Panel approves amended House bill to lower communication service fee to 2.5%

The Senate Finance and Tax Committee voted to advance House Bill 10 96 in its amended form, setting a communications/service fee at 2.5 percent. Committee members discussed competing interests between large carriers and rural telephone cooperatives and accepted the House-amended compromise rate.

Senator Wallen urged keeping the amended 2.5% rate, noting rural telephone cooperatives receive modest administration revenue from the fee and that reducing the fee further would diminish funds for those entities. "The rural telephone cooperatives are already under the 5% only getting about $100,000 a year. And if we drop it down to 2 and a half percent that gives them about $50,000 a year," Wallen said, adding that dividing that smaller amount among cooperatives reduces per-cooperative funding.

Committee members noted local variation in current fees: about 10 counties still collect a $1-per-line fee; others collect $1.50; the state adds an additional $0.50 in some structures. The House amendment proposing 2.5% was described to the committee as a compromise from an original 1% proposal.

Senator Wallen moved for approval of the House-amended bill; Senator Powers seconded. The clerk recorded the roll call: Chairman Weber — aye; Vice Chair Rummel — yes; Senator Marsauley — yes; Senator Patton — yes; Senator Powers — yes; Senator Wallen — yes. The motion carried and Senator Powers agreed to carry the bill.

Committee members asked carriers and county representatives to track administration revenues and noted the bill's fiscal impacts are concentrated on rural providers that rely on the fee to administer local programs.