SENATE CORPORATIONS AND TRANSPORTATION COMMITTEE SUBSTITUTE FOR

SENATE BILL 411

53rd legislature - STATE OF NEW MEXICO - first session, 2017

AN ACT

RELATING TO TELECOMMUNICATIONS; EXPANDING THE APPLICATION OF THE TELECOMMUNICATIONS RELAY SERVICE SURCHARGE TO INCLUDE MODERN TELECOMMUNICATIONS TECHNOLOGIES; EXEMPTING CERTAIN TELECOMMUNICATIONS SERVICES CUSTOMERS FROM THE SURCHARGE; CLARIFYING PROVISIONS OF THE TELECOMMUNICATIONS ACCESS ACT.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. Section 63-9F-3 NMSA 1978 (being Laws 1993, Chapter 54, Section 3, as amended) is amended to read:

     "63-9F-3. DEFINITIONS.--As used in the Telecommunications Access Act:

          A. "commission" means the commission for deaf and hard-of-hearing persons;

          B. "communications assistant" means an individual who translates conversation from text to voice and from voice to text between two end users of a telecommunications service;

          C. "home service provider" means a facilities-based carrier or reseller with which a customer contracts for the provision of wireless communications services;

          [C.] D. "impaired" means having an impairment of or deficit in the ability to hear or speak, or both;

          E. "interconnected voice over internet protocol service" means a service that:

                (1) enables real-time, two-way voice communications;

                (2) requires a broadband connection from the user's location;

                (3) requires internet protocol-compatible customer premises equipment; and

                (4) permits users generally to receive calls that originate on the public-switched telephone network and to terminate calls to the public-switched telephone network;

          [D.] F. "intrastate [telephone services means all charges for] telecommunications service":

                (1) means the provision of access lines, special services and intrastate toll services, including [all] for telephone calls originating and terminating in the state; and

                (2) does not include interconnected voice over internet protocol service or wireless communications service;

          G. "place of primary use" means the street address representative of where a customer's use of a wireless communications service primarily occurs and that is:

                (1) the residential street address or the primary business street address of the customer; and

                (2) within the licensed service area of the home service provider;

          H. "prepaid consumer" means a person who purchases prepaid wireless communications service in a retail transaction;

          I. "prepaid wireless communications service" means a wireless communications service that must be paid for in advance and is sold in predetermined units or dollars of which the number declines with use in a known amount;

          J. "retail transaction" means the purchase of prepaid wireless communications service from a seller for any purpose other than for resale;

          K. "seller" means a person who sells prepaid wireless communications service to another person;

          [E.] L. "specialized telecommunications equipment" means devices that enable or assist an impaired individual to communicate with another individual using the telephone network;

          [F.] M. "telecommunications company" means an individual, corporation, partnership, joint venture, company, firm, association, proprietorship or other entity that provides public telecommunications services, and includes cellular service companies as defined in Subsection B of Section 63-9B-3 NMSA 1978; [and

          G.] N. "telecommunications relay system" means a statewide telecommunications system through which an impaired individual using specialized telecommunications equipment is able to send or receive messages to and from an individual who is not impaired and whose telephone is not equipped with specialized telecommunications equipment and through which the unimpaired individual is able, by using voice communications, to send and receive messages to and from an impaired person; and

          O. "wireless communications service" means a commercial mobile radio service as defined by Section 20.3 of Title 47 of the Code of Federal Regulations, as amended, but excludes internet access service."

     SECTION 2. Section 63-9F-11 NMSA 1978 (being Laws 1993, Chapter 54, Section 11, as amended) is amended to read:

     "63-9F-11. IMPOSITION OF SURCHARGE.--

          A. A telecommunications relay service surcharge of thirty-three hundredths percent is imposed on the gross amount paid:

                (1) by customers, except customers whose telephone service rates are reduced as authorized by the Low Income Telephone Service Assistance Act, for [(1)] intrastate [telephone] telecommunications services [other than mobile telecommunications services] provided in this state; [and]

                (2) by customers for the intrastate portion of interconnected voice over internet protocol service;

                [(2)] (3) by customers for intrastate mobile telecommunications services that originate and terminate in the same state, regardless of where the mobile telecommunications services originate, terminate or pass through, provided by home service providers to customers whose place of primary use is in New Mexico; and

                (4) by a prepaid consumer in a retail transaction.

          B. The telecommunications relay service surcharge shall be included on the monthly bill of each customer of a local exchange company or other telecommunications company providing intrastate [telephone] telecommunications services, interconnected voice over internet protocol services or intrastate mobile telecommunications services and paid at the time of payment of the monthly bill. Receipts from selling [a service] those services to any other telecommunications company or provider for resale [shall] are not [be] subject to the surcharge. The customer [shall be] is liable for the payment of [this] the surcharge to the provider of intrastate mobile telecommunications services, the provider of interconnected voice over internet protocol services or the local exchange company or other telecommunications company providing intrastate [telephone] telecommunications services to the customer. [For the purposes of Subsections A and B of this section, "home service provider", "mobile telecommunications services" and "place of primary use" have the meanings given in the federal Mobile Telecommunications Sourcing Act.]

