Do people who get a free government cellphone through the Lifeline program have to pay Maryland's 911 fee?

Plain-English summary

A state senator asked the Attorney General whether low-income Marylanders who received a free cellphone and a monthly allotment of free minutes through the federal Lifeline program had to pay either of Maryland's two 9-1-1 fees. One fee applied to monthly telephone "subscribers," and the other, newer 60-cent fee applied to each "retail transaction" for prepaid wireless service, collected by the seller from the consumer at the point of sale.

The opinion concluded that Lifeline participants who received "free" prepaid service, subsidized by a $9.25 monthly federal payment to the provider rather than paid directly by the customer, fell under the newer prepaid wireless fee category rather than the older subscriber fee. But the opinion found that no "retail transaction" occurred when a Lifeline participant received the free minutes, because the participant did not purchase anything from a seller, and the statute gave no mechanism for collecting the fee from someone who paid nothing at the point of service. The opinion noted that the Legislature had never specifically considered whether Lifeline participants should pay the fee and left it to the General Assembly to decide, as a matter of policy, whether to amend the statute.

Currency note

This opinion was issued in 2014. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, fee amount, or exemption mentioned here.

Common questions

Did a 2014 Maryland opinion say people with free Lifeline cellphones had to pay the state's 911 fee?
No. The opinion concluded that, under the law as it then read, prepaid Lifeline participants who received free minutes were not required to pay either of Maryland's 9-1-1 fees, because their free service did not involve a "retail transaction" and the statute provided no way to collect the fee from them.

Did the opinion say the Maryland Legislature had deliberately decided to exempt Lifeline participants from the 911 fee?
No. The opinion found no evidence that the General Assembly had specifically considered whether Lifeline participants should pay the fee one way or the other, and it left the policy choice of whether to amend the statute to the Legislature.

Did other states reach the same conclusion about Lifeline participants and 911 fees at the time of this opinion?
Some did. The opinion noted that attorneys general in Rhode Island, South Carolina, and Tennessee had reached similar conclusions, while regulators or courts in Alabama, Texas, and Colorado had required 9-1-1 fee collection from at least some free-phone or Lifeline recipients under their own states' differently worded statutes.

Background and statutory framework

At the time of this opinion, Maryland imposed two mutually exclusive 9-1-1 fees under the Public Safety Article: an older fee of up to $1.00 per month on telephone "subscribers" billed monthly, under PS §§ 1-310 and 1-311, and a newer 60-cent fee on each "retail transaction" for prepaid wireless service, added in 2013 as PS § 1-313 after prepaid carriers argued the older fee did not apply to service that customers paid for in advance rather than by monthly bill. Lifeline is a federally funded program that gives qualifying low-income individuals subsidized phone service; because prepaid wireless carriers cannot apply a Lifeline discount to a monthly bill the way traditional carriers do, prepaid providers like SafeLink Wireless instead gave Lifeline customers a free phone and a free monthly allotment of minutes, with the federal government reimbursing the carrier $9.25 per month.

The opinion first determined that this arrangement counted as "prepaid wireless telecommunications service" under PS § 1-301(r), placing it under the newer § 1-313 fee rather than the older subscriber fee. It then found that no "retail transaction," defined by statute as a purchase from a "seller," occurred when a Lifeline participant received free minutes, since the participant paid nothing and the statute supplied no mechanism for collecting a fee from someone outside a purchase transaction. The opinion also surveyed how other states' attorneys general, regulators, and courts had resolved the same question under their own differently worded 9-1-1 fee statutes.

Citations and references

Statutes and regulations:
- PS § 1-310, the older 9-1-1 fee statute applying to monthly telephone "subscribers"
- PS § 1-311, authorizing counties to add an additional monthly 9-1-1 fee on top of the statewide fee
- PS § 1-313, the newer 60-cent prepaid wireless 9-1-1 fee collected on each "retail transaction"
- PS § 1-301(r), defining "prepaid wireless telecommunications service"
- 47 C.F.R. § 54.403(b)(1), the federal regulation requiring the Lifeline subsidy to reduce the cost of a generally available service plan

Cases:
- TracFone Wireless, Inc. v. Comm'n on State Emergency Comm'cns, 397 S.W.3d 173, 176 (Tex. 2012), a Texas case finding the state's 9-1-1 fee did not apply to prepaid wireless service
- Virgin Mobile U.S.A., L.P. v. Kentucky, 2014 WL 4116480 (Ky. Aug. 21, 2014), a Kentucky case reaching a similar conclusion and reasoning the legislature intended no other collection mechanism than the one it specified
- T-Mobile South, LLC v. Bonet, 85 So.3d 963, 976-77 (Ala. 2011), an Alabama case holding the lack of an explicit collection mechanism did not excuse providers from the fee under Alabama's differently worded statute
- Mayor and City Council of Baltimore v. Chase, 360 Md. 121, 128 (2000), on the cardinal rule of statutory interpretation to ascertain legislative intent
- Marriott Emps. Fed. Credit Union v. Motor Vehicle Admin., 346 Md. 437, 445 (1997), on using common sense to guide statutory interpretation

Source

• Landing page: https://oag.maryland.gov/resources-info/Pages/attorney-general%E2%80%99s-opinions.aspx
• Original PDF: https://oag.maryland.gov/resources-info/Documents/pdfs/Opinions/2014/99OAG208.pdf

