Legislature(2001 - 2002)
04/27/2001 01:45 PM Senate CRA
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ALASKA STATE LEGISLATURE
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
April 27, 2001
1:45 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Alan Austerman
Senator Randy Phillips
Senator Georgianna Lincoln
MEMBERS ABSENT
Senator Pete Kelly
COMMITTEE CALENDAR
HOUSE BILL NO. 186
"An Act relating to a municipal enhanced 911 surcharge on wireless
telephones."
MOVED HB 186 OUT OF COMMITTEE
SENATE BILL NO. 42
"An Act requiring an annual inflation adjustment of the base
student allocation used in the formula for state funding of public
education; and providing for an effective date."
MOVED CSSB 42 OUT OF COMMITTEE
SENATE BILL NO. 175
"An Act providing municipalities with the authority to protest or
to recommend conditions on the issuance and renewal of charitable
gaming permits and requiring the Department of Revenue to deny or
condition the license or permit unless the protest or conditions
are arbitrary, capricious, or unreasonable, or the conditions
conflict with state law."
MOVED SB 175 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
HB 186 - No previous action recorded
SB 42 - No previous action recorded
SB 175 - No previous action recorded
WITNESS REGISTER
Representative Kevin Meyer
Alaska State Capitol, Room 110
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 186
Dan Youmans
Juneau LIO offnet
No address provided
POSITION STATEMENT: Testified on HB 186
Douglas Robinson
Municipality of Anchorage
P.O. Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Testified on HB 186
Theresa Hillhouse
Attorney for the Municipality of Anchorage
P.O. Box 196650
Anchorage, AK 99519
POSITION STATEMENT: Testified on HB 186
Mark Mew
Deputy Chief
Anchorage Police Department
4501 South Bragaw Street
Anchorage, AK 99507-1599
POSITION STATEMENT: Testified on HB 186
Steve O'Connor
231 S. Binkley
Soldotna, AK 99669
POSITION STATEMENT: Testified on HB 186
Tim Rogers
Municipality of Anchorage
P.O. Box 96650
Anchorage, AK 99519
POSITION STATEMENT: Testified on HB 186
Mark Johnson
Chief
Department of Health & Social Services
Community Health & Emergency Medical Services
P.O. Box 110616
Juneau, AK 99811-0616
POSITION STATEMENT: Testified on HB 186
Richard Benavides
Staff for Senator Bettye Davis
Alaska State Capitol, Room 504
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 42
Eddie Jeans
Manager
Department of Education and Early Development
School Finance and Facilities Section
801 W. 10th Street STE 200
Juneau, AK 99801-1984
POSITION STATEMENT: Testified on SB 42
Vernon Marshall
NEA-AK
114 2nd Street
Juneau, AK 99801
POSITION STATEMENT: Testified on SB 42
Senator Kim Elton
Alaska State Capitol, Room 115
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of SB 175
ACTION NARRATIVE
TAPE 01-14, SIDE A
Number 001
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:45 p.m. Present were
Senators Austerman, Phillips, Lincoln and Chairman Torgerson.
HB 186-911 SURCHARGE ON WIRELESS TELEPHONES
Representative Kevin Meyer, bill sponsor, testified that HB 186
allows municipalities to impose the same surcharge on wireless
phones as is currently charged on hard line phones in order to help
pay for enhanced 911 services. Wireless or cell phones comprise
about 25 percent of the 911 calls made today and the number is
rising. The enhanced 911 system provides a visual location and
telephone number of the individual making the 911 call. This is
particularly helpful for those individuals who are not able to
articulate that information.
It provides the technology, equipment and staffing necessary for
fast response time and automatic routing to the appropriate
emergency response unit.
With wire line phones, Anchorage is currently able to impose an E
911 surcharge of up to 50 cents while all other communities may
impose up to a 75 cent monthly charge. This was made possible by an
enabling state statute passed in 1994 that covered wire line phones
only.
