SB 152 — LOW-INCOME TELECOMM. ASSISTANCE PROGRAM

(3) the surcharge is the liability of the e t 17 prepaid consumer and not of the seller or any provider;

w l n d 18 [except] provided that the seller shall be liable to remit all = = 19 surcharges collected from the prepaid consumer as provided in a l i a e r 20 this subsection, including all such surcharges that the seller a t m m 21 is deemed to collect where the amount of the surcharge has not d r e 22 been separately stated on an invoice, receipt or other similar c e s k 23 document provided to the prepaid consumer by the seller;

e a n b 24 (4) the amount of the surcharge that is u [ collected by a seller from a prepaid consumer, if such amount .233873.1 - 8 - SFC/SB 152 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 SFC/SB 152 Page 8 for a single, non-itemized price, the percentage specified in Subsection A of this section shall apply to the entire non-non-itemized itemized price unless the seller elects to apply such percentage to:

or (b) if the seller can identify the e t 17 portion of the price that is attributable to the prepaid w l n d 18 wireless communications service by reasonable and verifiable = = 19 standards from its books and records that are kept in the a l i a e r 20 regular course of business for other purposes, including non-non-tax a t m m 21 tax purposes, such portion;

d r e 22 (6) if a minimal amount of prepaid wireless c e s k 23 communications service is sold with a prepaid wireless device e a n b 24 for a single, non-itemized price, the seller may elect not to u [ apply the percentage specified in Subsection A of this section .233873.1 - 9 - SFC/SB 152 to such transaction.

The department shall establish registration and payment procedures that substantially SFC/SB 152 Page 9 coincide with the registration and payment procedures that apply to the Gross Receipts and Compensating Tax Act.

(9) the taxation and revenue department shall e t 17 establish procedures by which a seller of prepaid wireless w l n d 18 communications services may document that a sale is not a = = 19 retail transaction, which procedures shall substantially a l i a e r 20 coincide with the procedures for documenting sale for resale a t m m 21 transactions for the Gross Receipts and Compensating Tax Act;

d r e 22 and c e s k 23 (10) notwithstanding Paragraph (1) of this e a n b 24 subsection, if a 911 surcharge is imposed on prepaid wireless u [ communications service pursuant to the Enhanced 911 Act, the .233873.1 - 10 - SFC/SB 152 taxation and revenue department shall promulgate rules to permit sellers to combine the surcharge imposed pursuant to this section and the surcharge imposed pursuant to 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 SFC/SB 152 Page 10 to the respective 911 and telecommunications relay service funds.

A telecommunications company providing intrastate telecommunications services, a home service provider providing intrastate mobile telecommunications services and a seller of interconnected voice over internet protocol services shall, on sales subject to the telecommunications relay service surcharge, assess and collect the surcharge and remit the surcharge collected monthly to the taxation and revenue department on or before the twenty-fifth day of the month e t 17 following collection.

The department shall administer and w l n d 18 enforce the collection of the surcharge in accordance with the = = 19 Tax Administration Act.

a l i a e r 20 E.

The taxation and revenue department shall a t m m 21 transfer the following amounts of the net receipts of the d r e 22 telecommunications relay service surcharge collected, less any c e s k 23 amount deducted in accordance with Subsection F of this e a n b 24 section, within the month following the month in which the u [ surcharge is collected:

.233873.1 - 11 - SFC/SB 152 (1) twenty percent to the telecommunications access fund;

The taxation and revenue department may deduct an amount not to exceed three percent of the telecommunications relay service surcharge collected as a SFC/SB 152 Page 11 charge for the administrative costs of collection and shall remit that amount to the state treasurer for deposit in the general fund each month.

e t 17 (2) the amount and category of expenditures w l n d 18 from the funds;

and = = 19 (3) the balance of the funds on that June 30." a l i a e r 20 SECTION 4.

Section 63-9H-3 NMSA 1978 (being Laws 1999, a t m m 21 Chapter 295, Section 3, as amended by Laws 2021, Chapter 118, d r e 22 Section 1 and by Laws 2021, Chapter 120, Section 8) is amended c e s k 23 to read:

e a n b 24 "63-9H-3.

