Legislature(2005 - 2006)SENATE FINANCE 532

04/19/2005 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 142 REGIONAL SCHOOL BD LAND/BLDG OWNERSHIP TELECONFERENCED
Moved CSSB 142(L&C) Out of Committee
+ SB 160 STATE PROCUREMENT ELECTRONIC TOOLS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB 131 WAGE & HOUR ACT: EXEC/PROF/ADMIN/SALES TELECONFERENCED
Scheduled But Not Heard
+= SB 70 CRIMES INVOLVING CONTROLLED SUBSTANCES TELECONFERENCED
Heard & Held
+= SB 100 ENHANCED 911 SURCHARGES TELECONFERENCED
Moved CSSB 100(FIN) Out of Committee
+= SB 112 TAX ON REAA RESIDENTS TELECONFERENCED
Heard & Held
                                                                                                                                
     CS FOR SENATE BILL NO. 100(L&C)                                                                                            
     "An Act relating to enhanced 911 surcharges imposed by a                                                                   
     municipality."                                                                                                             
                                                                                                                                
                                                                                                                                
This  was the third  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
11:28:27 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green noted that  her staff had  assisted Senator  Bunde's                                                            
staff in the development of this bill.                                                                                          
                                                                                                                                
Senator Bunde,  the bill's sponsor, moved for the  adoption of CS SB
100 (FIN), Version 24-LS0407\R as the working document.                                                                         
                                                                                                                                
Co-Chair Green objected for explanation.                                                                                        
                                                                                                                                
KIM CARNOT,  Staff to Senator  Green, noted  that a memorandum  from                                                            
Co-Chair  Green's office, dated  April 18,  2005 [copy on file]  had                                                            
been distributed.  It detailed the  changes included in the  Version                                                            
"R" committee substitute as follows.                                                                                            
                                                                                                                                
     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 is amended                                                                        
        Page 2                                                                                                                  
        · Line 11 -- $1.50 surcharge for wireline and wireless                                                                  
        · Line 13 - 15 --L&C version language allowing for vote to                                                              
                go about cap remains in the bill.                                                                               
        · Line 15 - 17 -- requires parity between wireless                                                                      
                telephone and wireline telephone surcharge                                                                      
        · Line 24 - 26 -- requires notification by the municipality                                                             
                when the surcharge is assessed and when it is                                                                   
                changed.                                                                                                        
                                                                                                                                
     Section 3. AS 29.35.131 is amended by adding two new sections                                                              
        · (i) Page 2 Line 30 - Page 3 Line 26 defines appropriate                                                               
                use of the enhanced 911 surcharge                                                                               
        · (j) Page 3 Line 27 - Page 4 Line 3 requires enhanced 911                                                              
                providers to execute an agreement addressing the                                                                
          duties  and responsibilities of each and  establishing the                                                            
                priorities for the use of the E-911 surcharge                                                                   
          revenue.                                                                                                              
                                                                                                                                
     Section 4. Amends AS 29.35 to allow municipalities to require                                                              
     implementation of E-911 from a multi-line telecommunications                                                               
     system.                                                                                                                    
                                                                                                                                
     Section 5. AS 29.35 is amended to apply to home rule and                                                                   
     general law municipalities.                                                                                                
                                                                                                                                
     Section 6. AS 29.35.131(h) is repealed (home rule                                                                          
     applicability).                                                                                                            
                                                                                                                                
Ms. Carnot  noted that Sections  1, 5, and  6 would make  structural                                                            
changes in order "to make  the bill generally applicable to any form                                                            
of government; any form of community in the State".                                                                             
                                                                                                                                
Ms. Carnot stated that  the majority of the changes made are in Sec.                                                            
2 of the bill.  While a $1.50 limitation would be  imposed, language                                                            
in Sec. 2 would  allow the decision to increase the  surcharge above                                                            
that  amount  to  be  made  locally.  In  addition,  parity  in  the                                                            
surcharge amount  must occur in regards to wireless  and wired phone                                                            
service.  There would  also  be a  requirement that  a municipality                                                             
rather than  the telephone  company must  notify phone customers  at                                                            
the time a surcharge was imposed or changed.                                                                                    
                                                                                                                                
