[Federal Register Volume 86, Number 156 (Tuesday, August 17, 2021)]
[Rules and Regulations]
[Pages 45892-45909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2021-16068]


=======================================================================
-----------------------------------------------------------------------

FEDERAL COMMUNICATIONS COMMISSION

47 CFR Part 9

[PS Docket Nos. 20-291 and 09-14; FCC 21-80; FR ID 40050]


911 Fee Diversion; New and Emerging Technologies 911 Improvement 
Act of 2008

AGENCY: Federal Communications Commission.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: In this document, the Federal Communications Commission (the 
FCC or Commission) adopts rules to implement the Don't Break Up the T-
Band Act of 2020, which is section 902 of the Consolidated 
Appropriations Act, 2021, Division FF, Title IX (section 902). Section 
902 directs the Commission to issue final rules, not later than 180 
days after the date of enactment of section 902, designating the uses 
of 911 fees by states and taxing jurisdictions that constitute 911 fee 
diversion for purposes of certain sections of the United States Code, 
as amended by section 902. This Report and Order adopts rules that 
implement the provisions of section 902 requiring Commission action and 
that help to identify those uses of 911 fees by states and other 
jurisdictions that support the provision of 911 services.

DATES: 
    Effective date: This final rule is effective October 18, 2021.
    Compliance date: Compliance will not be required for 47 CFR 9.25(b) 
until the Commission publishes a document in the Federal Register 
announcing that compliance date.

FOR FURTHER INFORMATION CONTACT: For additional information, contact 
Brenda Boykin, Attorney Advisor, Policy and Licensing Division, Public 
Safety and Homeland Security Bureau, (202) 418-2062 or via email at 
<a href="/cdn-cgi/l/email-protection#551727303b31347b173a2c3e3c3b153336367b323a23"><span class="__cf_email__" data-cfemail="307242555e54511e725f495b595e705653531e575f46">[email protected]</span></a>; or Jill Coogan, Attorney Advisor, Policy and 
Licensing Division, Public Safety and Homeland Security Bureau, (202) 
418-1499 or via email at <a href="/cdn-cgi/l/email-protection#6923000505472a06060e0807290f0a0a470e061f"><span class="__cf_email__" data-cfemail="8cc6e5e0e0a2cfe3e3ebede2cceaefefa2ebe3fa">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report 
and Order, FCC 21-80, adopted on June 24, 2021 and released on June 25, 
2021, and the Erratum released on August 12, 2021. The complete text of 
this document is available for download at https://docs.fcc.gov/public/attachments/FCC-21-80A1.pdf. To request this document in accessible 
formats for people with disabilities (e.g., Braille, large print, 
electronic files, audio format, etc.) or to request reasonable 
accommodations (e.g., accessible format documents, sign language 
interpreters, CART, etc.), send an email to <a href="/cdn-cgi/l/email-protection#7a1c19194f4a4e3a1c1919541d150c"><span class="__cf_email__" data-cfemail="395f5a5a0c090d795f5a5a175e564f">[email protected]</span></a> or call the 
FCC's Consumer and Governmental Affairs Bureau at (202) 418-0530 
(voice), (202) 418-0432 (TTY).

Paperwork Reduction Act

    The requirements in 47 CFR 9.25(b) constitute a modification of the 
information collection with Office of Management and Budget (OMB) 
Control No. 3060-1122. This modified information collection is subject 
to the Paperwork Reduction Act of 1995 (PRA), Public Law 104-13. The 
modified information collection will be submitted to OMB for review 
under 47 U.S.C. 3507(d), and compliance with 47 CFR 9.25(b) will not be 
required until after approval by OMB.

Congressional Review Act

    The Commission has determined, and the Administrator of the Office 
of Information and Regulatory Affairs, Office of Management and Budget, 
concurs, that this is a major rule under the Congressional Review Act, 
5 U.S.C. 804(2). The Commission will send a copy of this Report and 
Order to Congress and the Government Accountability Office pursuant to 
5 U.S.C. 801(a)(1)(A).

Synopsis

I. Background

    Congress has had a longstanding concern about the practice by some 
states and local jurisdictions of diverting 911 fees for non-911 
purposes. Congress initially enacted measures to limit 911 fee 
diversion, codified in 47 U.S.C. 615a-1 (section 615a-1).\1\ 
Specifically, section 615a-1(f)(1) provided that nothing in the New and 
Emerging Technologies (NET) 911 Act, the Communications Act of 1934, or 
any Commission regulation or order shall prevent the imposition and 
collection of a fee or charge applicable to commercial mobile services 
or IP-enabled voice services specifically designated by a State, 
political subdivision thereof, Indian tribe, or village or regional 
corporation for the support or implementation of 9-1-1 or enhanced 9-1-
1 services, provided that the fee or charge is obligated or expended 
only in support of 9-1-1 and enhanced 9-1-1 services, or enhancements 
of such services, as specified in the provision of State or local law 
adopting the fee or charge. The NET 911 Act also required the 
Commission to report annually on the collection and distribution of 
fees in each state for the support or implementation of 911 or E911 
services, including findings on the amount of revenues obligated or 
expended by each state ``for any purpose other than the purpose for 
which any such fees or charges are specified.'' \2\ Pursuant to this 
provision, the Commission has reported annually to Congress on 911 fee 
diversion every year since 2009. In October 2020, the Commission 
released a Notice of Inquiry seeking comment on the effects of fee 
diversion and the most effective ways to dissuade states and 
jurisdictions from continuing or instituting the diversion of 911/E911

[[Page 45893]]

fees.\3\ Shortly thereafter, Congress enacted section 902.\4\
---------------------------------------------------------------------------

    \1\ New and Emerging Technologies 911 Improvement Act of 2008, 
Public Law 110-283, 122 Stat. 2620 (NET 911 Act). The NET 911 Act 
enacted 47 U.S.C. 615a-1 and also amended 47 U.S.C. 222, 615a, 615b, 
and 942. See 47 U.S.C. 615a-1 Editorial Notes.
    \2\ These annual reports can be viewed at viewed at https://www.fcc.gov/general/911-fee-reports.
    \3\ 911 Fee Diversion; New and Emerging Technologies 911 
Improvement Act of 2008, PS Docket Nos. 20-291 and 09-14, Notice of 
Inquiry, 35 FCC Rcd 11010, 11010, para. 1 (2020). The Commission 
received eight comments and seven reply comments in response to the 
Notice of Inquiry. These filings can be viewed in the FCC's 
electronic comment filing system (ECFS) at https://www.fcc.gov/ecfs/
, under PS Docket Nos. 20-291 and 09-14.
    \4\ Consolidated Appropriations Act, 2021, Public Law 116-260, 
Division FF, Title IX, Section 902, Don't Break Up the T-Band Act of 
2020 (section 902).
---------------------------------------------------------------------------

    Section 902 requires the Commission to take additional action with 
respect to 911 fee diversion. Specifically, section 902(c)(1)(C) adds a 
new paragraph (3)(A) to 47 U.S.C. 615a-1(f) that directs the Commission 
to adopt rules ``designating purposes and functions for which the 
obligation or expenditure of 9-1-1 fees or charges, by any State or 
taxing jurisdiction authorized to impose such a fee or charge, is 
acceptable'' for purposes of section 902 and the Commission's rules. 
The newly added 47 U.S.C. 615a-1(f)(3)(B) states that these purposes 
and functions shall be limited to ``the support and implementation of 
9-1-1 services'' provided by or in the state or taxing jurisdiction 
imposing the fee or charge, and ``operational expenses of public safety 
answering points'' within such state or taxing jurisdiction. The new 
section also states that, in designating such purposes and functions, 
the Commission shall consider the purposes and functions that states 
and taxing jurisdictions specify as the intended purposes and functions 
for their 911 fees or charges, and ``determine whether such purposes 
and functions directly support providing 9-1-1 services.''
    Section 902 also amends 47 U.S.C. 615a-1(f)(1) to provide that the 
rules adopted by the Commission for these purposes will apply to states 
and taxing jurisdictions that impose 911 fees or charges. Whereas the 
prior version of section 615a-1(f)(1) referred to fees or charges 
``obligated or expended only in support of 9-1-1 and enhanced 9-1-1 
services, or enhancements of such services, as specified in the 
provision of State or local law adopting the fee or charge,'' the 
amended version refers to the obligation or expenditure of fees or 
charges ``consistent with the purposes and functions designated in the 
final rules issued under paragraph (3) as purposes and functions for 
which the obligation or expenditure of such a fee or charge is 
acceptable.'' (Emphasis added.)
    In addition, section 902(c) establishes a process for states and 
taxing jurisdictions to seek a determination that a proposed use of 911 
fees should be treated as acceptable even if it is for a purpose or 
function that has not been designated as such in the Commission's 
rules. Specifically, newly added 47 U.S.C. 615a-1(f)(5) provides that a 
state or taxing jurisdiction may petition the Commission for a 
determination that an obligation or expenditure of a 911 fee or charge 
``for a purpose or function other than a purpose or function designated 
under [section 615a-1(f)(3)(A)] should be treated as such a purpose or 
function,'' i.e., as acceptable for purposes of this provision and the 
Commission's rules. The new section 615a-1(f)(5) provides that the 
Commission shall grant the petition if the state or taxing jurisdiction 
provides sufficient documentation that the purpose or function ``(i) 
supports public safety answering point functions or operations,'' or 
``(ii) has a direct impact on the ability of a public safety answering 
point to--(I) receive or respond to 9-1-1 calls; or (II) dispatch 
emergency responders.''
    Section 902(d) requires the Commission to create the ``Ending 9-1-1 
Fee Diversion Now Strike Force'' (911 Strike Force), which is tasked 
with studying ``how the Federal Government can most expeditiously end 
diversion'' by states and taxing jurisdictions and reporting to 
Congress on its findings within 270 days of the statute's enactment.\5\ 
In February, the agency announced the formation of the 911 Strike Force 
and solicited nominations. On May 21, 2021, the agency announced the 
911 Strike Force membership, which includes a diverse array of experts 
from across the nation representing Federal, state, and local 
government agencies, state 911 administrators, a consumer group, and 
organizations representing 911 professionals. The 911 Strike Force held 
its inaugural meeting on June 3, 2021, and has formed three working 
groups that will examine: (i) The effectiveness of any Federal laws, 
including regulations, policies, and practices, or budgetary or 
jurisdictional constraints regarding how the Federal Government can 
most expeditiously end 911 fee diversion; (ii) whether criminal 
penalties would further prevent 911 fee diversion; and (iii) the 
impacts of 911 fee diversion. Consistent with section 902(d), the 911 
Strike Force will complete its work and submit its final report to 
Congress by September 23, 2021. In addition, Section 902(d)(1) provides 
that if the Commission obtains evidence that ``suggests the diversion 
by a State or taxing jurisdiction of 9 1 1 fees or charges,'' the 
Commission shall submit such information to the 911 Strike Force, 
``including any information regarding the impact of any underfunding of 
9-1-1 services in the State or taxing jurisdiction.''
---------------------------------------------------------------------------

    \5\ 47 U.S.C. 615a-1 Statutory Notes (as amended); sec. 
902(d)(3).
---------------------------------------------------------------------------

    Section 902(d)(2) provides that the Commission shall also include 
evidence it obtains of diversion and underfunding in future annual fee 
reports, beginning with the first report ``that is required to be 
submitted after the date that is 1 year after the date of the enactment 
of this Act.'' \6\ In addition, section 902(c)(1)(C) provides that if a 
state or taxing jurisdiction receives a grant under section 158 of the 
National Telecommunications and Information Administration Organization 
Act (47 U.S.C. 942) after the date of the enactment of the new 
legislation, ``such State or taxing jurisdiction shall, as a condition 
of receiving such grant, provide the information requested by the 
Commission to prepare the [annual report to Congress on 911 fees].'' 
Finally, section 902(d)(4) prohibits any state or taxing jurisdiction 
identified as a fee diverter in the Commission's annual report from 
participating or sending a representative to serve on any committee, 
panel, or council established to advise the First Responder Network 
Authority (FirstNet) under 47 U.S.C. 1425(a) or any advisory committee 
established by the Commission.
---------------------------------------------------------------------------

    \6\ 47 U.S.C. 615a-1 Statutory Notes (as amended); section 
902(d)(3). September 23, 2021 is 270 days after the enactment date 
of section 902.
---------------------------------------------------------------------------

    Section 902 does not require states or taxing jurisdictions to 
impose any fee in connection with the provision of 911 service. As 
revised, the proviso to section 615a-1 states that nothing in the Act 
or the Commission's rules ``shall prevent the imposition and collection 
of a fee or charge applicable to commercial mobile services or IP-
enabled voice services'' specifically designated by the taxing 
jurisdiction ``for the support or implementation of 9-1-1 or enhanced 
9-1-1 services, provided that the fee or charge is obligated or 
expended only in support of 9-1-1 and enhanced 9-1-1 services, or 
enhancements of such services, consistent with the purposes and 
functions designated in [the Commission's forthcoming rules] as 
purposes and functions for which the obligation or expenditure of such 
a fee or charge is acceptable.'' In this regard, section 902 charges 
the Commission with adopting rules defining what relevant statutory 
provisions mean, a responsibility we fulfill in adopting the rules in 
this Report and Order. In this regard, when we define and describe

[[Page 45894]]

``acceptable'' expenditures in this Report and Order or in our rules, 
we mean to use that term as Congress did in section 902(c)(1)(C).
    On February 17, 2021, we adopted a notice of proposed rulemaking 
(NPRM), which proposed rules to implement section 902 and address 911 
fee diversion.\7\ The Commission received twenty-eight comments, nine 
reply comments, and five ex parte filings.
---------------------------------------------------------------------------

    \7\ 86 FR 12399 (March 3, 2021).
---------------------------------------------------------------------------

II. Discussion

    With this Report and Order, we adopt rules to implement the 
provisions of section 902 that require Commission action. Specifically, 
we amend part 9 of our rules to establish a new subpart I that 
addresses 911 fees and fee diversion in accordance with and for the 
purposes of the statute. The new subpart I rules (1) clarify what does 
and does not constitute the kind of diversion of 911 fees that has 
concerned Congress (and the Commission); (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 as 
defined by our rules.
    The record indicates that commenters are divided on whether 
expenditures of 911 fees for public safety radio systems and related 
infrastructure should be considered acceptable for Section 902 
purposes. Our new rules provide additional guidance on this question. 
We also refer additional questions concerning the application of our 
new rules to the 911 Strike Force for the development of 
recommendations. We also note that the petition process established by 
section 902 provides a mechanism for further consideration of this 
issue in the context of specific fact patterns, after adoption of the 
initial rules in this proceeding. We conclude that these changes to 
part 9 will advance Congress's stated objectives in section 902 in a 
cost-effective manner that is not unduly burdensome to providers of 
emergency telecommunications services or to state and taxing 
jurisdictions. In sum, the rules we adopt in this document closely 
track the statutory language addressing 911 fee diversion, and seek to 
promote transparency, accountability, and integrity in the collection 
and expenditure of fees collected for 911 services, while providing 
stakeholders reasonable guidance as part of implementing section 902.

