraph (1) and (2).
(1) Does all of the following:
(A) Enables real-time, two-way voice communication that originates from and terminates to the user’s location using Internet Protocol (IP) or any successor protocol.
(B) Requires a broadband connection from the user’s location.
(C) Permits users, generally, to receive calls that originate on the public switched telephone network and to terminate calls to the public switched telephone network.
(2) Does at least one of the following:
(A) Requires Internet Protocol-compatible customer premises equipment (CPE).
(B) When necessary, is converted to or from transmission control protocol (TCP)/IP by the service user’s service supplier before or after being switched by the public switched telephone network.
(C) Is a service that the Federal Communications Commission (FCC) has affirmatively required to provide 911 or E911 service.
(b) For the purposes of the surcharge imposed by Chapter 2 (commencing with Section 41020), both of the following shall apply:
(1) A VoIP service line does not include a direct inward dialing number, extension, or other similar feature that routes an inbound call and cannot provide access to the 911 emergency communications system.
(2) The number of surcharges imposed shall not exceed the total number of concurrent outbound calls that can be placed to the emergency communications system at a single point of time.
(c) This definition shall only apply to this part.
(d) This section shall become operative on January 1, 2019.

SEC. 15.

 Section 41017 of the Revenue and Taxation Code is amended to read:

41017.
 “Private communication service” shall mean
(a) The communication service furnished to a subscriber which entitles the subscriber—
(1) To exclusive or priority use of any communication channel or groups of channels, or
(2) To the use of an intercommunication system for the subscriber’s stations, regardless of whether such channel, groups of channels, or intercommunication system may be connected through switching with a service described in Sections 41015 and 41016,
(b) Switching capacity, extension lines and stations, or other associated services which are provided in connection with, and are necessary or unique to the use of channels or systems described in subdivision (a), and
(c) The channel mileage which connects a telephone station located outside a local telephone system area with a central office in such local telephone system, except that such term shall not include any communication service unless a separate charge is made for such service.

SEC. 16.

 Section 41020 of the Revenue and Taxation Code is amended to read:

41020.
 (a) A surcharge is hereby imposed on amounts paid by every person in the state for both of the following:
(1) (A) Intrastate telephone communication service in this state.
(B) Notwithstanding subparagraph (A), on and after January 1, 2016, and before January 1, 2020, in lieu of the surcharge imposed under subparagraph (A), a surcharge shall be imposed on amounts paid for prepaid mobile telephony services pursuant to the Prepaid Mobile Telephony Services Surcharge Collection Act (Part 21 (commencing with Section 42001)).
(2) VoIP service that provides access to the “911” emergency system by utilizing the digits 9-1-1 by any service user in this state commencing on January 1, 2009. The surcharge shall not apply to charges for VoIP service where any point of origin or destination is outside of this state.
(b) (1) Notwithstanding Section 41025, charges not subject to the surcharge may be calculated by a service supplier based upon books and records kept in the regular course of business, and, for purposes of calculating the interstate revenue portion not subject to the surcharge, a service supplier may also choose a reasonable and verifiable method from the following:
(A) Books and records kept in the regular course of business.
(B) Traffic or call pattern studies representative of the service supplier’s business within California.
(C) For VoIP service only, the VoIP safe harbor factor established by the FCC to be used to calculate the service supplier’s contribution to the federal Universal Service Fund. The FCC safe harbor factor in effect for VoIP service on September 1 of each year shall apply for the period of January 1 to December 31, inclusive, of the next succeeding calendar year for purposes of this method. At the time the FCC establishes a safe harbor factor for the federal Universal Service Fund for VoIP service that is greater than 75 percent for interstate revenue or abolishes the safe harbor factor applicable to VoIP service, this method shall become void and of no effect, in which case a VoIP service supplier may use an alternative method approved in advance by the board, which shall be available to all VoIP service suppliers. The FCC safe harbor factor applicable to VoIP service, as described in this subparagraph, is used solely as a mechanism to calculate the charges not subject to the surcharge for VoIP service and is not necessarily reflective of the intrastate portion of VoIP service. The use of the FCC safe harbor factor authorized by this subdivision shall not be interpreted to permit application of any intrastate requirement, other than the surcharge imposed under this part, upon VoIP service suppliers.
(2) Any method chosen by a service supplier shall remain in effect for at least one calendar year.
(3)  If a service supplier reasonably relies upon books and records kept in the regular course of business or any documentation that satisfies the reasonable and verifiable method, then the service supplier’s determination of the portion of the billed amount attributable to services not subject to the surcharge shall be rebuttably presumed to be correct. The service supplier’s choice of books and records or other method and surcharge billing practice shall also be rebuttably presumed to be fair and legal business practices.
(4) It is the intent of the Legislature that the provisions of subparagraph (C) shall not be considered to be a precedent for the application of the surcharge or any other tax or fee where a person is required to collect a tax or fee imposed upon another.
(c) The surcharge imposed shall be at the rate of one-half of 1 percent of the charges made for the services to and including November 1, 1982, and thereafter at a rate fixed pursuant to Article 2 (commencing with Section 41030).
(d) The surcharge shall be paid by the service user as hereinafter provided.
(e) The surcharge imposed shall not apply to either of the following:
(1) In accordance with the Mobile Telecommunications Sourcing Act (Public Law 106-252), which is incorporated herein by reference, to any charges for mobile telecommunications services billed to a customer where those services are provided, or deemed provided, to a customer whose place of primary use is outside this state. Mobile telecommunications services shall be deemed provided by a customer’s home service provider to the customer if those services are provided in a taxing jurisdiction to the customer, and the charges for those services are billed by or for the customer’s home service provider.
(2) To any charges for VoIP service billed to a customer where those services are provided to a customer whose place of primary use of VoIP service is outside this state.
(f) For purposes of this section:
(1) “Charges for mobile telecommunications services” means any charge for, or associated with, the provision of commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations, as in effect on June 1, 1999, or any charge for, or associated with, a service provided as an adjunct to a commercial mobile radio service, that is billed to the customer by or for the customer’s home service provider, regardless of whether individual transmissions originate or terminate within the licensed service area of the home service provider.
(2) “Customer” means (A) the person or entity that contracts with the home service provider for mobile telecommunications services, or with a VoIP service provider for VoIP service, or (B) if the end user of mobile telecommunications services or VoIP service is not the contracting party, the end user of the mobile telecommunications service or VoIP service. This paragraph applies only for the purpose of determining the place of primary use. The term “customer” does not include (A) a reseller of mobile telecommunications service or VoIP communication service, or (B) a serving carrier under an arrangement to serve the mobile customer outside the home service provider’s licensed service area.
(3) “Home service provider” means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications services.
(4) “Licensed service area” means the geographic area in which the home service provider is authorized by law or contract to provide commercial mobile radio service to the customer.
(5) “Mobile telecommunications service” means commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations, as in effect on June 1, 1999.
(6) “Place of primary use” means the street address representative of where the customer’s use of the mobile telecommunications service or VoIP service primarily occurs, that must be:
(A) The residential street address or the primary business street address of the customer.
(B) With respect to mobile telecommunications service, within the licensed service area of the home service provider.
(7) (A) “Reseller” means a provider who purchases telecommunications services or VoIP service from another telecommunications service provider or VoIP service and then resells the services, or uses the services as a component part of, or integrates the purchased services into, a mobile telecommunications service or VoIP service.
(B) “Reseller” does not include a serving carrier with which a home service provider arranges for the services to its customers outside the home service provider’s licensed service area.
(8) “Serving carrier” means a facilities-based carrier providing mobile telecommunications service to a customer outside a home service provider’s or reseller’s licensed area.
(9) “Taxing jurisdiction” means any of the several states, the District of Columbia, or any territory or possession of the United States, any municipality, city, county, township, parish, transportation district, or assessment jurisdiction, or any other political subdivision within the territorial limits of the United States with the authority to impose a tax, charge, or fee.
(10) “VoIP service provider” means that provider of VoIP service with whom the end user customer contracts for the provision of VoIP services for the customer’s own use and not for resale.
(11) “Prepaid mobile telephony services” has the same meaning as in subdivision (k) of Section 42004.
(g) This section shall become inoperative on January 1, 2019, and shall be repealed as of that date.

