Legislature(2005 - 2006)SENATE FINANCE 532

03/08/2005 09:00 AM FINANCE

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09:08:32 AM Start
09:25:06 AM SB100
10:09:12 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Heard & Held
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
Moved SCS CSHB 115(FIN) Out of Committee
                     SENATE FINANCE COMMITTEE                                                                                 
                           March 8, 2005                                                                                      
                             9:08 a.m.                                                                                        
CALL TO ORDER                                                                                                               
Co-Chair Green convened the meeting at approximately 9:08:32 AM.                                                              
Senator Lyda Green, Co-Chair                                                                                                    
Senator Gary Wilken, Co-Chair                                                                                                   
Senator Con Bunde, Vice Chair                                                                                                   
Senator Fred Dyson                                                                                                              
Senator Bert Stedman                                                                                                            
Senator Donny Olson                                                                                                             
Also  Attending:     REPRESENTATIVE   MIKE  HAWKER;  PAT   DAVIDSON,                                                          
Legislative   Auditor,  Division   of  Legislative   Audit;   LAUREN                                                            
WICKERSHAM,  Staff  to  Senator  Bunde;   KATHY  MCLERON,  EMS  Unit                                                            
Manager, Community  Health and Emergency Medical Services,  Division                                                            
of Public Health, Department of Health and Social Services;                                                                     
Attending  via  Teleconference:   From  Fairbanks:  STEVE  THOMPSON,                                                          
Mayor,  City of  Fairbanks;  From offnet  locations:  WALT  MONEGAN,                                                            
Chief, Anchorage  Police  Department; TIM  ROGERS, Alaska  Municipal                                                            
League; GEORGE MOLSON,  GCI; From Kenai: CHUCK KOPP, Alaska Chapter,                                                            
National Emergency Number Association                                                                                           
SUMMARY INFORMATION                                                                                                         
HB 115-AIRPORT CUSTOMER FACILITY CHARGES                                                                                        
This bill was  reported from Committee with an amendment  adopted at                                                            
the previous hearing.                                                                                                           
HB  64-EXTEND BOARD OF PUBLIC ACCOUNTANCY                                                                                       
The  Committee   heard  from  the   sponsor  and  the  Division   of                                                            
Legislative Audit. The bill was held in Committee.                                                                              
SB 100-ENHANCED 911 SURCHARGES                                                                                                  
The Committee  heard from the sponsor, the Department  of Health and                                                            
Social   Services,   and   municipal   and   emergency    responders                                                            
representatives. The bill was held in Committee.                                                                                
     SENATE CS FOR CS FOR HOUSE BILL NO. 115(TRA)                                                                               
     "An Act relating to charges paid or collected by users or                                                                  
     occupants of an airport facility owned or controlled by the                                                                
     state; and providing for an effective date."                                                                               
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Co-Chair Green  asked if all members  had an opportunity  to address                                                            
questions raised at the previous hearing.                                                                                       
Co-Chair Wilken  offered a motion to report SCS CS  HB 115 (TRA), as                                                            
amended,  from   Committee  with   individual  recommendations   and                                                            
accompanying fiscal note.                                                                                                       
There was no objection  and SCS CS HB 115 (FIN) MOVED from Committee                                                            
with zero fiscal  note #1 from the Department of Transportation  and                                                            
Public Facilities.                                                                                                              
     HOUSE BILL NO. 64                                                                                                          
     "An Act extending the termination date for the Board of Public                                                             
     Accountancy; and providing for an effective date."                                                                         
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
REPRESENTATIVE  MIKE HAWKER testified this housekeeping  legislation                                                            
would extend  the Board of Public  Accountancy. This Board  consists                                                            
of five certified  public accountants (CPA) and two  public members,                                                            
who adopt  regulations,  issue final  licensing  decisions and  take                                                            
action against  violators of licensing laws. Upon  completion of the                                                            
sunset  review, the  auditor determined  the Board  was meeting  its                                                            
statutory requirements  and that the occupational licensing fees are                                                            
sufficient to cover the regulatory costs of this occupation.                                                                    
Representative  Hawker  noted the  auditor made  one recommendation                                                             
relating  to  the  Board's  need  to  conform  to  recently  adopted                                                            
national professional  testing standards.  The previous legislative                                                             
session,  statutes  were amended  to  provide  for the  new  testing                                                            
procedures.  The Board  has undertaken  efforts to  secure a  second                                                            
testing location  in Fairbanks and  must secure a third location  in                                                            
Senator Olson  asked the  number of disciplinary  actions the  Board                                                            
has taken.                                                                                                                      
Representative  Hawker deferred to the audit report  or the Chair of                                                            
the Board. He estimated the number was limited.                                                                                 
Senator  Olson  asked  the  number  of  licensed  certified   public                                                            
accountants in Alaska.                                                                                                          
Representative  Hawker  estimated  the amount  to  be approximately                                                             
Co-Chair  Wilken cited  language  on page  12 of  the audit  report,                                                            
which reads as follows.                                                                                                         
     In June 2004,  13, or just over half, of the  complaints [filed                                                            
     during  the period between July  2001 and May 2004]  were still                                                            
     open.  Six of those  13 complaints had  been opened for  longer                                                            
     than  120 days.  We reviewed  five of these  six complaints  in                                                            
     detail. Four  of the five complaints had no evidence  of having                                                            
     any investigative  activity for the last 90 days.  Based on our                                                            
     review,  we  concluded  the  public  inquiries  and  complaints                                                            
     regarding BOPA activities  were not being resolved efficiently.                                                            
Co-Chair  Wilken asked for  an explanation  of this and whether  the                                                            
delays are cause for concern.                                                                                                   
Representative  Hawker  replied that  concern is  warranted for  all                                                            
boards. The audit statement  relates to the timing in which disputes                                                            
