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A09296 Memo:

submitted in accordance with Assembly Rule III, Sec 1(f)
  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.
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