          C. For the purposes of the surcharge imposed on a retail transaction pursuant to Paragraph (4) of Subsection A of this section:

                (1) the surcharge shall be collected by the seller from the prepaid consumer with respect to each retail transaction occurring in this state. The amount of the surcharge shall be either separately stated on an invoice, receipt or other similar document that is provided to the prepaid consumer by the seller or otherwise disclosed to the prepaid consumer;

                (2) for the purposes of Paragraph (1) of this subsection, a retail transaction that is effected in person by a prepaid consumer at a business location of the seller shall be treated as occurring in this state if that business location is in this state, and any other retail transaction is treated as occurring in this state if the retail transaction is treated as occurring in this state for purposes of the Gross Receipts and Compensating Tax Act;

                (3) the surcharge is the liability of the prepaid consumer and not of the seller or any provider, except that the seller shall be liable to remit all surcharges collected from the prepaid consumer as provided in this subsection, including all such surcharges that the seller is deemed to collect where the amount of the surcharge has not been separately stated on an invoice, receipt or other similar document provided to the prepaid consumer by the seller;

                (4) the amount of the surcharge that is collected by a seller from a prepaid consumer, if such amount is separately stated on an invoice, receipt or other similar document provided to the prepaid consumer by the seller, shall not be included in the base for measuring any tax, fee, surcharge or other charge that is imposed by this state, any political subdivision of this state or any intergovernmental agency;

                (5) when prepaid wireless communications service is sold with one or more other products or services for a single, non-itemized price, the percentage specified in Subsection A of this section shall apply to the entire non-itemized price unless the seller elects to apply such percentage to:

                     (a) if the amount of the prepaid wireless communications service is disclosed to the prepaid consumer as a dollar amount, such dollar amount; or

                     (b) if the seller can identify the portion of the price that is attributable to the prepaid wireless communications service by reasonable and verifiable standards from its books and records that are kept in the regular course of business for other purposes, including non-tax purposes, such portion;

                (6) if a minimal amount of prepaid wireless communications service is sold with a prepaid wireless device for a single, non-itemized price, the seller may elect not to apply the percentage specified in Subsection A of this section to such transaction. For the purposes of this paragraph, an amount of service denominated as ten minutes or less, or five dollars ($5.00) or less, is minimal;

                (7) surcharges collected by sellers shall be remitted to the taxation and revenue department at the times and in the manner provided with respect to the Gross Receipts and Compensating Tax Act. The department shall establish registration and payment procedures that substantially coincide with the registration and payment procedures that apply to the Gross Receipts and Compensating Tax Act. A seller shall be permitted to deduct and retain three percent of surcharges that are collected by the seller from the prepaid consumer;

                (8) the audit and appeal procedures applicable to the Gross Receipts and Compensating Tax Act shall apply to the surcharge;

                (9) the taxation and revenue department shall establish procedures by which a seller of prepaid wireless communications services may document that a sale is not a retail transaction, which procedures shall substantially coincide with the procedures for documenting sale for resale transactions for the Gross Receipts and Compensating Tax Act; and

                (10) notwithstanding Paragraph (1) of this subsection, if a 911 surcharge is imposed on prepaid wireless communications service pursuant to the Enhanced 911 Act, the taxation and revenue department shall promulgate rules to permit sellers to combine the surcharge imposed pursuant to this section and the surcharge imposed pursuant the Enhanced 911 Act into a single surcharge on the invoice, receipt or other similar document that is provided to the prepaid consumer. The department shall ensure that appropriate surcharge revenues are directed proportionately to the respective 911 and telecommunications relay service funds.

          [C.] D. A telecommunications company providing intrastate [telephone] telecommunications services, a home service provider providing intrastate mobile telecommunications services and a seller of interconnected voice over internet protocol services shall, [be responsible for assessing, collecting and remitting] on sales subject to the telecommunications relay service surcharge, [to the taxation and revenue department. The amount of the telecommunications relay service] assess and collect the surcharge and remit the surcharge collected [by a telecommunications company shall be remitted] monthly to the taxation and revenue department on or before the twenty-fifth day of the month following collection [which]. The department shall administer and enforce the collection of the surcharge [pursuant to the provisions of] in accordance with the Tax Administration Act.

          [D.] E. The taxation and revenue department shall [remit] transfer to the telecommunications access fund the amount of the telecommunications relay service surcharge collected less any amount deducted [pursuant to the provisions of] in accordance with Subsection [E] F of this section. Transfer of the net receipts from the surcharge to the telecommunications access fund shall be made within the month following the month in which the surcharge is collected.

          [E.] F. The taxation and revenue department may deduct an amount not to exceed three percent of the telecommunications relay service surcharge collected as a charge for the administrative costs of collection [which] and shall remit that amount [shall be remitted] to the state treasurer for deposit in the general fund each month.

          [F.] G. The commission shall report to the revenue stabilization and tax policy committee annually by September 30 the following information with respect to the prior fiscal year:

                (1) the amount and source of revenue received by the telecommunications access fund;

                (2) the amount and category of expenditures from the fund; and

                (3) the balance of the fund on that June 30."

     SECTION 3. EFFECTIVE DATE.--The effective date of the provisions of this act is July 1, 2017.

- 11 -