DEFINITIONS.--As used in the Rural u [ Telecommunications Act of New Mexico:

.233873.1 - 12 - SFC/SB 152 A.

"affordable rates" means rates for basic service that promote universal serviceservice, [within a local exchange service area], giving consideration to the economic conditions of households in the service area and costs to provide service in the area in which service is provided;

SFC/SB 152 Page 12 B.

"basic service" means service that is provided [to a rural end-user customer] that is consistent with the federal act:

"broadband infrastructure" means [any cable or device used for high-capacity transmission over a wide range of frequencies that enables a large number of electronic messages to be transmitted or received simultaneously] facilities and e t 17 equipment used to provide internet service, excluding w l n d 18 telecommunications equipment owned, controlled or operated by a = = 19 public or private end user;

a l i a e r 20 D.

"cable service" means the transmission to a t m m 21 subscribers of video programming or other programming service d r e 22 and subscriber interaction, if any, that is required for the c e s k 23 selection or use of the video programming or other programming e a n b 24 service;

u [ E.

"commission" means the public regulation .233873.1 - 13 - SFC/SB 152 commission;

"digital equity" means information technology needed for civic and cultural participation, employment, SFC/SB 152 Page 13 education, business and economic development, lifelong learning and access to essential services generally available to residents regardless of their racial grouping, socioeconomic status or cultural identity;

"eligible telecommunications carrier" means an e t 17 eligible telecommunications carrier as defined in the federal w l n d 18 act;

= = 19 J.

"federal act" means the federal a l i a e r 20 Telecommunications Act of 1996;

a t m m 21 K.

"fund" means the state rural universal service d r e 22 fund;

c e s k 23 L.

"incumbent local exchange carrier" means a e a n b 24 person that:

u [ (1) was designated as an eligible .233873.1 - 14 - SFC/SB 152 telecommunications carrier by the state corporation commission in Docket #97-93-TC by order dated October 23, 1997, or that provided local exchange service in this state on February 8, 1996;

"incumbent rural telecommunications carrier" means an incumbent local exchange carrier that serves fewer than fifty thousand access lines within the state and has SFC/SB 152 Page 14 been designated as an eligible telecommunications carrier by the state corporation commission or the public regulation commission;

e t 17 O.

"local exchange service" means the transmission w l n d 18 of two-way interactive switched voice communications furnished = = 19 by a telecommunications carrier within a local exchange area;

a l i a e r 20 P.

"long distance service" means telecommunications a t m m 21 service between local exchange areas that originate and d r e 22 terminate within the state;

c e s k 23 Q.

"office" means the office of broadband access e a n b 24 and expansion;

u [ [Q.] R.

"private telecommunications service" means .233873.1 - 15 - SFC/SB 152 a system, including its construction, maintenance or operation for the provision of telecommunications service, or any portion of that service, by a person for the sole and exclusive use of that person and not for resale, directly or indirectly.

If any other person uses SFC/SB 152 Page 15 the telecommunications service, whether for hire or not, the private telecommunications service is a public telecommunications service;

[R.] S.

"public telecommunications service" means the transmission of signs, signals, writings, images, sounds, messages, data or other information of any nature by wire, radio, lightwaves or other electromagnetic means originating and terminating in this state regardless of actual call e t 17 routing.

"Public telecommunications service" does not include w l n d 18 the provision of terminal equipment used to originate or = = 19 terminate the service;

a l i a e r 20 broadcast transmissions by radio, television and satellite a t m m 21 broadcast stations regulated by the federal communications d r e 22 commission;

radio common carrier services, including mobile c e s k 23 telephone service and radio paging;

e a n b 24 T.

"rural area" means an unincorporated area or a u [ city, a town or an incorporated area with a population of .233873.1 - 16 - SFC/SB 152 twenty thousand or less as reflected in the most recent federal decennial census or applicable tribal census;

[S.] U.

"statewide broadband plan" means the [Stateplan ofdeveloped Newby Mexicothe Broadbandoffice Strategicpursuant Planto andthe Rural Broadband AssessmentAccess publishedand byExpansion theAct; department of information technology in June 2020;

providedV. that, upon Senate Bill 93 of the first session of the fifty-fifth legislature becoming law, "statewide broadband plan" means the statewide broadband plan developed pursuant to that law and] plan developed by the office pursuant to the Broadband Access and Expansion Act;

[T.] V.

