File No. 575

Senate, April 23, 2012

The Committee on Finance, Revenue and Bonding reported through SEN. DAILY of the 33rd Dist., Chairperson of the Committee on the part of the Senate, that the bill ought to pass.

AN ACT CONCERNING THE ENHANCED EMERGENCY 9-1-1 PROGRAM.

Be it enacted by the Senate and House of Representatives in General Assembly convened:

Section 1. Section 28-30b of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2013):

As used in sections [28-30b to 28-30d, inclusive] 28-30a, as amended by this act, 28-30b, as amended by this act, and 28-30d, and section 2 of this act:

(1) ["Active prepaid wireless telephone service" means a prepaid wireless telephone service that has an account that has a positive balance greater than or equivalent to the fee to fund the enhanced emergency 9-1-1 program pursuant to section 16-256g.] "Consumer" means a person who purchases prepaid wireless telecommunications service in a retail transaction.

(2) "Prepaid wireless E 9-1-1 fee" means the charge that any seller collects from a consumer in an amount established by section 2 of this act.

[(2)] (3) "Prepaid wireless [telephone] telecommunications service" means a wireless telephone service that [is activated in advance by payment for a finite dollar amount of service or for a finite set of minutes that terminate either upon use by a subscriber and delivery by the wireless provider of an agreed upon amount of service corresponding to the total dollar amount paid in advance or within a certain period of time following the initial purchase or activation, unless additional payments are made] a consumer pays for in advance, that allows the consumer to access the E 9-1-1 system by dialing 9-1-1, and that is sold in predetermined units or dollars and such units or dollars decline with use.

[(3) "Mobile telephone number" or "MTN" means the telephone number assigned to a wireless telephone at the time of activation.]

(4) "Provider" means any person who provides prepaid wireless telecommunications service pursuant to a license issued by the Federal Communications Commission.

(5) "Retail transaction" means a purchase of prepaid wireless telecommunications service from a seller for any purpose other than resale.

(6) "Seller" means a person who sells prepaid wireless telecommunications service to a consumer.

[(4)] (7) "Voice over Internet protocol service" or "VOIP" means a service that has the following characteristics: (A) Enables real-time, two-way voice communication; (B) requires a broadband connection from the users' locations; (C) requires IP-compatible customer premises equipment; and (D) allows subscribers generally to receive calls that originate on the public switched telephone network and to terminate calls on the public switched telephone.

[(5)] (8) "Voice over Internet protocol service provider" or "VOIP service provider" means a company that provides VOIP telephone service.

(9) "Wireless telecommunications service" means commercial mobile radio service, as defined in 47 CFR Section 20.3, as from time to time amended.

Sec. 2. (NEW) (Effective January 1, 2013) (a) Each consumer shall be assessed a prepaid wireless E 9-1-1 fee. Such fee shall be fifty cents for each retail transaction. For the purposes of this section, if a consumer purchase includes multiple prepaid wireless telecommunications services, each such individual service shall constitute a retail transaction.

(b) Any seller who is a party to a retail transaction within this state with a consumer shall collect the fee described in subsection (a) of this section from such consumer for each such retail transaction. The seller shall disclose to the consumer the amount of such assessed fee in an invoice, a receipt, or other similar document, or post such amount conspicuously on the seller's Internet web site or on a sign conspicuously displayed to the consumer at the point of sale.

(c) For the purposes of subsection (b) of this section, a retail transaction made in the presence of the consumer at the place of business of the seller shall be treated as occurring within this state if such place of business is within the state, and any other retail transaction shall be treated as occurring in this state if the retail transaction is treated as occurring in this state under subdivision (2) of subsection (a) of section 12-407 of the general statutes, for the purposes of the sales and use tax.

(d) The consumer shall be liable for any prepaid wireless E 9-1-1 fee. There shall be no liability on the part of the seller or provider, except the seller shall be liable to remit any prepaid wireless E 9-1-1 fees that the seller collects from any consumer, pursuant to section 3 of this act, including, but not limited to, any such fee that the seller is required to collect but does not separately state on an invoice, receipt or other similar document provided to the consumer, as required by subsection (b) of this section.

(e) The amount of the prepaid wireless E 9-1-1 fee that a seller collects from a consumer shall not be included in the base for measuring any tax, fee, surcharge or other charge that the state, any political subdivision of the state, or any intergovernmental agency imposes on such seller, provided the seller separately stated such amount on an invoice, receipt, or other similar document provided to the consumer.