The enhanced 911 surcharge is not unique to Alaska; in fact, many
Lower 48 cities have surcharges far in excess of those in Alaska.
It is needed to help cover the cost for cities to purchase and
maintain equipment and technology to provide adequate emergency
services.
This is a priority for Anchorage, Fairbanks and Kenai all of which
are anxious to implement enhanced 911 service for wireless phones
this summer or fall. The wireless carriers AT&T, ACS and GCI have
all been very supportive.
He called attention to the letters of support in committee packets.
Senator Lincoln joined the meeting.
SENATOR AUSTERMAN asked how many wireless phones would be assessed
the enhanced fee so he could get an idea of what is currently going
on and what the increase would be. He also wanted to know what the
total increase has been for 911 calls if 25 percent of those calls
are now coming from cell phones. Are there fewer calls coming from
wire line phones with the increase in cell phone use? Originally,
the enabling state statue passed in 1994 was for wire line phones.
He wondered whether the 50 and 75 cent surcharges were still
realistic due to the volume of phones and subscribers.
REPRESENTATIVE MEYERS said that was a good question and Mr. Rogers
with the Municipality of Anchorage would be able to answer that
question. He surmised the original statute was designed to purchase
equipment and technology and the support staff to maintain it. With
the wireless, new equipment would need to be purchased so the
surcharge would go toward those purchases.
DAN YOUMANS testified via teleconference as an AT&T wireless
representative in support of HB 186. The combination of cell phones
and 911 network has created a new and vital communication system
for AT&T customers.
They support a reasonable and equitable surcharge on the customers
to help defer the cost of 911 services. With this in mind, they
support a 50 cent maximum surcharge for all municipalities. The
technology and services for cell phones is very different from wire
line phones so they feel the charge should be the same for all
areas. Since cell phones are mobile and 911 calls could be made
from any location, all wireless customers should pay the same
amount.
Cost recovery would only apply when municipalities are in a
position to offer new, enhanced 911 services for wireless phones.
In the future, 911 operators will be able to receive the phone
number of the wireless caller the location of the cell site that is
connecting the call and eventually, the approximate location of the
caller. Since the new technologies benefit the general public, they
feel that wireless carriers should have some mechanism for
recovering their costs. HB 186 says they would be able to recover
those costs as specified by the Federal Communication Commission
(FCC). The legislation cites the FCC order on this issue.
CHAIRMAN TORGERSON asked, "Your testimony is that the 50 cents is
just to pay for the hardware?"
MR. YOUMANS said the 50 cents would pay for needed upgrades and the
general cost of serving people who are calling 911 on their cell
phones. When new technology and upgrades are needed at the 911
operator level and by the carriers, they have the need to recover
those upgrade costs.
SENATOR AUSTERMAN said the bill allows municipalities to assess the
surcharge so they may have the enhanced 911 service. He asked
whether he heard correctly that they expected to recover their
costs for service and what service was that?
MR. YOUMANS said there are two phases of the new services as
defined by the FCC. The first phase allows the 911 operator to
receive the phone number of the wireless phone caller. It also
allows the wireless operators to receive the location of the cell
site that is connecting the call. The second phase will give the
approximate location of the caller, which is a vital safety tool
for the operator.
SENATOR AUSTERMAN asked Mr. Youmans to call his office at (907)
465-2487 so he could have a one to one conversation.
DOUGLAS ROBINSON with the Municipality of Anchorage testified via
teleconference that he would be providing statistics, some of which
applies to the State of Alaska.
There are currently 30 states with legislation authorizing the
collection of wireless 911 surcharges. The charges vary from 35
cents to $2.00 and that revenue is used to assist financing
equipment, software upgrades for the E 911 public safety answering
points.