are  resolved.  The  Board  of  Public  Accountancy  is  working  to                                                            
establish more  comprehensive guidelines  for resolving complaints.                                                             
The Board may  not have been timely  in resolving complaints  in the                                                            
past, but  is now aware of  the need to  address these matters  more                                                            
timely. None  of the delays were of  specific concern that  arose to                                                            
the attention of the Ombudsman.                                                                                                 
PAT DAVIDSON,  Legislative Auditor,  Division of Legislative  Audit,                                                            
informed  the  Committee  that  although  audits  are  performed  in                                                            
accordance  with General  Accounting  Procedures,  these  procedures                                                            
require  independence  and because  the  professional  staff of  the                                                            
Division  is  CPAs  and the  Division  is  statutorily  required  to                                                            
perform these audits, this  independence standard is not obtainable.                                                            
Ms. Davidson  stated  the Division  had overall  concerns about  the                                                            
timeliness   of  investigations   conducted   by   all  boards   and                                                            
commissions. Historically,  the audits have reviewed  this matter on                                                            
an individual  board basis;  this method  does not require  accurate                                                            
information from  which recommendations could be made.  However, the                                                            
audit  did   review  the   timeliness  for   this  Board  and   made                                                            
recommendations  to  the  Department   of Commerce,   Community  and                                                            
Economic  Development.  The Department  concurred  and changes  were                                                            
made to structure of the investigative process.                                                                                 
Co-Chair Green  asked if the complaints relate to  the boards or the                                                            
Ms. Davidson explained  that the Division of Occupational  Licensing                                                            
staff receives  the complaints and  "works" the investigations.  The                                                            
results of  those investigations are  brought before the  boards for                                                            
determination.  The  boards  serve  as administrative  adjudication                                                             
rather than detail investigative.                                                                                               
Co-Chair  Green   concluded  the   complaint  is  directed   to  the                                                            
Ms. Davidson affirmed  and pointed out that criterion  for review is                                                            
provided in statute. Delays  would impact the licensing of CPAs, and                                                            
is the concern of the Department and not the Board.                                                                             
Co-Chair Green  referenced other language  on page 12 of  the audit,                                                            
which reads as follows.                                                                                                         
     Efficiency   issues   related  to  investigations   are   being                                                            
     evaluated  in another audit report.  This report addresses  the                                                            
     history,  and  evaluates  the  effectiveness,  of  the  State's                                                            
     overall sunset process.                                                                                                    
Co-Chair Green asked if this audit has been released.                                                                           
Ms. Davidson replied this report has been issued.                                                                               
Co-Chair Green  members may want to review that report  to determine                                                            
if additional questions are warranted.                                                                                          
Senator Olson  asked if  the investigator  writes the Memorandum  of                                                            
Understanding to the applicable board.                                                                                          
Ms. Davidson responded  that the investigator makes a recommendation                                                            
to the  board  of a Memorandum  of  Agreement, licensing  action  or                                                            
Co-Chair  Green asked  for  an explanation  of the  examination  and                                                            
whether it is computerized.                                                                                                     
Representative  Hawker answered that until recently  the examination                                                            
was administered  as a paper test administered in  multiple parts in                                                            
three locations  of the State. The  American Institute of  Certified                                                            
Public Accountants  "guides"  this testing  process. A decision  was                                                            
made "outside  of the State  of Alaska" to  conduct the examination                                                             
using  a professional  testing agency  as a  computerized test.  The                                                            
legislature amended  statute to allow for this change,  as it became                                                            
the only testing  methodology available.  The company  administering                                                            
the tests offered the CPA  examinations four times annually although                                                            
only offered in Anchorage.  Previously, the tests were offered twice                                                            
each year. It was discovered  that the contractor provides unrelated                                                            
testing  services in  Fairbanks and  therefore  the CPA examination                                                             
could be administered at that location as well.                                                                                 
Co-Chair  Green   was  surprised  at  the  difficulty   in  securing                                                            
locations  given  the  commonality  of  this type  of  testing.  She                                                            
expected that  the tests should be available at any  location with a                                                            
proctor available  once a pass code  is provided to the examination                                                             
Senator  Olson asked  if a  person residing  in  Ketchikan would  be                                                            
required to travel to Anchorage to take this examination.                                                                       
Representative  Hawker replied that  the examination could  be taken                                                            
at many locations  nationally. A university  student could  take the                                                            
take  the test  at their  school campus.  He  took the  test at  his                                                            
college  in Iowa before  traveling  to Alaska and  was certified  to                                                            
practice in Alaska once reaching this state.                                                                                    
Co-Chair Green ordered the bill HELD in Committee.                                                                              
9:25:06 AM                                                                                                                    
     CS FOR SENATE BILL NO. 100(L&C)                                                                                            
     "An Act relating to enhanced 911 surcharges imposed by a                                                                   
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
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                                                            
Mr. Rogers affirmed.                                                                                                            
Senator Bunde  also surmised an election  to increase the  surcharge                                                            
to an  amount  more than  $2 would  receive general  acceptance  and                                                            
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                                                            
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                                                            
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                                                            
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.                                                                              
Co-Chair Green adjourned the meeting at 10:26 AM                                                                                

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