A. Definitions and Applicability

    Section 902 defines certain terms relating to 911 fees and fee 
diversion. To promote consistency, the NPRM proposed to codify these 
definitions with certain modifications. As described below, we adopt 
these definitions as proposed.\8\
---------------------------------------------------------------------------

    \8\ We also clarify in the introductory language of this section 
of the rules that where the Commission uses the term ``acceptable'' 
in subpart I, it is for purposes of the Consolidated Appropriations 
Act, 2021, Public Law 116-260, Division FF, Title IX, section 
902(c)(1)(C).
---------------------------------------------------------------------------

1. 911 Fee or Charge
    Background. Section 902 defines ``9-1-1 fee or charge'' as ``a fee 
or charge applicable to commercial mobile services or IP-enabled voice 
services specifically designated by a State or taxing jurisdiction for 
the support or implementation of 9-1-1 services.'' In the NPRM, we 
proposed to codify this definition in the rules. However, we also noted 
that the statutory definition in section 902 does not address services 
that may be subject to 911 fees other than Commercial Mobile Radio 
Services (CMRS) and IP-enabled voice services. As we observed in the 
NPRM, the reason for this omission is unclear. For example, virtually 
all states impose 911 fees on wireline telephone services and have 
provided information on such fees for inclusion in the agency's annual 
fee reports. In addition, as 911 expands beyond voice to include text 
and other non-voice applications, states could choose to extend 911 
fees to such services in the future.
    To promote regulatory parity and avoid gaps that could 
inadvertently frustrate the rapid deployment of effective 911 services, 
including advanced Next Generation 911 (NG911) services, we proposed to 
define ``911 fee or charge'' in the rules to include fees or charges 
applicable to ``other emergency communications services'' as defined in 
section 201(b) of the NET 911 Act. Under the NET 911 Act, the term 
``other emergency communications service'' means ``the provision of 
emergency information to a public safety answering point via wire or 
radio communications, and may include 9-1-1 and enhanced 9-1-1 
service.'' We noted that this proposed modification will make clear 
that the rules in subpart I extend to all communications services 
regulated by the Commission that provide emergency communications, 
including wireline services, and not just to CMRS and IP-enabled voice 
services. We also proposed in the NPRM to extend the definition of 
``911 fee or charge'' to include fees or charges designated for the 
support of ``public safety,'' ``emergency services,'' or similar 
purposes if the purposes or allowable uses of such fees or charges 
include the support or implementation of 911 services.
    Decision. We adopt our NPRM proposal. The Michigan 911 Entities 
support including ``other emergency communications services'' in the 
definition, and no commenter opposes this proposal. We find that this 
expansion of the definition of ``911 fee or charge'' is reasonably 
ancillary to the Commission's effective performance of its statutorily 
mandated responsibilities under section 902 and other Federal 911-
related statutes and Communications Act statutory provisions that, 
taken together, establish an overarching Federal interest in ensuring 
the effectiveness of the 911 system. The Commission's general 
jurisdictional grant includes the responsibility to set up and maintain 
a comprehensive and effective 911 system, encompassing a variety of 
communication services in addition to CMRS and IP-enabled voice 
services. Section 251(e)(3) of the Communications Act of 1934, which 
directs the Commission to designate 911 as the universal emergency 
telephone number, states that the designation of 911 ``shall apply to 
both wireline and wireless telephone service,'' which evidences 
Congress's intent to grant the Commission broad authority over 
different types of communications services in the 911 context.\9\ 
Similarly, RAY BAUM'S Act directed the Commission to consider adopting 
rules to ensure that dispatchable location is conveyed with 911 calls 
``regardless of the technological platform used.'' \10\ In addition, 
section 615a-1(e)(2) provides that the Commission ``shall enforce this 
section as if this section was a part of the Communications Act of 1934 
[47 U.S.C. 151 et seq.]'' and that ``[f]or purposes of this section, 
any violations of this section, or any regulations promulgated under 
this section, shall be considered to be a violation of the 
Communications Act of 1934 or a regulation promulgated under that Act, 
respectively.''
---------------------------------------------------------------------------

    \9\ 47 U.S.C. 251(e)(3).
    \10\ See Consolidated Appropriations Act, 2018, Public Law 115-
141, 132 Stat. 348, Division P, Repack Airwaves Yielding Better 
Access for Users of Modern Services Act of 2018 (RAY BAUM'S Act) 
section 506(c)(1) (codified at 47 U.S.C. 615 Notes).
---------------------------------------------------------------------------

    Accordingly, we conclude that including ``other emergency 
communications services'' within the scope of the definition of 911 
fees is also reasonably ancillary to the Commission's effective 
performance of

[[Page 45895]]

its statutorily mandated responsibilities for ensuring that the 911 
system, including 911, E911, and NG911 calls and texts from any type of 
service, is available, that these 911 services function effectively, 
and that 911 fee diversion by states and other jurisdictions does not 
detract from these critical, statutorily recognized purposes. As we 
stated in the NPRM, diverting fees collected for 911 service of any 
type, whether it be wireline, wireless, IP based, or text, undermines 
the purpose of these Federal statutes by depriving the 911 system of 
the funds it needs to function effectively and to modernize 911 
operations.
    We also adopt our proposal in the NPRM to extend the definition of 
``911 fee or charge'' to include multi-purpose fees or charges 
designated for the support of ``public safety,'' ``emergency 
services,'' or similar purposes if the purposes or allowable uses of 
such fees or charges include the support or implementation of 911 
services. We find that this aspect of the definition is consistent with 
the purpose of section 902 with respect to 911 fees and charges, which 
is to discourage states and taxing jurisdictions from diverting these 
fees and charges for purposes that do not directly benefit the 911 
system. Moreover, as we noted in the NPRM, this aspect of the 
definition is consistent with the approach taken in the agency's annual 
fee reports, which have found that the mere labelling of a fee is not 
dispositive and that the underlying purpose of the fee is relevant in 
determining whether it is (or includes) a 911 fee within the meaning of 
the NET 911 Act.
    Some commenters oppose the proposal to extend the definition of 
``911 fee or charge'' to include multi-purpose fees. The New York State 
Division of Homeland Security and Emergency Services (NYS DHSES) 
asserts that the Commission's statutory authority is limited to 
``specifically designated'' 911 fees or charges, and that the 
Commission lacks authority to regulate fees and charges designated for 
other purposes. The Boulder Regional Emergency Telephone Service 
Authority (BRETSA) argues that extending the definition as proposed 
will limit 911 funding because some states (including Colorado) have a 
constitutional prohibition on incurring debt and therefore must 
establish contingency or sinking funds for unpredictable 911 
expenditures. BRETSA asserts that if using the proceeds of such a fee 
to support 911 will mean that those proceeds cannot thereafter be used 
for more general purposes, the public safety answering point (PSAP) may 
be denied funding when needed.
    We disagree that our authority under the NET 911 Act extends only 
to ``specifically designated'' 911 fees or charges. The legislative 
history of the NET 911 Act indicates Congress's broad intention to 
discourage or eliminate the diversion of 911 fees by states and 
political subdivisions. In its report on H.R. 3403 (the bill that was 
enacted as the NET 911 Act), the House Committee on Energy and Commerce 
noted Congress's intent that ``[s]tates and their political 
subdivisions should use 911 or E911 fees only for direct improvements 
to the 911 system'' and that the Act ``is not intended to allow 911 or 
E-911 fees to be used for other public safety activities that, although 
potentially worthwhile, are not directly tied to the operation and 
provision of emergency services by PSAPs.'' A narrow interpretation 
covering only ``specifically designated'' 911 fees or charges would 
frustrate this congressional purpose by creating an opportunity for 
states to divert the 911 portion of a multi-purpose fee. Moreover, 
there is no language in the NET 911 Act (or in the amendments made by 
section 902) that limits the scope of that Act to fees designated 
exclusively for 911/E911. Finally, in its annual fee reports, the 
agency has found that multi-purpose fees that support 911/E911 and 
other purposes fall within the Commission's authority under the NET 911 
Act.
    With respect to BRETSA's argument that extending the definition of 
``911 fee or charge'' as proposed would prevent the establishment of 
sinking or contingency funds for 911 expenditures, we disagree that 
this would be prohibited under our rules. As discussed below, we also 
adopt a safe harbor under which a multi-purpose fee would not be deemed 
to be diverting 911 fees, and we note that sinking or contingency funds 
could fall within the safe harbor, provided that they meet the relevant 
criteria.
2. Diversion
    Background. Section 902(f) defines ``diversion,'' with respect to a 
9-1-1 fee or charge, as the obligation or expenditure of such fee or 
charge for a purpose or function other than the purposes and functions 
designated in the final rules issued under paragraph (3) of section 
6(f) of the Wireless Communications and Public Safety Act of 1999, as 
added by section 902, as purposes and functions for which the 
obligation or expenditure of such a fee or charge is acceptable.
    In the NPRM, we proposed to codify this definition with minor 
changes to streamline it. Specifically, we proposed to define diversion 
as ``[t]he 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 [the applicable rule section 
in subpart I].'' In addition, we proposed to clarify that the 
definition of diversion includes distribution of 911 fees to a 
political subdivision that obligates or expends such fees for a purpose 
or function other than those designated by the Commission.
    Decision. We adopt this definition as proposed. We find that it 
will encourage states and taxing jurisdictions to take proactive steps 
to address the conditions that enable diversion of 911 fees by 
political subdivisions, such as counties, that may receive 911 
fees.\11\
---------------------------------------------------------------------------

    \11\ The Illinois State Police support extending the definition 
of diversion but argue that the Commission should clarify that any 
local public agency that receives 911 fees from the 911 authority 
serving its jurisdiction is also responsible for the diversion of 
911 fees. IL State Police Mar. 23, 2021 Comments at 2. Section 902 
directs us to designate acceptable purposes and functions for the 
obligation or expenditure of 911 fees by ``any State or taxing 
jurisdiction.'' 47 U.S.C. 615a-1(f)(3)(A) (as amended); sec. 
902(c)(1)(C). Consistent with this, we clarify that taxing 
jurisdictions would be responsible for fee diversion occurring at 
the level of the taxing jurisdiction.
---------------------------------------------------------------------------

    Several commenters raise concerns with our proposal to specify that 
diversion includes distribution of 911 fees to a locality that diverts 
them. The National Emergency Number Association (NENA) states that it 
is concerned that the administrative burden of local surveillance and 
potential lack of state-level capacity for diversion enforcement could 
add to the already significant burden on state-level 911 officials. 
NENA also expresses concern that states ``may lack the logistical 
capability to prevent this diversion of funds, especially in a timely 
manner.'' The National Association of State 911 Administrators (NASNA) 
notes that in some states, service providers remit fees directly to 
political subdivisions, such as counties, for 911 use and that due to 
limits in their statutes or constitutions, these states have limited 
authority over the local use of those funds. NASNA adds that states 
``would have no visibility over how these funds are spent at the local 
level.'' NASNA suggests that in states where there is limited authority 
over local 911 fee collection or use, the Commission should require 
that local units report directly to the Commission, and ``the state 
should not be held accountable for any finding of diversion

[[Page 45896]]

occurring at the local level of which it does not have authority.'' 
Further, NASNA requests that the Commission ``notify the state in a 
timely manner of any diversion to ensure the state can restrict or 
require repayment of any grant funds or other restrictions that the 
local diverter would be subject to under the FCC's rules on 911 fee 
diversion.''
    We find that it is consistent with the intent of section 902 to 
hold states responsible for fee diversion by localities within their 
boundaries. Absent such a policy, states or taxing jurisdictions could 
have an incentive to avoid oversight or accountability for expenditures 
by political subdivisions. We also decline to require that local units 
report directly to the Commission, as NASNA requests. The NET 911 Act 
requires the Commission to report on the ``status in each State'' of 
the collection and distribution of 911 fees or charges, and the 
agency's annual 911 fee report questionnaire is consistent with this 
directive. We note that states may disclose limitations on their 
authority over local 911 fee collection or use in their responses to 
the fee report questionnaire and that these questionnaires are publicly 
available on the Commission's website. We also note that the petition 
for determination process established by section 902 provides a 
mechanism for further consideration of this issue in the context of 
specific fact patterns. In response to concerns that defining diversion 
in this way could result in the denial of grant funding for states or 
local jurisdictions on the basis of the actions of localities over 
which they have no control, we note that decisions with respect to 
grant eligibility will be made by the agencies managing the grant 
program, not the Commission. If states and localities seek flexibility 
under these circumstances with respect to eligibility for grant 
funding, they must request it from the agencies managing the grant 
program.\12\ We provide additional guidance below on how fee diversion 
at the local level would affect eligibility for Commission advisory 
panels.
---------------------------------------------------------------------------

    \12\ Consistent with this, the agencies administering the grant 
program would decide eligibility in the situation posed by the 
Illinois State Police of a locality that has diverted. See IL State 
Police Mar. 23, 2021 Comments at 2.
---------------------------------------------------------------------------

3. State or Taxing Jurisdiction
    Background. Section 902 defines a state or taxing jurisdiction as 
``a State, political subdivision thereof, Indian Tribe, or village or 
regional corporation serving a region established pursuant to the 
Alaska Native Claims Settlement Act (43 U.S.C. 1601 et seq.).'' We 
proposed in the NPRM to codify this definition in our rules. We also 
proposed to add the definition of ``State'' from 47 U.S.C. 615b to the 
subpart I rules. Under section 615b, the term ``State'' means ``any of 
the several States, the District of Columbia, or any territory or 
possession of the United States.'' Accordingly, provisions in subpart I 
that apply to any ``State or taxing jurisdiction'' would apply to the 
District of Columbia and any United States territory or possession as 
well.
    Decision. We adopt these definitions as proposed. We find that 
these definitions will be helpful to users of the subpart I 
regulations, and no commenter opposes them. With respect to the scope 
of subpart I, we proposed in the NPRM that the rules would apply to 
states or taxing jurisdictions that collect 911 fees or charges (as 
defined in that subpart) from commercial mobile services, IP-enabled 
voice services, and other emergency communications services. We believe 
this provision will help to clarify application of the subpart I rules, 
and no commenter opposes this proposal. Accordingly, we adopt this rule 
as proposed.