Specific uses for the revenues could be:
· For modifying the existing P-SAP software so the wireless X,Y
coordinate location data provided by the wireless carriers can
be displayed and tracked by 911 call takers
· Purchase required data interfaces for P-SAP computer aided
dispatch system of larger P-SAPs such as in Anchorage and
Fairbanks
· Network upgrades between the 911 system and the local exchange
carrier
The surcharge is strongly endorsed by the Association of Public
Safety Communication Officers (APSCO), National Emergency Number
Association (NENA). APSCO has recommended Anchorage as a model city
for phase 2 wireless 911 implementation.
THERESA HILLHOUSE, Anchorage Municipal Attorney's Office, was
available for questions.
MARK MEW, Deputy Chief of the Anchorage Police Department,
testified that about 250,000 calls per year come through their
dispatch center and a large portion of those come through the E 911
system.
The system was sized for wire line service. Cell phone use has
proliferated and a study conducted four years ago determined that
25 percent of the calls were coming in via cell phone. He believes
they are now approaching 50 percent. Due to the large number of
cell phone users, a single event will trigger multiple calls.
Wire line users are paying for the 911 service while cell phone
users are not.
SENATOR LINCOLN asked how many lines are designated for the E-911
lines and how many would be added if the surcharge is instituted
and is the 50 cent surcharge sufficient.
MR. MEW thought the number is eight trunks. About 50 calls will jam
the dispatch center and it's not unusual to receive that many calls
at once. A consultant would need to determine the number of
additional lines to put in. The 50 cent charge does not cover costs
now; it merely helps to offset the charges. He anticipates the cell
phone surcharge will help but not cover costs completely.
Currently, the surcharge covers about half the costs and he does
not know the percentage the cell surcharge would cover.
STEVE O'CONNOR testified via teleconference as the Kenai Peninsula
911 Advisory Committee Chairman. They have had an enhanced 911
system since the early 1990s. Since that time cell phone call
volume has increased from 5 percent to about 50 percent. They are
dealing with the same difficulties as Anchorage with multiple calls
for a single incident causing a 911 overload. They currently
collect 75 cents per line per month for wire line and recommend the
same fees for wireless phones. Fees offset the costs of operation
but don't cover them. The borough is budgeting $350,000 to $400,000
for Phase 1 and they view the 75 cent surcharge as important. Local
government is in the best position to decide what the fee should
be.
TIM ROGERS, Legislative Program Coordinator for the Municipality of
Anchorage, thought he could answer some of Senator Austerman's
questions. Recently, the Anchorage voters approved a bond issue for
$1.5 million to pay for necessary cellular upgrades for the E-911
service. That will cover consultants, hardware and software that
will be needed but not operational costs. The current surcharge
pays for roughly 40 percent of total operating costs and nothing
toward capital costs.
There are estimated to be 200,000 cell phones in Alaska.
SENATOR AUSTERMAN asked how the 200,000 relates to volume.
MR. ROGERS did not know but currently the annual surcharge
collected in Anchorage is around $1 million so an answer could be
figured mathematically.
MARK JOHNSON, Chief of Emergency Medical Services for the
Department of Health & Social Services, said there might be too
many calls coming in from urban areas but calls from outside an
urban area from a caller who does not know their location is
difficult, time consuming and potentially life threatening.
The rationale for the difference in fees is that smaller
communities have fewer phones to collect fees from so a higher
surcharge is necessary. If the fee is only 50 cents then some small
communities may not be able to afford the upgrades.
SENATOR LINCOLN asked for an explanation of 911 available referred
to in his letter.
MR. JOHNSON said there are many Alaskan communities with basic 911
service but there is no information available on who is calling and
from where. The enhanced feature provides the telephone number of
the caller and the location.
SENATOR LINCOLN asked if the list provided was for wire line or
wireless.
MR. JOHNSON said the list provided was for wire line.
SENATOR LINCOLN said fourteen communities that are listed as having
911 capabilities and she sincerely doubts that they have that the
ability to dial 911. She named Red Devil and Crooked Creek as
examples.
MR. JOHNSON said she might be correct. The data was lifted from a
recent McDowell Group study.
