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6.H. -Page 15 of 16 <br />Diane Howard, Mayor <br />Shelly Masur, Vice Mayor <br />Alicia C. Aguirre, Council Member <br />Ian Bain, Council Member <br />Janet Borgens, Council Member <br />Giselle Hale, Council Member <br />Diana Reddy, Council Member <br />June 8, 2020 <br />The Honorable Mike McGuire <br />California State Senate, District 02 <br />State Capitol Room 5061 <br />Sacramento, CA 95814 <br />Redwood <br />CityCalifornia <br />i Faunded 1861 <br />1017 Middlefield Road <br />Redwood City, CA 94063 <br />(650) 780-7301 <br />Fax(650)780-7225 <br />RE: SB 1441 (McGuire) Local Pre -Paid Mobile Telephone Services Collection Act—Support <br />Dear Senator McGuire: <br />On behalf of the City of Redwood City we are pleased to support SB 1441, which would remove the <br />sunset and make permanent the point of sale collection mechanism for Utility Users Taxes (UUTs) <br />imposed on prepaid wireless services. By making point of collection permanent, this bill will protect an <br />important revenue stream for local governments. <br />Prepaid wireless services are offered on a "pay-as-you-go" basis with no requirement contracts, term <br />or volume commitments, early termination penalties, overage charges, or credit checks. These <br />important factors make prepaid services available to those consumers to whom the security and <br />convenience of mobile telephone service might not be available. This business model offers reliable <br />service and affordable pricing. <br />In 2014, the Legislature approved AB 1717 (Perea) to create a statewide system for the retail point of <br />sale collection of state and local taxes and fees on prepaid wireless services. According to data <br />obtained by the California Department of Tax and Fee Administration (CDTFA) over $24 million has <br />been received by participating local governments since 2016 with an additional $6 million anticipated <br />this year. AB 1717 also enacted the Local Prepaid Mobile Telephony Services Collection Act, which <br />created the second part of the MTS fee – the local charge – which adds together local UUTs and any <br />charges to fund local 911 emergency fees that apply in the jurisdiction where the customer purchases <br />the prepaid MTS services. Currently this law is set to sunset January 1, 2021. <br />For Redwood City, the revenue derived from MTS fees go directly to fund critical housing programs for <br />our most vulnerable residents. SB 1441 will ensure continued collection of this important revenue <br />�=i <br />City of Redwood City 1017 Middlefield Road, Redwood City, CA. 94063 Tel: 650-780-7000 www.redwoodcitV.org <br />324 <br />