Original opinion text

208 [99 Op. Att'y

                   PUBLIC SAFETY

PUBLIC ASSISTANCE – WHETHER RECIPIENTS OF FEDERALLY
SUBSIDIZED CELLPHONE SERVICE ARE REQUIRED TO PAY
9-1-1 FEE
December 5, 2014
The Honorable James E. DeGrange, Sr.
The Senate of Maryland
You have asked whether low-income individuals who
receive a free cellphone and a monthly allotment of free minutes
from a prepaid wireless company through the federal
government's Lifeline program ("prepaid Lifeline participants")
must pay the fees that fund Maryland's 9-1-1 system. There are
two kinds of 9-1-1 fees. The first is a fee of up to $1.00 per
month on "subscribers" of telephone service; service providers
add this fee to their subscribers' monthly bills. See Md. Code
Ann., Public Safety ("PS") §§ 1-310 (authorizing collection of 9-
1-1 fee of $0.25 per month), 1-311 (authorizing counties to
impose additional monthly fee of up to $0.75) (2011 Repl. Vol. &
2014 Supp.).1 The second fee applies to prepaid wireless tele-
phone service. See PS § 1-313. This 60-cent fee is imposed on
every "retail transaction" for prepaid service and is collected by
the "seller" from the "consumer" at the time of purchase. PS § 1-
313. You have asked whether prepaid Lifeline participants must
pay either fee.
In our opinion, prepaid Lifeline participants are not required
to pay either fee under the law as it currently reads. Because we
conclude that these particular Lifeline participants receive
"prepaid wireless telecommunications service," the fee on
"subscribers" imposed by PS § 1-310 does not apply. Instead, we
must look to the fee that is imposed by PS § 1-313 on a "retail
transaction" of "prepaid wireless communications service." The
plain language of that section, however, provides no mechanism
for collecting the fee from Lifeline participants, who do not
participate directly in a "retail transaction." And while there is
some indication that, at an abstract level, the Legislature intended
everyone with access to the 9-1-1 system to pay the fees that
support the system, we have found no evidence that the

1
All citations to the Public Safety Article are to the 2011
Replacement Volume and 2014 Supplement unless otherwise noted.

Legislature specifically considered whether prepaid Lifeline
participants should pay a 9-1-1 fee. Given the language of the
statute and the lack of a clear collection mechanism, we cannot
conclude that the General Assembly intended prepaid Lifeline
participants who receive free cellphone service to pay a 9-1-1 fee.
The decision about whether these low-income individuals
should pay the fee is a matter of public policy that we must leave
to the Legislature. The General Assembly has twice before
considered whether to amend the 9-1-1 fee regime to take account
of emerging technologies and new business models in the
telecommunications industry. We see this as another instance
where the Legislature must decide whether the statute should be
amended.

                             I
                      Background

A. Maryland's Two 9-1-1 Fees
In 1979, the General Assembly established 9-1-1 as the
primary emergency telephone number in the State and created the
Emergency Number Systems Board2 to oversee the installation of
9-1-1 systems in every county. 87 Opinions of the Attorney
General 83, 85 (2002). In doing so, the Legislature also
established a fee to fund the installation of the system and any
necessary enhancements. 1979 Md. Laws, ch. 730 (codified as
Md. Code. Ann., Art. 41, § 204H-5(b)).
Over the next few decades, this fee evolved into what is now
the enhanced 9-1-1 (or "E 9-1-1") fee regime encompassed by
sections 1-310 and 1-311 of the Public Safety Article.3 These

 2
  The Board is an entity within the Department of Public Safety and

Correctional Services and is composed of 17 members appointed by the
Governor with the advice and consent of the Senate. PS § 1-305(a),
(b). The members include representatives from the telephone industry,
State government, and local government as well as two members of the
general public. PS § 1-305(b).
Further information on the development of "enhanced" 9-1-1
3

systems can be found in 87 Opinions of the Attorney General 83.
Because the distinction between the two systems is not important here,
we use the terms "9-1-1 fees" and "E 9-1-1 fees" interchangeably
throughout this opinion.

