NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A9296
SPONSOR: McDonald TITLE OF BILL: An act to amend the tax law, in relation to the public
safety communications surcharge and repealing certain provisions of such
law relating thereto
PURPOSE OR GENERAL IDEA OF BILL:
Specifies what percentage of the public safety communications surcharge
funds shall go to counties and local governments, and what percentage
shall go to the state.
SUMMARY OF SPECIFIC PROVISIONS:
Section 1: Repeals Subdivision 6 of section 186-f of the tax law and a
new subdivision 6 is added. New subdivision 6 specifies that: 58.3% of
surcharge funds shall be used for the provision of grants or reimburse-
ments to counties for the development, consolidation, or operation of
public safety communications systems or networks designed to support
interoperable communications for first responders. 41.7% shall be joint-
ly apportioned to the state police, the New York State emergency
services revolving loan fund, and other uses by the state.
Section 2: provides the effective date.
JUSTIFICATION:
New York passed a law n 1991 that placed a e0 cent surcharge on cell
phone bills, and in 2002 raised the tax to $1.20 per cell phone. Fund-
ing was intended to be transferred from the state police to local
governments to pay for 911 call center services and technology upgrades.
For years, however, the state has been diverting these funds for other
purposes. A 2002 audit by then-Comptroller H. Carl McCall identified and
criticized the state police for spending the funds on dry cleaning,
conferences, pens, decals, garbage removal and other miscellaneous items
unrelated to 911 call center upgrades.
The law was changed in response, but failed to require that wireless
surcharge funds be diverted to local governments. The New York State 911
Coordinators Association estimates that New York State has collected
over $1.2 billion in surcharges since 1994, and of the $190 million
collected last year the state transferred only $9.3 million to county
governments.
In 2004 Congress passed a law that limited 911 grants to states that
were improperly diverting wireless tax revenue and the U.S. Government
Accountability Office (GAO) has requested and received no response from
New York state officials over the course of two investigations into the
collection and use of funds for the 50 States and District of Columbia
Wireless Enhanced 911 Services. County governments have been forced to
raise sales and/or property taxes to cover for Albany's improper diver-
sion of these funds. In addition to being irresponsible, such improper
allocation of funds may be illegal; For example, the Tennessee Attorney
General recently concluded that raiding of 911 funds in that state was
illegal based OR the Federal Enhance 911 Act of 1994.
Removing discretion from the state in deciding how wireless surcharge
funds will be allocated Will ensure local governments receive the funds
necessary to upgrade 911 call centers and ensure counties are not forced
to raise property and/or sales taxes or fees to cover for Albany's
improper withholding of public safety communications surcharge funds.
PRIOR LEGISLATIVE HISTORY:
2011: Referred to Ways and Means;
2012: Referred to Ways and Means;
2012: Amend and recommit to Ways and Means;
2013-2014: Referred to Ways and Means;
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENT:
None.
EFFECTIVE DATE:
This act shall take effect on the one hundred twentieth day after it
shall have become law.
