Legislature(2005 - 2006)SENATE FINANCE 532

04/05/2005 09:00 AM FINANCE

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Heard & Held
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+ Bills Previously Heard/Scheduled TELECONFERENCED
     CS FOR SENATE BILL NO. 100(L&C)                                                                                            
     "An Act relating to enhanced 911 surcharges imposed by a                                                                   
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Co-Chair  Green   informed  the  Committee   that  the  forthcoming                                                             
committee substitute was  developed as the result of pubic testimony                                                            
to  a similar  bill  she  had  sponsored  the  previous Legislative                                                             
session.  The  committee  substitute   changes  are  detailed  in  a                                                            
Memorandum from her office,  dated April 5, 2005 [copy on file]. The                                                            
Memorandum also corrects  inadvertent language omissions in Sections                                                            
4 and  5, as  requested by  the bill  drafter.  These changes  would                                                            
allow  the bill  "to  apply  to all  municipalities,  regardless  of                                                            
organization, equally".                                                                                                         
Co-Chair  Wilken   moved  to  adopt  the  aforementioned   committee                                                            
substitute,  CS SB 100(FIN), Work  Draft Version 24-LS0407\S  as the                                                            
working document.                                                                                                               
Co-Chair Green  objected for purposes  of explanation. She  reviewed                                                            
the changes as outlined in the Memorandum as follows.                                                                           
     Work Draft to CSSB 100 (FIN) "Version S"                                                                                   
     Section 1. AS 29.10.200(37) is amended to include the enhanced                                                             
     911 system under Home Rule applicability.                                                                                  
     Section 2. AS 29.35.131(a)911 surcharge                                                                                    
          Page 2                                                                                                                
             ΠLine 11 - $1.50 surcharge for wireline and wireless                                                              
                     (from $2.00)                                                                                               
             ΠLine 23 - requires notification by the municipality                                                              
                when the  surcharge is assessed and when it is                                                                  
             ΠLine 27 - links the 911 surcharge to the federal                                                                 
             ΠLine 29 - requires the Borough to reimburse the                                                                  
                municipalities for their expenses first and that                                                                
                reimbursement shall occur at least every three                                                                  
     Section 3. AS 29.35 is amended to include Private Branch                                                                   
     Exchange (PBX) phone identification to ensure that responders                                                              
     go to the actual location of the caller.                                                                                   
     Section 4. AS 29.35 is amended to apply to home rule and                                                                   
     general law municipalities.                                                                                                
     Section 5. AS 29.35.131(h) is repealed (home rule                                                                          
Co-Chair  Green noted  that the proposed  change  to lines four  and                                                            
five  of  Section  1, are  supported  by  the  bill's  drafter.  The                                                            
customer  notification language  being proposed  in Section  2, page                                                            
two, beginning  on line  23 is included  because, historically,  the                                                            
telephone  utility has borne  the responsibility  for explaining  to                                                            
their customers  that they did not  increase the rate on  their own;                                                            
the cost of providing  Enhanced 911 (E-911) is allowed  to be passed                                                            
on to the ratepayer.  In addition,  aligning state definitions  with                                                            
federal  definitions  would further  clarify to  municipalities  the                                                            
proper usage of  the E-911 or 911 "funds for the purposes  for which                                                            
they were intended".  This is specified  in Section 2(a),  page two,                                                            
beginning  on line  27. This  expense reimbursement  language  would                                                            
clarify that Boroughs  with multiple Public Safety  Answering Points                                                            
(PSAPs)  municipal  service areas  within  their boundaries  and  in                                                            
which the Borough  is the primary collector of the  E-911 surcharge,                                                            
must distribute  those funds to the  municipalities. She  noted that                                                            
the  primary  purpose  of E-911  systems  is  to  provide  emergency                                                            
responders  both the location of the  caller and the caller's  phone                                                            
Senator Bunde,  the bill's sponsor, noted that SB  100 was developed                                                            
at  the request  of  municipalities  who,  while being  required  to                                                            
comply with E-911  service regulations, had no funding  mechanism in                                                            
place through which to  pay the associated expenses. This bill would                                                            
