Legislature(2005 - 2006)SENATE FINANCE 532
03/08/2005 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB100 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 64 | TELECONFERENCED | |
| + | SB 100 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | HB 115 | ||
9:25:06 AM
CS FOR SENATE BILL NO. 100(L&C)
"An Act relating to enhanced 911 surcharges imposed by a
municipality."
This was the first hearing for this bill in the Senate Finance
Committee.
Senator Bunde stated this bill is offered at the request of police
departments and other officials in Alaska. Currently the State has
a 911 emergency system and laws regulating it. This bill would make
three substantial changes to those laws.
Senator Bunde informed that the existing system does not allow for
the timely location of the caller by emergency responders. He
referenced a highly publicized instance in which the emergency
responders had difficulty locating a victim. This is problematic in
situations involving incapacitated callers, children or tourists
unfamiliar with their location.
Senator Bunde noted that current law imposes a surcharge of 50
cents or 75 cents for 911 emergency services depending upon the
size of the population served. This legislation would eliminate the
population differential and increase the maximum surcharge to $2.
Some communities would calculate their need at higher and other
communities would require less once it is determined that the
current system is adequate. The amount of $2 was deemed reasonable
for the Anchorage municipality. Communities could levy a higher
surcharge upon voter approval. He understood that many communities
could not afford the cost of an enhanced 911 emergency system and
would utilize this opportunity to generate increased revenue to pay
the costs of the existing service they are required to provide.
Senator Olson asked the three specific changes.
Senator Bunde listed the elimination of the population
differential, increase of the maximum surcharge to $2, and
allowance for an increase above that amount upon voter approval.
LAUREN WICKERSHAM, Staff to Senator Bunde, added that this
legislation also provides that the surcharge would be added to
wireless and cell phone use.
Co-Chair Wilken reminded that this concept was considered by the
Committee during the previous legislative session, but did not pass
as a result of questions regarding the definition of "enhanced
911". He asked if a definition is stipulated in this bill.
Senator Bunde responded that the enhanced 911 system utilizes
Global Positioning System (GPS) technology to determine the
location of callers. It does not include funding for patrol cars,
dispatchers and other expenses not directly related to the 911
emergency system.
Co-Chair Wilken recalled efforts discovered the previous session of
municipalities' intention to utilize these revenues to expand
roads, install guardrails and purchase fire trucks. The legislature
ruled against this. He asked if a definition of allowable
expenditures should be stipulated in statute.
Ms. Wickersham replied that such a definition is contained in
statute currently and that this legislation would not amend that
definition.
Co-Chair Wilken cited an additional source noting this information
is in current statute.
Co-Chair Wilken referenced language on page 2, lines 8 and 9 of the
bill providing that the surcharge was limited to $2 "unless the
surcharge is imposed by ordinance approved by the voters of the
enhanced 911 service area." He asked if passage of a ballot
initiative in a municipal election would be required or whether a
municipal assembly could adopt an ordinance.
Senator Bunde answered that approval would be required of the
majority of voters in the affected service area.
Co-Chair Wilken informed that the Fairbanks North Star Borough is
providing 911 emergency services to smaller communities including
Delta Junction and Galena. He asked if residents of those
communities would vote for any increases to the surcharges they
pay.
Senator Bunde responded that his intent is that all affected
consumers would be included in such an election.
Co-Chair Green understood that the Matanuska Telephone Association,
Inc. (MTA) services subscribers in boroughs in addition to the
Matanuska-Susitna Borough and that different rates apply to the
residents of each borough. The surcharges are not established at an
annual utility meeting.
Senator Bunde intended that each consumer impacted by a proposed
surcharge increase to have an opportunity to vote on those
increases.
Co-Chair Wilken calculated how this could impact Fairbanks and
nearby communities.
Co-Chair Wilken asked if the surcharges would be levied on phone
lines utilized for facsimile machines and other data transmission.
Ms. Wickersham answered yes.
Senator Bunde furthered that this bill mirrors current statute. The
surcharges are assessed on every line up to 100 per building.
Co-Chair Wilken clarified that a business with 20 lines would pay
20 surcharges.
Senator Bunde affirmed this is current law.
Senator Stedman supported the concept of this legislation. He
questioned the overall cost relative to other states and expressed
concern that revenues collected from this surcharge could be
expended by municipalities on expenses indirectly related to the
911 emergency service system.