Sec. 3. (NEW) (Effective January 1, 2013) (a) Any seller who collects a prepaid wireless E 9-1-1 charge shall remit such fee to the Department of Revenue Services at such time and in such manner as required by chapter 219 of the general statutes. The department shall establish registration and payment procedures that substantially coincide with the registration and payment procedures that apply to retail sellers under said chapter 219.

(b) Notwithstanding the provisions of chapter 219 of the general statutes, a seller who collects a prepaid wireless E 9-1-1 fee may retain one per cent of such fee.

(c) The audit and appeal procedures applicable under chapter 219 of the general statutes shall apply to each prepaid wireless E 9-1-1 fee.

(d) The department shall establish procedures by which a seller of prepaid wireless telecommunications service may document that a sale is not a retail transaction, which procedures shall substantially coincide with the procedures for documenting sale for resale transactions pursuant to section 12-410 of the general statutes.

(e) The department shall, not later than thirty days after receiving any prepaid wireless E 9-1-1 fee, transfer such fee to the office of the State Treasurer for deposit into the Enhanced 9-1-1 Telecommunications Fund, established pursuant to section 28-30a of the general statutes, as amended by this act. Any revenue from the prepaid wireless E 9-1-1 fee shall be subject to any restrictions provided by said section 28-30a. The department may make a one-time deduction of not more than one hundred twenty thousand dollars from such fund and may use said amount to reimburse its direct costs of administering the collection and remittance of prepaid wireless E 9-1-1 fees.

Sec. 4. Section 28-25 of the general statutes is amended by adding subdivisions (18) and (19) as follows (Effective January 1, 2013):

(NEW) (18) "Certified telecommunications provider" has the same meaning as provided in section 16-1.

(NEW) (19) "Prepaid wireless telecommunications service" has the same meaning as provided in section 28-30b, as amended by this act.

Sec. 5. Subsection (d) of section 28-28a of the 2012 supplement to the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2013):

(d) No telephone company, [or its agents] certified telecommunications provider, provider of wireless telecommunications service pursuant to a license issued by the Federal Communications Commission, provider of prepaid wireless telecommunications service, or the agents of any such company or provider and no voice over Internet protocol service provider or its agents shall be liable to any person or entity for release of the information specified in this section [,] or for any failure of equipment or procedure in connection with the enhanced 9-1-1 service or an emergency notification system established under sections 28-25 to 28-29b, inclusive, as amended by this act.

Sec. 6. Subsection (a) of section 28-30a of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2013):

(a) There is established a fund to be known as the "Enhanced 9-1-1 Telecommunications Fund". The fund shall contain any moneys required by law to be deposited in the fund, including, but not limited to, any federal funds collected pursuant to subsection (d) of section 28-24 and fees assessed against subscribers of local telephone service, [and] subscribers of commercial mobile radio services [,] pursuant to section 16-256g, as amended by this act, and revenues from the prepaid wireless E 9-1-1 fee imposed pursuant to section 2 of this act. The Enhanced 9-1-1 Telecommunications Fund shall be held separate and apart from all other moneys, funds and accounts. Interest derived from the investment of the fund shall be credited to the assets of the fund. Any balance remaining in the fund at the end of any fiscal year shall be carried forward in the fund for the fiscal year next succeeding.

Sec. 7. Section 16-256g of the general statutes is repealed and the following is substituted in lieu thereof (Effective January 1, 2013):

(a) By June first of each year, the Public Utilities Regulatory Authority shall conduct a proceeding to determine the amount of the monthly fee to be assessed against each subscriber of: (1) Local telephone service, (2) commercial mobile radio service, as defined in 47 CFR Section 20.3, and (3) voice over Internet protocol service, as defined in section 28-30b, as amended by this act, [and (4) prepaid wireless telephone service, as defined in section 28-30b,] to fund the development and administration of the enhanced emergency 9-1-1 program. The authority shall base such fee on the findings of the Commissioner of Emergency Services and Public Protection, pursuant to subsection (c) of section 28-24, taking into consideration any existing moneys available in the Enhanced 9-1-1 Telecommunications Fund. The authority shall consider the progressive wire line inclusion schedule contained in the final report of the task force to study enhanced 9-1-1 telecommunications services established by public act 95-318. The authority shall not approve any fee (A) greater than fifty cents per month per access line, [nor shall it approve any fee] (B) that does not include the progressive wire line inclusion schedule, or (C) for commercial mobile radio service, as defined in 47 CFR Section 20.3 that includes the progressive wire line inclusion schedule.

