SB 985 directs the California Office of Emergency Services (OES) to calculate, each year, surcharge amounts designed to fund the state’s 911 and 988 costs. The bill requires OES to divide approved costs (net of available fund balances) by its estimate of the number of access lines to produce a per-line monthly surcharge, while including Next Generation 911 (NG911) implementation and operation costs in the 911 calculation and capping certain surcharges.
The measure also tightens data and collection mechanics: service suppliers must report annual access-line counts by category (wireline, wireless, prepaid mobile, VoIP), OES must validate those figures against subscription data, and prepaid mobile surcharges are collected at retail per transaction. The bill centralizes funding calculations and adds reporting/validation duties that will affect carriers, retailers, local 911/988 operators, and customers paying the surcharge.
At a Glance
What It Does
The bill requires OES to determine annual per-access-line surcharges by dividing approved 911 and 988 costs (less available fund balances) by OES’s estimate of access lines for the coming calendar year, and to publish a summary of the calculation at least 30 days prior to making the determination. It imposes reporting obligations on service suppliers and lets OES validate reported counts with subscription data and share supplier-level counts with the administering department on request.
Who It Affects
Service suppliers across four categories — wireline, wireless, prepaid mobile telephony, and VoIP — must report access-line totals and adjust billing/collections. Retailers selling prepaid mobile services must collect a per-transaction surcharge. Local 911 agencies, county administrators, and 988 program operators are the intended beneficiaries of the revenue streams, while OES and the designated department take on administration and validation duties.
Why It Matters
SB 985 formalizes a data-driven, annual funding calculation that explicitly funds NG911 and 988 services, ties revenue to access-line counts (a declining base), and pushes collection duties to retailers for prepaid transactions. Compliance teams, billing operations, and public-safety finance officers need to adjust forecasting, reporting, and point-of-sale collection processes if this framework is implemented.
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What This Bill Actually Does
SB 985 sets a recurring annual process: on or before October 1 each year OES must determine surcharge amounts that will take effect on January 1 of the following year. To arrive at the per-line surcharge, OES divides that year’s approved 911 or 988 costs minus the available balance in the relevant state account by OES’s estimate of the number of access lines subject to the surcharge for the coming calendar year.
For 988 the bill preserves an eight-cent per-line amount for 2023–24 and then moves to the same cost-divided-by-lines formula for 2025 onward, with an explicit cap of $0.30 per line per month; the bill also imposes an unspecified maximum for the 911 surcharge (the statutory text leaves the 911 cap blank). The statute makes clear that NG911 planning, testing, implementation, and operation costs must be included in the 911 calculation consistent with the state NG911 plan.
To support that calculation the bill imposes an annual reporting and validation regime. Service suppliers must report, by August 1, the total number of access lines they supplied during the prior calendar year, broken out by wireline, wireless, prepaid mobile telephony, and VoIP.
OES must validate those supplier reports using subscription or comparable data from appropriate federal or state sources. The bill also authorizes OES to provide, within 45 days of a request, supplier names, addresses, and reported access-line counts to the department charged with administering this part — effectively enabling supplier-level reconciliation and oversight.On the collection side SB 985 treats prepaid mobile telephony differently from subscription-billed services: the prepaid surcharge is applied at retail and must equal the per-line surcharge determined under the formula for each retail transaction in California.
The bill requires OES to publish a summary of its proposed surcharge calculations at least 30 days before finalizing them and to make that summary available to the public, the Legislature, the California Health and Human Services Agency and relevant departments, and on OES’s website. There are also carryforward definitions and disclosure rules tied to determinations surrounding 2019–2020, which the text preserves for historical determinations and clarifies who counts as a "service supplier" and "service user" for that window.
The Five Things You Need to Know
OES must set annual surcharge amounts on or before October 1 to take effect January 1, using a costs-minus-balance divided-by-access-lines formula.
The bill fixes the 988 surcharge at $0.08 per line for 2023–2024 and shifts 988 to the formula for 2025 onward, but caps 988 at $0.30 per access line per month.
Service suppliers must report prior-calendar-year access-line totals by August 1, separately listing wireline, wireless, prepaid mobile, and VoIP counts.
OES must validate supplier-reported access-line counts using subscription or comparable federal/state data and must provide supplier names and counts to the designated department within 45 days of request.
Prepaid mobile telephony surcharges are collected at retail per transaction and must equal the per-line surcharge amount determined by OES.
Section-by-Section Breakdown
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Annual timing and effective dates for surcharge determinations
This subsection requires OES to perform the surcharge calculation annually, delivering the determination on or before October 1 so the resulting surcharge is effective January 1 of the following year. Practically, this sets a fixed planning cycle that aligns revenue decisions to the calendar year and forces OES to forecast both costs and access-line counts several months in advance.