Senator Bunde reiterated his intent that the revenues would only be
expended for direct enhanced 911 system costs. He shared the
underlying concern. He stressed that the telephone utilities should
not be "placed in the middle of a tax battle".
Senator Stedman asked how the $2 maximum surcharge amount was
determined. He compared this to the 20-cents charged in the state
of Washington, 27-cents charged in Idaho, and 75-cents charged in
the Oregon. He cited the publication titled "9-1-1 Fact Book for
the State of Alaska" [copy on file.] He asked if this legislation
would allow a municipality to impose a lesser amount. He surmised
that smaller communities would not require the large surcharge
fees.
Senator Bunde expected that smaller communities would require
higher surcharge amounts due to economy of scale. The amount of $2
was agreed upon for the community of Anchorage.
Ms. Wickersham informed that "enhanced 911 system" and "enhanced
911 equipment" are defined in statute. Language on page 2, lines 16
and 17 of this bill reads, "The municipality may only use the
enhanced 911 surcharge for the enhanced 911 system."
Co-Chair Green stated that federal laws governing 911 emergency
systems should be reviewed to ensure this legislation is in
compliance.
Co-Chair Green recommended consideration of language providing
that, "the funds received from 911 surcharges should be kept in
separate interest bearing accounts and not the general fund of
municipalities and used only for specific 911 use and
enhancements." This may be intended in the federal mandate, but
should be clarified.
Senator Olson asked the impact of this legislation on rural
consumers and whether they would be required to pay this surcharge.
Senator Bunde replied that current statute provides these rural
consumers pay a 75-cent fee. This legislation would also apply to
these residents.
Senator Olson clarified that those residents without the benefit of
a 911 emergency response system would continue to be required to
pay this surcharge for the service.
Senator Bunde affirmed all phone line consumers would be imposed
this fee. He noted the Universal Access Fee is imposed on those
consumers with easy access to telephone services to offset the
costs of delivering service to residents of areas in which the
service is not economically feasible.
Senator Stedman asked if a community with no 911 emergency response
service could opt out of this surcharge, resulting in a reduction
of the current fee from 75-cents to zero.
Co-Chair Green surmised those communities could reduce the
surcharge amount to zero.
Senator Bunde expected the "economics of delivering the service for
the carrier would decide what the charge is". He doubted any
community would eliminate the entire surcharge.
Co-Chair Green understood that the carrier is not determining the
rate.
Senator Bunde clarified that indirectly the carrier determines the
rate since it provides access to the telephone lines. The
dispatcher is a cost of the municipalities and if a community has
no dispatcher there is no reason to fund that position.
Co-Chair Green asked if language should provide for a minimum
amount.
Senator Bunde replied it is not necessary.
Ms. Wickersham interjected that Tim Rogers of the Alaska Municipal
League could speak to this issue.
Senator Dyson commented to the historical concept of providing
communication access to all citizens of this country. This is the
reason that postal rates are the same regardless of origination or
destination. In this manner urban residents subsidize the cost of
delivering services to rural areas. All who live in rural areas
must realize that the services they receive are "profoundly"
subsidized by urban residents.
KATHY MCLERON, EMS Unit Manager, Community Health and Emergency
Medical Services, Division of Public Health, Department of Health
and Social Services, read testimony into the record as follows.
According to the Alaska Municipal League there are 162
communities defined as a municipality representing over 97
percent of the State's residents.
In a study prepared by The McDowell Group for the Denali
Commission in October 2000, 107 communities had 911 service.
Of those communities 18.6 percent had enhanced 911 service.
This bill would allow municipalities to up the amount it
charges phone uses for the enhanced 911 system, lessening the
burden of the surcharge on property owners. It also requires
the surcharged to be levied on wireless phones in addition to
wire line service.
The Division supports this bill and other efforts to improve
the effectiveness of the 911 system.
Senator Olson asked the number of communities that have an enhanced
911 emergency response system.
Ms. McLeron replied that as of October 2000, 18.6 percent of
residents have an enhanced 911 service in their community. She did
not know the actual communities.
STEVE THOMPSON, Mayor, City of Fairbanks testified via
teleconference from Fairbanks in favor of this legislation. Without
enhanced 911 capability, emergency responders are prevented from
providing services to callers they are unable to locate. He
questioned the proposed $2 maximum surcharge, as the revenue
generated would be insufficient to cover the cost of the service.