"underserved" means an area or property that SFC/SB 152 Page 16 does not have access to fixed and mobile internet service offering speeds greater than one hundred megabits per second downstream and twenty megabits per second upstream;

and e t 17 X.

"unserved" means an area or property that either w l n d 18 does not have access to fixed and mobile internet service at = = 19 all or only has access to internet service offering speeds a l i a e r 20 below twenty-five megabits per second downstream or three a t m m 21 megabits per second upstream." d r e 22 SECTION 5.

Section 63-9H-4 NMSA 1978 (being Laws 1999, c e s k 23 Chapter 295, Section 4, as amended) is amended to read:

e a n b 24 "63-9H-4.

REGULATION BY COMMISSION.-- u [ A.

Except as otherwise provided in the Rural .233873.1 - 17 - SFC/SB 152 Telecommunications Act of New Mexico or the federal act, each public telecommunications service is declared to be affected with the public interest and, as such, subject to the provisions of those acts, including the regulation thereof as provided in those acts.

provided, however, that the commission's jurisdiction includes the regulation of wholesale rates, including access charges and interconnection agreements consistent with federal law and its enforcement SFC/SB 152 Page 17 and a determination of participation in low-income telephone service assistance programs pursuant to the [Low Income Telephone Service Assistance Act] Rural Telecommunications Act of New e t 17 Mexico.

w l n d 18 C.

The commission shall adopt rules consistent with = = 19 the requirement for relaxed regulation for incumbent rural a l i a e r 20 telecommunications carriers set forth in the Rural a t m m 21 Telecommunications Act of New Mexico that provide for:

d r e 22 (1) reduced filing requirements for applicants c e s k 23 in rate increase proceedings under the Rural Telecommunications e a n b 24 Act of New Mexico and proceedings under that act seeking u [ payments from the fund;

and .233873.1 - 18 - SFC/SB 152 (2) expedited consideration in all proceedings initiated pursuant to the Rural Telecommunications Act of New Mexico in order to reduce the cost and burden for incumbent rural telecommunications carriers and other applicants." SECTION 6.

The commission shall implement and maintain a "state rural universal service fund" to maintain and support universal service [that is] provided by eligible telecommunications carriers, including commercial mobile radio services carriers, as are determined by the commission.

As used in SFC/SB 152 Page 18 this section, "universal service" means basic local exchange service, comparable retail alternative services at affordable rates, service pursuant to a low-income [telephone] e t 17 telecommunications assistance plan and broadband internet w l n d 18 access service to unserved and underserved areas as determined = = 19 by the commission.

a l i a e r 20 B.

The fund shall be financed by a surcharge on a t m m 21 intrastate retail public telecommunications services to be d r e 22 determined by the commission, excluding services provided c e s k 23 pursuant to a low-income [telephone] telecommunications e a n b 24 assistance plan billed to end-user customers by a u [ telecommunications carrier, and excluding all amounts from .233873.1 - 19 - SFC/SB 152 surcharges, gross receipts taxes, excise taxes, franchise fees and similar charges.

For purposes of this section, a "communication connection" means a voice-voice-enabled enabled telephone access line, wireless voice connection, unique voice over SFC/SB 152 Page 19 internet protocol service connection or other uniquely identifiable functional equivalent as determined by the commission.

Such surcharges shall be competitively and e t 17 technologically neutral.

Money deposited in the fund is not w l n d 18 public money, and the administration of the fund is not subject = = 19 to the provisions of law regulating public funds.