statutes impose a fee on "[e]ach subscriber to switch local
exchange access service [i.e., landline service] or CMRS [i.e.,
"Commercial Mobile Radio Service" or, more simply, cellphone
service] or other 9-1-1-accessible service." PS § 1-310(b); see
also PS § 1-311(b). The fee is then "payable when the bill for the
telephone service or CMRS or other 9-1-1-accessible service is
due." PS § 1-310(c). In other words, the fee is added to every
subscriber's monthly bill, and the service provider remits the
funds to the Comptroller on behalf of the subscriber. PS §§ 1-
310(d), (e), 1-311(f)–(h). The statewide fee is 25 cents per
month, and counties may impose an additional 75 cents per month
on top of the statewide fee for a total of $1.00 per month. PS
§§ 1-310(c), 1-311(c)(1).
During the 1990s, however, a new business model emerged
that did not fit easily within the State's method of collecting the
fee through customers' monthly bills. Wireless carriers like
TracFone began offering prepaid cellphone service, which
allowed customers to buy a fixed allotment of minutes in advance
without the need for annual contracts or monthly bills. See
TracFone Wireless, Inc. v. Comm'n on State Emergency
Comm'cns, 397 S.W.3d 173, 176 (Tex. 2012) (explaining the
basics of prepaid wireless service). At first, many prepaid
wireless companies remitted 9-1-1 fees to state governments, but
they soon stopped, contending that they were not required to
collect the fees because their customers did not receive bills for
their service. See, e.g., id. at 176-77. In some states, the issue
was resolved through litigation, though with different outcomes.
In Texas and Kentucky, for example, courts agreed that the fee
did not apply to prepaid wireless service, see id. at 178, Virgin
Mobile U.S.A., L.P. v. Kentucky, __ S.W.3d __, 2014 WL
4116480 (Ky. Aug. 21, 2014), while in Alabama and Washington,
courts held that the lack of an explicit collection mechanism did
not excuse wireless providers from the statutory obligation to pay
the fee. See T-Mobile South, LLC v. Bonet, 85 So.3d 963, 976-77
(Ala. 2011); TracFone Wireless, Inc. v. Dep't of Revenue, 242
P.3d 810, 818-19 (Wash. 2010).
In Maryland, the issue was resolved by legislation. In 2013,
the General Assembly established a new 9-1-1 fee that explicitly
applied to "prepaid wireless telecommunications service." 2013
Md. Laws, ch. 313 (codified as PS § 1-313). This statute imposes
a 60-cent fee per "retail transaction," which is defined as the
"purchase of prepaid wireless telecommunications service from a
seller for any purpose other than resale." PS § 1-313(a)(4), (b).
The fee is then "collected by the seller from the consumer for

each retail transaction in the State." PS § 1-313(c). In other
words, the fee is levied at the point of sale, much like a sales tax.
Every time a consumer purchases a prepaid cellphone or prepaid
cellphone minutes from a seller, the seller collects a 60-cent fee
on behalf of the State by adding it to the purchase price. The "fee
is the liability of the consumer and not of the seller or of any
provider," except that the seller must remit the fees it collects to
the Comptroller. PS § 1-313(e), (g).
The two fee regimes are mutually exclusive. The new
prepaid wireless E 9-1-1 fee governs only "prepaid wireless
telecommunications service." PS § 1-313. Conversely, the older
fee, which is levied on "[e]ach subscriber to switch local
exchange access service or CMRS or other 9-1-1-accessible
service," explicitly excludes "prepaid wireless telecommunications
service" from its scope. PS §§ 1-310(a), 1-311(a). Many states
have similar dual systems that impose different fees on prepaid
wireless service and other 9-1-1-accessible service. Some of
these states have explicitly exempted all Lifeline participants
from paying either 9-1-1 fee. See, e.g., Del. Code Ann. tit. 16,
§ 10103(a)(1); N.Y. County Law §§ 304, 334, 335; Ohio Rev.
Code Ann. § 128.42(A)(2)(b). The Maryland statutes, however,
contain no such express exemption.

B. The Lifeline Program
Lifeline is a federally-funded program administered by the
FCC which, since 1985, has provided subsidized telephone
service to qualifying low-income individuals. See Federal Com-
munications Commission, Lifeline Program for Low-Income
Consumers, http://www.fcc.gov/lifeline (last visited, Dec. 2,
2014). The purpose of the program is to ensure that low-income
Americans can "connect to jobs, family, and emergency services."
Id. Federal regulations thus specifically require that Lifeline
service include access to the 9-1-1 system. 47 C.F.R. § 54.101(b).
Individuals qualify for Lifeline if their income is at or below
135% of the federal Poverty Guidelines or they participate in one
of various public assistance programs, such as Medicaid, the
Supplemental Nutrition Assistance Program, or Temporary
Assistance to Needy Families. 47 C.F.R. § 54.409. States may
also create broader eligibility criteria, 47 C.F.R. § 54.409(a)(3),

which Maryland has elected to do for landline subscribers.4 See
Md. Code Ann., Public Utilities ("PU") § 8-201(a)(2). But each
household may only have one Lifeline-subsidized connection. 47
C.F.R. § 54.409(c). Telephone companies, for their part, may
offer Lifeline service within a state only if they have been deemed
an "eligible telecommunications carrier" ("ETC") by that state's
regulating body.5 47 C.F.R. §§ 54.201, 54.405. The program is
financed through the Universal Service Fund, which levies a
charge on telecommunication providers, who, in turn, may pass it
on to their customers. 47 C.F.R. §§ 54.706, 54.712.
The federal program typically works as follows: A telephone
company will give an eligible participant a "reduced charge" or
"discount" of $9.25 per month on his or her bill, and the federal
government will reimburse the service provider for that discount.
See 47 C.F.R. §§ 54.401, 54.403(a)(1), 54.407. Although pro-
viders that are authorized to impose an "End User Common Line
Charge" are subject to slightly different rules, the cellphone
providers at issue in this opinion must apply the entire $9.25
subsidy "to reduce the cost of any generally available residential
service plan or package." 47 C.F.R. § 54.403(b)(1).