SEC. 17.

 Section 41020 is added to the Revenue and Taxation Code, to read:

41020.
 (a) (1) On and after January 1, 2019, a surcharge is hereby imposed on the purchase of an access line in this state at an amount determined under Article 2 (commencing with Section 41030).
(2) The surcharge shall be paid by the service user as hereinafter provided.
(b) (1) Notwithstanding subdivision (a), on and after January 1, 2019, and before January 1, 2020, in lieu of the surcharge imposed under subdivision (a), a surcharge as specified in subdivision (f) of Section 41030 shall be imposed on amounts paid for prepaid mobile telephony services pursuant to the Prepaid Mobile Telephony Services Surcharge Collection Act (Part 21 (commencing with Section 42001)) and remitted and administered in accordance with that act.
(2) On and after January 1, 2020, the purchase of prepaid mobile telephony services in this state shall be subject to the surcharge imposed by subdivision (a), as determined under Article 2 (commencing with Section 41030). The surcharge shall be paid by the prepaid consumer in accordance with Section 41028 and remitted and administered in accordance with this part.
(c) The surcharge imposed shall not apply to either of the following:
(1) In accordance with the Mobile Telecommunications Sourcing Act (Public Law 106-252), which is incorporated herein by reference, to any charges for mobile telecommunications services billed to a customer where those services are provided, or deemed provided, to a customer whose place of primary use is outside this state. Mobile telecommunications services shall be deemed provided by a customer’s home service provider to the customer if those services are provided in a taxing jurisdiction to the customer, and the charges for those services are billed by or for the customer’s home service provider.
(2) To any charges for VoIP service billed to a customer where those services are provided to a customer whose place of primary use of VoIP service is outside this state.
(d) For purposes of this section:
(1) “Charges for mobile telecommunications services” means any charge for, or associated with, the provision of commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations, as in effect on June 1, 1999, or any charge for, or associated with, a service provided as an adjunct to a commercial mobile radio service, that is billed to the customer by or for the customer’s home service provider, regardless of whether individual transmissions originate or terminate within the licensed service area of the home service provider.
(2) “Customer” means (A) the person or entity that contracts with the home service provider for mobile telecommunications services, or with a VoIP service provider for VoIP service, or (B) if the end user of mobile telecommunications services or VoIP service is not the contracting party, the end user of the mobile telecommunications service or VoIP service. This paragraph applies only for the purpose of determining the place of primary use. The term “customer” does not include (A) a reseller of mobile telecommunications service or VoIP communication service, or (B) a serving carrier under an arrangement to serve the mobile customer outside the home service provider’s licensed service area.
(3) “Home service provider” means the facilities-based carrier or reseller with which the customer contracts for the provision of mobile telecommunications services.
(4) “Licensed service area” means the geographic area in which the home service provider is authorized by law or contract to provide commercial mobile radio service to the customer.
(5) “Mobile telecommunications service” means commercial mobile radio service, as defined in Section 20.3 of Title 47 of the Code of Federal Regulations, as in effect on June 1, 1999.
(6) “Place of primary use” means the street address representative of where the customer’s use of the mobile telecommunications service or VoIP service primarily occurs, that must be:
(A) The residential street address or the primary business street address of the customer.
(B) With respect to mobile telecommunications service, within the licensed service area of the home service provider.
(7) (A) “Reseller” means a provider who purchases telecommunications services or VoIP service from another telecommunications service provider or VoIP service and then resells the services, or uses the services as a component part of, or integrates the purchased services into, a mobile telecommunications service or VoIP service.
(B) “Reseller” does not include a serving carrier with which a home service provider arranges for the services to its customers outside the home service provider’s licensed service area.
(8) “Serving carrier” means a facilities-based carrier providing mobile telecommunications service to a customer outside a home service provider’s or reseller’s licensed area.
(9) “Taxing jurisdiction” means any of the several states, the District of Columbia, or any territory or possession of the United States, any municipality, city, county, township, parish, transportation district, or assessment jurisdiction, or any other political subdivision within the territorial limits of the United States with the authority to impose a tax, charge, or fee.
(10) “VoIP service provider” means that provider of VoIP service with whom the end user customer contracts for the provision of VoIP services for the customer’s own use and not for resale.

SEC. 18.

 Section 41025 of the Revenue and Taxation Code is amended to read:

41025.
  (a)  If a bill is rendered to persons using intrastate telephone services or VoIP service, the amount on which the surcharge with respect to such services shall be based shall be the sum of all charges for such services included in the bill; except that if the person who renders the bill groups individual items for purposes of rendering the bill and computing the surcharge, then the amount on which the surcharge with respect to each such group shall be based shall be the sum of all items within that group, and the surcharge on the remaining items not included in any such group shall be based on the charge for each item separately.
(b) This section shall become inoperative on January 1, 2019, and shall be repealed as of that date.