provide  that funding mechanism.  He noted  that several  testifiers                                                            
were available to further explain the situation.                                                                                
9:16:36 AM                                                                                                                    
JIM  ROWE,   Executive  Director,   Alaska  Telephone  Association,                                                             
testified  via  teleconference  from  Anchorage  in support  of  the                                                            
Version  "S" committee  substitute  on behalf  of the Association's                                                             
fourteen-member companies  that serve Rural Alaska. The hope is that                                                            
the  bill would  be  adopted  this Legislative  Session.  While  the                                                            
original version of SB  100 proposed a $2.00 maximum surcharge limit                                                            
for E-911  services,  the Association  is  in support  of the  $1.50                                                            
surcharge proposed  in Version "S". "This is double  the amount that                                                            
is currently charged".  Language in Section 2(a),  line 16, page two                                                            
would  address "parity  in the  payment between  wireless  telephone                                                            
service  and  wireline   telephone  system".  This   issue  is  very                                                            
important  to  the  members  of  the  Association   because  of  the                                                            
competition   between  wireless  and   wireline  service   carriers.                                                            
"Competitive  neutrality   is  important"  and  if  one  service  is                                                            
required  to implement  a rate increase  on its  service, then  "the                                                            
competing service should  also be required to do that". The language                                                            
incorporated  into line  24,  page two  of Section  2(a) that  would                                                            
require a municipality  to inform the utility's customers  about the                                                            
rate increase  is important, as it would further clarify  the reason                                                            
for the increase.                                                                                                               
Mr. Rowe  stated that the  PBX and other  telephone system  language                                                            
identified  in Section 3, page three,  is an area that could  easily                                                            
invoke confusion.  In layman's  terminology,  there are "dumb  PBXs"                                                            
and  "smart  PBXs".  Smart  PBXs   are  systems  that  are  able  to                                                            
communicate  both  the caller's  phone  number and  location.  There                                                            
would  be costs associated  with  upgrading or  replacing the  older                                                            
"dumb"  PBXs. Consideration  should  be given to  specifying a  time                                                            
frame in this  legislation in which entities that  provide telephone                                                            
systems  must implement  the required  upgrade.  In conclusion,  the                                                            
Association supports the bill.                                                                                                  
9:20:35 AM                                                                                                                    
TIM   ROGERS,  Alaska   Municipal   League  (AML),   testified   via                                                            
teleconference  from an offnet  site and noted  that, while  he does                                                            
not have access  to a copy of the  Version "S" committee  substitute                                                            
and therefore  could not address it specifically,  AML does not take                                                            
issue with the customer  notification process that would be required                                                            
of municipalities. AML  is, however, concerned about the proposal to                                                            
reduce the surcharge from  $2.00 to $1.50, as AML considers $2.00 to                                                            
be a more reasonable  amount based  on some of the local  government                                                            
needs. Nonetheless, the bill would be acceptable.                                                                               
DON SAVICH,  Wasilla Police Department,  City of Wasilla,  testified                                                            
via teleconference from an offnet site in support of the bill.                                                                  
9:23:09 AM                                                                                                                    
BILL DOOLITTLE, Contract  Project Manager, Municipality of Anchorage                                                            
911 System, testified in  Juneau and informed the Committee that two                                                            
components  of the bill could generate  "significant impediments  to                                                            
911 programs within  the State". The first, located  in Section 2(a)                                                            
line  26,   page  two,   is  the  language   specifying  that   "The                                                            
municipality  may only use  the enhanced 911  surcharge for  phase I                                                            
and phase II enhanced 911  services, as described in 47 CFR 10.18 as                                                            
revised…" That  specific code of federal  regulations "only  applies                                                            
to wireless carriers".  This would, in effect, "block  using the 911                                                            
surcharge for even a basic 911 system within the State".                                                                        
Mr. Doolittle  explained that the  initial step in developing  a 911                                                            
system  is "the  basic" 911  system, which  allows 911  calls to  be                                                            
made. An E-911  system, which is built upon the basic  system, would                                                            