B. Designation of Obligations or Expenditures Acceptable for Purposes 
of Section 902

    Section 902 requires the Commission to issue rules ``designating 
purposes and functions for which the obligation or expenditure of 9-1-1 
fees or charges, by any State or taxing jurisdiction authorized to 
impose such a fee or charge, is acceptable'' for purposes of the 
statute. In addition, section 902 provides that the purposes and 
functions designated as acceptable for such purposes ``shall be limited 
to the support and implementation of 9 1 1 services provided by or in 
the State or taxing jurisdiction imposing the fee or charge and 
operational expenses of public safety answering points within such 
State or taxing jurisdiction.'' Section 902 also provides that the 
Commission shall consider the purposes and functions that states and 
taxing jurisdictions specify as their intended purposes and ``determine 
whether such purposes and functions directly support providing 9-1-1 
services.'' \13\ Moreover, section 902 provides states and taxing 
authorities with the right to file a petition with the Commission for a 
determination that an obligation or expenditure of a 911 fee or charge 
that is imposed for a purpose or function other than those designated 
as acceptable for purposes of the statute in the Commission rules 
should nevertheless be treated as having an acceptable purpose or 
function for such purposes.
---------------------------------------------------------------------------

    \13\ 47 U.S.C. 615a-1(f)(3)(B) (as amended); sec. 902(c)(1)(C). 
Section 902 also provides that the Commission ``shall consult with 
public safety organizations and States and taxing jurisdictions as 
part of any proceeding under this paragraph.'' 47 U.S.C. 615a-
1(f)(3)(C) (as amended); sec. 902(c)(1)(C). The legislative history 
of section 902 states that ``[a]s part of any proceeding to 
designate purposes and functions for which the obligation or 
expenditure of 9-1-1 fees or charges is acceptable, the FCC is 
required to consider the input of public safety organizations and 
States and taxing jurisdictions.'' House of Representatives 
Committee on Energy and Commerce, Report on Don't Break Up the T-
Band Act of 2020, H.R. Rep. No. 116-521, at 8 (2020) (emphasis 
added). We received one comment on this specific issue. See New York 
State Division of Homeland Security and Emergency Services (NYS 
DHSES) Comments, PS Docket Nos. 20-291 and 09-14, at 9 (rec. Mar. 
23, 2021) (arguing that ``the consultation must be in addition to 
the comments made in response to the Proposed Rule''). We note that 
to satisfy the consultation requirements of section 902, the Public 
Safety and Homeland Security Bureau staff conducted outreach to a 
diverse representative sample of public safety organizations, 
states, and taxing jurisdictions that expressed an interest in fee 
diversion issues generally prior to the release of this Report and 
Order; we solicited public comments on the proposed rules 
implementing section 902; and we released a public draft prior to 
adoption of the NPRM so that further input on it could help to 
inform the Commission's decision.
---------------------------------------------------------------------------

1. Standard for Determining Acceptable Purposes and Functions for 911 
Fees
    Background. In the NPRM, we proposed to codify the statutory 
standard for acceptable purposes and functions for the obligation or 
expenditure of 911 fees or charges by providing that acceptable 
purposes and functions for purposes of the statute 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 PSAPs within such state or taxing jurisdiction. We also 
noted that this language tracks the language in section 902.
    Decision. We adopt the general standard for designating acceptable 
purposes and functions for expenditures of 911 fees as proposed in the 
NPRM, with minor modifications to clarify that these designations of 
acceptable obligations or expenditures are for purposes of section 
902.\14\ Commenters are generally supportive of this proposal, and the 
proposed language tracks the language of section 902.
---------------------------------------------------------------------------

    \14\ In particular, we revise the title of Sec.  9.23 to read, 
``Designation of acceptable obligations or expenditures for purposes 
of the Consolidated Appropriations Act, 2021, Division FF, Title IX, 
section 902(c)(1)(C).'' We also add a reference to ``for purposes of 
section 902'' in the introductory language of Sec.  9.23(a) and (c). 
See Appendix A of the Commission's Report and Order (final rules).
---------------------------------------------------------------------------

    Several commenters urge the Commission to clarify the term ``911 
services'' or ``911 systems'' in the

[[Page 45897]]

proposed rule. The City of Aurora asserts that as proposed, the term 
would be narrowly limited to receipt of the call at the PSAP and 
processing the call through computer aided dispatch (CAD) 911, and that 
911 services should include ``all technology, staff, training, and 
administration necessary to effectively provide emergency response to 
the caller.'' The Colorado Public Utilities Commission (CoPUC) comments 
that what constitutes 911 services ``may mean different things to 
different people, particularly as technological advances in emergency 
communications technology blur the lines between what may be considered 
`911 service' and what may be just part of the emergency communications 
ecosystem.''
    State and local 911 authorities also urge the Commission to adopt 
broad rules that would provide flexibility at the state and local level 
and to defer to states and local authorities in determining what 
constitutes fee diversion. NASNA argues that ``[t]hese rules must be 
implemented in a manner that does not create conflict with existing 
state statutes and guidelines.'' NASNA adds that it believes the 
proposed rules ``do not consider each state's current legislative and 
regulatory processes that (1) involve their citizen knowledge and 
involvement, (2) have longstanding systems in place, and (3) have 
evolved through consensus-based processes that involve both the public 
safety community and the communication industry.'' The Oklahoma 911 
Management Authority (Oklahoma 911) similarly urges the Commission to 
make the rules ``broad and allow for flexibility within the State and 
region to narrow the requirements to fit local need.'' Adams County, 
CO, et al. encouraged the FCC to include a safe harbor for 911 entities 
that utilize funds from 911 fees in compliance with state laws 
substantially equivalent to the Colorado statute. BRETSA and the 
National Public Safety Telecommunications Council (NPSTC) also raise 
concerns that state fees and taxes are ``matters of state interest,'' 
or that the Commission should consider whether Federal rules defining 
how state funds can be used encompass any states' rights issues. Some 
commenters note that funding priorities and needs may evolve over time, 
and contend that it is not apparent that the proposed rules provide 
sufficient flexibility for the future. CTIA--the Wireless Association 
(CTIA), on the other hand, responds that the Commission may not defer 
to state laws regarding the permissible uses of 911 fees, as some 
commenters suggest, because section 902 charges the Commission with the 
responsibility to determine the appropriate purposes and functions for 
which 911 fees may be used. CTIA asserts that ``[i]t is well settled 
that federal agencies may not subdelegate such authority to outside 
entities (including state sovereign entities) absent express authority 
to do so, and nothing in the statute permits the Commission to 
subdelegate this responsibility.''
    We agree that our rules should be reasonably broad given the 
diverse and evolving nature of the 911 ecosystem. Consistent with this 
approach, our rules identify broad categories of acceptable purposes 
and functions for 911 fees and provide examples within each category to 
guide states and localities.\15\ As the rules make clear, the examples 
of acceptable expenditures for purposes of section 902 are non-
exclusive and are meant to be illustrative; they are not intended to 
anticipate every possible use of 911 fees at the state and local level. 
State and local jurisdictions thus have discretion to make reasonable, 
good faith determinations whether specific expenditures of 911 fees are 
acceptable under our rules. In light of this, we do not believe 
additional clarification of the terms ``911 services'' or 911 systems'' 
is necessary. We also note that the petition for determination process 
afforded by section 902 provides a mechanism for states and taxing 
jurisdictions that seek additional guidance on whether a particular 
expenditure would be an acceptable use of 911 fees.
---------------------------------------------------------------------------

    \15\ NYS DHSES contends that the statutory standard for granting 
a petition for determination under section 902(c)(1)(C) is broader 
than the standard for defining ``acceptable'' 911 expenditures in 
the rules, and asserts that the Commission's proposed rules for 
designating the ``acceptable'' purposes and functions should be 
consistent with, and not narrower than, the petition standards. NYS 
DHSES Mar. 23, 2021 Comments at 5-6. See similarly City of Aurora, 
CO Mar. 22, 2021 Comments at 2-3 (arguing language of petition 
standard supports broader definition of ``acceptable'' 911 use). 
However, we interpret these two provisions of section 902 as 
balancing each other, and we reject any argument that Congress 
intended inconsistent standards for the two provisions. In section 
902(c)(1)(C), Congress set forth the standard for the Commission to 
use in adopting rules by the statutory June 25, 2021 deadline, and 
then separately set forth the complementary standard for the 
Commission to use in deciding petitions for determination going 
forward, to address yet to be identified acceptable 911 purposes or 
functions in the face of a diverse and evolving 911 ecosystem.
---------------------------------------------------------------------------

    We do not agree, however, with commenters who contend that the 
Commission should defer to state and local law on what constitutes fee 
diversion for purposes of section 902. As CTIA points out, section 902 
charges the Commission with responsibility for determining appropriate 
purposes and functions for expenditure of 911 funds. A policy of 
deferring to states or localities on what constitutes fee diversion 
would negate one of the principal aspects for these purposes of section 
902, which is that it revises the language in 47 U.S.C. 615a-1 to make 
clear that fee diversion is not whatever state or local law says it is. 
Accordingly, we decline to create a safe harbor for 911 entities that 
use 911 fees in compliance with their state statute, as this would 
essentially make the categories of acceptable purposes and functions we 
establish herein meaningless. We also disagree that our rules encroach 
in any way on states' rights. Following the congressional directive 
given to the Commission in section 902, and in furtherance of a 
nationwide 911 and E911 service, the rules identify and define 
categories of expenditures that are, or are not, acceptable for 911 
fees for the specific purposes of section 902 and, consistent with the 
statute, provide consequences for states or taxing jurisdictions found 
to be diverting (such as ineligibility to serve on certain advisory 
panels). The rules do not, however, prohibit or require collection or 
expenditure of 911 fees by any state or taxing jurisdiction.
    Finally, we clarify the phrase ``support and implementation of 911 
services provided by or in the state or taxing jurisdiction imposing 
the fee or charge,'' under new Sec.  9.23(a). Some commenters contend 
that, as proposed in the NPRM, Sec.  9.23(a) would prohibit states or 
other taxing jurisdictions from spending 911 fees outside of the 
originating jurisdiction (i.e., cross-subsidization) and urge the 
Commission to permit such expenditures. We believe that Congress did 
not intend to address all 911 fund cross-subsidization with this 
language, and this is not the meaning of Sec.  9.23(a). Indeed, many 
cross-subsidization situations across local or state lines may be 
necessary for the benefit of a state or taxing jurisdiction's own 911 
system. For example, Oklahoma 911 argues that it should be deemed 
acceptable for purposes of section 902 for the landline fees collected 
at a very granular level locally to be used to ``pay for valid 9-1-1 
expenses outside of the originating taxing jurisdiction when 
municipalities and counties regionalize or consolidate.'' BRETSA 
argues, e.g., that there are large or sparsely populated areas that 
have insufficient PSAP coverage and need subsidies from other taxing 
jurisdictions within the state. Providing such subsidies from

[[Page 45898]]

another taxing locality might benefit the taxing locality not only by, 
e.g., providing mutual redundancy and backup, but also by reducing the 
load on the taxing locality's 911 system because it no longer has to 
step in regularly to provide 911 service and support for the 
underserved area, potentially also at much greater expense and 
difficulty due to the lack of interconnectivity. In sum, we do not 
believe that Congress in section 902(c)(1)(C) intended to prohibit 
cross-subsidization from one taxing state or jurisdiction to another to 
the detriment of a robust, efficient, and reliable 911 system that 
serves the public.\16\
---------------------------------------------------------------------------

    \16\ We note that the petition for determination process 
provides a mechanism for states and taxing jurisdictions to seek 
additional guidance in applying Sec.  9.23(a) to a particular 
proposal for use of 911 fees for cross-subsidization to meet local 
needs.
---------------------------------------------------------------------------