He exampled other states impose a surcharge up to $4. However, this
legislation is a "start in the right direction."
Co-Chair Green asked if the witness predicted voters would reject a
proposed surcharge of $3.
Mr. Thompson responded that voters want all services without the
any restrictions. He preferred that increases be implemented by
municipal assembly action within the public process.
Co-Chair Wilken asked the surcharge amount the witness would
prefer, as well as the recommended amount necessary for other
communities.
Mr. Thompson supported a $3 maximum surcharge amount, with
increases allowed with voter approval. However he was unsure if
this amount would be sufficient for communities such as Nome or
Ketchikan. He qualified that the Fairbanks local government would
not immediately increase the surcharge to $3, but would give the
matter careful review.
Mr. Thompson noted that 911 emergency response services are
provided to Delta Junction and other communities near Fairbanks
through a contractual agreement. Increases to the surcharge for
those consumers could not be voted upon, as these communities have
not organized local government. He pointed out that no limit is
placed on garbage collection rates.
Co-Chair Wilken asked if garbage rates are governed through the
Regulatory Commission of Alaska (RCA).
Mr. Thompson answered, no.
DAVID TYLER, Alaska Fire Chiefs Association, testified via
teleconference from Fairbanks, that the enhanced 911 emergency
service must continue to be provided. He expressed concern with the
proposed $2 maximum and the requirement of an election to increase
that amount. He remarked, "We have a representative form of
government for a reason: to allow the elected officials" to set
certain policies and resolve conflicts. The passage of this
legislation would not immediately result in every telephone bill
containing a $2 surcharge. Proposed increases would undergo a
public process first. He supported the legislation with this
exception.
WALT MONEGAN, Chief, Anchorage Police Department, testified via
teleconference from an offnet location in support of this bill. He
read a statement into the record as follows.
I support SB 100 and urge you to pass this bill out of your
Committee. Anchorage, as it exceeds a population of 100,000,
receives currently a surcharge of 50-cents per line. Of that
50-cents, by contract with our telephone 911 provider, we must
pay them 21-cents per line back. And that is for their
operating costs and their database management, leaving 29-
cents per line to cover our hardware and software costs as
well as the cost of our 911 call-takers. All of which is
insufficient - about $4 million a year insufficient.
That $4 million must be made up in other parts of our budget,
which also impacts our ability to perform all that we are
requested to.
Presently, about 50 percent of all of our quarter-million 911
calls that we get a year come in on cell phones. And with the
expectation of phase two wireless we will be even more
severely impacted in our operating budget if this surcharge is
not passed.
Phase two would allow us to determine the location of the
caller on a cell line. Most recently, last summer we had a
woman for example, who was hiking up in the Chugiak Mountains.
She got lost, disoriented, but she had a cell phone and had
cell phone coverage. She called us on 911 and it was kind of
an arduous process to try to locate her because obviously she
didn't know where she was and we didn't know how to find her.
We did have a happy ending; we were able to do it but we could
have done so much more expeditiously had we had the phase two
in effect where we could know the location.
Again, I support this bill and ask that you help us, all of us
in public safety, help those who call 911.
Senator Dyson understood that most cell phones do not have a
capacity to provide a GPS location.
Mr. Monegan agreed this is the current status; however, phase two
of the enhanced 911 emergency system includes GPS locating capacity
in cell phones or provides the ability to locate callers by
triangulating transmission towers.
Senator Dyson asked about new "reversed 911" technology that would
allow autodial to certain numbers to deliver messages.
Mr. Monegan replied that many venders are selling such packages.
Areas could be identified on a map and numbers within that areas
could be auto-dialed and provided with a recorded message. Messages
could include orders of evacuation in the event of an area wildfire
or notification of a mission child. The fire department is
combining efforts with the school district to develop this service.
Senator Dyson remarked his interest in this technology relates to
instances of a lost or abducted child. He asked whether language
should be included in this legislation to address possible future
costs of implementing a "reversed 911" system.
Mr. Monegan replied that a reversed 911 system would involve the
purchase and installation of a software package. The ability to
increase surcharges would assist in generated necessary revenues
for the enhanced 911 system, possibly including reversed 911
software. Currently, the system operates at a $4 million annual
deficit and the funds must be garnered from elsewhere. Expectations
for public safety services are high and the department is "duty
bound" to help as many people in the most efficient way possible.