Calculation method, specific 988 rules, and per-line caps
Subdivision (b) defines the mechanics: for both 911 and 988 OES must take approved costs (including incremental costs), subtract the available balance in the respective fund, and divide by OES’s estimate of access lines to produce a monthly per-line surcharge. The text preserves an $0.08 rate for 988 in 2023–24 and moves 988 to the formula-based approach for determinations applicable to 2025 and later, with a statutory cap of $0.30 per line per month for 988. The 911 clause includes a cap placeholder that is left blank in the draft, creating an immediate drafting gap that would need resolution before enforcement.
NG911 costs explicitly included in the 911 surcharge
This subsection instructs OES to include expected costs to plan, test, implement, and operate Next Generation 911 services — including text-to-911 and alerts/warnings — in the 911 cost pool. That ties surcharge revenue directly to NG911 modernization obligations and links funding to the timeline and plan established under the cited Government Code provision, making the surcharge a primary funding mechanism for upgrades.
Reporting requirements and data validation
Service suppliers must report the prior calendar year’s total access-line counts by August 1 and break them down into wireline, wireless, prepaid mobile, and VoIP categories. OES must validate those submitted counts using subscription or comparable data from federal or state agencies. The bill further authorizes OES, within 45 days of a department request, to provide supplier names, addresses, and reported access-line figures to support oversight and reconciliation efforts, effectively enabling supplier-level audits or enforcement actions.
Notice, prepaid collection, public summary, and legacy definitions
OES must notify the administering department of the surcharge amount on or before October 1. The prepaid mobile surcharge is uniquely imposed at the point of sale for each retail transaction. OES must also prepare and publish a summary of its proposed surcharge calculation at least 30 days before finalizing determinations, and the bill retains a set of historical definitions and summary-content requirements tied to determinations around 2019–2020, which creates some legacy reporting obligations and clarifies who qualifies as service supplier and service user for that historical window.
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Every bill creates winners and losers. Here's who stands to gain and who bears the cost.
Who Benefits
- Local 911 centers and counties: The bill channels funding toward 911 operations and NG911 upgrades by explicitly allowing NG911 planning and operating costs to be recovered through the surcharge, improving the revenue pathway for modernization.
- 988 crisis-service operators and behavioral health programs: With 988 costs carved out and a statutory cap established for future years, program operators gain a predictable revenue method (subject to the constraints of the per-line base) to sustain crisis services.
- Office of Emergency Services and state planners: OES gains formal authority and a regularized process to set surcharges, publish calculation summaries, validate provider data, and coordinate funding allocations, increasing centralized control and data-driven decision-making.
Who Bears the Cost
- Service suppliers (wireline, wireless, VoIP, prepaid mobile providers): Suppliers must compile and report category-specific access-line counts, support validation checks, and cooperate with data requests — adding compliance, systems, and possibly audit costs.
- Retailers of prepaid mobile telephony: Retail point-of-sale systems must apply and remit a per-transaction surcharge, which creates operational changes, potential transaction processing costs, and the need to adjust pricing displays and receipts.
- California consumers: The surcharge is ultimately passed through to end users as a per-line monthly fee or a per-transaction retail charge for prepaid services, so households and individuals will absorb higher bills if surcharges rise to cover NG911 and 988 costs.
- Administering department and OES staff: The agencies will incur administrative burdens to validate data, respond to supplier-level data requests within 45 days, publish summaries, and reconcile collections — work that may require new staffing or systems.
Key Issues
The Core Tension
The central dilemma is funding certainty versus base stability: the bill secures a direct, transparent revenue stream for 911/988 and NG911 by linking approved costs to a per-access-line surcharge, but it relies on a shrinking and hard-to-measure base—forcing a trade-off between higher per-line charges (and greater consumer pain) or risking underfunded emergency services and stalled NG911 deployment.
SB 985 creates a data-dependent funding mechanism built on a unit (per-access-line) that has been shrinking for years as consumers move away from traditional access lines and towards bundled or nontraditional connectivity. That shift makes per-line revenue volatile: unless OES’s access-line estimates are conservative, the formula can undercollect and force larger rate jumps, or conversely overcollect and create surplus balances with political pressure to reduce rates.
The statute mitigates risk for 988 in the short term with an $0.08 rate for 2023–24 and a $0.30 cap thereafter, but the 911 cap is left blank in the text — a drafting omission that creates legal uncertainty about maximum exposure for consumers and billing systems.
The bill also raises data governance and operational questions. OES’s authority to share supplier names, addresses, and counts with the "department" within 45 days of request facilitates oversight but implicates commercial confidentiality and data-sharing agreements; implementation will require clear protocols about what data flows, how it’s protected, and how disputes over counts are resolved.
Collecting a prepaid surcharge at retail simplifies passthrough but burdens retailers with point-of-sale changes and reconciling numerous small transactions. Finally, tying NG911 upgrades to a per-line levy forces a policy choice between raising per-line rates, broadening the base, or accepting slower modernization if lines keep declining.
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