Brief ⁽¹⁾

Senate Sub. for HB 2034 would establish a mechanism for financing of emergency telephone service. The bill defines "enhanced wireless 911 service" as a telephone exchange communication service by which wireless telecommunication carriers can provide automatic number identification, pseudo-automatic number identification, and wireless automatic location identification information to a public safety answering point which has the capability of providing selective routing, selective transfer, fixed transfer, automatic number identification, and wireless automatic location identification. Specifically, the bill would authorize a surcharge on wireless telecommunications service for purposes of financing emergency telephone systems. Current law provides for a tax on wireline or exchange telephone service, but expressly prohibits the taxation of wireless (cellular) telephone service.

The bill includes the following provisions.

Surcharge. The bill would authorize a surcharge of up to $.50 per month per subscriber account. Subscriber account is defined as the ten-digit access number assigned to a customer regardless or whether more than one such number is aggregated for the purpose of billing a service user. However, no tax on access lines could be applied to wireless connections used for remote control purposes and capable of accessing only one number. The wireless carriers would add the surcharge to each subscriber's telephone bill. The wireless carriers would then collect the surcharge and remit the proceeds to the administrator of the Wireless 911 Fund (hereafter "fund") on a monthly basis. The wireless carrier would be authorized under the bill to retain 2 percent of the surcharge to offset its administrative expenses. Those cities and counties which have entered into an agreement with wireless carriers for the purpose of implementing emergency 911 services and which operate a PSAP would automatically receive 20 percent of the surcharge collected within the city or county. Likewise, wireless carriers could retain 20 percent of the surcharge which they collect to recover emergency 911 costs. The bill specifies that all charges for E-911 services must be identified as such on the subscriber's bill.

Administrator of the Enhanced Wireless 911 Fund. The Governor would appoint a person who would be employed by or contracted with the Kansas Highway Patrol to administer the fund. The administrator would have the following duties:

• •Determine the costs to implement wireless automatic location identification.
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• •Promote collaboration between public safety answering points (PSAPs) and encourage economies of scale.
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• •Determine the level of funding available for disbursements to be made.
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• •Determine the percentage of the funds that shall be allocated to each funding purpose.
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• •Determine how the funds distributed for technology and equipment would be allocated and distributed to wireless carriers and PSAPs.
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• •Adjust the percentages of the surcharge which automatically go to wireless carriers, cities, or counties to prevent over or under recovery of costs incurred to implement emergency 911 service. These adjustments could only be made once every two years.
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• •Adopt necessary rules and regulations.
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Wireless Enhanced 911 Advisory Board. The bill would establish an 11-member advisory board to advise the administrator. The membership of the board would include the following: one representative of local law enforcement; one representative of the Kansas Highway Patrol; one county official or county employee; one municipal official or municipal employee; two representatives from the state's wireless telecommunications industry; two managers of PSAPs; one representative of the state's local exchange telecommunications service industry; and two legislators from different political parties, appointed by the Legislative Coordinating Council. The board would be required to report to the Legislature regarding the status of implementation of the act in 2003 and 2005. The board would sunset on July 1, 2005.

The board would make recommendations to the administrator on the implementation of the act and specifically on the following:

• •Allocation of moneys from the fund;
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• •Rules and regulations;
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• •Adjustments in the amount of the surcharge; and
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• •Resolution of disputes between PSAPs and wireless carriers.
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Enhanced Wireless 911 Fund. Fund moneys would come from surcharges, any appropriations from the state, and federal funds received for wireless emergency 911. The administrator, in consultation with the board, would establish standards and criteria to determine the eligibility of applications for disbursements from the fund and the level of disbursement for each application. The following purposes would be eligible for funding:

• •Necessary and reasonable costs incurred or to be incurred by PSAPs to implement enhanced wireless 911 service including purchase of equipment and upgrades and modification to equipment used solely to process the data elements of enhanced wireless 911 service, maintenance costs, and license fees for the equipment and the training of personnel to operate the equipment. This would include the cost of training PSAP personnel to provide effective service to system users with communications difficulties.
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• •Necessary and reasonable costs incurred or to be incurred by PSAPs for the purchase, installation, maintenance, and operation of telecommunications equipment and telecommunications services required for the provision of 911 service, or enhanced 911 service, if the costs are necessary to prepare the PSAP for the capability of providing enhanced wireless 911 service.
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• •Necessary and reasonable costs incurred or to be incurred by wireless carriers to implement enhanced wireless 911 service pursuant to a service agreement with a PSAP or pursuant to a request for service from a PSAP. Costs would include: the portion of the costs for equipment used for providing enhanced wireless 911 service; costs to lease another vendor's equipment or services to provide enhanced wireless 911 service; costs to create or maintain any database or database elements used solely for enhanced wireless 911 service; and other costs of establishing enhanced 911 wireless service. Only the portion of the costs of equipment or services used in the wireless carrier's main infrastructure necessary to implement enhanced 911 service or enhanced wireless 911 service shall be eligible for funding.
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• •Actual and necessary expenses incurred by members of the advisory board while performing duties required by the act.
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Administrative Support Services. The Superintendent of the Highway Patrol would provide budgeting, purchasing, and related management functions for the administrator and the enhanced wireless 911 advisory board.

