FRANKFORT (AP) — Prepaid cellphone customers in Kentucky would have to pay an extra fee of 93 cents every time they purchase minutes to help pay for local 911 systems under a bill that has unanimously cleared a key House committee.
Local governments operate 911 systems in Kentucky. They pay for them by imposing a fee on landlines. State law does not allow local governments to impose a fee on cellphones; the state government does that. Cellphone carriers charge Kentuckians a fee of 70 cents per month. That fee is easily collected from customers with traditional two-year contracts. But people who purchase prepaid phones and phone cards often pay far less because of a problem with the formula the state uses to collect the money.
The result is local 911 systems, already struggling with the loss of revenue from disappearing landline phones, have lost about $2 million a year as prepaid phones increase in popularity.
Tuesday, the state House of Representatives voted 89-4 to approve a bill that would impose a 93 cent fee on prepaid cellphones and calling cards. Retailers would collect the fee at the point of sale beginning Jan. 1, 2017, and remit the money back to the state.
Bill sponsor Democratic state Rep. Martha Jane King of Lewisburg said the higher fee accounts for the fact that, on average, prepaid customers purchase phone cards nine times a year instead of 12 times.
“No one with a contract with a carrier will see their bill go up at all,” King said. “I don’t think this is too much to ask for counties to have 911.”
Local governments support the bill, and cellphone carriers have not voiced opposition. But retailers oppose it, arguing it would cost them too much money.
“Your small mom and pop shops aren’t going to have the sophistication or are going to have to incur huge expense in order to collect this fee,” said Shannon Stiglitz, lobbyist for the Kentucky Retail Federation.
King noted that the bill lets retailers keep up to 3 percent of the fees it collects each month to compensate for the cost of collecting the fee. But Stiglitz said it would not generate enough money to cover the cost.
The bill now heads to the full House of Representatives for consideration. If it passes, the bill would still have to be approved by the Republican state Senate and signed by the governor before it could become law. Republican Senate President Robert Stivers said he is unaware of any opposition to the bill but noted that the legislature is quickly running out of time to pass bills this year.