SEC. 19.

 Section 41028 is added to the Revenue and Taxation Code, to read:

41028.
 (a) (1) On and after January 1, 2020, the surcharge amount imposed by Section 41020 on the purchase of prepaid mobile telephony services in this state shall be collected by a seller from each prepaid consumer at the time of each retail transaction in this state.
(2) The amount of the surcharge shall be separately stated on an invoice, receipt, or other similar document that is provided to the prepaid consumer of mobile telephony services by the seller, or otherwise disclosed electronically to the prepaid consumer, at the time of the retail transaction.
(b) (1) The surcharge that is required to be collected by a seller and any amount unreturned to the prepaid consumer of mobile telephony services that is not owed as part of the surcharge, but was collected from the prepaid consumer under the representation by the seller that it was owed as part of the surcharge, constitutes debts owed by the seller to this state.
(2) A seller that has collected any amount of surcharge in excess of the amount of the surcharge imposed by this part and actually due from a prepaid consumer may refund that amount to the prepaid consumer, even though the surcharge amount has already been paid over to the department and no corresponding credit or refund has yet been secured. Any seller making a refund of any charge to a prepaid consumer may repay therewith the amount of the surcharge paid. The seller may claim credit for such overpayment against the amount of surcharge imposed by this part which is due upon any other quarterly return, providing such credit is claimed in a return dated no later than three years from the date of overpayment.
(c) (1) Every prepaid consumer of prepaid mobile telephony services in this state is liable for the surcharge until it has been paid to this state, except that payment to a seller registered under this part relieves the prepaid consumer from further liability for the surcharge and local charges. Any surcharge collected from a prepaid consumer that has not been remitted to the department shall be a debt owed to the state by the person required to collect and remit the surcharge. Nothing in this part shall impose any obligation upon a seller to take any legal action to enforce the collection of the surcharge or local charge imposed by this section.
(2) A credit shall be allowed against, but shall not exceed, the surcharge amount imposed on any prepaid consumer of mobile telephony services by this part to the extent that the prepaid consumer has paid emergency telephone users charges on the purchase to any other state, political subdivision thereof, or the District of Columbia. The credit shall be apportioned to the charges against which it is allowed in proportion to the amounts of those charges.
(d) (1) A seller is relieved from liability to collect the prepaid MTS surcharge imposed by this part that became due and payable, insofar as the base upon which the surcharge is imposed is represented by accounts that have been found to be worthless and charged off for income tax purposes by the seller or, if the seller is not required to file income tax returns, charged off in accordance with generally accepted accounting principles. A seller that has previously paid the surcharge may, under rules and regulations prescribed by the board, take as a deduction on its return the amount found worthless and charged off by the seller. If any such accounts are thereafter in whole or in part collected by the seller, the amount so collected shall be included in the first return filed after such collection and the surcharge shall be paid with the return.
(e) For purposes of this part, all of the following definitions shall apply:
(1) “Prepaid consumer” means a service user who purchases prepaid mobile telephony services in a retail transaction.
(2) “Retail transaction” means 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. For these purposes, a “purchase” means any transfer of title or possession, exchange, or barter, conditional or otherwise.
(3) “Seller” means a person that sells prepaid mobile telephony service to a person in a retail transaction.
(f) For purposes of this section, a retail transaction occurs in the state under any of the following circumstances:
(1) The prepaid consumer makes the retail transaction in person at a business location in the state (point-of-sale transaction).
(2) If paragraph (1) is not applicable, the prepaid consumer’s address is in the state (known-address transaction). A known-address transaction occurs in the state under any 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) If the prepaid consumer’s address is known by the seller to be in the state, including 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.
(3) If an address is not available to the seller to determine whether any of the circumstances in paragraph (2) exist, the transaction will be deemed to be a known-address transaction occurring in this state if the mobile telephone number is associated with a location in this state.

SEC. 20.

 The heading of Article 2 (commencing with Section 41030) of Chapter 2 of Part 20 of Division 2 of the Revenue and Taxation Code is amended to read:
Article  2. Adjustment of Surcharge Rate Amount

SEC. 21.

 Section 41030 of the Revenue and Taxation Code, as amended by Section 49 of Chapter 25 of the Statutes of 2015, is repealed.
41030.

(a)The Office of Emergency Services shall determine annually, on or before October 1, to be effective on January 1 of the following year, a surcharge rate pursuant to subdivision (b) that it estimates will produce sufficient revenue to fund the current fiscal year’s 911 costs.

(b)(1)The surcharge rate shall be determined by dividing the costs (including incremental costs) the Office of Emergency Services estimates for the current fiscal year of 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, 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 and VoIP service to which the surcharge will apply for the period of January 1, 2015, to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge rate in any year be greater than three-quarters of 1 percent nor less than one-half of 1 percent.

(2)Commencing with the calculation made October 1, 2015, to be effective January 1, 2016, the surcharge shall be determined by dividing the costs (including incremental costs) the Office of Emergency Services estimates for the current fiscal year of 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, 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 mobile telephony services, and VoIP service to which the surcharge will apply for the period of January 1 to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge rate in any year be greater than three-quarters of 1 percent or less than one-half of 1 percent. In making its computation of the charges that are applicable to the intrastate portion of prepaid mobile telephony services, the Office of Emergency Services shall use the computation method developed by the Public Utilities Commission and reported to the Office of Emergency Services pursuant to subdivisions (a) and (b) of Section 319 of the Public Utilities Code.

(c)When determining the surcharge rates pursuant to this section, the office shall include the costs it expects to incur to plan, test, implement, and operate Next Generation 911 technology and services, including text to 911 service, consistent with the plan and timeline required by Section 53121 of the Government Code.

(d)The office shall notify the board of the surcharge rate imposed under this part, determined pursuant to this section on or before October 1 of each year, and the surcharge rate applicable to prepaid mobile telephony services determined pursuant to this section for purposes of the prepaid MTS surcharge calculated under Part 21 (commencing with Section 42001) on or before October 15 of each year.

(e)At least 30 days prior to determining the surcharge pursuant to subdivision (a), the Office of Emergency Services shall prepare a summary of the calculation of the proposed surcharge and make it available to the public, the Legislature, the 911 Advisory Board, and on its Internet Web site. The summary shall contain all of the following:

(1)The prior year revenues to fund 911 costs, including, but not limited to, revenues from prepaid service.