The a l i a e r 20 commission shall not apply this surcharge to a private a t m m 21 telecommunications network;

to the state, a county, a d r e 22 municipality or other governmental entity;

to a public school c e s k 23 district;

to e a n b 24 eligible households that participate in the low-income u [ telecommunications assistance program;

to an Indian nation, .233873.1 - 20 - SFC/SB 152 tribe or pueblo;

(1) establish eligibility criteria for participation in the fund consistent with federal law that ensure the availability of universal service at affordable SFC/SB 152 Page 20 rates.

e t 17 (2) provide for the collection of the w l n d 18 surcharge on a competitively neutral basis and for the = = 19 administration and disbursement of money from the fund;

a l i a e r 20 (3) determine those services and areas a t m m 21 requiring support from the fund;

d r e 22 (4) provide for the separate administration c e s k 23 and disbursement of federal universal service funds consistent e a n b 24 with federal law;

and u [ (5) establish affordability benchmark rates .233873.1 - 21 - SFC/SB 152 for local residential and business services that shall be utilized in determining the level of support from the fund.

The commission may grant eligible carrier status to a competitive carrier in a rural area upon a finding that granting the application is in SFC/SB 152 Page 21 the public interest.

(1) the impact of designation of an additional e t 17 eligible carrier on the size of the fund;

w l n d 18 (2) the unique advantages and disadvantages of = = 19 the competitor's service offering;

and a l i a e r 20 (3) any commitments made regarding the quality a t m m 21 of [telephone] service.

d r e 22 F.

The commission shall adopt rules, including a c e s k 23 provision for variances, for the implementation and e a n b 24 administration of the fund in accordance with the provisions of u [ this section.

The rules shall enumerate the appropriate uses .233873.1 - 22 - SFC/SB 152 of fund support and any restrictions on the use of fund support by eligible telecommunications carriers.

The rules shall require that through December 31, 2028, an eligible telecommunications carrier receiving support from the fund pursuant to Subsection K, L, M or N of this section [must] shall expend no less than sixty percent of the support it receives to deploy and maintain broadband internet access services in rural areas of the state.

The rules also shall SFC/SB 152 Page 22 provide for annual reporting by eligible telecommunications carriers verifying that the reporting carrier continues to meet the requirements for designation as an eligible e t 17 telecommunications carrier for purposes of the fund and is in w l n d 18 compliance with the commission's rules, including the = = 19 provisions regarding use of support from the fund.

a l i a e r 20 G.

The commission shall, upon implementation of the a t m m 21 fund, select a neutral third-party administrator to collect, d r e 22 administer and disburse money from the fund under the c e s k 23 supervision and control of the commission pursuant to e a n b 24 established criteria and rules promulgated by the commission.

u [ The administrator may be reasonably compensated for the .233873.1 - 23 - SFC/SB 152 specified services from the surcharge proceeds to be received by the fund pursuant to Subsection B of this section.

provided, however, that nothing in this section shall be construed as granting any authority to the commission to [impose the surcharge on or otherwise] regulate broadband internet access services.

The commission shall ensure that intrastate switched access charges are equal to interstate switched access charges established by the federal communications SFC/SB 152 Page 23 commission as of January 1, 2006.

Nothing in this section shall preclude the commission from considering further adjustments to intrastate e t 17 switched access charges based on changes to interstate switched w l n d 18 access charges.

= = 19 J.

To ensure that providers of intrastate retail a l i a e r 20 communications service contribute to the fund and to further a t m m 21 ensure that the surcharge determined pursuant to Subsection B d r e 22 of this section to be paid by the end-user customer will be c e s k 23 held to a minimum, the commission shall adopt rules, or take e a n b 24 other appropriate action, to require all such providers to u [ participate in a plan to ensure accurate reporting.

.233873.1 - 24 - SFC/SB 152 K.

Notwithstanding the provisions of Subsection K SFC/SB 152 Page 24 of this section, the annual amount of access reduction support payments for an eligible incumbent local exchange carrier in [2024, 2025 and 2026] each year shall be equal to the annual e t 17 access reduction support payments for that eligible incumbent w l n d 18 local exchange carrier for the year 2023.

[Access reduction = = 19 support payments shall be terminated after December 31, 2026.] a l i a e r 20 M.