2. Designation of Acceptable Purposes and Functions for 911 
Expenditures
    Background. We proposed in the NPRM that examples of acceptable 
purposes and functions include, but not be limited to, the following, 
provided that the state or taxing jurisdiction can adequately document 
that it has obligated or spent the fees or charges in question for 
these purposes and functions:
    (1) PSAP operating costs, including lease, purchase, maintenance, 
and upgrade of customer premises equipment (CPE) (hardware and 
software), computer aided dispatch (CAD) equipment (hardware and 
software), and the PSAP building/facility;
    (2) PSAP personnel costs, including telecommunicators' salaries and 
training;
    (3) PSAP administration, including costs for administration of 911 
services and travel expenses associated with the provision of 911 
services;
    (4) Integrating public safety/first responder dispatch and 911 
systems, including lease, purchase, maintenance, and upgrade of CAD 
hardware and software to support integrated 911 and public safety 
dispatch operations; and
    (5) Providing for the interoperability of 911 systems with one 
another and with public safety/first responder radio systems.
    We noted in the NPRM that we believe these purposes and functions 
are consistent with the general standard for designating acceptable 
uses of 911 fees and charges set out in section 902. In addition, we 
noted that these purposes and functions are consistent with the 
agency's past analysis of 911 fee diversion in its annual fee reports, 
as well as the legislative history of the NET 911 Act. We sought 
comment in the NPRM on our proposed designation of acceptable and 
unacceptable purposes and functions under the statute, including 
whether our proposals were underinclusive or overinclusive. In 
addition, we sought comment on the purposes and functions that states 
and taxing jurisdictions have specified as the intended functions for 
911 fees and charges and how we should take these specifications into 
account as we designate acceptable purposes and functions under section 
902.
    Decision. We revise one of the categories of acceptable purposes 
and functions in response to commenters' requests for additional 
examples of expenditures that fall within the category. We adopt the 
other categories as proposed in the NPRM.
    Commenters generally support the proposed framework of general 
categories of acceptable and unacceptable expenditures for purposes of 
section 902, with examples within each category. CTIA states that it 
supports the proposed standard for determining acceptable purposes and 
functions and notes that section 902 directs the Commission, in 
considering expenditures, to ``determine whether such purposes and 
functions directly support providing 9-1-1 services.'' Intrado states 
that ``the basic framework proposed by the Commission of providing a 
list of acceptable and unacceptable expenditures and obligations for 
911 fees is sound. Addressing fee diversion through a non-exhaustive 
list of acceptable and unacceptable purposes and functions will 
invariably produce objections from affected parties. What matters most, 
however, is the Commission sets a clear demarcation line for compliance 
that public safety organizations can internalize, which the Commission 
can accomplish using the proposed rule's framework with an acceptable/
unacceptable list of expenditures and obligations.''
    Other commenters request additions or changes to the categories of 
acceptable expenditures. CoPUC contends that more clarity is needed 
regarding what constitutes ``operational expenses of PSAPs'' in 
proposed Sec.  9.23(b)(1) because a wide range of different service 
models exist. Commenters also ask the Commission to clarify the term 
``interoperability'' in proposed Sec.  9.23(b)(5). In addition, 
commenters request a variety of additions to the list of examples 
within each category, including expenditures for pre-arrival 
instructions and associated training; maintenance and replacement 
costs; 911 cybersecurity; budgeting and forecasting; hiring, retention, 
and training of staff; industry-specific training through organizations 
such as NENA and the Association of Public-Safety Communications 
Officials-International, Inc. (APCO); mental health services for 911 
professionals; administrative expenses for overseeing 911 programs; 
compliance costs; 911 call processing systems; CAD systems, mobile data 
computers (MDCs); geographic information systems (GIS) call routing, 
wide area networks (WANs), Emergency Services IP Networks (ESInets), 
and other NG911 technologies; emergency notification systems (ENS); and 
platforms such as Smart911 and RapidSOS. BRETSA provides an extensive 
list of requested additions, as does the Illinois State Police.
    We agree with commenters that it would be helpful to add some of 
these examples to the language of the rule. Specifically, we revise 
Sec.  9.23(b)(1) to refer to PSAP operating costs, including lease, 
purchase, maintenance, replacement, and upgrade of customer premises 
equipment (CPE) (hardware and software), computer aided dispatch (CAD) 
equipment (hardware and software), and the PSAP building/facility and 
including NG911, cybersecurity, pre-arrival instructions, and emergency 
notification systems (ENS). PSAP operating costs also include 
technological innovation that supports 911.
    This revision to the proposed rule makes clear that replacement of 
911 systems is an acceptable expenditure for purposes of Section 902 
and that 911 includes pre-arrival instructions and ENS. We also add a 
reference to cybersecurity. As NPSTC and BRETSA note, CSRIC VII 
recently recommended that spending on cybersecurity improvements be 
``explicitly authorized as an eligible use of 9-1-1 funds.'' We also 
add a reference to NG911, and we revise the language to make clear that 
acceptable expenditures for these purposes include funding not just for 
existing systems, but also for innovation that will support 911 in the 
future.\17\ We

[[Page 45899]]

find that these additions to the rule will help to clarify the scope of 
acceptable expenditures for PSAP operating costs in the implementation 
of section 902.
---------------------------------------------------------------------------

    \17\ The North Carolina 911 Board (NC 911 Board) suggests 
clarifying the proposed rules to ``specifically identify'' NG911 
services in a manner consistent with 47 U.S.C. 942(e)(1), which 
defines next generation 911 services as an IP-based system comprised 
of hardware, software, data, and operational policies and procedures 
that--(A) provides standardized interfaces from emergency call and 
message services to support emergency communications; (B) processes 
all types of emergency calls, including voice, data, and multimedia 
information; (C) acquires and integrates additional emergency call 
data useful to call routing and handling; (D) delivers the emergency 
calls, messages, and data to the appropriate public safety answering 
point and other appropriate emergency entities; (E) supports data or 
video communications needs for coordinated incident response and 
management; and (F) provides broadband service to public safety 
answering points or other first responder entities. NC 911 Board 
Mar. 31, 2021 Reply at 2; 47 U.S.C. 942(e)(5). States and taxing 
jurisdictions should use this definition if they find it is helpful, 
but we decline to add it to our rules. We believe NG911 technology 
is still evolving and that we lack an adequate record to define it 
at this time.
---------------------------------------------------------------------------

    With respect to additional suggestions from commenters for 
identifying specified uses of 911 funds as acceptable for purposes of 
Section 902, we do not believe it is necessary to add every specific 
example to the text of the rules or to attempt further clarification of 
terms such as ``operating expenses'' or ``interoperability.'' As we 
note above, we intend to keep these rules general so that states and 
taxing jurisdictions have reasonable flexibility to use their good 
faith judgment in applying the rules to particular circumstances. In 
addition (and as the rules explicitly state), the categories and 
examples are non-exclusive and are not intended to specify every 
possible use of 911 fees that would be acceptable. We also note that 
the petition for determination process provides a mechanism for states 
and taxing jurisdictions that seek additional guidance in applying the 
rules to a particular proposal for use of 911 fees.
3. Designation of Unacceptable Purposes and Functions for 911 
Expenditures
    Background. We sought comment in the NPRM on specifying examples of 
purposes and functions that are not acceptable for the obligation or 
expenditure of 911 fees or charges for purposes of the statute. We 
proposed in Sec.  9.23(c) of the rules that such examples would 
include, but not be limited to, the following:

    <bullet> Transfer of 911 fees into a state or other 
jurisdiction's general fund or other fund for non-911 purposes;
    <bullet> Equipment or infrastructure for constructing or 
expanding non-public safety communications networks (e.g., 
commercial cellular networks); and
    <bullet> Equipment or infrastructure for law enforcement, 
firefighters, and other public safety/first responder entities, 
including public safety radio equipment and infrastructure, that 
does not have a direct impact on the ability of a PSAP to receive or 
respond to 911 calls or to dispatch emergency responders.

    We noted that identifying these examples as unacceptable 
expenditures for purposes of the statute is consistent with the manner 
in which such expenditures have been analyzed in the agency's annual 
911 fee reports and sought comment on whether these examples should be 
codified.\18\
---------------------------------------------------------------------------

    \18\ See NPRM at 10, paras. 24-25. For example, the annual fee 
reports have repeatedly found that transferring 911 fees to the 
state's general fund or using 911 fees for the expansion of 
commercial cellular networks constitutes fee diversion. See NPRM at 
11, para. 25. The fee reports also have found that expenditures to 
support public safety radio systems, including maintenance, 
upgrades, and new system acquisitions, are not 911 related. See NPRM 
at 11, para. 25. In addition, the agency has found that radio 
networks used by first responders are ``technically and 
operationally distinct from the 911 call-handling system.'' See NPRM 
at 11, para. 25. Given our request for comment in the NPRM on such 
examples in the annual fee reports, we reject contentions such as 
those raised by Michigan 911 Entities, who argue that the statements 
in the agency's fee reports on public safety radios were never part 
of a notice and comment rulemaking and therefore cannot be used as a 
rationale for adopting rules in this proceeding. Michigan 911 
Entities Mar. 23, 2021 Comments at 11-12 & n.6.
---------------------------------------------------------------------------

    Decision. We adopt these provisions as proposed in the NPRM, with 
two minor modifications to Sec.  9.23(c)(3), as detailed below. In 
light of the divided record on using 911 fees for public safety radio 
systems, we provide additional guidance on when such use of 911 fees 
will be deemed to have purposes or functions that ``directly support 
providing 9-1-1 services'' and so qualifies as ``acceptable'' for 
purposes of avoiding section 902 consequences. We also seek 
recommendations from the 911 Strike Force on developing additional 
specific examples in these regards.
    We adopt our proposal to classify as unacceptable for Section 902 
purposes the transfer of 911 fees into a general fund or other fund for 
non-911 purposes. The agency's annual fee reports consistently have 
found that transferring 911 fees to a state's general fund constitutes 
fee diversion. In addition, no commenter opposes this provision.
    We also adopt our proposal that expenditures of 911 fees for 
constructing or expanding non-public safety communications networks, 
such as commercial cellular networks, are not acceptable for Section 
902 purposes. This finding is consistent with our approach in the 
agency's annual 911 fee reports, where the agency has concluded, for 
example, that construction of commercial cellular towers to expand 
cellular coverage is not 911 related within the meaning of the NET 911 
Act. In the Twelfth Annual Report to Congress on State Collection and 
Distribution of 911 and Enhanced 911 Fees and Charges, the agency 
explained that, although expanding cellular coverage ``enhances the 
public's ability to call 911,'' the NET 911 Act focuses on funding the 
elements of the 911 call-handling system that are operated and paid for 
by state and local 911 authorities.
    Some commenters recommend a more ``nuanced'' approach that would 
allow 911 spending on non-public safety communications networks in 
certain circumstances. For example, BRETSA agrees that ``wireless 
providers should not require 9-1-1 Authorities to subsidize expansion 
of their coverage with 9-1-1 Fees,'' \19\ but expresses concern that 
Sec.  9.23(c)(2) could prevent Colorado from providing ``diverse 
paths'' to ``currently unprotected Central Offices [ ] serving PSAPs'' 
due to ``incidental benefits to wireless providers.'' Oklahoma 911 
contends that expenditures to provide for PSAP backup during outages 
should be looked at on a ``case by case basis'' at the state and local 
level, to ensure 911 calls are delivered ``quickly and appropriately.'' 
We agree that expenditures to provide redundancy, backup, or resiliency 
in components of the 911 network (e.g., components that provide path 
diversity to PSAPs or support rerouting of 911 traffic in the event of 
an outage) would not be deemed unacceptable under this rule. We also 
note that the petition for determination process provides a mechanism 
for states and taxing jurisdictions to seek additional guidance in 
applying Sec.  9.23(c)(2) to a particular proposal for use of 911 fees 
to meet local needs.
---------------------------------------------------------------------------

    \19\ BRETSA Mar. 23, 2021 Comments at 27. BRETSA also urges the 
Commission to focus on the wireless providers, rather than the 911 
Authority, when the Commission finds diversion of 911 fees to 
subsidize commercial wireless towers. BRETSA notes, for example, 
that the Bureau has labeled West Virginia a fee diverter for 
``subsidizing construction of wireless towers to extend 9-1-1 
calling capabilities to areas wireless providers have found or 
represented are not financially viable or only marginally 
financially viable to serve,'' that wireless providers require 911 
Authorities to ``subsidize with 9-1-1 Fees their own commercial 
wireless services within their licensed service areas,'' and that 
911 service is ``an exception to the rule that providers bear the 
cost of delivering their customers [sic] calls.'' Boulder Regional 
Emergency Telephone Service Authority Reply, PS Docket Nos. 20-291 
and 09-14, at 16-17 (rec. Apr. 2, 2021) (BRETSA Apr. 2, 2021 Reply); 
see also BRETSA Mar. 23, 2021 Comments at 27-28 (``focus should be 
on the Commission's coverage rules and the actions of the wireless 
providers rather than on the 9-1-1 Authorities who must pay these 
subsidies for the providers to expand coverage''). We refer to the 
911 Strike Force for further consideration the issue of whether, and 
how much, the Commission should focus on wireless providers, rather 
than 911 authorities, when finding fee diversion for subsidization 
of commercial wireless towers.
---------------------------------------------------------------------------

    We also adopt with minor modifications our proposal to classify as 
unacceptable, for purposes of section

[[Page 45900]]

902, expenditures of 911 fees on equipment or infrastructure for law 
enforcement, firefighters, and other public safety/first responder 
entities that do not directly support 911 services. We revise the 
language of this section slightly to provide that examples of purposes 
and functions that are not acceptable for the obligation or expenditure 
of 911 fees or charges for purposes of section 902 include, but are not 
limited to, ``Equipment or infrastructure for law enforcement, 
firefighters, and other public safety/first responder entities that 
does not directly support providing 911 services.'' The reference to 
whether such equipment or infrastructure ``directly support[s] 
providing 911 services'' more closely tracks the language in section 
902.
    Further, with respect to the application of this rule to public 
safety radio expenditures, we leave the precise dividing line between 
acceptable and unacceptable radio expenditures open for further 
refinement, and we refer this issue to the 911 Strike Force for further 
consideration and the development of recommendations.
    Commenters were divided on whether using 911 funds to pay for 
public safety radio systems constitutes fee diversion. The Tarrant 
County (TX) 9-1-1 District strongly disagrees with commenters who 
assert that allowable uses of 911 fees should include items such as 
radio infrastructure, mobile radios, portable radios, pagers or other 
systems: ``THIS is exactly the problem. Agencies want to fund the 
entire public safety response system by recategorizing equipment, 
vehicles, and unrelated systems as part of the 9-1-1 response. It is 
emphatically NOT all part of the 9-1-1 system. The purpose of the fee 
is strictly to support Basic 9-1-1 and Enhanced 9-1-1 (E911) services 
only.'' CTIA and NTCA--The Rural Broadband Association (NTCA) argue 
that allowing radio system expenses would depart from fee report 
precedent, where the agency has ruled that use of funds to support 
public safety radio systems and associated maintenance and upgrades are 
not 911-related and constitute fee diversion. The North Carolina 911 
Board (NC 911 Board) supports the NPRM proposal and notes that it only 
funds radio expenses within the PSAP based on the definition of ``call 
taking'' in the North Carolina statute.
    However, some state and local 911 entities urge the Commission to 
find that expenditures of 911 funds on public safety radio systems are 
broadly acceptable and do not constitute fee diversion. These 
commenters contend that radio networks are not operationally and 
technically distinct from the 911 system and should be treated as 
integral components of the 911 ecosystem. For example, NYS DHSES 
asserts that ``[p]ublic safety communication systems are most effective 
when they address all users. This requires connecting the general 
public to 911 Centers and their telecommunicators who, in turn, 
communicate with first responders in the field.'' The Michigan 911 
Entities assert that ``[u]nless the Commission is suggesting that 
police and fire go back to the wired Call Box on the street corner, 
there is no doubt that a PSAP is virtually useless without its 
interconnection to the radio system. Similarly, that radio system is 
useless without subscriber units for the system with which to 
communicate.''
    Several commenters also assert that our proposal to consider 
expenditures for public safety radio expenses unacceptable for section 
902 purposes in certain circumstances is inconsistent with our proposal 
that expenditures providing for ``the interoperability of 911 systems 
with one another and with public safety/first responder radio systems'' 
would be acceptable. The Pennsylvania Emergency Management Agency 
(PEMA) asserts that ``[t]he proposed rules imply there is a boundary 
between acceptable and not acceptable radio system expenses, but it is 
not clear where the boundary lies.'' CoPUC states that the line between 
acceptable and unacceptable radio equipment ``is not clear at all'' and 
that ``[p]resumably, radio equipment inside the PSAP is allowed, but 
everything from the PSAP to the portable radio on a patrol officer's 
utility belt is part of the infrastructure required to dispatch 
emergency responders.''
    The issue whether radio system expenditures are acceptable or 
unacceptable for purposes of section 902 turns on how the Commission 
interprets the statutory provision that 911 fee expenditures directly 
support the provision of 911 services. We believe it is important to 
strike a balance between the opposing views in the record while 
recognizing the evolving nature of the 911 landscape and the variety of 
specific issues that could arise. Therefore, we reject as overbroad the 
proposition that all public safety radio expenditures ``directly 
support the provision of 911 services'' and are therefore acceptable. 
This is inconsistent with the standard applied in prior 911 fee reports 
and risks becoming an exception that swallows the rule. However, the 
test of whether specific radio expenditures directly support the 
provision of 911 services should be sufficiently flexible to allow for 
innovation and evolution in the 911 environment. For example, 
acceptable radio expenditures are not necessarily limited to technology 
``inside the PSAP'' and could extend to development of integrated 
communications systems that support 911-related functions such as 
caller location or that enhance 911 reliability and resiliency. As NENA 
points out, the Commission's determinations with respect to edge cases 
``evolve and are clarified over time as [the agency] is confronted with 
new quasi-9-1-1 public safety expenditures.'' We therefore decline to 
define a ``bright line'' test for applying the rule to specific radio 
expenditures.
    We also find that commenters on both sides of this issue raise 
arguments that warrant additional consideration in determining where 
the line should be drawn between acceptable and unacceptable 
expenditures for public safety radio equipment. 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 on how to apply this standard--to 
be delivered to the Commission contemporaneously with its final report 
to Congress--including the extent to which radio expenditures should be 
considered acceptable for purposes of section 902 because they provide 
for the interoperability of 911 systems with one another and with 
public safety/first responder radio systems. Finally, we note that the 
petition for determination process established by the statute provides 
a mechanism for further consideration of this issue in the context of 
specific cases after adoption of these rules.
4. Safe Harbor for Multi-Purpose Fee or Charge
    Background. In the NPRM, we proposed to adopt an elective safe 
harbor in our rules 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: (1) Specifies the 
amount or percentage of such fees or charges that is dedicated to 911 
services; (2) ensures that the 911 portion of such fees or charges is 
segregated and not

