Bill Summary for Bill Number SB10-120

Date: 04/06/2010

Final
BILL SUMMARY for SB10-120

HOUSE COMMITTEE ON BUSINESS AFFAIRS AND LABOR

Votes: View-->	Action Taken:
Move a substitute motion on page 5, line 13 of the Moved amendment L.005 (Attachment F). The motion Moved amendment L.007 (Attachment J). The motion Moved amendment L.008 (Attachment G) [see substitu Moved amendment L.009 (Attachment H). The motion Moved amendment L.010 (Attachment I). The motion Moved to refer Senate Bill 10-120 to the Committee	TIE TIE FAIL FAIL FAIL FAIL PASS

11:25 AM -- Senate Bill 10-120

Representative Rice, prime sponsor, presented Senate Bill 10-120 concerning the inclusion of prepaid wireless telephone service among the services subject to the surcharge that funds enhanced 911 emergency services. The bill imposes a charge of 1.4 percent on the retail sale of prepaid wireless telephone service to fund local enhanced 911 services (E911). The Department of Revenue will collect the E911 charges and remit them to the local 911 authority boards based on a formula established by the Public Utilities Commission (PUC) in the Department of Regulatory Agencies. Retail sellers can retain 2 percent of the E911 charges collected from consumers, and are subject to penalties for failure to collect or remit charges. The Department of Revenue is authorized to retain up to $450,000 of the E911 charges to cover the department's initial start-up costs and up to 3 percent per year for ongoing administration.

11:28 AM -- Chris Howes, representing the Colorado Retail Council, testified in opposition to the bill and talked about the issues the bill will create for retailers and the cost of compliance. He talked about an amendment that was passed in the Senate that raised the percentage to 3 percent from 2 percent. Mr. Howes also distributed the Retail Sales Tax Compliance Costs: A National Estimate prepared by Price Waterhouse Coopers (Attachment D).

11:37 AM

Representative Soper asked about the current percentage. Representative Liston asked why Mr. Howes was not included in the earlier discussions about the bill. He also asked who the major retailer is that is in support of the bill when all the others are not. Representative Liston asked how many telecommunications vendors there would be, Mr. Howes deferred to the retailers and guessed between 25 and 100. Representative Liston talked about 7-11 and the requirements that the retailers would have to collect the tax and remit it to the state and the retailer would receive 2 percent. Representative Liston commented on the fiscal note. Representative Stephens expressed her concerns with the bill and the effects it will have on retailers.

11:46 AM -- Kevin Bommer, representing the Colorado Municipal League (CML), testified in support of the bill and stated that surcharges should be collected in a way that is fair and equitable. The bill, he said, was the effort of several years to address the gap on the remittance of 911 surcharges. He shared his views about the need for 911 services and also stated the bill is supported by other retailers. He addressed the change in the Senate from 2 percent to 3 percent. He also talked about the Massachusetts model and their efforts to remove their existing law and replace it with the NCSL model, which is Senate Bill 120. He also added that the counties are in favor of the bill as well as CML.

11:54 AM

Representative Liston commented on the study that was distributed by Mr. Howes and asked if Mr. Bommer feels it is not relevant because it is out of date. Mr. Bommer explained that the study does not have anything to do with the issue at hand. Representative Liston responded and commented on the fiscal note and the fact that it will cost 15 percent the first year. Representative Rice explained the need for the costs in the bill. Representative Liston stated that it would be easier to collect from the small number of telecommunications companies rather than thousands of retailers.

12:03 PM -- Kimberley Culp, representing the 911 Task Force, testified in support of the bill and talked about the importance that they receive funds. She asked that some letters of support from other organizations be entered into the record (Attachment E). Ms. Culp mentioned three states have already passed the model law and eight states have introduced it this session, including Massachusetts. She addressed the fiscal note and said the retailers can retain up to 3 percent, but should be more around about 1 percent. Ms. Kulp said they are opposed to the 4 percent amendment. She said it is also not mandatory for retailers to participate and sell prepaid wireless and mentioned that both Wal-mart and Walgreens are in support of the bill. She stated that the bill is a national model.

12:10 PM -- Carl Simpson, representing Denver 911 for the City and County of Denver, testified in support of the bill. Mr. Simpson explained the history of the 911 system and the rapid increase of wireless calls. He noted that because people are migrating away from land line phones, fewer surcharges are being paid and the revenue impact is felt by local entities. Mr. Simpson talked about the issues with 911 and cell phones due to their mobility.