The commission shall determine the methodology a t m m 21 to be used to authorize payments to all other carriers that d r e 22 apply for and receive eligible carrier status;

c e s k 23 (1) an eligible incumbent telecommunications e a n b 24 carrier that is not eligible for funding pursuant to rate u [ rebalancing in Subsection K of this section and that has been .233873.1 - 25 - SFC/SB 152 previously authorized pursuant to Subsection N of this section for need-based support may apply for ongoing fund support at the annual amount previously authorized in 2023;

[provided that an eligible telecommunications carrier receiving fund support pursuant to this subsection shall not offer basic local exchange residential and business services at rate levels lower than the rates for such services charged by any of the comparable carriers used for the determination of the level of support;] (3) the commission shall act upon a request for ongoing fund support within one hundred twenty days of the filing of the request;

and (4) nothing in this [section] subsection shall e t 17 limit the commission's authority to adopt rules [pursuant to w l n d 18 Subsection F of this section] regarding appropriate uses of = = 19 fund support and any restrictions on the use of the fund a l i a e r 20 support by eligible telecommunications carriers.

aSFC/SB t152 mPage m25 21 N.

The commission may also authorize payments from d r e 22 the fund to incumbent rural telecommunications carriers or to c e s k 23 telecommunications carriers providing comparable retail e a n b 24 alternative services that have been designated as eligible u [ telecommunications carriers serving in rural areas of the state .233873.1 - 26 - SFC/SB 152 upon a finding, based on factors that may include a carrier's regulated revenues, expenses or investment, by the commission that such payments are needed to ensure the widespread availability and affordability of universal service.

The commission shall decide cases filed pursuant to this subsection with reasonable promptness, with or without a hearing, but no later than six months following the filing of an application seeking payments from the fund, unless the commission finds that a longer time will be required, in which case the commission may extend the period for an additional three months.months." SECTION 7.

[O.

The commission shall adopt rules that establish and implement a broadband program to provide funding to eligible telecommunications carriers for the construction and maintenance of broadband infrastructure.

Each year, an amount equal to forty million dollars ($40,000,000) less the amounts e t 17 expended pursuant to Subsections K, L, M and N of this section w l n d 18 shall be dedicated to the broadband program.

= = 19 P.

Rules adopted pursuant to Subsection O of this a l i a e r 20 section shall require that the commission:

a t m m 21 (1) consider applications for funding on a d r e 22 technology-neutral basis;

c e s k 23 (2) submit applications for funding to the e a n b 24 connect New Mexico council for prioritization and alignment u [ with the statewide broadband plan to ensure digital equity and .233873.1 - 27 - SFC/SB 152 digital inclusion;

and (3) require that the awards of support be consistent with federal universal service support programs.

Q.

The total obligations of the fund determined by the commission pursuant to this section, plus administrative expenses and a prudent fund balance, shall not exceed a cap of forty million dollars ($40,000,000) per year.

R.

By October 1 of each year, the commission shall make a report to the legislature regarding the status of the fund, including:

(1) relevant data relating to implementation of the broadband program and the progress toward digital equity and digital inclusion in rural areas of the state;

(2) recommendations for changes to the structure, size and purposes of the fund and whether the cap on the fund provided for in Subsection Q of this section should be e t 17 modified, maintained or eliminated;

and w l n d 18 (3) the service areas that received funding = = 19 awards from the broadband program and the amounts of those a l i a e r 20 awards.

a t m m 21 S.

The 2025 annual report made pursuant to d r e 22 Subsection R of this section shall include an assessment of the c e s k 23 state rural universal service fund that addresses:

e a n b 24 (1) whether to repurpose the access reduction u [ support funds into the commission's broadband support program;

.233873.1 - 28 - SFC/SB 152 (2) a methodology for determining broadband support levels that is consistent with the requirements of Subsection C of this section and accounts, at a minimum, for broadband costs, potential revenues from deployed infrastructure and existing federal support mechanisms;

(3) the appropriate size of the fund;

(4) criteria for awarding funding;

(5) the impact of proposed changes on per- connection assessments;

and (6) whether all sellers of prepaid telecommunications services should be required to collect state rural universal service fund assessments at the point of sale, similar to the methodology for collecting 911 emergency surcharges pursuant to Section 63-9D-5 NMSA 1978.]" SECTION 7.

e"LOW-INCOME t 17 "[NEW MATERIAL] LOW-INCOME TELECOMMUNICATIONS ASSISTANCE w l n d 18 AND BROADBAND PROGRAMS--REPORTS.-- = = 19 A.