TIM ROGERS, Alaska Municipal League, testified via teleconference
from an offnet location as follows.
We believe that it is an important bill for continuing the
improvements and operation of our emergency response systems
throughout the State. Legislation enabling a telephone
surcharge has been around for about 13 years now. It was
initially enacted to allow local governments to offer an
enhanced 911 system, as was previously mentioned in testimony.
Then later it was changed to allow a surcharge on cell phones
as well, as cell phone use has become more widespread. Now
about 50 percent of all calls originate from cell phones to
911 services.
Passage of this increase will help continue with the upgrade
to be able to take advantage of the technological improvements
to 911 service. As we well know, it can mean the difference
between life and death and cases where a caller may not be
able to provide precise information on where they're located.
It can also help fund the development of address databases to
avoid untimely response delays, such as occurred in the
Godfrey tragedy in Eagle River.
Another reason for the necessity of this legislation is that
several funding sources for the implementation upgrade and
operation of 911 systems has disappeared over the years. Safe
Communities and Revenue Sharing programs were eliminated
several years ago and those funds were frequently used for 911
call center expenditures. Likewise the Community Matching
Grant program was also eliminated and that program did help
fund the capital improvements needed for the 911 system.
We do have a couple concerns about the bill that have been
raised before but there's nothing in the bill we can't live
with now. We would like to see a differential rate for areas
outside of Anchorage that can't take advantage of the scales
that Anchorage has in terms of reducing their costs. We're
also a little bit concerned about the election provision. We
fell that an election on the surcharge maybe setting a
precedence in this case. We're concerned that at some future
point there may be requirements requiring a vote on any type
of service fee that a local government may decide to assess.
Again, we like the bill as it is. We offer these as
improvements on the bill.
I would like to clarify a couple things that have been said
earlier. By existing statute, the 911 surcharge can only be
used for the purpose of providing 911 services. It does
require that there be an annual report, a public annual
report, to the governing body, whether it be the city council
or an assembly, on the costs versus the revenues from the
surcharge. That has to be done on an annual basis. So there is
a safeguard that the funding is used appropriately.
The second point I'd like to clarify is that the 911 surcharge
is only assessed in those areas where 911 service is provided
and the governing body that is providing the 911 service has
affected. So in rural areas of Alaska, there is no surcharge
unless they are receiving 911 service and their local
government has approved the assessment. Right now, Nome does
have a service charge. Their service charge is being used to
implement a 911 system. I believe Kotzebue also considered a
911 surcharge to help pay for and enhanced system. It's my
understanding that none of the other rural areas are currently
paying for any sort of a surcharge. It's only in those areas
that are offering enhanced 911 services.
Senator Bunde surmised that access to 911 emergency response
services in Anchorage is universally accepted and supported by the
public.
Mr. Rogers affirmed.
Senator Bunde also surmised an election to increase the surcharge
to an amount more than $2 would receive general acceptance and
support.
Mr. Rogers agreed.
Co-Chair Green asked if the witness supports a provision requiring
that the revenues generated from the surcharge would be maintained
in a separate interest bearing account.
Mr. Rogers knew of no separate account requirement; however the
revenues must be accounted separately and expended only for costs
directly related to the 911 system.
Senator Olson clarified that rural exchanges would be exempt from
the surcharge.
Mr. Rogers replied that unless a local government is providing
enhanced 911 emergency response services, the surcharge is not
levied.
Co-Chair Green asserted that from any location in Alaska a caller
could dial 911 and reach some type of emergency response system.
Senator Olson countered that if 911 is dialed in Golovin the caller
receives a busy signal.
Co-Chair Green understood that a toll free "1-800" system would
reach an operator located in Fairbanks.
10:09:12 AM
CHUCK KOPP, Alaska Chapter, National Emergency Number Association,
testified via teleconference from Kenai that that organization is
comprised of several telephone companies, most public safety
agencies in the State, the Department of Administration and the
Department of Military and Veterans Affairs and some legislators.
The Association recommends passage of this legislation. The $2
surcharge is "easily justified". The $2 limitation does not remove
local government control for determining the appropriate fee for a
community. Enhanced 911 emergency response systems safeguards
emergency response employees and addresses the rising public
expectation that government have adequate technology to respond to
emergencies. The increased surcharge would allow for the purchase
of basic components, defined as equipment that provides the caller
with a "direct talk path and a data stream to the public safety
answering point." The data stream provides the name, address and
phone number of the caller to the emergency call taker. Basic 911
service consists of only the talk path and does not provide
additional identifying information. This bill has broad based
support across the State.