Liability Issues. Under the bill, the administrator, governing bodies, public agencies, and wireless carriers and their employees and agents would not be liable for the payment of damages resulting from the performance of installing, maintaining, or providing or contracting for enhanced wireless 911 service, except as provided by the Kansas Tort Claims Act.

Deployment Deadline. The bill would impose a deadline of July 1, 2004 for deployment of Phase I and II of the enhanced 911 service as established by the Federal Communications Commission (FCC).

Background

Currently, when someone calls 911 using a wireless phone, no information is available to the dispatcher about the call or the caller. In 1996, the Federal Communications Commission (FCC) issued regulations which set up a two-phase process for implementing enhanced 911 for wireless service. Phase I requires wireless service providers to relay to the appropriate PSAP the telephone number of a wireless handset originating a 911 call, as well as the location of the cell tower receiving the call. This information will provide a rough indication of the caller's location. The FCC requires the wireless service provider to comply with Phase I requirements within six months after a PSAP makes a request for those services.

A 14-member task force established by 2000 Senate Sub. for HB 2945 proposed several recommendations, which were reflected in the introduced version of HB 2034. The House Utilities Committee amended the bill to: add cable telephony service providers to the definition of service supplier; prohibit the use of a protest petition for the extension of the emergency telephone tax to cable telephony service or wireless service; specify that the customer's billing address is the basis for the imposition of the tax on wireless service; provide that the tax should not be imposed on wireless connections used for remote control purposes; specify that nonadministrative expenses not included in tariffs or customer charges may be recovered through negotiations between service providers and the city or county at its discretion; remove as allowable uses for emergency telephone tax funding for PSAP operations: engineering, architectural, and construction costs attributable to the emergency telephone system; require separate accounting of emergency telephone tax revenues and expenditures by type of service; require a deadline on the imposition of an emergency telephone tax on wireless service if Phase I is not implemented within 24 months after the date the tax is first imposed; expand protection to service suppliers and public agencies from liability that may result from the release of subscriber information; require service suppliers to design, maintain, and operate their facilities to maximize direct delivery of each 911 call to the appropriate PSAP; and establish a wireless enhanced 911 advisory board. Other amendments were technical.

The Senate Commerce Committee introduced SB 298, also pertaining to wireless emergency 911 services. The Committee held hearings on both HB 2034 and SB 298, at which time representatives of the following governments, corporations, and organizations offered testimony: the Johnson County Sheriff's Office, the League of Kansas Municipalities, Sedgwick County Emergency Management, the City of Overland Park, the Kansas Association of Counties, the City of Olathe, AT&T, the Kansas Trial Lawyers Association, the Rural Local Exchange Carriers of Kansas, Sprint, ALLTEL, the Overland Park Police Department, the Rural Telephone Companies of Kansas, the Kansas Emergency Medical Services Association, and Barton County.

The Senate Committee ultimately recommended a Senate substitute bill for HB 2034 using language from both HB 2034 and SB 298. The Senate substitute bill contains the centralized approach of SB 298, which differs from the decentralized approach of HB 2034. The decentralized approach of the House version would allow governing bodies to impose a tax on cable telephony access lines and wireless connections.

The Senate Committee of the Whole made the following amendments to Senate Sub. for HB 2034.

• •Inserted language in the liability section of the bill to hold the administrator, governing bodies, public agencies, and wireless carriers liable for the payment of damages resulting from intentional acts.
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• •Provided for recovery of costs of training PSAP personnel to provide effective service to system users with communications difficulties.
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• •Removed the requirement that members of the Wireless Enhanced 911 Advisory Board be appointed for staggered terms.
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• •Exempted wireless connections used for remote control purposes and capable of accessing only one number from any access line tax.

The Senate Committee further amended HB 2034 in several ways. These amendments include the following.

• •Provide for an automatic payment of 20 percent of the surcharge to cities or counties operating a PSAP and wireless carriers providing emergency 911 service.
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• •Specify that no additional money beyond the surcharge could be collected from a subscriber's bill for emergency 911.
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• •Impose a deadline of July 1, 2004 for deployment of Phase I and II of the enhanced 911 service as established by the FCC.
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• •Allow the administrator to adjust, once every two years, the percentages of the surcharge which participating wireless carriers, cities, or counties automatically receive.
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The Senate amended the bill on final action to remove the provision specifying that no additional money beyond the surcharge could be collected from a subscriber's bill for E-911. This language was replaced with a requirement that all charges for E-911 services must be identified as such on the subscriber's bill.

An updated fiscal note for the Senate substitute for HB 2034 was not available upon publication of this supplemental note. However, the Division of the Budget provided a fiscal note for SB 298 which estimated that a surcharge of $0.50 per subscriber account would generate $6,000,000 for the Wireless Enhanced 911 Fund in FY 2002. The fiscal note also anticipated additional expenditures of $314,884 by the Highway Patrol relative to the program in FY 2002.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/fulltext.cgi