C. Prepaid Wireless Providers, the Lifeline Program, and
"Free" Cell Phones
Because prepaid wireless customers pay up front, providers
cannot give Lifeline participants a discount on their monthly bills,
as the federal regulations contemplate. Instead, these carriers give
Lifeline customers a free cellphone and a monthly allotment of
"free" minutes. This monthly allotment of minutes is at least
equal in retail value to the $9.25 per month subsidy provided by
the federal government. See Matt Richtel, Providing Cellphones
for the Poor, N.Y. Times (June 15, 2009), available at

 4
  Maryland has also established an additional discount for eligible

landline subscribers under State law. See PU § 8-201(c). This ad-
ditional discount does not apply to wireless carriers, however, who are
covered instead by the standard federal regulations. See PU §§ 8-
201(b) (providing that the State program applies only to "local
telephone compan[ies]"), 1-101(ll)(2) (defining "telephone company"
to exclude "a cellular telephone company").
5
In Maryland, the regulating body is the Public Service
Commission. A service provider can also petition the FCC for
recognition as an ETC if the provider is "not subject to the jurisdiction
of a State commission." 47 U.S.C. § 214(e)(6).

http://www.nytimes.com/2009/06/15/technology/15cell.html?_r=0.
The federal government then reimburses the provider $9.25 per
month for the prepaid phone service.
You asked in particular about SafeLink Wireless, a
subsidiary of TracFone, but other prepaid wireless companies also
offer the same kind of "free" plans.6 Indeed, TracFone and other
wireless companies have become ETCs for the limited purpose of
providing Lifeline in numerous states, including Maryland. See,
e.g., Letter Order of Maryland Public Serv. Comm'n (Aug. 19,
2009) (approving Petition of TracFone Wireless, Inc. for
Designation as an Eligible Telecommunications Carrier in the
State of Maryland for the Limited Purpose of Offering Lifeline
Service to Qualified Households). The plan offered by SafeLink
to Lifeline participants includes either 68, 125, or 250 minutes per
month, depending on whether the participant wants free
international calling, rollover minutes, or both. See SafeLink
Wireless Website, Terms & Conditions. Customers may also
purchase additional minutes to supplement their subsidized
monthly allotment. Id.
Because it is not clear how these Lifeline customers fit into
the point-of-sale fee regimes adopted in Maryland and other
states, SafeLink's service model has again led to uncertainty
about whether prepaid wireless providers must collect 9-1-1 fees.
Most of the states that have considered the issue concluded that
the fee does not apply to Lifeline participants who receive "free"
prepaid service. See, e.g., Letter from the Attorney General of
Rhode Island to Speaker of the House Gordon D. Fox (Oct. 12,
2012); Op. Att'y Gen. S.C., 2011 WL 5304075, at 3-4 (Oct. 10,
2011); Op. Att'y Gen. Tenn. No. 09-87, 2009 WL 1430917, at 5-
6 (May 18, 2009); Virginia Department of Taxation, Prepaid
Wireless E-911 Fee, http://www.tax.virginia.gov/site.cfm?alias=
PrepaidWirelessE-911 (last visited Aug. 4, 2014). Other states,
however, specifically require Lifeline customers or other
recipients of free phone service to pay their 9-1-1 fee.

6
See, e.g., SafeLink Wireless, https://www.safelinkwireless.com/
Enrollment/Safelink/en/NewPublic/index.html (last visited Dec. 3, 2014)
("SafeLink Wireless Website"); Life Wireless, http://www.lifewireless.com/
phones.php (last visited Dec. 2, 2014); Access Wireless, http://
www.accesswireless.com/Lifeline (last visited Dec. 2, 2014).

  The Alabama 9-1-1 Board, for example, recently issued

regulations requiring all ETCs to collect a monthly fee from
Lifeline participants, including those who receive a free phone. 7
See Ala. Admin. Code r. 585-X-4-.05. Texas regulations also
appear to require that sellers or providers remit a fee even if they
provide free service. See 34 Tex. Admin. Code § 3.1271(d)(4)(B)
(applying fee to "prepaid wireless telecommunication service not
sold at retail but used by a seller or other person in Texas,"
including, for example, free service provided by the wireless
company to employees). And Colorado entered into a settlement
agreement with a number of prepaid wireless providers that
allowed them to operate as ETCs if, among other things, they
agreed to pay the 9-1-1 fee on behalf of their Lifeline customers.
See, e.g., Colorado Public Utilities Comm'n, Docket No. 13A-
0150T, Stipulation & Settlement Agreement, at 12, ¶11E (July 3,
2013) (attached to Colorado Public Utilities Comm'n,
Recommended Decision, In the Matter of Telrite Corp., 2013 WL
4013300 (July 30, 2013)). As we understand it, prepaid service
providers in Maryland do not currently collect any 9-1-1 fee from
their Lifeline customers.

                             II
                           Analysis
  You have asked whether any of Maryland's 9-1-1 fees apply

to prepaid Lifeline participants who receive a free allotment of
monthly minutes from SafeLink Wireless or other prepaid
wireless companies. As always, the "cardinal rule" of statutory
interpretation "is to ascertain and effectuate legislative intent."
Mayor and City Council of Baltimore v. Chase, 360 Md. 121, 128
(2000). Although we begin our analysis with "the plain language
of the statute," La Valle v. La Valle, 432 Md. 343, 355 (2013),
"the plain language rule of construction is not absolute; rather, the
statute must be construed reasonably with reference to the
purpose, aim, or policy of the enacting body." Pelican Nat'l Bank
v. Provident Bank, 381 Md. 327, 336 (2004) (internal quotation
marks and citation omitted). "[I]f the true legislative intent
cannot readily be determined from the statutory language alone,"
7
TracFone has filed a lawsuit challenging these regulations, and
certain interest groups sent a letter to Alabama's Governor in July 2014
urging him to rescind the regulations. Mike Cason, Users of Free
Government Cellphones to Start Paying State 911 Tax, AL.com,
http://www.al.com/news/index.ssf/2014/07/users_of_free_government_
cellp.html (last visited Dec. 2, 2014).

we must "look to other indicia of that intent, including . . . its
legislative history, its general purpose, and the relative rationality
and legal effect of various competing constructions [of the
statute]." Baltimore County v. RTKL Assocs., 380 Md. 670, 678
(2004).

