911 vendor compensation debate: bill would cut telco retention from 5% to 1%; committee pauses for more information

House Bill 1096 would change the vendor compensation rate that telecommunications providers may retain when collecting local 9‑1‑1 fees, cutting the statutory retention from 5% to 1%.

Representative Todd Porter, sponsor, opened the hearing by describing the bill as an update to a fee structure established when landlines predominated. He said advances in 9‑1‑1 administration and a new centralized collection program run by the North Dakota Association of Counties have reduced the administrative burden on carriers and counties. “The program now takes receipt of all 911 fee revenue from telcos and deposits the appropriate amounts per county into each of the funds,” Jason Horning of the Association of Counties told the committee, describing the new process as more efficient and noting the association takes no administrative fee.

Horning and Danelle Presque (North Dakota Association of Counties) said North Dakota’s current 5% vendor compensation — written into Century Code — is among the highest in the region; Horning provided an estimate that 5% of roughly $18 million in annual 9‑1‑1 fees is about $800,000 retained statewide. The counties’ proposal to lower vendor compensation to 1% is intended to return more revenue to local emergency‑communications funds now that remittance and distribution are centralized.

Industry witnesses opposed the change. Amy Cleary, representing AT&T through the GA Group, and Jake Lestock of CTIA (the wireless trade association) told the committee that telecom providers face specialized, industry‑specific tax and remittance requirements and that many states allow higher vendor compensation or handle 9‑1‑1 fees at the statewide level, which reduces carrier administrative costs. Lestock said North Dakota’s county‑by‑county fee imposition requires carriers to track local ordinances and file returns across many jurisdictions, increasing complexity and justifying higher vendor compensation. He said many states that permit vendor compensation do so at levels above 1%; the prepaid 9‑1‑1 vendor compensation in statute is 3%.

Representative Jason Machobacher asked whether carriers in neighboring states with lower vendor compensation saw worse 9‑1‑1 service; carriers said they were not aware of degraded service. Committee members asked industry witnesses to consult with member companies on a compromise percentage between 1% and 5% and return that information to the committee. The wireless trade association representative agreed to follow up.

The committee did not take an immediate vote. Chairman Craig Hedlund said committee action would wait for the industry follow‑up and that no decision would be reached that day; members were told the bill likely would not be acted on until later in the week. The committee adjourned with further education sessions planned for the afternoon.

What happens next: The committee paused action and requested additional information from telecommunications trade groups about carrier administrative costs and potential compromise vendor‑compensation levels before proceeding.