provide  both  the phone  number  and  the address  of  the  caller.                                                            
Wireless phase I capability,  which would provide the address of the                                                            
cell site transmitting  the call, and Wireless phase  II capability,                                                            
which  would provide  the  latitude  and  longitude of  the  handset                                                            
making the call, are programs developed upon the basic 911 and E-                                                               
911 systems.                                                                                                                    
Mr. Doolittle noted that  the second significant matter involves the                                                            
issue of reimbursement  to the municipality, as specified in Section                                                            
2(a), line 28,  on page two. The language specifies  that "A borough                                                            
must use  the enhanced 911  surcharge to  fully reimburse each  city                                                            
within the borough  for expenses borne by the city  for the enhanced                                                            
911 services  before  the enhanced  911  surcharge may  be used  for                                                            
other expenses  of the enhanced  911 system".  He noted that  "there                                                            
are necessarily  some area-wide types of expenses,  such as the "the                                                            
database management piece",  that must be put in place" prior to the                                                            
911 system  becoming operational.  "The database management  piece …                                                            
aggregates  the subscriber  records from all  the carriers"  for the                                                            
location identification  capabilities for the E-911 system. "This is                                                            
generally a super-jurisdictional  area", and in addition to its one-                                                            
time start-up  fee, continuous monthly expenses would  be associated                                                            
with the maintenance of those records.                                                                                          
Mr. Doolittle  continued that  trunking and  circuitry from  each of                                                            
the carriers  to  the primary  PSAP would  also be  necessary.  In a                                                            
situation where  there might be multiple  PSAPs, there could  be the                                                            
opportunity  to  identify  municipal-specific  expenses;  "but  they                                                            
would be equally  reimbursable to all municipalities  or a borough's                                                            
911  center".  He  offered  "as  an  alternative"  the  ability  "to                                                            
determine  precedence of  cost" of  such things  as database  costs,                                                            
infrastructure  costs, and technology costs. These  components would                                                            
be less  expensive  were they aggregated  among  agencies. Doing  so                                                            
would allow  for some of the surcharge  revenues to reimburse  call-                                                            
taking and  operational  expenses associated  with the 911-program.                                                             
The current  challenge is that the  existing surcharge program  does                                                            
not allow reimbursement  for many  of these costs, and, as  a result                                                            
of an inadequate  surcharge,  many 911 programs  are operating  at a                                                            
Co-Chair  Green asked  what specific  changes would  be required  to                                                            
address  these  concerns.  The purpose  of  this legislation  is  to                                                            
remind the collectors  and the recipients of the 911-surcharge  that                                                            
the funds are  generated for "specific  use", as defined  in federal                                                            
Mr. Doolittle  pointed out that there  are two classes of  carriers:                                                            
local exchange  carriers who  are regulated  at the local level  and                                                            
wireless carriers  who are regulated  by the Federal Communications                                                             
Commission  (FCC). Therefore, two  sets of rules govern such  things                                                            
as surcharges  and collections. The  federal government has  allowed                                                            
each state to establish  its own 911 program. As a result, 50 unique                                                            
programs exist  in the nation, and 27 states impose  differing rates                                                            
for  the two  carrier systems.  Therefore,  State  "statute is  what                                                            
directs or  allows what a  local level 911  program would be".  As a                                                            
result of interaction  with numerous municipalities  and boroughs in                                                            
the State,  it has been determined  that "one of the challenges"  is                                                            
achieving an inter-local  agreement about the scope  of services and                                                            
the  scope  of  the  911 program.   Current  statutes  provide  wide                                                            
latitude to municipalities  in that regard. "Many municipalities and                                                            
boroughs  are challenged"  in regards  to specifying  the roles  and                                                            
responsibilities and the  allocation of surcharges. "The priority of                                                            
those costs  could be specified  on a Statewide  basis based  on the                                                            
reality of  how you make  those expenditures.  But really the  needs                                                            
and  configurations   of  dispatch  centers  within   a  borough  or                                                            
municipality  …  is a  local  selection".  The local  public  safety                                                            