(2)Projected expenses and revenues from all sources, including, but not limited to, prepaid service to fund 911 costs.

(3)The rationale for adjustment to the surcharge determined pursuant to subdivision (b), including, but not limited to, all impacts from the surcharge collected pursuant to Part 21 (commencing with Section 42001).

(f)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.

SEC. 22.

 Section 41030 of the Revenue and Taxation Code, as added by Chapter 926 of the Statutes of 2014, is repealed.
41030.

(a)The Office of Emergency Services shall determine annually, on or before October 1, a surcharge rate that it estimates will produce sufficient revenue to fund the current fiscal year’s 911 costs. The surcharge rate shall be determined by dividing the costs (including incremental costs) the Office of Emergency Services estimates for the current fiscal year of 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, 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 and VoIP service to which the surcharge will apply for the period of January 1 to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge rate in any year be greater than three-quarters of 1 percent nor less than one-half of 1 percent.

(b)When determining the surcharge rate, the office shall include the costs it expects to incur to plan, test, implement, and operate Next Generation 911 technology and services, including text to 911 service, consistent with the plan and timeline required by Section 53121 of the Government Code.

(c)At least one month before determining the surcharge rate pursuant to subdivision (a), the office shall prepare a summary of the calculation of the proposed surcharge and make it available to the Legislature and the 911 Advisory Board, and on the office’s Internet Web site.

(d)This section shall become operative on January 1, 2020.

SEC. 23.

 Section 41030 is added to the Revenue and Taxation Code, to read:

41030.
 (a) The Office of Emergency Services shall determine annually, on or before October 1, to be effective on January 1 of the following year, a surcharge amount pursuant to subdivision (b) that it estimates will produce sufficient revenue to fund the current fiscal year’s 911 costs.
(b) (1) For the determination made by the office on or before October 1, 2018, that is applicable for the calendar year beginning on January 1, 2019, and ending on December 31, 2019, the surcharge amount shall be determined annually by dividing the costs, including incremental costs, the Office of Emergency Services estimates for the current fiscal year of 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, less the available balance in the State Emergency Telephone Number Account in the General Fund and less estimated 911 revenues from the prepaid MTS surcharge described in subdivision (b) of Section 41020, by its estimate of the number of access lines to which the surcharge will be applied per month for a period of January 1 to December 31, inclusive, but in no event shall the surcharge amount in any month be greater than eighty cents ($0.80) per access line per month nor less than twenty cents ($0.20) per access line per month.
(2) For determinations made that are applicable to the calendar year beginning on January 1, 2020, and each calendar year thereafter, the surcharge amount shall be determined annually by dividing the costs, including incremental costs, the Office of Emergency Services estimates for the current fiscal year of 911 costs approved pursuant to Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code, less the available balance in the State Emergency Telephone Number Account in the General Fund, by its estimate of the number of access lines to which the surcharge will apply per month for the period of January 1 to December 31, inclusive, of the next succeeding calendar year, but in no event shall the surcharge amount in any month be greater than eighty cents ($0.80) per access line per month nor less than twenty cents ($0.20) per access line per month.
(c) When determining the surcharge amount pursuant to this section, the office shall include the costs it expects to incur to plan, test, implement, and operate Next Generation 911 technology and services, including text to 911 service, consistent with the plan and timeline required by Section 53121 of the Government Code.
(d) (1) Service suppliers shall report the total number of access lines to the Office of Emergency Services, on or before August 1, for the previous period of January 1 to December 31, inclusive.
(2) The total number of access lines required to be reported in paragraph (1) shall include all lines from the categories of wireline communication service line, wireless communication service line, prepaid mobile telephony service line, and VoIP service line. The number of access line figures shall be reported individually for these categories.
(e) The office shall perform a validation of the number of access lines using subscription data or other comparable data collected by appropriate federal or state agencies. This subscription data or other comparable data shall be used to validate the access line data required to be reported by service suppliers in subdivision (d).
(f) (1) The office shall notify the department of the surcharge amount imposed under this part, determined pursuant to this section on or before October 1 of each year.
(2) For purposes of the prepaid MTS surcharge calculated under Part 21 (commencing with Section 42001) for the year commencing on January 1, 2019, and ending on December 31, 2019, the 911 surcharge imposed on prepaid mobile telephony services shall be three-quarters of 1 percent of the charges for mobile telecommunications services.
(3) For purposes of the surcharge amount imposed on the purchase of prepaid mobile telephony services in this state on and after January 1, 2020, the office shall determine an amount which is equivalent to the monthly surcharge rate imposed on the purchase of all other access lines in this state. In making the determination, the office may use any reasonable data available and may set varying surchange amounts based on services amounts that approximate average monthly usage by service users who pay for access lines on a monthly billing cycle.
(g) (1) At least 30 days prior to determining the surcharge pursuant to subdivision (a), the Office of Emergency Services shall prepare a summary of the calculation of the proposed surcharge and make it available to the public, the Legislature, the 911 Advisory Board, and on its Internet Web site.
(2) For determinations made on or before October 1, 2018, the summary shall contain all of the following:
(A) The prior year revenues to fund 911 costs, including, but not limited to, revenues from prepaid service.
(B) Projected expenses and revenues from all sources, including, but not limited to, prepaid service to fund 911 costs.
(C) The rationale for adjustment to the surcharge determined pursuant to subdivision (b), including, but not limited to, all impacts from the surcharge collected pursuant to Part 21 (commencing with Section 42001).
(h) For purposes of this section, for the determination made by the office on or before October 1, 2018, that is applicable for the calendar year beginning on January 1, 2019, and ending on December 31, 2019, the following definitions shall apply:
(1) “Service supplier” shall mean a person supplying an access line to a service user in this state.
(2) “Service user” means any person that purchases an access line in this state who is required to pay a surcharge under the provisions of this part.

SEC. 24.

 Section 41031 of the Revenue and Taxation Code is amended to read:

41031.
 The Office of Emergency Services shall make its determination of the surcharge rate amount each year no later than October 1 and shall notify the board department of the new rate, amount, which shall be fixed by the board department to be effective with respect to charges made for intrastate telephone communication services and VoIP service access lines on or after January 1 of the next succeeding calendar year.

SEC. 25.