(b) Each telephone or telecommunications company providing local telephone service, each provider of commercial mobile radio service [, each provider of prepaid wireless telephone service] and each provider of voice over Internet protocol service shall assess against each subscriber, the fee established by the authority pursuant to subsection (a) of this section, which shall be remitted to the [Office of] office of the State Treasurer for deposit into the Enhanced 9-1-1 Telecommunications Fund established pursuant to section 28-30a, as amended by this act, not later than the fifteenth day of each month.

(c) The fee imposed under this section shall not apply to any prepaid wireless telecommunications service, as defined in section 28-30b, as amended by this act.

Sec. 8. Section 28-30c of the general statutes is repealed. (Effective January 1, 2013)

The following Fiscal Impact Statement and Bill Analysis are prepared for the benefit of the members of the General Assembly, solely for purposes of information, summarization and explanation and do not represent the intent of the General Assembly or either chamber thereof for any purpose. In general, fiscal impacts are based upon a variety of informational sources, including the analyst's professional knowledge. Whenever applicable, agency data is consulted as part of the analysis, however final products do not necessarily reflect an assessment from any specific department.

OFA Fiscal Note

State Impact:

Note: GF=General Fund

Municipal Impact: None

Explanation

The bill is anticipated to increase revenue to the Department of Emergency Services and Public Protection E911 Telecommunications Fund of approximately $1.9 million¹ in FY 13 and $4.2 million in FY 14. The revenue gain is comprised of two components, outlined in the following table.

Total Revenue Changes

Additionally, the bill results in a one-time set-up and programming cost of $120,000 in FY 13 to the Department of Revenue Services (DRS) related to updates to the taxpayer service center (TSC) and form creation. This cost is based on equivalent costs for the creation of new tax types. The bill allows DRS to make a one-time deduction of up to $120,000 from the E911 Telecommunications Fund for any direct costs of administering the collection and remittance of the fees.

The Out Years

The annualized ongoing fiscal impact identified above would continue into the future subject to inflation.

OLR Bill Analysis

SB 354

AN ACT CONCERNING THE ENHANCED EMERGENCY 9-1-1 PROGRAM.

SUMMARY:

This bill modifies how prepaid wireless subscribers are assessed the fee that supports the Enhanced 9-1-1 (E 9-1-1) program. It eliminates the monthly fee (currently 50 cents) for subscribers and, instead, levies a 50-cent fee (prepaid wireless E 9-1-1 fee) on each purchase of prepaid wireless telecommunications services from a retailer.

The bill requires retailers to collect the prepaid wireless E 9-1-1 fee, and makes consumers liable for paying it. It allows retailers to keep 1% of the amount collected and requires them to remit the balance to the Division of Revenue Services (DRS), which must forward it to the State Treasurer's Office for deposit in the E 9-1-1 Telecommunications Fund. It allows DRS to make a one-time deduction of not more than $120,000 from the fund for its direct costs of administering the collection and remittance of the fees.

The bill extends to telecommunications service providers, wireless telecommunications service providers, and prepaid wireless telecommunications service providers, and their agents, the immunity that currently applies to telephone companies and their agents who release 9-1-1 subscriber information as required by law.

The bill also prohibits the Public Utilities Regulatory Authority (PURA) from approving any monthly fee for commercial mobile radio service (e.g., cell phone) subscribers that includes the progressive wire line inclusion schedule. This schedule discounts the monthly rate paid by subscribers with more than one phone at a location.

It makes technical and conforming changes.

EFFECTIVE DATE: January 1, 2013

PREPAID WIRELESS FEES

E 9-1-1 Fee Assessment and Collection

Under current law, PURA must determine the monthly fee to be assessed on subscribers of the following telecommunications services: (1) local telephone, (2) commercial mobile radio service, (3) voice over Internet protocol (VOIP) (e.g., services provided by Vonage or Skype), and (4) prepaid wireless telephone service. By law, the fee is capped at 50 cents per line per month and PURA cannot approve any fee that excludes the progressive wire line inclusion schedule.

The bill creates a separate assessment method for, and replaces the monthly assessment on, people who buy prepaid wireless telecommunications service with a 50-cent per transaction assessment. For the bill's purposes, if a consumer purchase includes multiple prepaid services, each such individual service constitutes a retail transaction. It also prohibits PURA from approving any commercial mobile radio service fee that includes the progressive wire line inclusion schedule.