12:16 PM -- Bill Soards, President of AT&T Colorado, testified in support of the bill. Representative Balmer asked a question about how prepaid phones compare to month subscriber services since they are not linked to a particular consumer. Mr. Soards explained the difference between post-paid, monthly consumers versus a pre-paid consumer.

12:20 PM -- Edie Ortega, representing Century Link and she is an industry member on the PUC 911 task force, testified in support of the bill. She talked about when the 911 policy was initially created.

12:21 PM -- Grier Bailey, representing the Colorado Wyoming Petroleum Marketers Association, testified on the bill. He talked about the various taxing jurisdictions and the vendor provider fee. Representative Liston said it would make more sense to collect from the wholesale level rather than the retail level. Mr. Bailey responded. A discussion ensued regarding this issue. Representative Bradford talked about the difficulty of tracking transactions at the wholesale level. Mr. Bailey responded. Representative Priola also weighed in on the conversation.

12:29 PM -- Lyle Williamson, representing Verizon, testified in support of the bill and talked about the Massachusetts law.

12:31 PM

Representative Rice gave some closing remarks on the bill.


BILL:	SB10-120
TIME:	12:33:05 PM
MOVED:	Liston
MOTION:	Moved amendment L.005 (Attachment F). The motion was withdrawn.
SECONDED:	Stephens
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: WITHDRAWN


BILL:	SB10-120
TIME:	12:37:43 PM
MOVED:	Liston
MOTION:	Moved amendment L.008 (Attachment G) [see substitute motion on following vote sheet]. The motion failed 4-7.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	No
	Casso	No
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	No
	Stephens	Yes
	Gagliardi	No
	Rice	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	SB10-120
TIME:	12:38:35 PM
MOVED:	Soper
MOTION:	Move a substitute motion on page 5, line 13 of the bill to strike "two" and substitute "one". The motion failed due to the lack of a second.
SECONDED:
		VOTE
	Balmer
	Bradford
	Casso
	Kerr A.
	Liston
	Middleton
	Priola
	Soper
	Stephens
	Gagliardi
	Rice

Not Final YES: 0 NO: 0 EXC: 0 ABS: 0 FINAL ACTION: FAIL DUE TO LACK OF A SECOND


BILL:	SB10-120
TIME:	12:39:35 PM
MOVED:	Liston
MOTION:	Moved amendment L.009 (Attachment H). The motion failed 3-8.
SECONDED:	Stephens
		VOTE
	Balmer	No
	Bradford	No
	Casso	No
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	No
	Stephens	Yes
	Gagliardi	No
	Rice	No

Not Final YES: 3 NO: 8 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	SB10-120
TIME:	12:40:49 PM
MOVED:	Liston
MOTION:	Moved amendment L.010 (Attachment I). The motion failed 5-6.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	No
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	No
	Stephens	Yes
	Gagliardi	No
	Rice	No

Not Final YES: 5 NO: 6 EXC: 0 ABS: 0 FINAL ACTION: FAIL


BILL:	SB10-120
TIME:	12:42:21 PM
MOVED:	Liston
MOTION:	Moved amendment L.007 (Attachment J). The motion failed 4-7.
SECONDED:	Stephens
		VOTE
	Balmer	Yes
	Bradford	No
	Casso	No
	Kerr A.	No
	Liston	Yes
	Middleton	No
	Priola	Yes
	Soper	No
	Stephens	Yes
	Gagliardi	No
	Rice	No

Not Final YES: 4 NO: 7 EXC: 0 ABS: 0 FINAL ACTION: FAIL

12:44 PM

Representative Stephens asked whether Representative Rice would work with her in coming up with a new number. Representative Rice stated that the fee is meant to cover the start up costs. Representative Liston commented on the vendor fee.


BILL:	SB10-120
TIME:	12:46:48 PM
MOVED:	Rice
MOTION:	Moved to refer Senate Bill 10-120 to the Committee on Appropriations. The motion passed 9-2.
SECONDED:	Kerr A.
		VOTE
	Balmer	Yes
	Bradford	Yes
	Casso	Yes
	Kerr A.	Yes
	Liston	No
	Middleton	Yes
	Priola	Yes
	Soper	Yes
	Stephens	No
	Gagliardi	Yes
	Rice	Yes

Final YES: 9 NO: 2 EXC: 0 ABS: 0 FINAL ACTION: PASS

12:47 PM

The committee adjourned.