agencies  "get to choose  who will  dispatch for  them". This  would                                                            
include decisions regarding  whether to have a radio dispatch center                                                            
and 911-call taking and service area responsibilities.                                                                          
Mr. Doolittle  concluded  that some alternative  language  regarding                                                            
these  issues could  be developed  and  provided  to the  Committee.                                                            
However, being unsure as  to whether the Committee wished to further                                                            
delay the bill,  he noted that there "is great support  for the bill                                                            
as written  today", and his comments  could be viewed as  cautionary                                                            
in  regards  to  how  some  of  the  language  is  written  and  the                                                            
challenges it might create.                                                                                                     
Co-Chair Green  voiced the desire  to correct the bill in  Committee                                                            
rather than allowing it to move out of Committee "flawed".                                                                      
Co-Chair Green noting that  Mr. Doolittle's first concern dealt with                                                            
the federal regulations,  asked for further clarification  regarding                                                            
his second concern.                                                                                                             
Mr. Doolittle  verified that the federal concern involved  tying the                                                            
surcharge to  Phase I and Phase II.   His second concern  dealt with                                                            
"reimbursement to municipalities as a priority".                                                                                
Co-Chair  Green   acknowledged  and  asked  whether   Mr.  Doolittle                                                            
understood the issue the legislation was intended to address.                                                                   
Mr. Doolittle  assured that he understood,  as he has worked  with a                                                            
number of  municipalities.  There "is a  question regarding  program                                                            
scope and accountability  to municipalities within boroughs", as not                                                            
all 911 programs  hold monthly, quarterly, and annual  meetings. The                                                            
scopes of many  programs are not published  and explicit.  "It would                                                            
be  very easy  to  have that  requirement.  It  is very  simple  and                                                            
straight forward to do that on a local level."                                                                                  
Co-Chair  Green asked  how the  issue could  be  addressed in  State                                                            
Mr. Doolittle  suggested  that there  be a requirement  "that  a 911                                                            
program   explicitly  document   the  scope   of  the  program   and                                                            
reimbursement  to agencies". This  would establish "the groundwork"                                                             
for establishing  a mechanism through which to address  "a bona fide                                                            
request" for reimbursement from an agency.                                                                                      
9:31:15 AM                                                                                                                    
AT EASE 9:31:41 AM / 9:39:45 AM                                                                                             
Co-Chair  Green stated that  upon the conclusion  of today's  public                                                            
testimony,  staff would work with  "experts" to further develop  the                                                            
bill's language.                                                                                                                
Co-Chair Wilken voiced  being pleased that the bill would be further                                                            
refined as  he has a few  problems with  it; specifically whether  a                                                            
surcharge level of $1.50  would be appropriate. Continuing, he asked                                                            
regarding the  home rule city within second-class  borough situation                                                            
that exists  in Fairbanks; if the  City of Fairbanks is responsible                                                             
for the  911/E-911 system  and they wished  to adjust the rate,  the                                                            
question is who  would vote on the issue: the residents  of the City                                                            
or the residents of the Fairbanks North Star Borough.                                                                           
Co-Chair Green  asked for further  clarification as to which  entity                                                            
manages the 911-system.                                                                                                         
Co-Chair Wilken affirmed that the City does.                                                                                    
Senator  Bunde speculated  that  the vote  would depend  on who  the                                                            
subscribers  of  the telephone  utility  system  were:  whether  the                                                            
subscriber base  was limited to the City or included  other areas of                                                            
the Borough.                                                                                                                    
Co-Chair  Wilken noted that  he would ask  the community to  provide                                                            
the answer to this question.                                                                                                    
STEVE HEBBE, Lieutenant,  Anchorage Police Department,  Municipality                                                            
of Anchorage testified  in Juneau and agreed with Senator Bunde that                                                            
anyone assessed the surcharge  would vote on it. Therefore, were the                                                            
surcharge  borough-wide,   there  would  be  a  borough-wide   vote.                                                            
