SB3103.DOC

SECTION 1. The legislature finds that, unlike traditional telecommunication services, prepaid wireless telecommunications services are not sold or used pursuant to term contracts or subscriptions, and monthly bills are not sent to consumers by prepaid wireless telecommunication service providers or retail vendors. Instead, purchases tend to be made on a "cash-and-carry" or "pay-as-you-go" basis from retailers at a wide variety of general retail locations. Nevertheless, prepaid wireless consumers have the same access to emergency 911 services from their wireless devices as wireless consumers on term contracts, and prepaid wireless consumers benefit from the ability to access the 911 system by dialing 911, all without having to pay the enhanced 911 surcharge imposed on wireless consumers on term contracts.

In order to ensure equitable contributions to the funding of 911 systems from consumers of prepaid wireless telecommunication services, the collection and payment obligation of charges to support enhanced 911 should be imposed upon the consumer's retail purchase of the prepaid wireless telecommunication service and should be in the form of a single, statewide charge that is collected once at the time of purchase directly from the consumer.

SECTION 2. Section 138-1, Hawaii Revised Statutes, is amended as follows:

1. By adding a new definition to be appropriately inserted and to read as follows:

""Prepaid wireless telecommunications service" means a wireless telecommunications service that allows a caller to dial 911 to access the 911 system, requires payment in advance of service, and is sold in predetermined units or dollars of which the number declines with use in a known amount."

2. By amending the definition of "prepaid connection" to read as follows:

""Prepaid connection" means the sale of a communications service other than a prepaid wireless telecommunications service that is paid for in advance or sold in predetermined units of which the number of units declines with use of the services."

SECTION 3. Section 138-2, Hawaii Revised Statutes, is amended by amending subsection (a) to read as follows:

"(a) There is created within the department of accounting and general services, for administrative purposes, an enhanced 911 board consisting of thirteen voting members; provided that the membership shall consist of:

(1) The chief information officer or the chief information officer's designee;

(2) Three representatives from wireless communications service providers, who shall be appointed by the governor as provided in section 26-34; provided that at least one of the three representatives shall be from a prepaid wireless telecommunications service provider;

(3) One representative each from the public safety answering points for Oahu, Hawaii, Kauai, Maui, and Molokai and one representative, chosen by the mayor of the city and county of Honolulu, who shall be appointed by the governor as provided in section 26-34;

(4) The consumer advocate or the consumer advocate's designee;

(5) One representative from a communications service company that offers Interconnected Voice over Internet Protocol services, who shall be appointed by the governor as provided in section 26-34; and

(6) One representative of the public utility providing telecommunications services and land line enhanced 911 services through section 269-16.95."

SECTION 4. Section 138-4, Hawaii Revised Statutes, is amended to read as follows:

"§138-4 Surcharge. (a) [A] Subject to this chapter, a monthly enhanced 911 surcharge[~~, subject to this chapter,~~] shall be imposed upon each communications service connection[~~, except connections of the public utility providing telecommunications services and land line enhanced 911 services through section 269-16.95.~~] and a one-time enhanced 911 surcharge shall be imposed upon each prepaid wireless telecommunication service.

(b) The rate of the surcharge shall be set at 66 cents per month for each communications service connection[.]; provided that the surcharge shall be set at for each prepaid wireless telecommunication service. The surcharge shall have uniform application and shall be imposed on each communications service connection operating within the State except:

(1) Connections billed to federal, state, and county governmental entities;

(2) Prepaid connections; and

(3) Connections provided by the public utility providing telecommunications services and land line enhanced 911 services through section 269-16.95.

(c) [~~All~~] Except as provided in subsection (l), all communications service providers and resellers shall bill to and collect from each of their customers a monthly surcharge at the rate established for each communications service connection. The communications service provider or reseller may list the surcharge as a separate line item on each bill. If a communications service provider or reseller receives a partial payment for a monthly bill from a communications service customer, the communications service provider or reseller shall apply the payment against the amount the customer owes the communications service provider or reseller, before applying the partial payment against the surcharge.

(d) A communications service provider that:

(1) Is collecting the surcharge and remitting appropriate portions of the surcharge to the fund pursuant to this chapter; and

(2) Has been requested by a public safety answering point to provide enhanced 911 service in a particular county or counties,

may recover enhanced 911 service costs as provided in this chapter.

(e) Each communications service provider or reseller may retain two per cent of the amount of surcharges collected to offset administrative expenses associated with billing and collecting the surcharge.

(f) A communications service provider or reseller shall remit to the enhanced 911 fund, within sixty days after the end of the calendar month in which the surcharge is collected, an amount that represents the surcharges collected less amounts retained for administrative expenses incurred by the communications service provider or reseller, as provided in subsection (e).

(g) A public utility providing telecommunications services and land line enhanced 911 services for its customer base and other service providers using the wire line provider's enhanced 911 service may collect and retain the surcharge at the established rate set forth in section 269-16.95.

(h) The surcharges collected by the communications service provider or reseller pursuant to this section shall not be subject to any tax, fee, or assessment, nor are the surcharges considered revenue of the provider or reseller.

(i) Each customer who is subject to this chapter shall be liable to the State for the surcharge until it has been paid to the communications service provider. Communications service providers shall have no liability to remit surcharges that have not been paid by customers. A communications service provider or reseller shall have no obligation to take any legal action to enforce the collection of the surcharge for which any customer is billed. However, the board may initiate a collection action against the customer. If the board prevails in such a collection action, reasonable attorney's fees and costs shall be awarded.

(j) At any time the members deem it necessary and appropriate, the board may meet to make recommendations to the legislature as to whether the surcharge and fund should be discontinued, continued as is, or amended.

(k) When considering whether to discontinue, continue as is, or amend the fund or surcharge, the board's recommendations shall be based on the latest available information concerning costs associated with providing enhanced 911 service.

(l) A communications service provider or reseller shall collect the surcharge on a prepaid wireless telecommunications service connection from its customer at the time of the sale. If a prepaid wireless telecommunications service connection is transacted with the sale of one or more other products or services for a single, non-itemized price, then the amount specified in subsection (b) shall apply to the entire non-itemized price; provided that if a minimal amount of prepaid wireless telecommunication service is sold with a prepaid wireless device for a single, non-itemized price, then the communications service provider or reseller may elect not to apply the amount specified in subsection (b) to the prepaid connection. For purposes of this subsection, an amount of service denominated as ten minutes or less, or $5 or less, is deemed minimal."

SECTION 5. Statutory material to be repealed is bracketed and stricken. New statutory material is underscored.

SECTION 6. This Act shall take effect on January 1, 2015.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3103
TWENTY-SEVENTH LEGISLATURE, 2014
STATE OF HAWAII