Ms. Carnot  continued that Sec. 3  would define the appropriate  use                                                            
of  the E-911  surcharge  funds  so  that  the funds  would  not  be                                                            
"mismanaged   or   misused".   Both  federal   and   other   states'                                                            
requirements  were considered  in the development  of this  section.                                                            
Sec.  3(j)  would require  an  agreement  to  be entered  into  when                                                            
another provider  in lieu  of the local  municipality, provides  the                                                            
service.  Such an agreement  would  clarify how  the funds would  be                                                            
utilized and would allow  for regional planning efforts between, for                                                            
example,  a borough  and its  municipalities.  The agreement  should                                                            
also include the  Alaska State Troopers were their  service provided                                                            
in  the area.  The  purpose  of  subsection  (j)  would be  to  help                                                            
communities  coordinate  planning  on  how  to  utilize  "the  money                                                            
wisely" and accommodate system growth.                                                                                          
                                                                                                                                
Ms.   Carnot  stated   that   Sec.   4  would   require   multi-line                                                            
telecommunication  systems,  often  referred  to as  Private  Branch                                                            
Exchange  (PBX)  systems,  to  implement  technology  through  which                                                            
emergency  responders  would  be notified  of  the location  of  the                                                            
caller. However,  concern was voiced regarding this  requirement and                                                            
in response,  rather than  specifying a timeline  in State  Statute,                                                            
the  language  was  included  that would  allow  a  municipality  to                                                            
develop an ordinance and regulate the timeline.                                                                                 
                                                                                                                                
11:32:15 AM                                                                                                                   
                                                                                                                                
Senator Bunde  conveyed that the federal  Enhanced-911 requirements                                                             
"are costing our communities  a lot of money". Absent the ability to                                                            
raise  the E-911  surcharge  amount,  as would  be provided  by  the                                                            
legislation,  communities   would  be  required  to  increase  local                                                            
property taxes and other  sources. It is also important to take into                                                            
consideration  the increasing  use by  wireless phones  of the  911-                                                            
service and require  them to make "a larger contribution".  It is "a                                                            
fairness  issue". This  would  be likened  to asking  those who  use                                                            
something to pay for it.                                                                                                        
                                                                                                                                
Co-Chair  Wilken noted  that  the City  of Fairbanks  had written  a                                                            
letter dated  April 7, 2005 [copy  not provided] regarding  PBXs and                                                            
the fact that  this Legislation might  incur significant  expense to                                                            
some businesses, such as  hotels, that currently own PBX systems, as                                                            
some older  versions are  not up-gradable.  To that point,  he asked                                                            
whether his understanding of the situation was correct.                                                                         
                                                                                                                                
Ms. Carnot responded that  language in Sec. 4, page four, lines five                                                            
and six of  Version "R" would provide  a municipality the  option of                                                            
whether or  not to require  the implementation  of such technology.                                                             
The requirement  would  be a  local decision  that  would allow  for                                                            
public comment and consideration.                                                                                               
                                                                                                                                
Co-Chair  Green noted  that  others had  also raised  this  concern.                                                            
Efforts to accommodate it were made.                                                                                            
                                                                                                                                
Co-Chair Wilken noted that  a technical correction might be required                                                            
as  the word  "with"  appears  to  be missing  between  "guide"  and                                                            
"valid" in language in Sec. 4, page four, line nine.                                                                            
                                                                                                                                
Co-Chair  Green suggested  that rather  than the  word "with"  being                                                            
inserted, a comma might suffice.                                                                                                
                                                                                                                                
Co-Chair  Green stated  that  the bill's  drafter  would review  the                                                            
language.                                                                                                                       
                                                                                                                                
11:36:00 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken noted  that  a copy of  the Version  "R"  committee                                                            
substitute  had recently been provided  to the Mayor of the  City of                                                            
Fairbanks,  and a  response is  expected. Continuing,  he  expressed                                                            
that  the  City  "is very,  very  concerned  about  the  $1.50  cap"                                                            
limitation.  According to the City's  calculations, a level  ranging                                                            
between $2.50  to $3.50 would be required.  Therefore, he  requested                                                            
that consideration  be given to allowing the local  governing bodies                                                            
to  determine  the level  that  would  be needed  to  support  their                                                            
service.                                                                                                                        
                                                                                                                                