 Section 41032 of the Revenue and Taxation Code is amended to read:

41032.
 Immediately upon notification by the Office of Emergency Services and fixing the surcharge rate, amount, the board department shall each year no later than November 15 publish in its minutes the new rate, amount, and it shall notify every service supplier registered with it of the new rate amount by a means, or means determined by the board, department, that may include, but is not limited to, mail, electronic mail, or Internet Web site postings.

SEC. 26.

 Section 41033 of the Revenue and Taxation Code is repealed.
41033.

(a)For purposes of this section, the following terms have the following meanings:

(1)“Direct seller,” “prepaid mobile telephony services,” “prepaid MTS provider,” “retail transaction,” and “seller” have the same meanings as defined in Section 42004.

(2)“Prepaid MTS 911 Account” means the Prepaid MTS 911 Account created in the Prepaid Mobile Telephony Services Surcharge Fund pursuant to Section 42023.

(b)(1)For each fiscal year, beginning with the 2016–17 fiscal year and ending with the 2018–19 fiscal year, the board shall calculate the following on or before the November 1 following the end of that fiscal year:

(A)The total collections for the fiscal year of that portion of the prepaid MTS surcharge that is for the emergency telephone users surcharge, net of any amounts that a seller was permitted to deduct and retain pursuant to subdivision (e) of Section 42010.

(B)Less the expenses incurred and reimbursed to the board for the fiscal year from that portion of the prepaid MTS surcharge that is for the emergency telephone users surcharge pursuant to subdivision (e) of Section 42020.

(2)The board shall provide notification of whether the amount calculated in this section exceeds or is less than nine million nine hundred thousand dollars ($9,900,000) on its Internet Web site by December 15 following the calculation, along with the underlying calculations, assumptions, and methodology.

(c)If for any fiscal year the calculation performed pursuant to subdivision (b) results in an amount less than nine million nine hundred thousand dollars ($9,900,000), the deficiency shall be the responsibility, on a pro rata basis of each prepaid MTS provider or direct seller, as provided in this subdivision. The board shall calculate the deficiency and bill each prepaid MTS provider or direct seller its pro rata share of that deficiency based upon each prepaid MTS provider’s or direct seller’s percentage share of total California intrastate prepaid mobile telephony services revenues, as reported to the Public Utilities Commission pursuant to Section 319 of the Public Utilities Code for the prior fiscal year.

(d)For each fiscal year, beginning with the 2016–17 fiscal year and ending with the 2018–19 fiscal year, each prepaid MTS provider or direct seller shall, on or before September 1 of each year, report to the board the amount of that portion of the prepaid MTS surcharge that is for the emergency telephone users surcharge, remitted by the provider or seller pursuant to subdivision (f) of Section 42010 for the prior fiscal year.

(e)The Public Utilities Commission, within 45 days of request, shall provide the board the name and address of each prepaid MTS provider and direct seller and each prepaid MTS provider’s and direct seller’s California intrastate prepaid mobile telephone services revenue, along with the provider’s and seller’s percentage share of total California intrastate prepaid mobile telephony services revenue for the prior fiscal year, and any other information the board deems necessary.

(f)The obligation of each prepaid MTS provider and direct seller shall be enforced by serving a notice in the manner prescribed for service of a notice of a deficiency determination, not later than three years after the date the board determines that the calculation performed pursuant to subdivision (b) results in a deficiency for the previous fiscal year. Notwithstanding any provisions to the contrary in this part, a petition for a redetermination of a notice issued pursuant to this subdivision may be filed within 60 days after service upon the person of notice thereof. Solely for purposes of a notice issued pursuant to this subdivision, interest shall begin to accrue at the expiration of the 60-day period. If a petition for redetermination is not filed within the 60-day period, the determination becomes final at the expiration of that period. All determinations made by the board under this section are due and payable at the time they become final. If they are not paid when due and payable, a penalty of 10 percent of the amount of the determination, exclusive of interest and penalties, shall be added thereto. Interest shall apply in accordance with Article 6 (commencing with Section 41095). The liability imposed by this section shall be collected by the board in accordance with the provisions of this part.

(g)This section shall remain in effect only until January 1, 2020, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2020, deletes or extends that date.

SEC. 27.

 Section 41040 of the Revenue and Taxation Code is amended to read:

41040.
 Every service supplier or seller in this state shall register with the board upon a form prescribed by the board and shall set forth the name under which it transacts or intends to transact business and such other information as the board may require.

SEC. 28.

 Section 41051 of the Revenue and Taxation Code is amended to read:

41051.
 The surcharges imposed by this part and the amounts thereof required to be collected are due monthly, and the amount of surcharge collected in one calendar month by the service supplier or seller shall be remitted to the board department on or before the last day of the second month following the month in which the surcharges were collected. However, the fourth quarter collection for the 1996 calendar year shall be remitted no later than February 15, 1997.

SEC. 29.

 Section 41053 of the Revenue and Taxation Code is amended to read:

41053.
 The person required to file the return shall deliver the return together with a remittance of the amount of the surcharge payable to the office of the board. department.

SEC. 30.

 Section 41055 of the Revenue and Taxation Code is amended to read:

41055.
 All amounts required to be paid to the state under this part shall be paid to the board in the form of remittances payable to the State Board California Department of Equalization of the State of California. Tax and Fee Administration.

SEC. 31.

 Section 41056 of the Revenue and Taxation Code is amended to read:

41056.
 The service supplier or seller shall maintain such records as may be necessary to determine the amount of surcharge collected under provisions of this part. Those records shall be maintained for a period of four years from the time the surcharge is due.

SEC. 32.

 Section 41075 of the Revenue and Taxation Code is amended to read:

41075.
 The board department shall give to the service supplier supplier, seller, or service user written notice of its determination. The notice shall be placed in a sealed envelope with postage paid addressed to the service supplier supplier, seller, or service user at his the service supplier, seller, or service user’s address as it appears in the records of the board. department. The giving of notice shall be deemed complete at the time of the deposit of the notice in the United States post office or facility regularly maintained or provided by the United States Postal Service, without extension of time for any reason. In lieu of mailing, a notice may be served personally by delivering to the person to be served and service shall be deemed complete at the time of such delivery. Personal service to a corporation may be made by delivery of a notice to any person designated in the Code of Civil Procedure to be served for the corporation with summons and complaint in a civil action.

SEC. 33.