[[Page 45901]]

commingled with any other funds; and (3) obligates or expends the 911 
portion of such fees or charges for acceptable purposes and functions 
as defined in Sec.  9.23 under new subpart I. We reasoned that the 
rules should provide states and taxing jurisdictions the flexibility to 
apportion the collected funds between 911 related and non-911 related 
programs, but include safeguards to ensure that such apportionment is 
not subject to manipulation that would constitute fee diversion.
    Decision. We adopt the safe harbor provision as proposed. As we 
note above, Congress tasked us with designating the acceptability of 
the obligation and expenditure of 911 fees or charges for purposes of 
determining whether section 902 consequences will apply. Consistent 
with that mandate, and to incentivize states and taxing jurisdictions 
to be transparent about multi-purpose fees, adopting a safe harbor 
provision offers flexibility to states and taxing jurisdictions to have 
the 911 portion of such multi-purpose fees be deemed acceptable while 
not having the non-911 portion be deemed diversion. Some commenters 
support adoption of the proposed safe harbor, while other commenters 
object to the creation of the safe harbor provision as regulating non-
911 fees outside of the Commission's authority or as burdensome. In 
establishing the safe harbor, we believe that we are neither regulating 
non-911 fees nor overstepping the responsibility Congress required of 
the Commission. Because new paragraphs (3)(A) and (B) of section 615a-
1(f) require the Commission to define ``acceptable'' expenditures of 
911 fees or charges for purposes of section 902, and because some 
states and taxing jurisdictions collect 911 fees or charges as part of 
multi-purpose fees, we conclude that the Commission has the obligation 
to consider the portions of such fees that are dedicated to 911 
services. The safe harbor is a voluntary provision that provides a set 
of criteria for states and taxing jurisdictions with multi-purpose fees 
to demonstrate that they are not diverting 911 fees or charges. 
Accordingly, Sec.  9.23(d)(2), which provides that the 911 portion of 
such fees or charges is segregated and not commingled with any other 
funds, only applies to states and taxing jurisdictions that opt to use 
the safe harbor provision to demonstrate that they are not diverting 
911 fees. Arguments that fee segregation exceeds the Commission's 
authority or is burdensome are obviated by the elective nature of the 
safe harbor.
    We find that the safe harbor will promote visibility into how funds 
ostensibly collected for both 911 and other purposes are apportioned, 
which furthers Congress's transparency goals and enhances our ability 
to determine whether 911 funds are being diverted. Without such 
visibility, multi-purpose fees could be used to obscure fee diverting 
practices from Commission inquiry, and potentially could render our 
rules and annual 911 fee report ineffective.
    We also clarify that the safe harbor provision is not intended to 
preclude the use of fees collected for non-911 purposes from later 
being used for 911 purposes. BRETSA ``supports the Commission's 
proposal in Section 9.23(d),'' but challenges a purported provision 
that ``if a fee which is specified to be for a purpose other than 9-1-1 
is used to support 9-1-1, it will thereafter be considered a 9-1-1 
Fee.'' BRETSA misconstrues the safe harbor provision. Nothing in the 
rules we adopt in this document would prevent a state or taxing 
jurisdiction from using fees originally collected for other public 
safety purposes to instead support 911 services if needed, and then 
later using those same non-911 public safety fees to support other 
public safety purposes again.
    BRETSA also contends that the safe harbor prohibition on comingling 
of 911 funds with other funds is ``unnecessarily restrictive.'' We 
disagree. Segregation of 911 funds in a separate account will help to 
ensure that the funds are fully traceable, provide a straightforward 
framework to avoid 911 fee diversion issues, and promote transparency 
in the use of 911 fees when a state or taxing jurisdiction collects a 
fee for both 911 and non-911 purposes. We also clarify that states and 
taxing jurisdictions are not required to use the safe harbor provision 
of our rules. Thus, a state or taxing jurisdiction may create an 
alternative multi-purpose fee mechanism that does not meet the safe 
harbor requirements. If it does so, however, the burden will be on the 
state or taxing jurisdiction to demonstrate that it is not diverting 
911 funds.
    Finally, BRETSA suggests that ``[i]n section 9.23(d)(1), it should 
suffice if the 9-1-1 funding statute or regulations specify the: (i) 
Amount or percentage of such fees or charges which are dedicated to 
purposes other than 9-1-1 Services, (ii) minimum amount or percentage 
dedicated to 9-1-1 services, or (iii) prioritize use of the fees or 
charges for 9-1-1 Service (e.g., permit use of the fees for non-911 
purposes after the costs of 9-1-1 Service have been met[)].'' BRETSA's 
suggestions (i) and (ii) appear consistent with Sec.  9.23(d)(1), as 
long as the state or taxing jurisdiction adheres to Sec.  9.23(d)(2) 
requiring that the fees be kept segregated. We do not intend the safe 
harbor to restrict flexibility of states and taxing jurisdictions to 
adjust the percentages of a multi-purpose fee that are allocated to 911 
and non-911 purposes.
5. Diverter Designations
    Some commenters raise concerns regarding the sufficiency of the 
process by which jurisdictions are determined to be engaged in 
diversion by the Commission, or request additional procedural 
safeguards before being designated a diverter in the annual fee report. 
In addition, some commenters urge creation of an appeal process for 
states identified as diverters, and one commenter requests a process by 
which a diversion finding can be removed once a state has come into 
compliance.
    We decline to adopt such procedures that are not provided for in 
either section 902 or the NET 911 Act. As discussed above, Congress 
directed the Commission to adopt final rules defining the acceptable 
uses of 911 fees and to rule on petitions for determination for 
additional uses, in order to discourage fee diversion.\20\ Section 902 
also does not alter the well-established data collection and reporting 
process that the agency has employed to compile its annual reports. To 
the contrary, Congress implicitly affirmed the agency's existing 
reporting processes by requiring that Federal grant recipients 
participate in the annual data collection.
---------------------------------------------------------------------------

    \20\ 47 U.S.C. 615a-1(f)(3)(A), (f)(5) (as amended); sec. 
902(c)(1)(C). Furthermore, Congress defined diversion under section 
902(f)(4) in reference to the final rules that the Commission issues 
here, stating that diversion is ``the obligation or expenditure of 
such fee or charge for a purpose or function other than the purposes 
and functions designated in the final rules.'' 47 U.S.C. 615a-1 
Statutory Notes (as amended); sec. 902(f)(4). When the agency 
reports to Congress as required by 47 U.S.C. 615a-1(f)(2) on the 
status of diversion in states and taxing jurisdictions, it will do 
so using this definition. See 47 U.S.C. 615a-1 Statutory Notes (as 
amended); sec. 902(d)(2).
---------------------------------------------------------------------------

    For similar reasons, we decline to establish a ``glide path'' or 
``phase-in'' period for states and taxing jurisdictions to come into 
compliance with our rules, as proposed by some commenters. Section 902 
does not provide any mechanism for the Commission to delay the 
implementation of these rules under the statute. We recognize that 
commenters are concerned about the potential 911 grant eligibility 
consequences of being designated a fee diverter based on the rules 
adopted in this order. The Michigan Chapter of APCO, for example, 
asserts that a

[[Page 45902]]

determination of diversion puts significant Federal grant money at 
risk, which could hinder the 911 system in fulfilling its primary 
purpose and ultimately harm those it was originally created to protect. 
Several commenters note that a finding of diversion could impact 
eligibility for future grants under the Leading Infrastructure for 
Tomorrow's America (LIFT America) Act if it is enacted into law. 
However, these issues are beyond the scope of this proceeding. The 
current 911 grant program is administered by the National 
Telecommunications and Information Administration (NTIA) and the 
National Highway Traffic Safety Administration (NHTSA), and the LIFT 
America Act, as currently drafted, provides for grants to be 
administered by these same agencies. Thus, these agencies, and not the 
Commission, will determine the appropriate criteria for eligibility to 
receive 911 grants, including whether a state or taxing jurisdiction 
would be eligible in the circumstances raised by commenters.\21\
---------------------------------------------------------------------------

    \21\ NTIA and NHTSA administer the 911 Grant Program, enacted by 
the ENHANCE 911 Act section 158 (codified at 47 U.S.C. 942(c)), and 
amended by the NG911 Act section 6503 (codified at 47 U.S.C. 
942(c)). In rulemakings to revise the implementing regulations for 
the 911 Grant program, NTIA, NHTSA, the Department of Commerce, and 
the Department of Transportation have clarified that they ``are not 
bound by the FCC's interpretation of non-diversion under the NET 911 
Act.'' 911 Grant Program, 83 FR 38051, 38058 (Aug. 3, 2018) 
(codified at 47 CFR part 400).
---------------------------------------------------------------------------

Petition for Determination

    Background. Section 902(c)(1)(C) provides that a state or taxing 
jurisdiction may petition the Commission for a determination that an 
obligation or expenditure of a 911 fee for a purpose or function other 
than those already deemed ``acceptable'' by the Commission should be 
treated as an acceptable expenditure. The state or taxing jurisdiction 
must demonstrate that the expenditure: (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 ``receive or 
respond to 9-1-1 calls'' or to ``dispatch emergency responders.'' If 
the Commission finds that the state or taxing jurisdiction has provided 
sufficient documentation to make this demonstration, section 902 
provides that the Commission shall grant the petition.
    In the NPRM, we proposed to codify these provisions in our rules. 
We stated our belief that ``Congress intended this petition process to 
serve as a safety valve allowing states to seek further refinement of 
the definition of obligations and expenditures that are considered 911 
related.'' We also stated that the proposed rule would set clear 
standards for what states must demonstrate to support a favorable 
ruling, including the requirement to provide sufficient documentation. 
In addition, to promote efficiency in reviewing such petitions, we 
proposed that states or taxing jurisdictions seeking a determination do 
so by filing a petition for declaratory ruling under Sec.  1.2 of the 
Commission's rules. We noted that the declaratory ruling process would 
promote transparency regarding the ultimate decisions about 911 fee 
revenues that legislatures and executive officials make and how such 
decisions promote effective 911 services and deployment of NG911. We 
proposed to delegate authority to the Public Safety and Homeland 
Security Bureau to rule on these petitions for determination, following 
the solicitation of comments and reply comments via public notice. We 
sought comment on these proposals and on any possible alternative 
processes for entertaining such petitions.
    We adopt our proposed rules and procedures for addressing petitions 
for determination, with some clarifications. Commenters generally 
support these proposals, although most commenters recommend 
modifications or additions to the process. We address these issues in 
turn.
    Petitions and permitted filers. First, we adopt our proposal that 
states or taxing jurisdictions seeking a determination must do so by 
filing a petition for declaratory ruling under Sec.  1.2 of the 
Commission's rules.\22\ Some commenters, however, urge us to make the 
declaratory ruling process available to other stakeholders, such as 
communications providers and public safety organizations, to request 
Commission guidance on whether certain measures constitute 911 fee 
diversion. For example, CTIA asserts that expanding this process would 
``create a deterrent effect that can restrain state or local taxing 
jurisdictions from taking new actions that may constitute 9-1-1 fee 
diversion.'' However, other commenters oppose expanding the petition 
process to other stakeholders. The Adams County E-911 Emergency 
Telephone Service Authority, Arapahoe County 911 Authority, and 
Jefferson County Emergency Communications Authority (AAJ Authorities) 
note that section 902 ``clearly states'' that ``only states and taxing 
jurisdictions'' can initiate such proceedings, for the limited purpose 
of determining whether an expenditure by such a state or taxing 
jurisdiction is consistent with the Commission's rules. BRETSA also 
opposes expanding the petition process to other stakeholders, noting 
the ``wide disparity'' between the resources of wealthy service 
providers and many PSAPs, most of which ``do not regularly retain 
counsel and participate in Commission proceedings,'' and might ``lack 
the resources to oppose'' the petitions. Another commenter, Consumer 
Action for a Strong Economy (CASE), proposes a different mechanism, 
suggesting that to encourage reporting by non-governmental entities, 
the Commission could establish ``a new docket or a portal'' in which 
non-governmental entities could provide evidence demonstrating that a 
state or taxing jurisdiction is underfunding 911 services or ``has 
failed to meet an acceptable purpose and function for the obligation or 
expenditure of 911 fees or charges.'' The AAJ Authorities ask the 
Commission to reject CASE's proposal, contending that creation of a new 
docket or portal would create ``undue burdens'' for states and local 
911 authorities, which would have to spend time and resources 
responding to Commission inquiries. The AAJ Authorities also note that 
Commission ``already has an information collection process to identify 
fee diverters.''
---------------------------------------------------------------------------