Allowing only the City  subscribers to vote on an Areawide surcharge                                                            
would prevent  the borough-wide subscribers  from having  a voice in                                                            
the matter.                                                                                                                     
Co-Chair  Green understood  therefore  that anyone  residing in  the                                                            
telephone  service area should  be provided  the ability to  vote on                                                            
the issue. It  should not be limited solely to the  residents of the                                                            
City of Fairbanks.                                                                                                              
Lieutenant Hebbe affirmed  that anyone to whom the surcharge rate is                                                            
charged should have the right to vote on it.                                                                                    
Co-Chair Green asked Mr. Rogers his position on the issue.                                                                      
Mr. Rogers concurred  with Lieutenant Hebbe that the  entire service                                                            
area should vote.                                                                                                               
Co-Chair Wilken  stated that his office  would develop a  definitive                                                            
answer to the question.                                                                                                         
Co-Chair Green  agreed, as she recalled the issue  of whom should be                                                            
charged  the  surcharge   was  the  crux  of  Fairbanks   residents'                                                            
discussions last year during the discussions on her bill.                                                                       
9:44:18 AM                                                                                                                    
Senator  Bunde  commented  that  the  intent  of  the  language,  as                                                            
drafted,  was to provide  "that combination  of flexibility  for the                                                            
municipality  and  protection from  the  municipality"  in that  the                                                            
people in the  service areas would be allowed to vote  regarding the                                                            
surcharge assessment.  How this would affect other  divisions in the                                                            
area should be further clarified.                                                                                               
CHUCK KOPP,  Kenai Police Department,  testified via teleconference                                                             
from Kenai and recounted  that, in 1985, the Kenai Peninsula Borough                                                            
included three  home rule cities:  Kenai, Homer, and Seward  and one                                                            
first  class  city:  Soldotna.   Each  had  their  own  911  program                                                            
supported  by residents  of that  particular  city. Eventually,  all                                                            
four cities  transferred  their individual  authorities  to a  singe                                                            
borough-wide  authority to which all  borough-wide residents  paid a                                                            
surcharge.  The situation  in Fairbanks  mirrors  that of the  Kenai                                                            
Peninsula  in that the City  of Fairbanks  has agreed to manage  the                                                            
911-program  for the entire Borough,  Therefore, the entire  borough                                                            
would vote on  the surcharge. A single unified 911  system should be                                                            
the preferred  choice instead  of a "fragmented"  system, which  was                                                            
originally the  case in the Kenai Peninsula Borough.  He appreciated                                                            
the Committee's  work in  addressing this  complicated issue  and he                                                            
supported moving the bill forward.                                                                                              
Mr.   Kopp  supported   Mr.  Doolittle'   comments   regarding   the                                                            
establishment  of program management  guidelines. "Any borough  that                                                            
has 911  authority must  have a program,  documented, that  explains                                                            
how the  program is  managed",  to include language  addressing  the                                                            
program's reimbursement methodology.                                                                                            
WALT  MONEGAN, Police  Chief,  Municipality  of Anchorage  spoke  in                                                            
Juneau in support  of the bill. He  noted that the Anchorage  Police                                                            
Department is the manager  of the Anchorage PSAP of which Lieutenant                                                            
Hebbe  was the commander.  He voiced  appreciation  for the  efforts                                                            
being exerted  regarding the  surcharge. The  bill is supported  "in                                                            
that  every dollar  that  is now  being  utilized to  subsidize  the                                                            
shortfall  could be reallocated  to its  proper duties".  Addressing                                                            
the funding shortfall  "would effectively enhance  all public safety                                                            
efforts within our municipality".                                                                                               
Senator  Olson asked  Mr. Monegan  his  position in  regards to  the                                                            
proposal to reduce the surcharge from two dollars to $1.50.                                                                     
Mr.  Monegan  voiced the  preference  for  a  two-dollar  surcharge.                                                            
Adopting a two-dollar  levy would provide "more breathing  room" for                                                            
managers and would negate  the expense of possibility being required                                                            