A. Which 9-1-1 Fee Statute Governs?
Before we address whether prepaid Lifeline participants
must pay the 9-1-1 fee, we must first determine which of
Maryland's two 9-1-1 fee regimes governs the situation here.
SafeLink's service is either "prepaid wireless telecommunications
service," in which case it must be analyzed under the new point-
of-sale fee imposed by PS § 1-313, or it is not, in which case the
fee may be assessed only if SafeLink's customers are
"subscribers" within the meaning of the older 9-1-1 fee set forth
in PS § 1-310. A cellphone service qualifies as "prepaid wireless
telecommunications service" if it satisfies the following four
elements: It must (1) be "a commercial mobile radio service" and
it must also (2) "allow[] a consumer to dial 9-1-1 to access the 9-
1-1 system;" (3) "be paid for in advance;" and (4) be "sold in
predetermined units that decline with use in a known amount."
PS § 1-301(r).
As an initial matter, SafeLink provides commercial mobile
radio service through the Lifeline program. CMRS "means
mobile telecommunications service that is: (1) provided for profit
with the intent of receiving compensation or monetary gain; (2)
an interconnected, two-way voice service; and (3) available to the
public." PS § 1-301(d). SafeLink clearly satisfies the second and
third criteria; it provides voice service to the public in the same
way as other cellphone plans. Although one might question
whether the service is "provided for profit," the prepaid wireless
companies indeed turn a profit from the $9.25 per month federal
reimbursement because that reimbursement covers the retail
price, not the per-unit cost to the provider. See Richtel, supra.8
Turning back to the other three elements of "prepaid
wireless telecommunication service," SafeLink easily satisfies

 8
 A provider may earn more profit still if the Lifeline participant

purchases additional minutes or becomes a loyal, paying customer
when he is no longer eligible for the federal program. See Richtel,
supra.

most of these as well. It certainly allows a consumer to dial
9-1-1. In fact, federal law requires Lifeline providers to ensure
access to the 9-1-1 system. See 47 C.F.R. § 54.101(b). And the
service is provided "in predetermined units that decline with use
in a known amount." But it is not as clear that the service is "paid
for in advance" given that Lifeline participants do not pay
anything to their providers before receiving their monthly
allotment of minutes. Although the federal government pays for
the service, it technically does not do so "in advance" because it
reimburses the provider.
We do not believe, however, that the General Assembly
intended for the determination of which 9-1-1 fee should govern
to hinge on the timing of federal reimbursement. Common sense
must guide us in the interpretation of statutes, Marriott Emps.
Fed. Credit Union v. Motor Vehicle Admin., 346 Md. 437, 445
(1997), and, from a common sense perspective, SafeLink offers
prepaid service. The customer signs up for a set number of
minutes of phone service and, if he uses up all of the minutes
before his next allotment, he cannot make another call unless he
purchases more. It seems to us that the Legislature, in defining
"prepaid wireless telecommunications service," was trying to
distinguish prepaid service from the traditional "post-paid" model
of wireless service covered by PS § 1-310, where a consumer is
billed at the end of the month based on usage during that month.
The phrase "paid for in advance," therefore, was probably meant
only to distinguish prepaid service from more traditional
subscription service.
Our conclusion is bolstered by the fact that SafeLink
customers who purchase additional minutes on top of their
subsidized monthly allotment unquestionably receive "prepaid
wireless telecommunications service" that would be governed by
PS § 1-313. It seems unlikely that the General Assembly
intended consumers to be governed by two different, mutually
exclusive fee statutes for the same service. We will therefore
categorize SafeLink as a "prepaid wireless" provider and focus on
PS § 1-313 to determine whether its customers are subject to a
9-1-1 fee.

B. The Plain Language of § 1-313 of the Public Safety Article
We begin our analysis of § 1-313 with the plain language of
the statute. The provision imposes "a prepaid wireless E 9-1-1
fee of 60 cents per retail transaction." PS § 1-313(b). "Retail
transaction" is defined as "the purchase of prepaid wireless

