Key Provisions of the FCC 911 Fee Diversion Order

The FCC has adopted new rules designating the uses of 911 fees by states and taxing jurisdictions that constitute 911 fee diversion as required by the Don’t Break Up the T-Band Act of 2020, which became law as part of the Consolidated Appropriations Act, 2021. The Report and Order adopting the new rules tracks the proposed rules in the Commission’s February 17, 2021 Notice of Proposed Rulemaking with some modifications and clarifications. 

The Report and Order amends part 9 of the FCC rules to (1) clarify what does and does not constitute the diversion of 911 fees; (2) establish a declaratory ruling process for providing further guidance to states and taxing jurisdictions on fee diversion issues; and (3) codify the specific obligations and restrictions that section 902 imposes on states and taxing jurisdictions, including those that engage in diversion.

Here are a few key provisions of the new rules:

1. Definitions of 911 fee and diversion:

911 fee or charge. A fee or charge applicable to commercial mobile services, IP-enabled voice services, or other emergency communications services specifically designated by a State or taxing jurisdiction for the support or implementation of 911 services. A 911 fee or charge shall also include a fee or charge designated for the support of public safety, emergency services, or similar purposes if the purposes or allowable uses of such fee or charge include the support or implementation of 911 services.

Diversion. The obligation or expenditure of a 911 fee or charge for a purpose or function other than the purposes and functions designated by the Commission as acceptable pursuant to § 9.23. Diversion also includes distribution of 911 fees to a political subdivision that obligates or expends such fees for a purpose or function other than those designated as acceptable by the Commission pursuant to § 9.23. Federal Communications Commission FCC 21-80 43

Other emergency communications services. The provision of emergency information to a public safety answering point via wire or radio communications, and may include 911 and E911 service.

2. Acceptable purposes and functions:

Acceptable purposes and functions for the obligation or expenditure of 911 fees or charges for purposes of section 902 are limited to:

     (1) Support and implementation of 911 services provided by or in the State or taxing jurisdiction imposing the fee or charge; and

     (2) Operational expenses of public safety answering points within such State or taxing jurisdiction.

The rule includes a nonexclusive list of examples of acceptable and unacceptable purposes and functions.  The Order clarifies, “State and local jurisdictions … have discretion to make reasonable, good faith determinations whether specific expenditures of 911 fees are acceptable under our rules.  …  We do not agree, however, with commenters who contend that the Commission should defer to state and local law on what constitutes fee diversion … .”  The Report and Order includes a lengthy discussion of whether public safety radio systems are an acceptable purpose, ultimately “declin[ing] to define a ‘bright line’ test for applying the rule to specific radio expenditures.  … Accordingly, we do not specify public safety radio expenditures in our codified list of unacceptable uses, but we adopt our proposal defining expenditures on infrastructure or equipment as unacceptable if they do not directly support providing 911 services. In addition, we refer this issue to the 911 Strike Force for further guidance … .”

It also includes an elective “safe harbor” providing that if a state or taxing jurisdiction collects fees or charges designated for “public safety,” “emergency services,” or similar purposes and a portion of those fees goes to the support or implementation of 911 services, the obligation or expenditure of such fees or charges shall not constitute diversion provided that the state or taxing jurisdiction follows specific guidelines set out in the rules, including segregating the 911 portion of the fee from the other funds. 

3. Declaratory Ruling Process:  Under the rules, a State or taxing jurisdiction may petition the Commission for a determination that an obligation or expenditure of 911 fees or charges for a purpose or function other than the purposes or functions designated as acceptable in the rules should be treated as an acceptable purpose or function. Petitions must meet the requirements applicable to a petitions for declaratory ruling in the Commission’s rules (47 CFR § 1.2).  The Commission must grant the petition if the State or taxing jurisdiction provides sufficient documentation to demonstrate that the purpose or function: (1) Supports public safety answering point functions or operations; or (2) Has a direct impact on the ability of a public safety answering point to: (i) Receive or respond to 911 calls; or (ii) Dispatch emergency responders.

4. Consequences of Diversion:  The new rules state, as required by the Act, that any state or taxing jurisdiction identified by the FCC as engaging in diversion will be ineligible to participate on any advisory committee established by the Commission.  The Order clarifies that only employees of a diverting jurisdiction (i.e., state or other taxing jurisdiction) who are acting as official representatives of that jurisdiction will be ineligible to participate; this prohibition does not extend to representatives of non-diverting localities that are located within diverting states.  Note that the Act also states that representatives from any state or taxing jurisdiction that is found to be diverting fees are ineligible to participate or send a representative to serve on any committee, panel, or council established under the FirstNet statute.  (This is not codified in the FCC’s new rules.)