to conduct an election to increase the fee over time.                                                                           
Senator  Olson asked  whether "a  significant  decrease in  service"                                                            
might occur absent that fifty-cents.                                                                                            
Mr. Monegan replied "not at this point".                                                                                        
JOHN FULLEMWIDER,  Fire Chief, Municipality  of Anchorage,  spoke in                                                            
Juneau and  stated that a great deal  of discussion has occurred  in                                                            
regards  to the language  in this  bill and changes  that should  be                                                            
made. While he, like Mr.  Monegan, supported the bill as written, he                                                            
opined that  a few changes could be  made to further enhance  it and                                                            
make  it   a  "little   bit  more  palatable   from  the   borough's                                                            
standpoint". He reiterated  Lieutenant Hebbe's remarks to the effect                                                            
that the  Municipality  of Anchorage  "does not have  a dog  in that                                                            
fight". Representatives  of the Anchorage fire and  police community                                                            
are testifying  today "because of public safety issue".  When people                                                            
call 911, they  anticipate that the call would be  answered and that                                                            
the  response  would  be to  the  correct  location,  regardless  of                                                            
whether the  call is made from a hardwire  or wireless phone.  "That                                                            
is what  this legislation  is all about …  it's the ability  to turn                                                            
the switch  on so that we can find  you or somebody else  that has a                                                            
cell  phone and  go  forward". Anchorage  has  been  "the first"  to                                                            
address  the  wireless  issue, but  the  communities  of  Fairbanks,                                                            
Kenai,  Nome,  and  Juneau  "are right  behind  us".  He  asked  the                                                            
Committee to support the legislation.                                                                                           
Co-Chair Green requested  that those willing to work on revising the                                                            
bill's language to address  the issues raised by Mr. Doolittle, work                                                            
with her and Senator Bunde's staff in that regard.                                                                              
Senator  Hoffman  asked whether  information  could  be provided  in                                                            
regards  to how  the Alaska  State  Troopers' Department  of  Public                                                            
Safety, emergency services system operates on a statewide basis.                                                                
STAN   HERREA,   Director/Chief   Technology   Officer,   Enterprise                                                            
Technology  Services, Department  of Administration  responded  that                                                            
the Department's  role in  the 911 program  is two-fold in  that the                                                            
Department  of Administration  and  the Department  of Military  and                                                            
Veterans  Affairs jointly  house the coordinator  for the  Statewide                                                            
911 program. The Department's role with regards to the 911-                                                                     
coordinator "is  to ensure compliance with the law,  or the statutes                                                            
that are established,  for 911". This  would include such  things as                                                            
the collection  of the surcharge and  the compliance with  the terms                                                            
within   the  legislation.   The  Department   of  Public   Safety's                                                            
commissioner,  William  Tandeske,  "has  voiced  concern  about  the                                                            
affects of the collection  of 911 surcharges; specific … to the Mat-                                                            
Su Borough  and how  that affects  the PSAP  and …  the role of  the                                                            
Alaska State  Troopers in  that". The question  is "who is  actually                                                            
getting the funds verses  who is having to provide the services". He                                                            
stated that  a Department  representative  would work with  Co-Chair                                                            
Green's staff to address language revisions.                                                                                    
Senator  Hoffman commented  that 911  programs must  be operated  24                                                            
hours  a day, seven  days  a week, year-round.  To  that point,  the                                                            
question is how  the Alaska State Trooper 911 program  is manned and                                                            
funded, specifically as  it applies to responding to Rural calls for                                                            
assistance  from anywhere in the State.  A response from  the Alaska                                                            
State Troopers would be appreciated.                                                                                            
Co-Chair Green responded  that the Troopers would be contacted for a                                                            
Co-Chair Wilken  asked to withdraw the motion to adopt  Version "S".                                                            
There being  no objection,  the motion to  adopt Version "S"  as the                                                            
working document was WITHDRAWN.                                                                                                 
Co-Chair  Green  ordered the  bill  HELD in  Committee  in order  to                                                            
further modify its language.                                                                                                    
9:56:29 AM                                                                                                                    

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