communications service from a seller for any purpose other than
resale." PS § 1-313(a)(4). The statute requires that the "amount
of the [fee] shall be disclosed to the consumer at the time of the
retail transaction," PS § 1-313(d) (emphasis added), and it
provides an explicit collection mechanism: "[T]he fee shall be
collected by the seller from the consumer for each retail
transaction in the State." PS § 1-313(c). In sum, the statutory
scheme apparently envisions that a consumer will buy his or her
phone service from a retailer and that the fee will be added to the
purchase price, collected by the retailer, and remitted to the
Comptroller.
Just based on these few provisions, it seems unlikely that the
General Assembly specifically intended the fee to apply to
prepaid Lifeline participants. The way in which Lifeline
participants receive their service is not something that most
people would normally think of as a "retail transaction."
SafeLink customers do not buy their phone service, and no
obvious transaction occurs when the 60-cent fee can be charged to
the customer. If the customer chooses to buy additional minutes,
he certainly must pay the fee on those minutes. But requiring
Lifeline participants who do not pay for their service to pay the 9-
1-1 fee does not seem to fit very comfortably within the statutory
language.
The statutory definition of "retail transaction"—at least on
its face—seems to confirm our initial sense that there is no such
transaction here. As noted above, the statutory definition of
"retail transaction" depends on whether a consumer "purchases"
wireless service from a "seller." See PS § 1-313(a)(4).
"Purchase" is not defined by the statute, but it generally means to
"acquire by the payment of money or its equivalent." Webster's
Encyclopedic Unabridged Dictionary 1568 (1996). "Seller" is
defined by statute, but the definition is not very helpful: a "person
that sells prepaid wireless telecommunications service to another
person." PS § 1-301(v). The dictionary definition is somewhat
more helpful; it defines "sell" as "to transfer (goods) or render
(services) for another in exchange for money." Webster's
Encyclopedic Unabridged Dictionary 1739. Together, then, the
terms "purchase" and "seller" imply that some exchange of
"money or its equivalent" must take place between the buyer and
seller during the transaction—something that does not happen
between the provider and the Lifeline participant here.

 On similar grounds, two other Attorneys General have

concluded that providing free service to Lifeline participants does
not qualify as a "retail transaction" because the participants are
not "charged for" and do not "purchase" their phones or phone
service. See Letter from the Attorney General of Rhode Island to
Gordon D. Fox, supra; Op. Att'y Gen. S.C., 2011 WL 5304075,
at *3-4. The Rhode Island Attorney General, for example,
reasoned that, "[s]ince . . . the qualifying consumer receives the
telephone and service free of charge, no 'purchase' takes place,"
and there is thus no "retail transaction upon or for which E-911
charges must be collected." Letter from the Attorney General of
Rhode Island to Gordon D. Fox, supra (internal quotation marks
omitted).
Although this plain reading has considerable merit, we are
not sure that the meaning of the statute is so clear as to foreclose
all further inquiry. See Mayor & Council of Rockville v. Rylyns
Enterprises, Inc., 372 Md. 514, 551-52 (2002) (noting that the
"intrinsic meaning [of a statute] may be fairly clear, but its
application to a particular object or circumstance may be
uncertain" (internal quotations omitted)). The notion that
SafeLink provides free service is, after all, a fiction. The service
is not actually free; the federal government pays for it. In this
way, the government arguably "purchases" the minutes from the
provider every month on behalf of the Lifeline participant. If the
federal government implemented Lifeline by giving eligible
participants a $9.25 voucher every month, and the participant
exchanged that voucher for prepaid minutes from TracFone, it
seems likely that the exchange would qualify as a "retail
transaction." It is not obvious why the same participant should be
exempt from the fee merely because the federal government has
chosen a different way to administer its program.
Moreover, if the Legislature had specifically intended to
exempt these customers, it could have explicitly excluded Lifeline
participants from the fee regime, as a number of other state
legislatures have done. See, e.g., Del. Code Ann. tit. 16,
§ 10103(a)(1); N.Y. County Law §§ 304, 334, 335; Ohio Rev.
Code Ann. § 128.42(A)(2)(b). But it did not provide for such an
explicit exemption. In light of this ambiguity in how the plain
language should apply, we will turn to "other indicia of [the
Legislature's] intent" to help us interpret the statute. RTKL
Assoc., 380 Md. at 678; see also Rylyns Enterprises, 372 Md. at
552.

C. Other Indicia of Legislative Intent
Unfortunately, these other indicia of legislative intent also
do not provide a definitive answer. The legislative history of PS
§ 1-313, for example, is not instructive. There is only one
mention of Lifeline participants in the legislative record and no
evidence whatsoever that the General Assembly considered this
issue one way or the other.9 To be sure, the 9-1-1 fee statute
includes a declaration of purpose that, at first blush, appears to
offer guidance: The General Assembly explicitly declared when
enacting the prepaid wireless fee in 2013 that "all end user
customers of 9-1-1-accessible services, including consumers of
prepaid wireless communications service, should contribute in a
fair and equitable manner to the 9-1-1 Trust Fund." PS § 1-
302(a)(6) (emphasis added). This provision arguably reflects a
legislative intent that everyone who has access to the 9-1-1
system should pay the fee that supports the system.
Although the principle makes sense in the abstract, we are
not convinced that the Legislature, when it made this statement,
was thinking about Lifeline participants who do not pay for their
phone service. In 2013, the General Assembly was focused on
paying customers who, at the time, were not required to
contribute to the 9-1-1 Fund simply because they paid for their
service in advance rather than receiving monthly bills. The
Legislature did not have the opportunity to consider whether it
would be "fair and equitable" to impose the same burden on low-
income individuals who receive phone service at no cost through
9
The only mention of Lifeline that we could find in the legislative
history came from DPSCS's legislative affairs director, Kevin Loeb,
during the hearings on Senate Bill 745, and it does not shed much light
on the applicability of the 9-1-1 fee. Responding to concerns about the
impact a prepaid wireless 9-1-1 fee could have on Maryland's low-
income residents, Mr. Loeb explained that data showed that people of
all incomes used prepaid phones and that, in any event, the poorest of
the poor received federal subsidies through the Lifeline program. See
2013 Leg., Reg. Sess., Hearings on S.B. 745 Before the Senate Finance
Comm. (Feb. 19, 2013) and the House Health and Gov't Operations
Comm. (March 26, 2013) (testimony of Kevin Loeb). It is unclear
whether Mr. Loeb meant that the Lifeline participants would not have
to pay the fee or merely that the fee would not inflict a significant
financial burden on Lifeline participants because they already received
discounted service. In any event, there is no evidence of how the
members of the General Assembly regarded his remarks.

