FCC: Six States Diverted 911 Funds for Other Purposes in 2016

Six states diverted 911 funds for other purposes in 2016, according to an annual report released by the FCC today. The total amount diverted by reporting jurisdictions was $128.9 million, or about 5% of the total collected in 911/enhanced 911 (E911) fees, the report said. The report, the ninth annual document to Congress on fee diversions, said that the following states diverted 911 fees for other purposes: New Jersey, West Virginia, Illinois, New Mexico, Rhode Island, and New York. The report covered the calendar year 2016.

New York was the only one of the six states that did not submit a report to the FCC for the report the agency released today (46 states, the District of Columbia, American Samoa, and the U.S. Virgin Islands responded to the FCC’s data request). But the Commission said that “sufficient public record information exists to support a finding that New York diverted funds for non-public safety uses.”

The report said that the FCC’s Public Safety and Homeland Security Bureau “has found New York to be a diverter of 911 fees every year since the 2009 Report to Congress, and in 2016 New York continued to operate under the state law framework that provides for such diversion. New York State Consolidated Tax Law §186-f requires the collection of a monthly $1.20 fee for each mobile device. Under the statute, approximately forty-one percent of the collected fee is diverted to the state’s General Fund. In addition, the law requires that $25.5 million ‘must be’ allocated to the New York State Police. Further, also by statute, ‘up to’ another $75 million of collected fees is set aside for grants or reimbursements to counties for the development, consolidation, or operation of public safety communications systems or networks designed to support statewide interoperable communications for first responders.

“An additional $10 million ‘shall be’ used for the provision of grants to counties for costs related to the operations of PSAPs,” the report said. “Lastly, the statute allows for the diversion of approximately $1.5 million to the New York State Emergency Services Revolving Fund, but that provision is suspended from fiscal years 2011-2018. State tax records indicate that in 2016, New York collected approximately $185,344,986 from the Public Safety Surcharge. During the annual 2016 period, the state awarded approximately $10 million in grants to counties to support PSAP related costs. Thus, while New York has not provided 911 fee data to the Bureau to enable a calculation of the amount of fees diverted by the state in 2016, and is therefore not listed in Table 16, the Bureau finds sufficient information in the public record to support a finding that New York diverted funds for non-public safety purposes and that the amount diverted was likely substantial.”

The report said that New Jersey and West Virginia said they used a portion of the 911/E911 funds for non-911 public safety programs, while Illinois, New Jersey, New Mexico, and Rhode Island used a portion of those funds for non-public safety “or unspecified uses.”

The report said that states and other reporting jurisdictions said they collected nearly $2.8 billion in 2016 in 911/E911 fees or charges.

In addition, 38 states and D.C. said they engaged in next-generation 911 (NG-911) activities in 2016, with those expenditures totaling $205.5 million, or about 7.4% of the total collected. Thirteen states reported the deployment of state-wide ESInets, and 12 said they have regional ESInets. Eight states have local ESInets.

As for text-to-911 deployment, 46 states, D.C., American Samoa, and the U.S. Virgin Islands said that 811 public safety answering points (PSAPs) were text-capable at the end of 2016 and they projected that 1,026 PSAPs would be at the end of 2017. The report said that information from the FCC’s registry on text-to-911 deployments “suggests that the expansion of text-to-911 in 2017 has come close to these projections.”

“While almost every state collects 911 fees from in-state subscribers, twenty states, the District of Columbia, American Samoa, and the U.S. Virgin Islands reported that they lack authority to audit service providers to verify that the collected fees accurately reflect the number of instate subscribers served by the provider,” the report also said. “Of the states that have audit authority, five conducted audits in 2016.”

“On the topic of cybersecurity preparedness for Public Safety Answering Points (PSAPs), thirty-four states, American Samoa, and the U.S. Virgin Islands indicated that they spent no 911 funds in 2016 on 911–related cybersecurity programs for PSAPs,” according to the report. “Eleven states and the District of Columbia stated that they had made cybersecurity-related expenditures.”

FCC Commissioner Mike O’Rielly tweeted about the report today. “Harmfully, a subset of states & territories are underfunding 9-1-1 systems, preventing NG9-1-1 upgrades, or deceiving its citizens,” he said.

The bureau released a public notice today seeking comment on the report. Comments are due March 9 and replies March 26 in PS docket 09-14.

“As an initial matter, we seek comment on the sufficiency and accuracy of the reported information, including additional information concerning the specific impact, if any, that such diversion has had on the provision of 911 service in those states. We also seek comment on whether there have been any other instances of fee diversion by states or local jurisdictions not identified in the Report, including counties or other jurisdictions in states that have local or hybrid fee collection programs,” the bureau said.

“Secondly, we seek comment on potential ways to dissuade states and other jurisdictions from instituting 911 fee diversion,” it said. “We seek comment on whether states and other jurisdictions have altered practices in order to avoid losing eligibility to participate in [a] grant program. We also seek comment on other mechanisms, including Commission action, which can create incentives for state and other jurisdictions to avoid diverting 911 fees to non-911 purposes. For example, proposals for Commission action have included barring states that divert 911 fees from imposing 911 fees on interstate calls, and prohibiting service providers from collecting and remitting 911 fees back to state or other jurisdictions that divert those fees to other uses.”

The bureau said it also wants information on NG-911 spending. “Thirty-eight states and the District of Columbia reported engaging in NG911 programs in calendar year 2016. The total amount of reported NG911 expenditures from 911/E911 fees was $205,494,105, or approximately 7.4 percent of total 911/E911 fees collected in 2016,” it noted. “In 2014, 2015 and 2016, NG911-related expenditures totaled approximately $108 million, or 4.5 percent of total fees collected, $227.5 million, or 9 percent of total 911 fees, and $164.8 million, or 6 percent of total fees, respectively. We seek comment on whether NG911 expenditures identified over the past three years are representative of overall NG911 expenditures, indicative of a trend in expected future expenditures, and whether the identified expenditures are adequate for implementation of NG911 services and infrastructure nationwide. Thirteen states, American Samoa, and the US Virgin Islands reported not spending any money on NG911. We seek comment on the impact of this failure to prepare for impending communications sector IP technology transition, including the impact on commercial providers and on consumers and communities.”

The public notice also pointed out that “[a]s in previous years, the Report finds that almost every reporting jurisdiction collects 911 fees from in-state subscribers, but many states continue to lack authority to audit service providers to verify that the collected fees accurately reflect the number of in-state subscribers served by the provider. We seek comment on the impact that this lack of auditing authority has on these states and local entities and any additional barriers towards their effective oversight of fee collection.” —Paul Kirby, paul.kirby@wolterskluwer.com

Courtesy TRDaily