HomeMy WebLinkAboutSB 344_20191002_ Request for the Governor's Signature
02 October 2019
The Honorable Gavin Newsom
State Capitol
Sacramento, CA 95814
Fax: (916) 558-3160
Subject: SB 344 (McGuire) Local Prepaid Mobile Telephony Services Collection Act /
One-Year Sunset Extension Request for Signature
Dear Governor Newsom:
On behalf of the City of San Luis Obispo I am requesting your signature on SB 344, which would
provide a one-year sunset extension, from January 1, 2020 to January 1, 2021, for the point-of-sale
collection mechanism for Utility User Taxes (UUTs) imposed on prepaid wireless service. AB
1717 (2014) set up this collection mechanism, similar to sales tax, where the California
Department of Tax and Fee Administration (CDTFA) collects our voter-approved locally imposed
UUT from retail sales of prepaid wireless telecommunication products and services and distributes
those revenues to our community and the other 103 local agencies that participate in the program.
Prior to AB 1717, there was no mechanism for collecting local UUTs on prepaid wireless, and
because of this local agencies were losing their respective revenues. According to CDTFA data,
to-date, over $24 million since 2016 has been received by local agencies under AB 1717. Another
$6 million is estimated to flow from SB 344.
The City of San Luis Obispo’s local utility user’s tax (UUT) supports police, fire, parks and other
core services for our residents. We appreciate the continuation of the Local Prepaid MTS Act
because it ensures equity among taxpayers by enabling our community to collect the applicable
UUT when mobile telephony services are sold in a retail prepaid environment. The City of San
Luis Obispo is among the 104 local agencies that participate in the collection of UUT made
possible by AB 1717.
Prepaid wireless services are offered on a "pay-as-you-go" basis with no required contracts, term
or volume commitments, early termination penalties, overage charges, or credit checks. These
factors make prepaid services available to those consumers to whom the security and convenience
of mobile telephone service might not be available.
We are pleased that SB 344, as with AB 1717, includes provisions to ensure that the UUT does
not apply to prepaid transactions with a service allotment denominated as 10 minutes or less, or
five dollars ($5) or less. This provides consumers utilizing prepaid wireless as an affordable and
reliable option. SB 344 also continues to reimburse the CDTFA for the costs to implement the
program through the collected local charges.
Our agency along with other stakeholders, including the State Treasurer, the League of California
Cities, California State Association of Counties, CTIA – the Wireless Association, the California
Retailers Association, MuniServices/ Avenu and numerous cities recognize that the recent court
decision (MetroPCS California, LLC v. Michael Picker et al, case number 17-cv-05959-SI) will
require additional ‘clean-up’ language and that is why a short-term measure is the most effective
approach to keep the local provisions continuing under current law.
Without your signature on SB 344, AB 1717 will sunset on January 1, 2020 and subject our agency
to lost revenue. For these reasons, we request your signature on SB 344.
Respectfully,
Heidi Harmon
Mayor
City of San Luis Obispo
cc: State Senator Bill Monning, fax (916) 651-4917
State Assembly Member Jordan Cunningham, fax (916) 319-2135
Dave Mullinax, League of California Cities, dmullinax@cacities.org
Meg Desmond, League of California Cities, cityletters@cacities.org
Che Salinas, Governor’s Office (che.salinas@gov.ca.gov)
Danielle Bradley, Legislative Aide, Senator McGuire (danielle.bradley@sen.ca.gov)