 Section 41100 of the Revenue and Taxation Code is amended to read:

41100.
 If the board department determines that any amount, penalty, or interest has been paid more than once or has been erroneously or illegally collected or computed, the board department shall set forth that fact in the records of the board, department, certify the amount collected in excess of the amount legally due and the person from whom it was collected or by whom paid, and credit the excess amount collected or paid on any amounts then due and payable from the person from whom the excess amount was collected or by whom it was paid under this part, and the balance shall be refunded to the person, or his or her successors, administrators, or executors. Any proposed determination by the board department pursuant to this section with respect to an amount in excess of fifty thousand dollars ($50,000) shall be available as a public record for at least 10 days prior to the effective date of that determination.
Any overpayment of the surcharge by a service user to a service supplier or seller who is required to collect the surcharge shall be credited or refunded by the state to the service user. However, if the service supplier or seller has paid the amount to the board department and establishes to the satisfaction of the board department that it has not collected the amount from the service user or has refunded the amount to the service user, the overpayment may be credited or refunded by the state to the service supplier.

SEC. 34.

 Section 41129 of the Revenue and Taxation Code is amended to read:

41129.
 Every service supplier or seller in this state shall keep such records pertaining thereto in such form as the board department may require.

SEC. 35.

 Section 41130 of the Revenue and Taxation Code is amended to read:

41130.
 Upon proper notification to the service supplier, supplier or seller, the board department or its authorized representative shall have the right to inspect and audit all records and returns of the service supplier or seller at all reasonable times.

SEC. 36.

 Section 41135 of the Revenue and Taxation Code is amended to read:

41135.
 All amounts required to be paid to the state under this part shall be paid to the board department in the form of remittances payable to the State Board California Department of Equalization of the State of California. Tax and Fee Administration. The board department shall transmit the payments to the State Treasurer to be deposited in the State Treasury to the credit of the State Emergency Telephone Number Account in the General Fund, which is hereby created.

SEC. 37.

 Section 41136 of the Revenue and Taxation Code is amended to read:

41136.
 From the funds in the State Emergency Telephone Number Account, a minimum of one-half of 1 75 percent of the charges for intrastate telephone communications and VoIP service to which total amount of the surcharge applies collected shall, when appropriated by the Legislature, be spent solely for the following purposes:
(a) To pay refunds authorized by this part.
(b) To pay the State Board of Equalization department for the cost of the administration of this part.
(c) To pay the Office of Emergency Services for its costs in administration of the “911” emergency telephone number system.
(d) To pay bills submitted to the Office of Emergency Services by service suppliers or communications equipment companies for the installation of, and ongoing expenses for, the following communications services supplied to local agencies in connection with the “911” emergency phone number system:
(1) A basic system. system, defined as 911 systems, including, but not limited to, Next Generation 911, and the subsequent technologies, and interfaces needed to deliver 911 voice and data information from the 911 caller to the emergency responder.
(2) A basic system with telephone central office identification.
(3) A system employing automatic call routing.
(4) Approved incremental costs.
(e) To pay claims of local agencies for approved incremental costs, not previously compensated for by another governmental agency.
(f) To pay claims of local agencies for incremental costs and amounts, not previously compensated for by another governmental agency, incurred prior to the effective date of this part, for the installation and ongoing expenses for the following communication services supplied in connection with the “911” emergency telephone number system:
(1) A basic system. system, defined as 911 systems, including, but not limited to, Next Generation 911, and the subsequent technologies, and interfaces needed to deliver 911 voice and data information from the 911 caller to the emergency responder.
(2) A basic system with telephone central office identification.
(3) A system employing automatic call routing.
(4) Approved incremental costs. Incremental costs shall not be allowed unless the costs are concurred in by the Office of Emergency Services.

SEC. 38.

 Section 41137 of the Revenue and Taxation Code is amended to read:

41137.
 The Office of Emergency Services shall pay, from funds appropriated from the State Emergency Telephone Number Account by the Legislature, as provided in Section 41138, bills submitted by service suppliers or communications equipment companies for the installation and ongoing costs of the following communication services provided local agencies by service suppliers in connection with the “911” emergency telephone number system:
(a) A basic system. system, defined as 911 systems, including, but not limited to, Next Generation 911, and the subsequent technologies, and interfaces needed to deliver 911 voice and data information from the 911 caller to the emergency responder.
(b) A basic system with telephone central office identification.
(c) A system employing automatic call routing.
(d) Approved incremental costs that have been concurred in by the Office of Emergency Services.

SEC. 39.

 Section 41140 of the Revenue and Taxation Code is amended to read:

41140.
 The Office of Emergency Services shall reimburse local agencies, from funds appropriated from the Emergency Telephone Number Account by the Legislature, for amounts not previously compensated for by another governmental agency, which have been paid by agencies for approved incremental costs or to service suppliers or communication equipment companies for the following communications services supplied in connection with the “911” emergency telephone number, provided local agency plans had been approved by the Office of Emergency Services:
(a) A basic system. system, defined as 911 systems, including, but not limited to, Next Generation 911, and the subsequent technologies, and interfaces needed to deliver 911 voice and data information from the 911 caller to the emergency responder.
(b) A basic system with telephone central office identification.
(c) A system employing automatic call routing.
(d) Approved incremental costs.

SEC. 40.

 Section 41150 of the Revenue and Taxation Code is amended to read:

41150.
 The Legislature hereby declares and finds that to enable public agencies to implement “911” emergency phone systems required by the provisions of Chapter 1005 of the 1972 Regular Session (Article 6 (commencing with Section 53100) of Chapter 1 of Part 1 of Division 2 of Title 5 of the Government Code) it is necessary that a surcharge be imposed upon amounts paid access lines purchased by every person in the state for intrastate telephone communication services in this state. access to the 911 emergency communication system. This bill act will provide funding for basic 911, basic 911 (including telephone central office identification) 911 with selective routing or a combination of as defined in Section 41136, and the above. These services will include incoming technology and interfaces needed to deliver 911 lines/trunks, voice and data information from the 911 answering positions including common control equipment, transfer lines and transfer positions. caller to the emergency responder. In addition, this part will provide funding for incremental costs.

SEC. 41.