a federal benefit program. Nor does the "everyone pays"
principle have universal appeal. As the Tennessee Attorney
General noted, it would "seem peculiar for persons who are
supplied a free phone to be subjected to a monthly service
charge." Op. Att'y Gen. Tenn. No. 09-87, 2009 WL 1430917, at
*6.
The collection mechanism established by the General
Assembly provides perhaps the best evidence that the Legislature
did not have Lifeline participants in mind when creating the new
prepaid wireless fee. The fee is supposed to be collected "by the
seller from the consumer" for each "retail transaction." PS § 1-
313(c)(1)(i). A person only qualifies as a "consumer" if he
"purchases prepaid wireless telecommunications service in a retail
transaction." PS § 1-313(a)(2). Even assuming that a "purchase"
occurs when the federal government pays for Lifeline service, the
Lifeline participant is not the one doing the purchasing and thus
would seem not to qualify as a "consumer" from which the fee
may be collected.
Moreover, even if a Lifeline participant were considered a
"consumer," there would be no obvious way to collect the fee.
The statute envisions that the seller will collect the fee from the
consumer at the time of the retail transaction, but there is no direct
financial transaction between the prepaid Lifeline participant and
the service provider. If the General Assembly had specifically
intended the fee to apply to these Lifeline participants, we suspect
that it would have outlined a workable collection mechanism.10

10
Although we have concluded that the prepaid wireless fee
governs this situation, we note that a similar problem would arise if we
analyzed SafeLink's service under PS §§ 1-310 and 1-311. This older
fee regime, which applies to "subscriber[s] to . . . 911-accessible
service," requires that the fee be paid "when the bill for . . . service is
due" and mandates that the service carrier "add the 9-1-1 fee to all
current bills rendered." PS § 1-310(b)–(d). Lifeline participants who
receive free phone service may well be "subscriber[s]," but, even so,
there is no clear collection mechanism. The fee must be paid when the
bill is due, but SafeLink customers are not billed for their service. See
Op. Att'y Gen. Tenn. No. 09-87, 2009 WL 1430917, at *5-6
(concluding that a similarly-worded statute did not require SafeLink
customers to pay an E 9-1-1 fee). If the General Assembly were to
consider legislation clarifying the applicability of the 9-1-1 fee to
Lifeline participants, we would recommend that the legislation address
both the prepaid and subscription services provided under the Lifeline
program.

  The Kentucky Supreme Court recently found that the

absence of a mechanism for collecting 9-1-1 fees from certain
paying customers was relevant in determining whether the
legislature intended prepaid wireless service providers to collect
9-1-1 fees from those customers. See Virgin Mobile, 2014 WL
4116480 at *5-7 (explaining that the legislature could not have
intended to require service providers to fashion their own
collection mechanisms where the legislature created an explicit
mechanism and, thereby, "permitted or authorized no other means
of collecting the fee"); see also TracFone Wireless, 397 S.W.3d at
176-78 (reaching a similar conclusion under Texas law). We
similarly think that the absence of a workable mechanism for
collecting the fee from prepaid Lifeline participants weighs
against requiring these individuals to pay the fee.
We recognize that the "difficulty in collecting the tax" is
largely "due to TracFone's choice of business model." Wash.
Dep't of Revenue, 242 P.3d at 818. If prepaid wireless companies
implemented Lifeline in a different way, there might be no
ambiguity in the statute as applied to Lifeline participants. Along
these lines, some courts have held that the lack of a clear
collection mechanism should not excuse prepaid wireless
providers from collecting 9-1-1 fees from their paying customers.
Virgin Mobile USA, LP v. Arizona Dep't of Revenue, 282 P.3d
1281, 1284 (Ariz. 2012); Bonet, 85 So.3d at 976-77; TracFone
Wireless, 242 P.3d at 818-19.
In those cases, however, the plain language of the fee
statutes in question explicitly covered all telephone users. In
Alabama, for instance, the fee was imposed on each telephone
"connection." Bonet, 85 So.3d at 973; see also Arizona Dep't of
Revenue, 282 P.3d at 1284 (imposing fee on each "customer"
who receives "telephone or telecommunication services"); Wash.
Dep't of Revenue, 242 P.3d at 817 (imposing fee on "all radio
access lines"). A prepaid cellphone is still a "telephone con-
nection," telephone "service," or "radio access line" even if the
statute does not provide a clear way to collect the fee from that
particular telephone user. Thus, the only question in those cases
was whether the lack of a collection mechanism—by itself—
somehow excused the providers from collecting an otherwise
applicable fee for every "telephone connection" or every "radio
access line." Here, however, the plain language of PS § 1-313
does not clearly provide that the fee applies in the first place. We