Co-Chair Green asked the amount of revenue that would be generated
from the proposed increase and with the inclusion of wireless
phones for each community. She recalled discussions on the similar
legislation from the previous session identified significant
discrepancies between communities and the amounts allotted to their
enhanced 911 emergency response systems. She relayed concerns
expressed about the surcharge levied on every phone line into a
building with a maximum of 100 lines. Homeowners have multiple
lines that do not duplicate the need for service. The surcharge
should be limited to one per household. Businesses and apartment
buildings are different issues. Multiple surcharges are appropriate
for households with more than one cell phone because all family
members could be in different locations.
Co-Chair Green asked if the surcharge for wireless phones is based
on the location of the service provider or the residence of the
consumer.
Senator Bunde would research the matter.
Co-Chair Green expressed intend to give consideration to a
provision requiring that revenues collected by a municipality from
this surcharge be held in a separate interest bearing account. She
also spoke to the need to address penalties for any misuse of these
funds. Strict federal requirements must be reviewed and given
consideration in this legislation.
Senator Bunde noted that the aforementioned 9-1-1 Fact Book
includes spreadsheets detailing the number of phone lines and
anticipated revenue collected for the communities of Anchorage and
Fairbanks. The surcharges assessed to wireless phones would be
levied according to the residence of the consumer. He added that
this legislation assesses a surcharge per each telephone line
because this is the billing procedure of the telephone companies
and a reflection of the current system.
Co-Chair Green agreed the current system assesses charges per line;
however, as the fees increase, consideration must be given to other
options. If adequate revenue is collected through the addition of
cell phones, landline surcharges may be limited to one per
household.
Co-Chair Wilken expressed concern about the election process,
conceptually and structurally. He would address the matter with
Senator Bunde.
Co-Chair Wilken requested additional information about the size of
communities and their economies of scale. He questioned whether
larger communities would require higher surcharges assessed per
line, given the multitude of lines.
Co-Chair Wilken requested representatives from telephone companies
address the issue of multiple telephone lines. He asked if the
companies could differentiate lines into a residence.
Mr. Kopp addressed the impact of fee increase. Currently, the 75-
cent surcharge generates $450,000 for the Kenai Peninsula Borough,
which would increase 125 percent to over $1 million if the full $2
amount were enacted. He noted Chief Monegan had testified that the
Municipality of Anchorage stated that community requires
approximately $4 million more than is currently collected from the
surcharge to operate the 911 emergency response system. He did not
anticipate the Municipality of Anchorage would increase the
surcharge to the maximum amount allowed before an election is
required; rather the fee would likely be $1. Revenue to all
participating communities would increase, but he did not predict
"any real big numbers" would be generated. Billing procedures for
wired and wireless lines are already stipulated in statute and
consumers currently pay a surcharge for each line into their home
that could access an 911 emergency response system.
GEORGE MOLSON, GCI, testified via teleconference from offnet
location that he agreed fundamentally with Mr. Kopp's explanations.
The assessment of surcharges to multiple lines within one household
could be differentiated, as the telephone companies have records of
each customer's service address. The industry average is 1.3 lines
per address. This figure could be utilized to calculate the impact
of the surcharges per household. Charges for cell phones are
assessed to a billing address, because the company is unable to
determine at what location that phone would "end up".
Senator Bunde commented to Co-Chair Wilken that their respective
communities require approximately $4 million annual to "break even"
the cost of operating a 911 emergency response system. The
surcharge could be assessed to each line at a lower amount, or to
each billing address at a higher amount. This is a policy decision.
Co-Chair Green asked the fiscal impact of imposing this surcharge
to wireless accounts.
Co-Chair Green spoke to concerns about allowing the surcharge rate
to be increased through a municipal ordinance. Consumer complaints
would not likely be directed to the municipality, but rather to the
telephone company. This would create a public relations problem for
these utility companies. She suggested that municipalities be
required to publicly notify consumers of new rates and clarify that
the municipality and not the telephone company made the decision.
Co-Chair Green noted the Committee is awaiting additional
information on this bill.
Co-Chair Green ordered the bill HELD in Committee.
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