 Section 42004 of the Revenue and Taxation Code is amended to read:

42004.
 For purposes of this part, the following terms have the following meanings:
(a)  “Board” “Department” means the State Board California Department of Equalization. Tax and Fee Administration.
(b) (1) “Direct seller” means a prepaid MTS provider or service supplier, as defined in Section 41007, that makes a sale of prepaid mobile telephony services directly to a prepaid consumer for any purpose other than resale in the regular course of business. A direct seller includes, but is not limited, to any of the following:
(A) A telephone corporation, as defined by Section 234 of the Public Utilities Code.
(B) An interconnected Voice over Internet Protocol (VoIP) service, as defined in Section 285 of the Public Utilities Code.
(C) A retailer, as defined by Section 6203, that is a member of the same commonly controlled group, as defined in Section 25105, or that is a member of the same combined reporting group, as defined in paragraph (3) of subdivision (b) of Section 25106.5 of Title 18 of the California Code of Regulations, as an entity described in subparagraph (A) or (B).
(2) For purposes of this subdivision, “sale” means any transfer of title, possession, exchange, or barter, conditional or otherwise.
(c) “Emergency telephone users surcharge” means surcharges authorized pursuant to the Emergency Telephone Users Surcharge Act (Part 20 (commencing with Section 41001)) to be collected from prepaid consumers of mobile telephony services.
(d) “In this state” means within the exterior limits of the State of California and includes all territory within those limits owned by or ceded to the United States of America.
(e) “Local charges” means those charges described in subdivision (a) of Section 42101.
(f) “Local jurisdiction” or “local agency” means a city, county, or city and county, which includes a charter city, county, or city and county.
(g) “Mobile data service” has the same meaning as defined in Section 224.4 of the Public Utilities Code.
(h) “Mobile telephony service” or “MTS” has the same meaning as defined in Section 224.4 of the Public Utilities Code.
(i) “Person” includes any individual, firm, partnership, joint venture, limited liability company, association, social club, fraternal organization, corporation, estate, trust, business trust, receiver, assignee for the benefit of creditors, trustee, trustee in bankruptcy, syndicate, the United States, this state, any city, county, city and county, municipality, district, or other political subdivision of the state, or any other group or combination acting as a unit.
(j) “Prepaid consumer” means a person who purchases prepaid mobile telephony services in a retail transaction.
(k) “Prepaid mobile telephony services” means the right to utilize a mobile device for mobile telecommunications services or information services, including the download of digital products delivered electronically, content, and ancillary services, or both telecommunications services and information services, that must be purchased in advance of usage in predetermined units or dollars. For these purposes, “telecommunications service” and “information service” have the same meanings as defined in Section 153 of Title 47 of the United States Code.
(l) “Prepaid MTS provider” means a telephone corporation, pursuant to Section 234 of the Public Utilities Code, that provides prepaid mobile telephony services.
(m) “Prepaid MTS surcharge” means the surcharge that consists of the emergency telephone users surcharge and the Public Utilities Commission surcharges, as calculated pursuant to subdivision (b) of Section 42010, that is required to be collected by a seller from a prepaid consumer.
(n) “Public Utilities Commission surcharges” means surcharges authorized by the Public Utilities Commission to be billed and collected from end-use consumers of wireless communications services, and of which the commission provides the board department with notice pursuant to Section 319 of the Public Utilities Code, including:
(1) The California High-Cost Fund-A Administrative Committee Fund program surcharge (Section 275.6 of the Public Utilities Code).
(2) The California High-Cost Fund-B Administrative Committee Fund program surcharge (Section 739.3 of the Public Utilities Code).
(3) The Deaf and Disabled Telecommunications Program Administrative Committee Fund surcharge (Section 2881 of the Public Utilities Code).
(4) The California Teleconnect Fund Administrative Committee Fund program surcharge (Section 280 of the Public Utilities Code).
(5) The California Advanced Services Fund program surcharge (Section 281 of the Public Utilities Code).
(6) 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).
(7) Public Utilities Commission reimbursement fees imposed pursuant to Chapter 2.5 (commencing with Section 401) of Part 1 of Division 1 of the Public Utilities Code.
(o) “Retail transaction” means 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. For these purposes, a “purchase” means any transfer of title or possession, exchange, or barter, conditional or otherwise.
(p) “Seller” means a person that sells prepaid mobile telephony service to a person in a retail transaction.

SEC. 42.

 Section 42010 of the Revenue and Taxation Code is amended to read:

42010.
 (a) (1) On and after January 1, 2016, a prepaid MTS surcharge shall be imposed on each prepaid consumer and shall be collected by a seller from each prepaid consumer at the time of each retail transaction in this state. The prepaid MTS surcharge shall be imposed as a percentage of the sales price of each retail transaction that occurs in this state.
(2) The prepaid MTS surcharge shall be in lieu of any charges imposed pursuant to the Emergency Telephone Users Surcharge Act (Part 20 (commencing with Section 41001)) and the Public Utilities Commission surcharges for prepaid mobile telephony services.
(b) The prepaid MTS surcharge shall be annually calculated by the board department by no later than November 1 of each year commencing November 1, 2015, by adding the following:
(1) The surcharge rate reported pursuant to specified in subdivision (d) (f) of Section 41030.
(2) The Public Utilities Commission’s reimbursement fee and telecommunications universal service surcharges, established by the Public Utilities Commission pursuant to subdivisions (b) and (c) of Section 319 of the Public Utilities Code.
(c) (1) The board department shall post, for each local jurisdiction, the combined total of the rates of prepaid MTS surcharge and the rate or rates of local charges, as calculated pursuant to Sections 42102 and 42102.5, that each local jurisdiction has adopted, not later than December 1 of each year, on its Internet Web site. The posted combined rate shall be the rate that applies to all retail transactions during the calendar year beginning April 1 following the posting.
(2) Notwithstanding paragraph (1), if a local agency notifies the board department pursuant to subdivision (d) of Section 42101.5 that the posted rate is inaccurate or it no longer imposes a local charge or local charges or that the rate of its local charge or local charges has decreased, the board department shall promptly post a recalculated rate that is applicable to the jurisdiction of that local agency. The change shall become operative on the first day of the calendar quarter commencing more than 60 days from the date the local agency notifies the board department of the inaccuracy or that it no longer imposes a local charge or that the rate of its local charge has decreased. Nothing in this section modifies the notice obligations of Section 799 of the Public Utilities Code. However, beginning January 1, 2016, the notification and implementation requirements of paragraphs (5) and (6) of subdivision (a) of Section 799 of the Public Utilities Code shall not apply to prepaid mobile telephony services.
(3) The board department shall also separately post on its Internet Web site the individual rates for each of the following:
(A) Each of the Public Utilities Commission surcharges that make up the Public Utilities Commission surcharge portion of the prepaid MTS surcharge, as reported pursuant to Section 319 of the Public Utilities Code.
(B) The rate for the emergency telephone users surcharge reported pursuant to specified in subdivision (d) (f) of Section 41030.
(C) Each of the individual local charges reported pursuant to Section 42101.5.
(4) A seller collecting the prepaid MTS surcharge and local charges pursuant to this part and Part 21.1 (commencing with Section 42100) may rely upon the accuracy of the information posted on the board’s department’s Internet Web site in collecting and remitting all amounts of the prepaid MTS surcharge and local charges.
(d) (1) Except for amounts retained pursuant to subdivision (e), and except as provided in subdivision (f) for a seller that is a direct seller, all amounts of the prepaid MTS surcharge and local charges collected by sellers shall be remitted to the board department pursuant to Chapter 3 (commencing with Section 42020).
(2) A seller that is authorized to provide lifeline service under the state lifeline program or federal lifeline program, that sells prepaid mobile telephony services directly to the prepaid customer, shall remit the prepaid MTS surcharge to the board, department, less any applicable exemption from the surcharge that is applicable to the retail transaction pursuant to Section 42012.
(e) A seller that is not a direct seller shall be permitted to deduct and retain an amount equal to 2 percent of the amounts that are collected by the seller from prepaid consumers for the prepaid MTS surcharge and local charges, on a pro rata basis, according to that portion of the revenues collected by the seller for each of the following:
(1) The emergency telephone users surcharge.
(2) The Public Utilities Commission surcharges.
(3) Local charges.
(f) A direct seller shall remit the prepaid MTS surcharge and local charges as follows:
(1) That portion of the prepaid MTS surcharge that consists of the Public Utilities Commission surcharges shall be remitted to the commission with those reports required by the commission. The amounts remitted to the Public Utilities Commission pursuant to this paragraph shall be deposited into the respective universal service funds created pursuant to Chapter 1.5 (commencing with Section 270) of Part 1 of Division 1 of the Public Utilities Code and to the Public Utilities Commission Utilities Reimbursement Account described in Chapter 2.5 (commencing with Section 401) of Part 1 of Division 1 of the Public Utilities Code.
(2) That portion of the prepaid MTS surcharge that consists of the emergency telephone users surcharge shall be remitted to the board department pursuant to the Emergency Telephone Users Surcharge Act (Part 20 (commencing with Section 41001)) for those retail transactions with a prepaid consumer in the state, with a return filed with the board department using electronic media. The amount remitted to the board department pursuant to this paragraph shall be deposited into the State Emergency Telephone Number Account in the General Fund.
(3) Local charges, if applicable, shall be remitted to the local jurisdiction or local agency imposing the local charge. Remittance of the local charges shall be separately identified from any other local taxes or other charges that are remitted to the local jurisdiction or local entity imposing the local tax or other charge. The amounts remitted to the local jurisdiction or local agency imposing the local charge pursuant to this paragraph shall be deposited into the respective local jurisdiction or local agency account.
(g) A direct seller shall utilize the amounts posted by the board department pursuant to subdivision (c) when determining what amounts to remit to the Public Utilities Commission, the board, department, and each local jurisdiction or local agency.
(h) A prepaid MTS provider shall offer prepaid consumers the option to make payment for additional prepaid usage directly to the prepaid MTS provider at the provider’s retail location or Internet Web site.
(i) The amount of the combined prepaid MTS surcharge and local charges shall be separately stated on an invoice, receipt, or other similar document that is provided to the prepaid consumer of mobile telephony services by the seller, or otherwise disclosed electronically to the prepaid consumer, at the time of the retail transaction.
(j) The prepaid MTS surcharge that is required to be collected by a seller and any amount unreturned to the prepaid consumer of mobile telephony services that is not owed as part of the surcharge, but was collected from the prepaid consumer under the representation by the seller that it was owed as part of the surcharge, constitute debts owed by the seller to this state. The local charge that is required to be collected by a seller and any amounts unreturned to the prepaid consumer of mobile telephony services that are not owed as part of the local charge, but that were collected from the prepaid consumer under the representation by the seller that they were owed as part of the local charge, constitute debts owed by the seller jointly to the state, for purposes of collection on behalf of, and payment to, the local jurisdiction and to the local jurisdiction imposing that local charge.
(k) A seller that has collected any amount of prepaid MTS surcharge and local charges in excess of the amount of the surcharge imposed by this part and actually due from a prepaid consumer may refund that amount to the prepaid consumer, even though the surcharge amount has already been paid over to the board department and no corresponding credit or refund has yet been secured. Any seller making a refund of any charge to a prepaid consumer may repay therewith the amount of the surcharge paid.
(l) (1) Every prepaid consumer of mobile telephony services in this state is liable for the prepaid MTS surcharge and any local charges until they have been paid to this state, except that payment to a seller registered under this part relieves the prepaid consumer from further liability for the surcharge and local charges. Any surcharge collected from a prepaid consumer that has not been remitted to the board department shall be a debt owed to the state by the person required to collect and remit the surcharge. Any local charge collected from a prepaid consumer that has not been remitted to the board department shall be a debt owed jointly to the state, for purposes of collection on behalf of, and payment to, the local jurisdiction and to the local jurisdiction imposing the local charge by the person required to collect and remit the local charge. Nothing in this part shall impose any obligation upon a seller to take any legal action to enforce the collection of the surcharge or local charge imposed by this section.
(2) A credit shall be allowed against, but shall not exceed, the prepaid MTS surcharge and local charges imposed on any prepaid consumer of mobile telephony services by this part to the extent that the prepaid consumer has paid emergency telephone users charges, state utility regulatory commission fees, state universal service charges, or local charges on the purchase to any other state, political subdivision thereof, or the District of Columbia. The credit shall be apportioned to the charges against which it is allowed in proportion to the amounts of those charges.
(m) (1) A seller is relieved from liability to collect the prepaid MTS surcharge imposed by this part that became due and payable, insofar as the base upon which the surcharge is imposed is represented by accounts that have been found to be worthless and charged off for income tax purposes by the seller or, if the seller is not required to file income tax returns, charged off in accordance with generally accepted accounting principles. A seller that has previously paid the surcharge may, under rules and regulations prescribed by the board, department, take as a deduction on its return the amount found worthless and charged off by the seller. If any such accounts are thereafter in whole or in part collected by the seller, the amount so collected shall be included in the first return filed after such collection and the surcharge shall be paid with the return.
(2) The board department may by regulation promulgate such other rules with respect to uncollected or worthless accounts as it shall deem necessary to the fair and efficient administration of this part.

SEC. 43.

 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. 44.

 This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.

It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2018.