SENATOR AUSTERMAN asked for assurance that the option to charge a
75 cent surcharge was currently in the bill.
CHAIRMAN TORGERSON said it mirrored the wire line surcharges.
SENATOR PHILLIPS moved HB 186 and zero fiscal note from committee
with individual recommendations. There was no objection.
SB 42-FOUNDATION FORMULA INCREASE
RICHARD BENAVIDES, staff for Senator Davis, introduced SB 42 for
Senator Davis because she was attending a HESS committee meeting.
He described it as an issue that has been a priority this year due
to the recognition that current levels of funding have not kept up
with teaching costs. SB 42 would help alleviate the most
unpredictable reason for the erosion by inflation proofing the
foundation formula. Inflation has risen about 30 percent in the
last 10 years and the legislature has increased the base foundation
formula by only five percent. During the same time, the required
local contribution has risen about 37 percent.
There are many examples of rising school costs such as fuel or
electricity increases and this legislation allows school districts
to continue to operate without eliminating positions due to those
types of increases.
This action would not bind future legislatures. Each legislature
would have the power to determine the appropriate level of funding
for each fiscal year.
CHAIRMAN TORGERSON said he had prepared a CS to change the
effective date from 2001 to 2002.
SENATOR PHILLIPS moved the CS \J version as the working document.
SENATOR LINCOLN objected for the purpose of asking for an
explanation of the difference is between "preceding fiscal year"
from page 1, line 7 of the original bill and "preceding calendar
year" on page 1, line 7 of the CS \J version. She wondered whether
the change is supposed to coincide with the effective date and
whether the new language is acceptable with Senator Davis.
MR. BENAVIDES said the language was acceptable with Senator Davis.
SENATOR LINCOLN withdrew her objection.
SENATOR PHILLIPS commented that he thought some school districts
are on a calendar year versus a fiscal year.
EDDY JEANS, school finance manager for the Department of Education
and Early Development, said the purpose of the language "second
preceding calendar year" is because of the timing in which the TPI
index comes out. This allows the appropriate increase to be built
into the budget for the upcoming year.
Both the department and the administration support the bill. School
districts have lost 25 percent of the purchasing power they had 10
years ago. Chairman Torgerson represents a school district that
struggles to meet their budget. The municipality contributes to the
CAP on an annual basis and yet the school district has increased
costs of personnel services through salaries and benefits of over
$1 million per year. This must be absorbed from other programs. The
department believes it is time to provide some inflationary
adjustment in the foundation formula.
VERNON MARSHALL, executive director of National Education
Association (NEA) Alaska, said inflation is a cruel and unavoidable
tax. There is no avoiding that inflationary payment and kids have
felt that tax in terms of missed educational opportunities. Unless
inflation is offset it will be charged against current capacity. At
a time when both teaching and learning standards are being improved
it is time to stop "the hemorrhage of academic depreciation and the
effects of inflation."
Retirement incentive programs (RIP) have been used to offset
inflation. Data from the American Federation of Teachers (AFT)
clearly shows ground has been lost in terms of employee salary as a
percentage of education expenditure. At the same time, in relation
to other states ground has also been lost in terms of school
operational costs. For the year 1999-2000 they estimate that
teachers salaries are approximately $1,000 to $1,100 less than they
were in 1998-1999. This could be caused by retiring of experienced
teachers at the high end of the scale and hiring teachers lower on
the salary scale but the $1,100 times the approximately 8000
teachers, equals $8,800,000 that has come out of experience to be
put back into the classroom and programs. Part of the cause of that
is because inflation is not offset.
He closed in saying that they support the efforts of the committee
and will work together but asked for stabilization of the funding
for children in the future. It is a wise move for the State of
Alaska because schools are thrown into a catch up race when
inflation is not offset and the children will never win.
SENATOR LINCOLN asked for explanation of the ranking on a sheet
handed to committee members.
MR. MARSHAL said the figures on the far right indicate the percent
change during the decade. It's a comparison of the state's percent
of the U.S. average over the ten year period.