    \22\ The Commission notes that the decision to apply Sec.  1.2 
of the Commission's rules to the filing of these section 902 
petitions is limited to the use of Sec.  1.2 as a procedural vehicle 
for conducting an adjudication of these petitions. Accordingly, any 
limitations of 47 CFR 1.2 and the Administrative Procedure Act at 5 
U.S.C. 554(e) that might arise from the specification that the 
Commission may issue a declaratory ruling to terminate a controversy 
or remove uncertainty do not apply here. Rather, the standard for 
accepting and granting these special petitions for determination is 
dictated by the statutory requirements of section 902(c)(1)(C)--
specifically, that the Commission must grant such a petition if it 
finds that the State has provided sufficient documentation to 
demonstrate that the ``purpose or function'' (i) supports PSAP 
functions or operations, or (ii) has a direct impact on the ability 
of a PSAP to ``(I) receive or respond to 911 calls; or (II) dispatch 
emergency responders.'' 47 U.S.C. 615a-1(f)(5)(B) (as amended); sec. 
902(c)(1)(C).
---------------------------------------------------------------------------

    We find that, under the explicit language of section 902, only a 
``State or taxing jurisdiction'' may file a petition for determination, 
and that other stakeholders (e.g., communications providers) may not 
file a petition for determination. In addition, we decline to create a 
``new docket or portal'' for non-governmental authorities to report 911 
fee diversion and underfunding issues. Non-governmental parties can 
provide information to the Commission on a 911 fee concern at any time 
and can comment on annual 911 fee reports and state responses to the 
FCC data

[[Page 45903]]

collection. We find that these existing procedural options available to 
non-governmental entities are sufficient and decline to add another 
layer of procedures. For example, these other stakeholders may file a 
petition for declaratory ruling under Sec.  1.2 of the Commission's 
rules or a petition for rulemaking under Sec.  1.401 of the 
Commission's rules. However, such petitions would not be subject to or 
entitled to the specialized petition for determination process and 
substantive standards that we establish here.
    Bureau delegation and public comment. In general, the Public Safety 
and Homeland Security Bureau (Bureau) has delegated authority under our 
existing rules that is sufficient to act on petitions for determination 
in the first instance. We also adopt our NPRM proposal that the Bureau 
seek comment on petitions. Although the North Carolina 911 Board 
expresses concern that the comment and reply process could lead to 
administrative burdens for state and local government, other commenters 
support the proposal. We conclude that seeking comment on petitions 
will promote transparency and informed decision-making in furtherance 
of Congress's goals.
    Time Limits. We decline to place a time limit on Bureau action on 
petitions for determination. We agree with commenters who advocate for 
timely action on petitions, but also agree with CTIA that the process 
needs ``to allow for public comment and sufficient deliberation of 
whether expenditures are appropriately within the scope of the 
Commission's rules.'' Although some commenters advocate mandatory 
timelines, imposing a rigid time limit on an as yet unknown volume of 
petition decisions, many of which will require careful consideration of 
complex situations and questions, would not allow time for sufficient 
deliberation or public input, would unduly burden limited Commission 
staff resources, and would potentially lead to inconsistent results.
    Review. Some commenters advocate that an appeal process should be 
available, whether specifically in relation to the petition decision, 
or as a more general matter for any finding of fee diversion. In terms 
of appeals of the Bureau's petition decisions, we believe creating any 
specialized appeal process is unnecessary, because petitioners may 
submit petitions for reconsideration under Sec.  1.106 of the 
Commission's rules or applications for Commission review of any Bureau-
level decision under Sec.  1.115 of the Commission's rules.
    Blanket Waivers. We continue to believe that Congress intended the 
petition process ``to serve as a safety valve allowing states to seek 
further refinement of the definition of obligations and expenditures 
that are considered 911 related.'' However, BRETSA argues that the 
petition process should include provisions for ``blanket waivers'' or 
special rules for certain common situations that affect a large number 
of 911 authorities. We decline to establish such specialized 
provisions. We find that our general guidelines on acceptable and 
unacceptable 911 expenditures are sufficiently broad, and that these 
overarching national guidelines, the illustrative lists of examples, 
and the petition process complement each other, with the petition 
process allowing localized refinements that accommodate varying 
circumstances as well as a reasonable mechanism to evaluate future 
perhaps as yet unforeseen, but legitimate, expenses. We also note that 
nothing in the rules prevents multiple states or taxing authorities 
from filing a joint petition to address a common issue.

Eligibility To Participate on Advisory Committees

    Background. Pursuant to section 902(d)(4), any state or taxing 
jurisdiction identified by the agency in the annual 911 fee report as 
engaging in diversion of 911 fees or charges ``shall be ineligible to 
participate or send a representative to serve on any committee, panel, 
or council established under section 6205(a) of the Middle Class Tax 
Relief and Job Creation Act of 2012 . . . or any advisory committee 
established by the Commission.'' In the NPRM, we proposed to codify 
this restriction in Sec.  9.26 as it applies to any advisory committee 
established by the Commission.
    Decision. We adopt the proposal from the NPRM with a minor 
modification and provide additional guidance and clarification on 
certain aspects of the rule.\23\ As proposed, we find that any state or 
taxing jurisdiction identified by the agency as engaging in diversion 
will be ineligible to participate on any advisory committee established 
by the Commission. The first fee diversion report required to be 
submitted one year after the enactment of section 902 will include a 
list of states and taxing jurisdictions identified as practicing fee 
diversion. The agency will begin identifying representatives of 
diverting jurisdictions on its current advisory committees, if any, 
following the issuance of that report, and evaluate how to remove such 
representatives from current advisory committees. One commenter 
supports the prohibition without caveats, and some commenters seek 
clarification on or ask the Commission to revisit the scope of the 
prohibition against serving on advisory committees when a state or 
taxing jurisdiction has been designated a diverter.\24\
---------------------------------------------------------------------------

    \23\ We revise the language of the proposed rule to clarify the 
reference to section 6(f)(2) of the Wireless Communications and 
Public Safety Act of 1999, as amended (47 U.S.C. 615a-1(f)(2)).
    \24\ NPSTC notes that section 902(d)(4) references the 
ineligibility of diverting states or taxing jurisdictions to serve 
on FirstNet committees, panels, or councils, and states that this 
section encompasses the FirstNet Public Safety Advisory Committee 
(PSAC). NPSTC Mar. 23, 2021 Comments at 7. NPSTC asserts that 
``[t]he PSAC appears to be established by Congress in the 
legislation, not by the Commission.'' Id. at 7. NPSTC argues that 
``the Commission, in coordination with the FirstNet governmental 
entity, should clarify any impact of this legislation to FirstNet 
and related advisory committees, councils or panels,'' as ``an 
individual on the PSAC that represents a public safety or 
governmental association/organization should not be penalized for an 
employer's 911 fee decisions over which he/she may have no 
involvement.'' Id. at 7; see also IAFC Apr. 2, 2021 Reply at 5 
(quoting NPSTC). We observe that at the May 5, 2021 FirstNet board 
meeting, FirstNet updated the charter of the PSAC to prevent 
representatives of fee diverting jurisdictions from participating on 
the PSAC. See First Responder Network Authority, Board Resolution 
109-Bylaws and Public Safety Advisory Committee Charter Revisions at 
1-2 & Exh. B (May 5, 2021), https://firstnet.gov/sites/default/files/Resolution%20109%20-%20Bylaws%20and%20PSAC%20Charter%20Revisions%20May%202021.pdf.
---------------------------------------------------------------------------

    We clarify 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 
on advisory committees established by the Commission. Further, we 
clarify that this prohibition will not extend to representatives of 
non-diverting localities that are located within diverting states. We 
also clarify that an individual who is employed by a diverting 
jurisdiction may still serve on a Commission advisory committee as a 
representative of a public safety organization or other outside 
association. Lastly, we clarify that an advisory committee 
``established'' by the Commission includes any advisory committee 
established under the Federal Advisory Committee Act and any other 
panel that serves an advisory function to the Commission as reflected 
on the Commission's website.\25\ In light

[[Page 45904]]

of these clarifications, we believe the prohibition appropriately 
balances the interests of Congress in restricting representatives of 
fee diverting jurisdictions from serving on advisory committees, 
without limiting representatives of non-diverting jurisdictions from 
providing their perspectives. Our clarification tracks NPSTC's view 
that an individual ``may be employed by a locality or state, but serve 
voluntarily in public safety associations/organizations for the benefit 
of all public safety,'' and may wish to end diverting practices.
---------------------------------------------------------------------------

    \25\ A full list of the advisory committees established by the 
Commission can be found at https://www.fcc.gov/about-fcc/advisory-committees-fcc. This prohibition would not extend to the Regional 
Planning Committees (RPCs), which are administrative rather than 
advisory in nature. See NPSTC Mar. 23, 2021 Comments at 6 
(requesting clarification of whether RPCs would be considered 
committees ``established'' by the Commission).
---------------------------------------------------------------------------

    Mission Critical Partners proposes that the restriction on diverter 
participation on advisory committees be expanded to include 
``congressional panel[s], the National 911 Program, or other public 
safety-related committees, panels, or councils.'' Because this proposal 
would exceed Congress's directive in section 902, we decline to adopt 
it.

Reporting Requirement

    Background. Section 902(c)(1)(C) provides that if a state or taxing 
jurisdiction receives a grant under section 158 of the National 
Telecommunications and Information Administration Organization Act (47 
U.S.C. 942) after the date of enactment of section 902, ``such State or 
taxing jurisdiction shall, as a condition of receiving such grant, 
provide the information requested by the Commission to prepare [the 
annual report to Congress on 911 fees].'' \26\ In the NPRM, we proposed 
to codify this provision in Sec.  9.25 under new subpart I to require 
grant recipients to provide such information to the Commission.
---------------------------------------------------------------------------

    \26\ 47 U.S.C. 615a-1(f)(4) (as amended); sec. 902(c)(1)(C). 
NHTSA and NTIA will review the regulations for the 911 Grant Program 
at 47 CFR part 400 in order to determine how best to implement the 
new obligation under the law. The Commission will work with these 
agencies to ensure a coordinated compliance regime.
---------------------------------------------------------------------------

    Decision. We adopt our proposal, which was unopposed in the comment 
record, with clarifying modifications.\27\ Mission Critical Partners 
notes that the collection of information regarding states' use of 911 
funds ``provides comprehensive information for Congress to scrutinize 
and understand the needs of states and local 911 authorities.'' APCO 
notes that ``[u]sing the strike force and annual reports to better 
understand the relationship between funding for 9-1-1 and emergency 
response will produce helpful information for public safety agencies 
and serve the Commission's and Congress's goal of discouraging fee 
diversion.''
---------------------------------------------------------------------------

    \27\ We revise the language of the rule to clarify the reference 
to section 6(f)(2) of the Wireless Communications and Public Safety 
Act of 1999, as amended (47 U.S.C. 615a-1(f)(2)). We also clarify 
that each state or taxing jurisdiction subject to this requirement 
must file the information requested by the Commission and in the 
form specified by the Public Safety and Homeland Security Bureau.
---------------------------------------------------------------------------

Underfunding 911 Services and Improving the Annual 911 Fee Report

    Background. In the Notice of Inquiry in this proceeding, we sought 
comment on whether improvements to the agency's data collection and 
reporting process could further discourage fee diversion. Section 
902(d)(2) provides that, beginning with the first annual fee report 
``that is required to be submitted after the date that is 1 year after 
the date of the enactment of this Act,'' the Commission shall include 
in each report ``all evidence that suggests the diversion by a State or 
taxing jurisdiction of 9-1-1 fees or charges, including any information 
regarding the impact of any underfunding of 9-1-1 services in the State 
or taxing jurisdiction.'' Given that section 902 similarly requires us 
to forward any evidence of fee diversion, ``including any information 
regarding the impact of any underfunding of 9-1-1 services,'' to the 
911 Strike Force, in the NPRM we sought comment on how we can best 
emphasize this aspect in our information collection reports.
    Decision. As a threshold matter, we direct the Bureau to update the 
annual 911 fee report questionnaire to reflect the rules adopted in the 
Report and Order. This should help address concerns raised by 
commenters that our annual data collection be more effective in 
identifying fee diversion.
    Commenters generally support the Commission's approach of using the 
911 Strike Force and annual reports to better understand 
underfunding.\28\ APCO and several other commenters urge us to take a 
``broad approach'' to analyzing the extent and impacts of 911 
underfunding, whether or not it is caused by 911 fee diversion. 
Commenters note that the presence or absence of fee diversion does not 
reliably correlate to adequate funding for 911 and suggest that we take 
additional steps to study the broader impacts of underfunding the 911 
system. We direct the Bureau to modify the annual fee report 
questionnaire to seek additional information on the underfunding of 911 
systems, including both (1) information on the impact of fee diversion 
on 911 underfunding, and (2) information on 911 underfunding in 
general. We also refer this issue to the 911 Strike Force. The 911 
Strike Force is charged with examining, among other things, ``the 
impacts of diversion,'' and we expect that its report will address 
underfunding as a potential impact of diversion.
---------------------------------------------------------------------------

    \28\ APCO Mar. 23, 2021 Comments at 2 (using the Strike Force 
and annual reports will produce helpful information and serve the 
goal of discouraging fee diversion ``while looking at the bigger 
picture of the extent of underfunding regardless of the source''); 
NC 911 Board Mar. 31, 2021 Reply at 3 (stating that the NC 911 Board 
``supports the Commission's apparent intent to seek greater clarity 
[on underfunding] through the Strike Force''); IAFC Apr. 2, 2021 
Reply at 5-6 (quoting and supporting APCO's assertion that the 
Commission should use the Strike Force and annual reports to produce 
helpful information regarding underfunding). We note that the 911 
Strike Force is due to submit its report to Congress by September of 
this year, which will not be enough time for the agency to pass 
along underfunding information collected through the fee report 
process this year. The 911 Strike Force will examine, however, the 
impact of fee diversion on underfunding, and the Commission will 
submit to the 911 Strike Force the information that it currently 
has, as mandated by statute. See 47 U.S.C. 615a-1 Statutory Notes 
(as amended); sec. 902(d)(1)-(3).
---------------------------------------------------------------------------

    We decline two requests from the NC 911 Board to expand the 
Commission's approach to analyzing underfunding, first that the 
Commission address underfunding of 911 as a prerequisite to finding 
that fee diversion has occurred, and second that the Commission provide 
more detail regarding the intent, definition, and scope of 
underfunding. Neither section 902 nor the NET 911 Act contains a 
requirement that the Commission find underfunding prior to finding fee 
diversion. Regarding the request that the Commission provide more 
detail about the intent, definition, and scope of underfunding, we note 
that section 902 did not specifically direct the Commission to define 
underfunding at this time, but we refer the topic of defining 
underfunding 911 to the 911 Strike Force to study.