find the analysis of the Kentucky Supreme Court to be more
relevant in this context.11
In sum, it does not appear that the General Assembly
specifically intended to exempt prepaid Lifeline participants from
the new prepaid wireless 9-1-1 fee or specifically intended them
to pay the fee. But, considered together, the statutory language
and the absence of a specific collection mechanism lead us to
conclude that the best reading of the statute is that it does not
require Lifeline participants to pay the fee on their free minutes.12
We do not mean to suggest that there is no way in which
SafeLink and other service providers could collect the fee from
prepaid Lifeline participants. For example, in Alabama—which
requires all Lifeline customers to pay a 9-1-1 fee—SafeLink has
notified its Lifeline customers that they should send it a check for
$1.75 every month to cover the fee, which SafeLink presumably
then remits to the state. See SafeLink Wireless Website, Notice to
Alabama SafeLink Customers, https://www.safelinkwireless.com/
Enrollment/Safelink/en/Public/AL.html (last visited Dec. 3,

11
Washington Department of Revenue is distinguishable in another
way as well. In that case, the state statute specifically identified the
9-1-1 fee as an "excise tax," so the court applied the canon of statutory
construction by which exemptions from taxation are construed
narrowly in favor of the government. See 242 P.3d at 822; see
generally Comptroller v. Gannett Co., 356 Md. 699, 707-08 (1999)
(describing the canon). Here, however, it seems unlikely that the
"9-1-1 fee" constitutes a tax. See Bonet, 85 So.3d at 984-85 (con-
cluding that Alabama 9-1-1 fee was not a tax); see also W. Capital
Associated Ltd. P'ship v. City of Annapolis, 110 Md. App. 443, 450-51
(1996) (concluding that service charge applicable to people who use a
government service is not a tax). And, even if we were to consider the
fee a tax, there is a competing canon of construction by which the
applicability of tax laws—as opposed to exemptions therefrom—is
interpreted in favor of the taxpayer. See Gannett Co., 356 Md. at 707-
08. Given that the language of PS § 1-313 does not clearly provide that
the fee applies here, we think that this second canon would probably
control in the unlikely event a reviewing court were to consider the
9-1-1 fee a tax.
12
We do not decide whether the same analysis would apply to a
customer who receives free minutes as part of a promotion or any other
means. Such promotions might include the functional equivalent of a
retail transaction between the seller and buyer—an exchange of loyalty
points, for example—and, in any event, would require an entirely
separate inquiry into the Legislature's intent.

2014). Another way to collect the fee might be to require the
provider to subtract 60 cents every month from the $9.25 federal
subsidy, remit those 60 cents to the Comptroller, and deduct 60
cents worth of minutes from the Lifeline participant's phone.13
But, even if there are ways to collect the fee, it is not for us to
determine the most appropriate collection mechanism. That is a
policy choice for the General Assembly to make once it has had
the opportunity to decide whether Lifeline participants should pay
the 9-1-1 fee in the first place.
The General Assembly has twice before made similar policy
decisions about whether to adapt the 9-1-1 fee regime to emerging
business models in the telecommunications industry. In 1995, for
example, the Legislature reacted to the increasing popularity of
cellphones by extending the fee to "subscribers to . . . wireless
telephone service and other 9-1-1-accessible service." 1995 Md.
Laws, ch. 158. Then, when prepaid service providers claimed
that they did not need to collect the existing fee from their paying
customers, the Legislature established the new prepaid wireless
fee in PS § 1-313. Whether the statute should be amended to
account for the Lifeline program is again a question for the
General Assembly.

                             III
                        Conclusion
 We conclude that, under current law, customers of SafeLink

Wireless and similar prepaid wireless providers are not required
to pay a 9-1-1 fee on the free allotment of minutes they receive
13
We are not certain whether this approach would be consistent
with federal regulations, which require the subsidy to be used "to
reduce the cost of any generally available residential service plan or
package" without any reference to state-imposed 9-1-1 fees. See 47
C.F.R. § 54.403(b)(1). It is not uncommon for federal benefit programs
to prohibit the use of federal benefits to pay unrelated state-imposed
charges. See, e.g., 7 U.S.C. § 2013(a) (providing explicitly that states
participating in the Supplemental Nutrition Assistance Program are
prohibited from charging sales tax on purchases made with food
stamps). But given that service providers must include access to the
9-1-1 system in order to qualify under the Lifeline program, 47 C.F.R.
§ 54.101(b), we suspect that the FCC would consider the 9-1-1 fee to
be part of the "cost of [the] generally available" plan. Still, in the
absence of federal guidance, we cannot say with confidence the FCC
would permit the use of federal subsidies to pay the 9-1-1 fee.

through the Lifeline program. Although we see no evidence that
the Legislature specifically considered whether Lifeline
participants should pay the fee, both the terms of the statute and
the lack of a specific collection mechanism suggest that the fee
does not apply to them. The General Assembly may wish to
consider amending the statute to clarify whether these individuals
should pay the fee and, if so, how the fee should be collected.

                              Douglas F. Gansler
                              Attorney General of Maryland

                              Patrick B. Hughes
                              Assistant Attorney General

Adam D. Snyder
Chief Counsel, Opinions & Advice