SENATOR LINCOLN said Alaska was ranked #1 in 1988-1989 and number 6
in 1998-1999.
MR. MARSHAL responded Alaskan teacher's salaries ranked #1 ten
years ago. The ranking does not reflect 1999-2000 and 2000-2001
and they believe the RIP has had a significant impact on schools.
They believe that the ranking for 1998-1999 is actually 8 rather
than the 6th place shown. Using the percentage as a part of the
national average our ranking today is 51st.
SENATOR LINCOLN moved CSSB 42 from committee with individual
recommendations and accompanying fiscal note. There were no
objections.
SB 175-MUNICIPAL PROTESTS OF GAMING PERMITS
SENATOR ELTON, bill sponsor and Senator from district B, said the
bill addressed a problem that has arisen in his community. SB 175
gives municipalities the opportunity to protest or recommend
conditions on the issuance or renewal of a gaming permit similar to
the way municipalities now protest or ask for conditions on
alcoholic beverage control (ABC) licenses.
Under the bill provisions, a municipality or applicant may, after a
hearing, make a defense and then protest the permit or ask for
conditions. One provision would, under certain circumstances,
preclude municipalities from doing that. For example, if the
municipality holds gaming permits, they could hold a hearing and
protest a permit for non-payment of taxes. The Department of
Revenue would then review the protest by the municipality and if
they determine that it is a reasonable protest they could deny the
issuance of a permit. They too would have to hold a hearing and go
through a process before they could deny the permit thus giving the
applicant another chance to present their case.
Without the bill, municipalities may only have a local option
election that would allow them to ban all gaming or just pull-tabs
or, by ordinance, they may prohibit a vendor or operator from
managing a permit. The permit would then go to another vendor or
operator.
The situation is Juneau was that three operators did not pay taxes
and over a three year period, their tax liability grew to $627,000
plus $300,000 in attorney and other costs. There was no way for the
municipality to protest the issuance of the permits even though
they are issued on a yearly basis. Since the operators have no
assets to attach, there is no way of recovering the liability. In
doing nothing to the operators who are flaunting the law, the
municipality is giving them a competitive advantage over the
operators who are paying the taxes.
This sets in place a system to give municipalities control over the
operations of the permits. Other situations in which a community
might want to have a hearing before protesting a license are fire
safety or public nuisance issues.
Side B
This solution is reserved for organized municipalities.
CHAIRMAN TORGERSON commented that public nuisance is in the eye of
the beholder and he does not like the idea of a municipality having
to define nuisance and then place conditions on the activity. He
looks upon the tax as a good policy but the nuisance bothers him.
He recommended tightening the definition a bit.
SENATOR ELTON responded arbitrary, capricious and unreasonable are
definitions lifted from the ABC statutes and there is precedent
behind those issues so new definitions should not be necessary.
CHAIRMAN TORGERSON asked whether anyone from the Department of
Revenue was present.
SENATOR ELTON said the Deputy Commissioner showed up for the
previous hearing that was canceled and his arrival was anticipated.
CHAIRMAN TORGERSON said he could not get there in time. He asked
for the next committee of referral.
SENATORS LINCOLN AND PHILLIPS said it was Labor and Commerce.
CHAIRMAN TORGERSON said he had some problems with the bill but he
would entertain a motion to move the bill. He wants to continue to
work with Senator Elton to narrow the focus to taxes. He wasn't
sure about fire hazard. He thought perhaps they could come up with
an amendment to offer.
SENATOR ELTON asked to be advised of which staff member to work
with and he would get any information that was needed.
CHAIRMAN TORGERSON indicated his Community and Regional Affairs
staff person, Mary Jackson.
SENATOR LINCOLN moved SB 175 from committee with individual
recommendations and accompanying fiscal note. There were no
objections.
CHAIRMAN TORGERSON adjourned the meeting at 2:40 p.m.
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