III. Procedural Matters

    Regulatory Flexibility Act. The Regulatory Flexibility Act of 1980, 
as amended (RFA), requires that an agency prepare a regulatory 
flexibility analysis for notice and comment rulemakings, unless the 
agency certifies that ``the rule will not, if promulgated, have a 
significant economic impact on a substantial number of small 
entities.'' Accordingly, we have prepared a Final Regulatory 
Flexibility Analysis (FRFA) concerning the possible impact of the rule 
changes contained in this Report and Order on small entities. The FRFA 
is set forth in Appendix B of the Commission's Report and Order.
    Paperwork Reduction Act of 1995 Analysis. The requirements in Sec.  
9.25(b) constitute a modified information collection to OMB Control No. 
3060-1122. The modified information collection will be submitted to the 
Office of Management and Budget

[[Page 45905]]

(OMB) for review under section 3507(d) of the Paperwork Reduction Act 
of 1995 (PRA). OMB, the general public, and other Federal agencies are 
invited to comment on the new or modified information collection 
requirements contained in this proceeding. In addition, we note that, 
pursuant to the Small Business Paperwork Relief Act of 2002, we 
previously sought, but did not receive, specific comment on how the 
Commission might further reduce the information collection burden for 
small business concerns with fewer than 25 employees. The Commission 
does not believe that the new or modified information collection 
requirements in Sec.  9.25(b) will be unduly burdensome on small 
businesses. Applying these modified information collections will 
implement section 902 and promote transparency in the collection and 
expenditure of 911 fees. We describe impacts that might affect small 
businesses, which includes most businesses with fewer than 25 
employees, in the FRFA in Appendix B of the Commission's Report and 
Order.
    Congressional Review Act. The Commission has determined, and the 
Administrator of the Office of Information and Regulatory Affairs, 
Office of Management and Budget, concurs, that this is a major rule 
under the Congressional Review Act, 5 U.S.C. 804(2). The Commission 
will send a copy of this Report and Order to Congress and the 
Government Accountability Office pursuant to 5 U.S.C. 801(a)(1)(A).
    Additional Information. For additional information on this 
proceeding, contact Brenda Boykin, <a href="/cdn-cgi/l/email-protection#713303141f15105f331e081a181f311712125f161e07"><span class="__cf_email__" data-cfemail="145666717a70753a567b6d7f7d7a547277773a737b62">[email protected]</span></a> or 202-418-
2062, Rachel Wehr, <a href="/cdn-cgi/l/email-protection#8cdeedefe4e9e0a2dbe9e4fecceaefefa2ebe3fa"><span class="__cf_email__" data-cfemail="6a380b09020f06443d0f02182a0c0909440d051c">[email protected]</span></a> or 202-418-1138, or Jill Coogan, 
<a href="/cdn-cgi/l/email-protection#baf0d3d6d694f9d5d5dddbd4fadcd9d994ddd5cc"><span class="__cf_email__" data-cfemail="064c6f6a6a284569696167684660656528616970">[email protected]</span></a> or 202-418-1499, of the Public Safety and Homeland 
Security Bureau, Policy and Licensing Division.

Final Regulatory Flexibility Analysis

    As required by the Regulatory Flexibility Act of 1980, as amended 
(RFA), an Initial Regulatory Flexibility Analysis (IRFA) was 
incorporated in the NPRM adopted in February 2021. The Commission 
sought written public comment on the proposals in the NPRM, including 
comment on the IRFA. No comments were filed addressing the IRFA. This 
present Final Regulatory Flexibility Analysis (FRFA) conforms to the 
RFA.

A. Need for, and Objectives of, the Final Rules

    The Report and Order adopts rules to implement section 902 of the 
Consolidated Appropriations Act, 2021 that required the Commission to 
take action to help address the diversion of 911 fees by states and 
taxing jurisdictions for purposes unrelated to 911. The Commission 
amends part 9 of its rules to establish a new subpart I to address the 
use of 911 fees and fee diversion in accordance with the requirements 
of section 902. More specifically, the rules the Commission adopts in 
the new subpart I designate illustrative, non-exhaustive purposes and 
functions for the obligation or expenditure of 911 fees or charges by 
states and taxing jurisdiction authorized to impose such a fee or 
charge that are acceptable for purposes of section 902 and the 
Commission's rules; clarify what does and does not constitute 911 fee 
diversion; establish a declaratory ruling process for providing further 
guidance to states and taxing jurisdictions on fee diversion issues; 
and codify the specific restrictions that section 902 imposes on states 
and taxing jurisdictions that engage in diversion, such as the 
exclusion from eligibility to participate on Commission advisory 
committees.
    The Commission adopts rules in the Report and Order that provide 
guidance on the types of expenditures of 911 fees for public safety 
radio systems and related infrastructure that can be considered 
acceptable but leaves the precise dividing line between acceptable and 
unacceptable radio expenditures open for further refinement, and refers 
this issue to the 911 Strike Force for further consideration and 
development of recommendations. The Report and Order also codifies the 
provision of section 902 that allows states and taxing jurisdictions to 
petition the FCC for a determination that an obligation or expenditure 
of a 911 fee for a purpose or function other than those deemed 
acceptable by the Commission should be treated as an acceptable 
expenditure. Further, the Commission amends its rules to include a 
voluntary safe harbor provision that provides 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 meets certain criteria. 
This safe harbor provision should incentivize states and taxing 
jurisdictions to be transparent about multi-purpose fees, while 
providing flexibility to states and taxing jurisdictions to have the 
911 portion of such multi-purpose fees be deemed acceptable while not 
having the non-911 portion be deemed diversion.
    The safe harbor provision should also provide visibility into how 
funds ostensibly collected for both 911 and other purposes are 
apportioned, while including safeguards to ensure that such 
apportionment is not subject to manipulation that would constitute fee 
diversion. Inclusion of the safe harbor furthers Congress's 
transparency goals and enhances our ability to determine whether 911 
funds are being diverted. Without such visibility, multi-purpose fees 
could increase the burden on limited Commission staff resources in 
analyzing varied fee structures, and potentially render our rules and 
annual 911 fee report ineffective. The changes to part 9 adopted in the 
Report and Order are consistent with and advance Congress's stated 
objectives in section 902 in a cost-effective manner that is not unduly 
burdensome to providers of emergency telecommunications services or to 
state or taxing jurisdictions. The rules closely track the statutory 
language of section 902 addressing 911 fee diversion and seek to 
promote transparency, accountability, and integrity in the collection 
and expenditure of fees collected for 911 services, while providing 
stakeholders reasonable guidance as part of implementing section 902.

B. Summary of Significant Issues Raised by Comments in Response to the 
IRFA

    There were no comments filed that specifically addressed the 
proposed rules and policies presented in the IRFA.

C. Response to Comments by the Chief Counsel for Advocacy of the Small 
Business Administration

    Pursuant to the Small Business Jobs Act of 2010, which amended the 
RFA, the Commission is required to respond to any comments filed by the 
Chief Counsel for Advocacy of the Small Business Administration (SBA) 
and to provide a detailed statement of any change made to the proposed 
rules as a result of those comments.
    The Chief Counsel did not file any comments in response to the 
proposed rules in this proceeding.

D. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply

    The RFA directs agencies to provide a description of and, where 
feasible, an estimate of the number of small entities that may be 
affected by the rules adopted herein. The RFA generally

[[Page 45906]]

defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' ``small organization,'' and ``small 
governmental jurisdiction.'' In addition, the term ``small business'' 
has the same meaning as the term ``small-business concern'' under the 
Small Business Act. A ``small-business concern'' is one which: (1) Is 
independently owned and operated; (2) is not dominant in its field of 
operation; and (3) satisfies any additional criteria established by the 
SBA.
    Small Businesses, Small Organizations, Small Governmental 
Jurisdictions. Our actions, over time, may affect small entities that 
are not easily categorized at present. We therefore describe here, at 
the outset, three broad groups of small entities that could be directly 
affected herein. First, while there are industry-specific size 
standards for small businesses that are used in the regulatory 
flexibility analysis, according to data from the Small Business 
Administration's (SBA's) Office of Advocacy, in general a small 
business is an independent business having fewer than 500 employees. 
These types of small businesses represent 99.9% of all businesses in 
the United States, which translates to 30.7 million businesses.
    Next, the type of small entity described as a ``small 
organization'' is generally ``any not-for-profit enterprise which is 
independently owned and operated and is not dominant in its field.'' 
The Internal Revenue Service (IRS) uses a revenue benchmark of $50,000 
or less to delineate its annual electronic filing requirements for 
small exempt organizations. Nationwide, for tax year 2018, there were 
approximately 571,709 small exempt organizations in the U.S. reporting 
revenues of $50,000 or less according to the registration and tax data 
for exempt organizations available from the IRS.
    Finally, the small entity described as a ``small governmental 
jurisdiction'' is defined generally as ``governments of cities, 
counties, towns, townships, villages, school districts, or special 
districts, with a population of less than fifty thousand.'' U.S. Census 
Bureau data from the 2017 Census of Governments indicate that there 
were 90,075 local governmental jurisdictions consisting of general 
purpose governments and special purpose governments in the United 
States. Of this number there were 36,931 general purpose governments 
(county, municipal and town or township) with populations of less than 
50,000 and 12,040 special purpose governments--independent school 
districts with enrollment populations of less than 50,000. Accordingly, 
based on the 2017 U.S. Census of Governments data, we estimate that at 
least 48,971 entities fall into the category of ``small governmental 
jurisdictions.''
    Wireless Telecommunications Carriers (except Satellite). This 
industry comprises establishments engaged in operating and maintaining 
switching and transmission facilities to provide communications via the 
airwaves. Establishments in this industry have spectrum licenses and 
provide services using that spectrum, such as cellular services, paging 
services, wireless internet access, and wireless video services. The 
appropriate size standard under SBA rules is that such a business is 
small if it has 1,500 or fewer employees. For this industry, U.S. 
Census Bureau data for 2012 show that there were 967 firms that 
operated for the entire year. Of this total, 955 firms employed fewer 
than 1,000 employees and 12 firms employed 1,000 employees or more. 
Thus, under this category and the associated size standard, the 
Commission estimates that the majority of Wireless Telecommunications 
Carriers (except Satellite) are small entities.
    Wired Telecommunications Carriers. The U.S. Census Bureau defines 
this industry as ``establishments primarily engaged in operating and/or 
providing access to transmission facilities and infrastructure that 
they own and/or lease for the transmission of voice, data, text, sound, 
and video using wired communications networks. Transmission facilities 
may be based on a single technology or a combination of technologies. 
Establishments in this industry use the wired telecommunications 
network facilities that they operate to provide a variety of services, 
such as wired telephony services, including voice over internet 
protocol (VoIP) services, wired (cable) audio and video programming 
distribution, and wired broadband internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry.'' The SBA has developed a small business size standard 
for Wired Telecommunications Carriers, which consists of all such 
companies having 1,500 or fewer employees. U.S. Census Bureau data for 
2012 show that there were 3,117 firms that operated that year. Of this 
total, 3,083 operated with fewer than 1,000 employees. Thus, under this 
size standard, the majority of firms in this industry can be considered 
small.
    All Other Telecommunications. The ``All Other Telecommunications'' 
category is comprised of establishments primarily engaged in providing 
specialized telecommunications services, such as satellite tracking, 
communications telemetry, and radar station operation. This industry 
also includes establishments primarily engaged in providing satellite 
terminal stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing internet services or VoIP services via client-
supplied telecommunications connections are also included in this 
industry. The SBA has developed a small business size standard for 
``All Other Telecommunications,'' which consists of all such firms with 
annual receipts of $35 million or less. For this category, U.S. Census 
Bureau data for 2012 show that there were 1,442 firms that operated for 
the entire year. Of those firms, a total of 1,400 had annual receipts 
less than $25 million, and 15 firms had annual receipts of $25 million 
to $49,999,999. Thus, the Commission estimates that the majority of 
``All Other Telecommunications'' firms potentially affected by our 
action can be considered small.

E. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements

    The rules adopted in the Report and Order to implement section 902 
will impose new or additional reporting or recordkeeping and/or other 
compliance obligations on small and other sized state and taxing 
jurisdictions subject to compliance with the Commission's 911 fee 
obligation or expenditure requirements. While some of the requirements 
will only impact entities that choose to invoke the provisions, the 
Commission is not in a position to determine whether small entities 
will have to hire professionals to comply and cannot quantify the cost 
of compliance for small entities. Below we discuss the reporting and 
recordkeeping requirements implicated in the Report and Order.
    New Sec.  9.25 requires that if a State or taxing jurisdiction 
receives a grant under section 158 of the National Telecommunications 
and Information Administration Organization Act (47 U.S.C. 942) after 
December 27, 2020, such State or taxing jurisdiction shall provide the 
information requested by the Commission to prepare the report required 
under section 6(f)(2) of the Wireless Communications and Public Safety 
Act of 1999, as amended (47 U.S.C. 615a-1(f)(2)). Each state or taxing

[[Page 45907]]

jurisdiction subject to paragraph (a) of this section must file the 
information requested by the Commission and in the form specified by 
the Public Safety and Homeland Security Bureau (Bureau).
    The Report and Order directs the Bureau to update the Commission's 
911 fee report questionnaire to facilitate the provision of information 
regarding states' use of 911 funds in order for the Commission to 
prepare an annual report to Congress on 911 fees. The Report and Order 
also directs the Bureau to modify the annual fee report questionnaire 
to obtain additional information on the underfunding of 911 systems, 
including both (1) information on the impact of fee diversion on 911 
underfunding, and (2) information on 911 underfunding in general.
    Pursuant to the voluntary Petition for Determination process 
adopted in the Report and Order to resolve questions of what are and 
are not acceptable 911 expenditures, a petitioning state or taxing 
jurisdiction is required to provide information show that a proposed 
expenditure: (1) Supports PSAP functions or operations, or (2) has a 
direct impact on the ability of a PSAP to receive or respond to 911 
calls or to dispatch emergency responders. If the Commission finds that 
a state or taxing jurisdiction has provided sufficient documentation to 
make this demonstration, the statute provides that it shall grant the 
petition. The information and documentation that a state or taxing 
jurisdiction is required to provide the Commission to make the 
requisite showing will impact the reporting and recordkeeping 
requirements for small entities and others subject to the requirements.
    Similarly, pursuant to the voluntary safe harbor provisions adopted 
in the Report and Order, small and other sized state or taxing 
jurisdictions that utilize the safe harbor provision to have the non-
911 portion of a multi-purpose fee or charge not constitute diversion, 
must: (1) Specify the amount or percentage of such fees or charges that 
is dedicated to 911 services; (2) show that the 911 portion of such 
fees or charges are segregated and not commingled with any other funds; 
and (3) obligate or expend the 911 portion of such fees or charges for 
acceptable purposes and functions as defined in Sec.  9.23 under new 
subpart I.

F. Steps Taken To Minimize the Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered

    The RFA requires an agency to describe any significant specifically 
small business alternatives that it has considered in reaching its 
proposed approach, which may include the following four alternatives 
(among others): (1) The establishment of differing compliance or 
reporting requirements or timetables that take into account the 
resources available to small entities; (2) the clarification, 
consolidation, or simplification of compliance or reporting 
requirements under the rule for such small entities; (3) the use of 
performance, rather than design, standards; and (4) an exemption from 
coverage of the rule, or any part thereof, for such small entities.
    In the Report and Order the approach we take to implement the 
provisions of section 902 that require Commission action to help 
address diversion of 911 fees for other purposes by state and taxing 
jurisdictions, adopts changes to part 9 of the Commission's rules 
seeking to achieve the stated objectives of Congress's mandates in a 
cost-effective manner that is not unduly burdensome to providers of 
emergency telecommunication services or to states and taxing 
jurisdictions. Using this approach, we have taken the steps discussed 
below to minimize any significant economic impact or burden for small 
entities.
    To promote consistency for small entities and others who will be 
subject to both section 902 and our rules, the rules adopted in the 
Report and Order and codified in part 9 of the Commission's rules, 
closely tracks the statutory language from section 902. Specifically, 
the definitions in section 902 for certain terms relating to 911 fees 
and fee diversion in part 9 of our rules were adopted and codified as 
proposed in the NPRM. For a few terms, limited modifications were made 
to the definition, i.e., the definitions for the terms ``911 fee or 
charge'' and ``Diversion'' include modifications to promote regulatory 
parity and avoid gaps that could inadvertently interfere with the rapid 
deployment of effective 911 services. We believe that having 
consistency between section 902 and our rules will avoid additional 
compliance costs for small entities.
    Similarly, to fulfill the Commission's obligations associated with 
issuing rules designating acceptable purposes and functions, we use 
language from section 902, codifying the statutory standard for which 
the obligation or expenditure of 911 fees or charges by any state or 
taxing jurisdiction is considered acceptable. We considered but 
rejected arguments to defer to states and local authorities in 
determining what constitutes fee diversion. A policy of deferring to 
states or localities on what constitutes fee diversion would negate one 
of the principal aspects of section 902, which is that it revises the 
language in 47 U.S.C. 615a-1 to make clear that fee diversion is not 
whatever state or local law says it is. Section 902 charges the 
Commission with responsibility for determining appropriate purposes and 
functions for expenditure of 911 funds and we agree that our rules 
should be reasonably broad given the evolving and diverse 911 
ecosystem. The rules adopted in the Report and Order establish broad 
categories of acceptable purposes and functions for 911 fees and 
provide examples within each category to guide states and localities. 
Therefore, we have provided State and local jurisdictions sufficient 
discretion to make reasonable, good faith determinations whether 
specific expenditures of 911 fees are acceptable under our rules.
    In the final rules we specify examples of both acceptable and 
unacceptable purposes and functions for the obligation or expenditure 
of 911 fees or charges. For example, we revised Sec.  9.23(b)(1) from 
the NPRM proposal to include examples to make clear that replacement of 
911 systems is an acceptable expenditure and that 911 includes pre-
arrival instructions and ENS and also added a reference to 
cybersecurity. Identifying and including specific examples in the 
Commission's rules should enable small entities to avoid unacceptable 
expenditures in violation of our rules, which could impact eligibility 
for Federal grants and participation in Federal advisory committees.
    Finally, we adopt two processes in the Report and Order that could 
minimize the economic impact for small entities, (1) the safe harbor 
for multi-purpose fees or charges and (2) the petition for 
determination. As discussed in the prior section, the safe harbor 
provision gives flexibility to states and taxing jurisdictions to 
implement multi-purpose fees or charges and to have the 911 portion of 
such multi-purpose fees be deemed acceptable and the non-911 portion 
not deemed 911 fee diversion provided certain conditions are met. Also 
discussed in the prior section, the Commission adopted a petition for 
determination process to resolve questions of what are and are not 
acceptable 911 expenditures, allowing states and other taxing 
jurisdictions to request a determination on whether a proposed 
expenditure would constitute fee diversion. Using these processes 
small, and other sized state and taxing jurisdictions can avoid 
violating section 902 and the Commission's rules for 911 fee diversion 
and any ensuing economic and other consequences.

[[Page 45908]]

G. Report to Congress

    26. The Commission will send a copy of the Report and Order, 
including this FRFA, in a report to Congress pursuant to the 
Congressional Review Act. In addition, the Commission will send a copy 
of the Report and Order, including this FRFA, to the Chief Counsel for 
Advocacy of the SBA. A copy of the Report and Order and FRFA (or 
summaries thereof) will also be published in the Federal Register.

IV. Ordering Clauses

    Accordingly, it is ordered, pursuant to Sections 1, 4(i), 4(j), 
4(o), 201(b), 251(e), 301, 303(b), and 303(r) of the Communications Act 
of 1934, as amended, 47 U.S.C. 151, 154(i), 154(j), 154(o), 201(b), 
251(e), 301, 303(b), and 303(r), the Don't Break Up the T-Band Act of 
2020, Section 902 of Title IX, Division FF of the Consolidated 
Appropriations Act, 2021, Public Law 116-260, Section 101 of the New 
and Emerging Technologies 911 Improvement Act of 2008, Public Law 110-
283, 47 U.S.C. 615a-1, and the Wireless Communications and Public 
Safety Act of 1999, Public Law 106-81, 47 U.S.C. 615 note, 615, 615a, 
and 615b, that this Report and Order is hereby adopted.
    It is further ordered that the amendments of part 9 of the 
Commission's rules, as set forth in Appendix A of the Commission's 
Report and Order, are adopted, effective sixty (60) days after 
publication in the Federal Register. Compliance will not be required 
for paragraph (b) in Sec.  9.25 until after approval by the Office of 
Management and Budget. The Commission delegates authority to the Public 
Safety and Homeland Security Bureau to publish a document in the 
Federal Register announcing that compliance date and revising paragraph 
(c) in Sec.  9.25.
    It is further ordered that the Office of the Managing Director, 
Performance Evaluation and Records Management, shall send a copy of 
this Report and Order in a report to be sent to Congress and the 
Government Accountability Office pursuant to the Congressional Review 
Act, 5 U.S.C. 801(a)(1)(A).
    It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of this Report and Order, including the Final Regulatory 
Flexibility Analysis, to the Chief Counsel for Advocacy of the Small 
Business Administration.

List of Subjects in 47 CFR Part 9

    Communications common carriers, Communications equipment, Radio, 
Federal Communications Commission.

Marlene Dortch,
Secretary, Office of the Secretary.

Final Rules

    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR part 9 as follows:

PART 9--911 Requirements

0
1. The authority citation for part 9 is revised to read as follows:

    Authority:  47 U.S.C. 151-154, 152(a), 155(c), 157, 160, 201, 
202, 208, 210, 214, 218, 219, 222, 225, 251(e), 255, 301, 302, 303, 
307, 308, 309, 310, 316, 319, 332, 403, 405, 605, 610, 615, 615 
note, 615a, 615b, 615c, 615a-1, 616, 620, 621, 623, 623 note, 721, 
and 1471, and Section 902 of Title IX, Division FF, Pub. L. 116-260, 
134 Stat. 1182, unless otherwise noted.


0
2. Add subpart I, consisting of Sec. Sec.  9.21 through 9.26, to read 
as follows:
Subpart I--911 Fees
Sec.
9.21 Applicability.
9.22 Definitions.
9.23 Designation of acceptable obligations or expenditures for 
purposes of the Consolidated Appropriations Act, 2021, Division FF, 
Title IX, section 902(c)(1)(C).
9.24 Petition regarding additional purposes and functions.
9.25 Participation in annual fee report data collection.
9.26 Advisory committee participation.


Sec.  9.21  Applicability.

    The rules in this subpart apply to States or taxing jurisdictions 
that collect 911 fees or charges (as defined in this subpart) from 
commercial mobile services, IP-enabled voice services, and other 
emergency communications services.


Sec.  9.22  Definitions.

    For purposes of this subpart, the terms in this section have the 
following meanings set forth in this section. Furthermore, where the 
Commission uses the term ``acceptable'' in this subpart, it is for 
purposes of the Consolidated Appropriations Act, 2021, Public Law 116-
260, Division FF, Title IX, section 902(c)(1)(C).
    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 Sec.  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 Sec.  
9.23.
    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.
    State. Any of the several States, the District of Columbia, or any 
territory or possession of the United States.
    State or taxing jurisdiction. A State, political subdivision 
thereof, Indian Tribe, or village or regional corporation serving a 
region established pursuant to the Alaska Native Claims Settlement Act 
(43 U.S.C. 1601 et seq.).


Sec.  9.23  Designation of acceptable obligations or expenditures for 
purposes of the Consolidated Appropriations Act, 2021, Division FF, 
Title IX, section 902(c)(1)(C).

    (a) 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.
    (b) Examples of acceptable purposes and functions include, but are 
not limited to, the following, provided that the State or taxing 
jurisdiction can adequately document that it has obligated or spent the 
fees or charges in question for these purposes and functions:
    (1) PSAP operating costs, including lease, purchase, maintenance, 
replacement, and upgrade of customer premises equipment (CPE) (hardware 
and software), computer aided dispatch (CAD) equipment (hardware and 
software), and the PSAP building/facility and including NG911, 
cybersecurity, pre-arrival instructions, and emergency notification 
systems (ENS). PSAP operating costs include technological innovation 
that supports 911;

[[Page 45909]]

    (2) PSAP personnel costs, including telecommunicators' salaries and 
training;
    (3) PSAP administration, including costs for administration of 911 
services and travel expenses associated with the provision of 911 
services;
    (4) Integrating public safety/first responder dispatch and 911 
systems, including lease, purchase, maintenance, and upgrade of CAD 
hardware and software to support integrated 911 and public safety 
dispatch operations; and
    (5) Providing for the interoperability of 911 systems with one 
another and with public safety/first responder radio systems.
    (c) Examples of purposes and functions that are not acceptable for 
the obligation or expenditure of 911 fees or charges for purposes of 
section 902 include, but are not limited to, the following:
    (1) Transfer of 911 fees into a State or other jurisdiction's 
general fund or other fund for non-911 purposes;
    (2) Equipment or infrastructure for constructing or expanding non-
public safety communications networks (e.g., commercial cellular 
networks); and
    (3) Equipment or infrastructure for law enforcement, firefighters, 
and other public safety/first responder entities that does not directly 
support providing 911 services.
    (d) If a State or taxing jurisdiction collects fees or charges 
designated for ``public safety,'' ``emergency services,'' or similar 
purposes that include 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:
    (1) Specifies the amount or percentage of such fees or charges that 
is dedicated to 911 services;
    (2) Ensures that the 911 portion of such fees or charges is 
segregated and not commingled with any other funds; and
    (3) Obligates or expends the 911 portion of such fees or charges 
for acceptable purposes and functions as defined under this section.


Sec.  9.24  Petition regarding additional purposes and functions.

    (a) 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 Sec.  9.23 should be treated as an 
acceptable purpose or function. Such a petition must meet the 
requirements applicable to a petition for declaratory ruling under 
Sec.  1.2 of this chapter.
    (b) The Commission shall 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.


Sec.  9.25  Participation in annual fee report data collection.

    (a) If a State or taxing jurisdiction receives a grant under 
section 158 of the National Telecommunications and Information 
Administration Organization Act (47 U.S.C. 942) after December 27, 
2020, such State or taxing jurisdiction shall provide the information 
requested by the Commission to prepare the report required under 
section 6(f)(2) of the Wireless Communications and Public Safety Act of 
1999, as amended (47 U.S.C. 615a-1(f)(2)).
    (b) Each State or taxing jurisdiction subject to paragraph (a) of 
this section must file the information requested by the Commission and 
in the form specified by the Public Safety and Homeland Security 
Bureau.
    (c) Paragraph (b) of this section contains information collection 
and recordkeeping requirements. Compliance will not be required until 
after approval by the Office of Management and Budget. The Commission 
will publish a document in the Federal Register announcing that 
compliance date and revising this paragraph (c) accordingly.


Sec.  9.26  Advisory committee participation.

    Notwithstanding any other provision of law, any State or taxing 
jurisdiction identified by the Commission in the report required under 
section 6(f)(2) of the Wireless Communications and Public Safety Act of 
1999, as amended (47 U.S.C. 615a-1(f)(2)), as engaging in diversion of 
911 fees or charges shall be ineligible to participate or send a 
representative to serve on any advisory committee established by the 
Commission.

[FR Doc. 2021-16068 Filed 8-16-21; 8:45 am]
BILLING CODE 6712-01-P


</pre><script data-cfasync="false" src="/cdn-cgi/scripts/5c5dd728/cloudflare-static/email-decode.min.js"></script></body>
</html>