The bill replaces the term “prepaid wireless telephone service” with “prepaid wireless telecommunications service” to reflect the enhanced capability of current technology. It defines “prepaid wireless telecommunications service” as a service that a consumer pays for in advance, allowing him or her to access the E 9-1-1 system by dialing 9-1-1. The service is sold in predetermined units or dollars that decline with use. The bill defines a “provider” as anyone who provides prepaid wireless telecommunications service under a Federal Communications Commission license.

Collection and Remittance of E 9-1-1 Fees

Under current law, wireless service providers assess the E 9-1-1 fee against their subscribers and pay the fee monthly to the state treasurer for deposit in the E 9-1-1 fund. The bill requires any seller conducting a retail transaction in Connecticut to collect the prepaid wireless E 9-1-1 fee from consumers when they buy prepaid wireless communications services. A retail transaction occurs in Connecticut if (1) it is made in the consumer's presence at the retailer's business place in Connecticut or (2) the customer's shipping address or, if no item is shipped, his or her billing address or the location associated with his or her mobile phone number is in Connecticut.

Retailers must disclose the amount of the fee to consumers in an invoice, a receipt, other similar document, or post it conspicuously on their website or on a conspicuous sign at the point of sale.

Liability for Fees

Consumers are liable for paying the prepaid wireless E 9-1-1 fee. Sellers and providers of prepaid wireless telecommunications services have no liability, except that they must remit any fees they are required to collect, including any fees not stated separately on an invoice, receipt, or other similar document they give to the consumer.

DRS Responsibilities

The bill allows retailers to retain 1% of the fees they collect and requires them to remit the balance to DRS by following existing sales and use tax procedures. The same audit and appeal procedures established in statute for the sales and use tax apply to prepaid wireless E 9-1-1 fees.

DRS must establish registration and payment procedures that substantially coincide with those that apply to retailers for sales and use tax purposes. It must also establish procedures by which sellers of prepaid wireless telecommunications may document that a sale is not a retail transaction. The procedures must substantially coincide with those used for documenting sale for resale transactions for sales and use tax purposes.

DRS, not later than 30 days after receiving any prepaid wireless E 9-1-1 fee, must transfer it to the state treasurer for deposit in the E 9-1-1 Telecommunications Fund. Any revenue from the prepaid wireless E 9-1-1 fee is subject to any restrictions under existing law.

Treatment of Prepaid Wireless E 9-1-1 Fees for Tax Purposes

The amount of the prepaid wireless E 9-1-1 fees that sellers collect must not be included in the base for measuring any tax, fee, surcharge, or other charge that the state, any state political subdivision, or any intergovernmental agency imposes on a seller, as long as the seller separately stated the amount in an invoice, receipt, or other similar document provided to the consumer.

E 9-1-1 LIABILITY ISSUES

By law, telephone companies and VOIP service providers must forward the telephone number and street address from which a 9-1-1 call is made to a safety answering point.  The law immunizes the companies and their agents from liability for (1) releasing E 9-1-1 subscriber information in accordance with the law or (2) failure of any equipment or procedure in connection with E 9-1-1 or an emergency notification system.

BACKGROUND

The E 9-1-1 System and Funding

The E 9-1-1 system provides dispatch services to people who call 9-1-1. The emergency services and public protection commissioner (formerly the public safety commissioner) must annually determine the amount of funds needed to develop and administer the system. Funding for the system is generated by a monthly surcharge levied on all phone lines (CGS § 28-30a). PURA sets the surcharge based on cost and usage data provided by the Office of State-Wide Emergency Telecommunications (OSET).

Current rates are at the statutory cap of 50 cents per month for subscribers with a single telephone line (CGS § 16-256g). Subscribers with multiple lines are assessed on a sliding scale, starting at 50 cents for the first line. Subscribers pay the surcharge to their telephone service provider which, in turn, remits it to OSET monthly for deposit in the E 9-1-1 Telecommunications Fund.

Related Bill

sHB 5378 (File 184), favorably reported by the Public Safety and Security Committee, increases from 50 cents to 75 cents per month, per access line, the maximum amount that PURA may assess telecommunications subscribers to fund the E 9-1-1 program.

COMMITTEE ACTION

Finance, Revenue and Bonding Committee

Joint Favorable

¹ Please note this amount is net of the $120,000 allowed one-time deduction for DRS' costs of administering the program.