April 07, 2010

Indiana General Assembly Addresses 911 Service Fees

On March 25, 2010, Governor Mitch Daniels signed House Enrolled Act 1086 into law. HEA 1086 (State and Local Administration) is also known as the 2010 tax bill due to the numerous tax provisions contained in the 196-page single bill. While the language addresses various tax provisions, it also addresses pre-paid wireless phone 911 service fees. Similar bills containing 911 service fee language were introduced earlier in the session as recognition of the struggling condition of public safety answering points (PSAPs) continues to grow. Although state statute only requires counties to consolidate to less than three PSAPs by 2014, some county PSAPs have already consolidated or are considering early consolidation to save money. Landline and mobile 911 fees typically only cover a small portion of a PSAP's budget, leaving cities, towns and counties to fund the shortfalls.

Aware of the funding dilemma, the Indiana Wireless E911 Advisory Board, comprised of State Treasurer Richard Murdock, three PSAP representatives and three wireless carrier representatives, strives to improve this emergency service for wireless callers throughout the State. While HEA 1086 focuses on the inconsistency in payment by pre-paid phones for 911 services, many legislators addressed other issues relating to PSAPs during the session including, but not limited to, landline and wireless fee parity. Prior to HEA 1086, PSAPs received fees from two separate fee classifications: landline 911 service fees and wireless 911 service fees. Under statutory requirements, landline fees are set by local units of government while the Indiana Wireless E911 Advisory Board sets wireless fees. With the movement away from landline phones to wireless phones, some legislators found a need to bring the differences in fees closer to parity in order to begin to properly fund PSAPs.

With little traction to move the two fee classifications closer to one this session, Senator Brandt Hershman led a charge to create a new, third fee classification for pre-paid phones. Prior to the legislation, PSAPs received payment for services from both wireless and landline phones. However, the remittance varies by vendor of the pre-paid phones. Some prepaid vendors considered pre-paid phones wireless telephones and remitted the entire 911 service fee of 50 cents for each phone to the state for distribution to the PSAPs while at least one vendor did not remit anything to the state for pre-paid services. Thus, the legislators sought to clear up the controversy and inconsistencies over the amount owed to the state from pre-paid phones for distribution to the local PSAPs.

HEA 1086 requires pre-paid retailers to collect half of the current wireless 911 fee, or 25 cents, to remit to the state for distribution to the PSAPs. The pre-paid collection is set to expire if the amount collected two years after the legislation is less than 5 percent of the total collected over two years prior to the legislation.

Concerned with the unpredictable outcome of House Enrolled Act 1086 and the needs of the struggling, underfunded PSAPs, Representative Kathy Richardson (R-Noblesville) authored House Resolution 96 which urges the Legislative Council to establish an interim study committee to examine the enhanced wireless emergency telephone service.

The Legislative Council is chaired this year by House of Representatives Speaker Pat Bauer (D-South Bend), and Senate President Pro Tem David Long (R-Fort Wayne) will serve as Vice Chair. The Legislative Council will determine the issues the committees will address and convene early this summer.

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