By January 1, 2027, the commission shall a l i a e r 20 promulgate rules to implement a low-income telecommunications a t m m 21 assistance program to ensure affordable access to d r e 22 telecommunications services to eligible low-income households c e s k 23 in New Mexico.

Rules adopted pursuant to this subsection eSFC/SB a152 nPage b26 24 shall:

u [ (1) complement the lifeline program .233873.1 - 29 - SFC/SB 152 administered by the federal communications commission or a successor federal broadband affordability program;

(4) require participating eligible telecommunications carriers to use the national verifier or national lifeline accountability database administered by the federal communications commission, a successor federal broadband affordability database or an alternative mechanism e t 17 approved by the commission to verify eligible households under w l n d 18 Paragraph (5) of this subsection;

and = = 19 (5) provide for an eligible telecommunications a l i a e r 20 carrier to provide assistance in the form of reduced rates to a t m m 21 households that:

d r e 22 (a) include a student identified by the c e s k 23 public education department who is determined to be at risk eSFC/SB a152 nPage b27 24 pursuant to the final judgment in the Yazzie/Martinez v.

State u [ of New Mexico consolidated lawsuit;

.233873.1 - 30 - SFC/SB 152 (b) meet the eligibility criteria of one or more need-based assistance programs administered by the health care authority;

The commission shall adopt rules to establish and implement a broadband program to provide funding to assist eligible telecommunications carriers in the construction or maintenance of rural broadband infrastructure to ensure that all New Mexico residents have access to broadband internet e t 17 access service that meets the quality of service standards w l n d 18 established pursuant to the Broadband Access and Expansion Act = = 19 or by the federal communications commission if state standards a l i a e r 20 are not established pursuant to the Broadband Access and a t m m 21 Expansion Act;

provided that rules adopted pursuant to this d r e 22 subsection shall:

cSFC/SB e152 sPage k28 23 (1) consider applications for funding on a e a n b 24 technology-neutral basis;

u [ (2) require that applications for funding be .233873.1 - 31 - SFC/SB 152 submitted to the office for prioritization and alignment with the statewide broadband plan;

e t 17 (1) the number of households receiving w l n d 18 assistance from the low-income telecommunications assistance = = 19 program pursuant to this section;

a l i a e r 20 (2) the number of households in New Mexico aSFC/SB t152 mPage m29 21 eligible for low-income telecommunications assistance pursuant d r e 22 to this section based on eligible households identified by the c e s k 23 public education department, the health care authority and the e a n b 24 federal communications commission;

u [ (3) the estimated cost of providing low-income .233873.1 - 32 - SFC/SB 152 telecommunications assistance to all eligible households in New Mexico;

and e t 17 (b) whether the cap on the broadband w l n d 18 program provided for in Subsection B of Section 8 of this 2026 = = 19 act should be modified, maintained or eliminated;

a l i a e r 20 (8) details regarding collaboration with the aSFC/SB t152 mPage m30 21 office in the implementation and operation of the broadband d r e 22 program;

and c e s k 23 (9) details regarding collaboration with the e a n b 24 public education department and the health care authority in u [ the implementation and operation of the low-income .233873.1 - 33 - SFC/SB 152 telecommunications assistance program." SECTION 8.

"[NEW"STATE MATERIAL] STATE RURAL UNIVERSAL SERVICE FUND BUDGET CAPS.--The total obligations of the fund determined by the commission, plus administrative expenses and a prudent fund balance, shall not exceed a cap of:

e t 17 (1) ten million dollars ($10,000,000) in the w l n d 18 first year of the program;

and = = 19 (2) forty-five million dollars ($45,000,000) a l i a e r 20 per year in subsequent years of the program." aSFC/SB t152 mPage m31 21 SECTION 9.

REPEAL.--Sections 63-9C-1 through 63-9C-6 NMSA d r e 22 1978 (being Laws 1987, Chapter 197, Sections 1 through 6, as c e s k 23 amended) are repealed.

e a n b 24 SECTION 10.

EFFECTIVE DATE.--The effective date of the u [ provisions of this act is July 1, 2026.

.233873.1SFC/SB -152 34Page -32 7 9 25