Co-Chair Wilken  asked whether "the  issue about who controls  what"                                                            
in regards to cities within boroughs had been rectified.                                                                        
                                                                                                                                
Co-Chair Green  affirmed that that issue had been  addressed in Sec.                                                            
3(j) on page  three, beginning on  line 27. That language  specifies                                                            
that an "agreement  must be reached between overlapping  geography."                                                            
                                                                                                                                
11:37:12 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken  asked  for  further  clarification   about  how  a                                                            
community vote  on an E-911 issue  would transpire in the  case of a                                                            
city within  a borough, in which the  city operates the 911-system.                                                             
                                                                                                                                
11:37:28 AM                                                                                                                   
                                                                                                                                
Ms. Carnot responded that  this is a two-part issue. Sec. 3(j) would                                                            
establish the agreement  between the primary Public Safety Answering                                                            
Point  (PSAP)  and  the  secondary  PSAP.  She  explained  that  the                                                            
surcharge  funds  collected  by  the  local  telephone  company  are                                                            
transferred  to the  designated  primary  responder.  In the  Mat-Su                                                            
area, for example,  which emergency  responder would respond  to the                                                            
call  would be  determined by  the type  and location  of the  call.                                                            
Either the Alaska State  Troopers or the municipality could respond.                                                            
Therefore,  the language in  Sec. 3(j) would  develop the  mechanism                                                            
through which  those communities could work to form  an agreement in                                                            
regards to how services  would be provided in addition to how the E-                                                            
911 surcharge would be utilized.                                                                                                
                                                                                                                                
Ms. Carnot stated that  the people being served in the E-911 service                                                            
area  would  vote on  the  surcharge  level issue.  She  was  unsure                                                            
regarding  which entity would  be responsible  for coordinating  the                                                            
election.                                                                                                                       
                                                                                                                                
11:39:09 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  asked  whether   the  City  of  Fairbanks  was  the                                                            
Fairbanks North Star Borough's primary PSAP.                                                                                    
                                                                                                                                
Co-Chair  Wilken  understood   that  the  City  provides  the  E-911                                                            
service,  as the  Fairbanks  North Star  Borough  is a second-class                                                             
borough  and  as   such  "does  not  have  public  safety   powers".                                                            
Therefore,  the  City  "shoulders"   the  expense  of  the  service,                                                            
borough-wide. Financial  assistance would be welcome as the City has                                                            
a three million dollar deficit in that regard.                                                                                  
                                                                                                                                
Co-Chair Wilken  noted however, that while further  clarification of                                                            
the voting process would  be sought, he would not object to the bill                                                            
moving forward.                                                                                                                 
                                                                                                                                
11:40:07 AM                                                                                                                   
                                                                                                                                
Co-Chair Green  asked whether the language in Sec.  3(j) would apply                                                            
to the Fairbanks  area, as she doubted  that any of the area's  911-                                                            
funds were  directed to  any budget  other than  that of the  City's                                                            
primary PSAP service budget.                                                                                                    
                                                                                                                                
Co-Chair Wilken  understood that the  City supported the  Fairbanks'                                                            
E-911  service  in  its entirety.  He  worried  that  voters  living                                                            
outside  of the City  but within  the Borough  might decide  not "to                                                            
support moving  that responsibility from the City  to Borough-wide".                                                            
Uncertainty  in regards  to how this  might pan  out was the  reason                                                            
that he had sought further advice from the Mayor of Fairbanks.                                                                  
                                                                                                                                
Co-Chair  Green  understood  that "the  entire  universe  of who  is                                                            
served  by the  system"  would pay.  In  other words,  anyone  whose                                                            
emergency calls transit through that system should support it.                                                                  
                                                                                                                                
Ms. Carnot  stated that  both Co-Chair Wilken  and Co-Chair  Green's                                                            
"understanding of the situation are correct".                                                                                   
                                                                                                                                
11:42:29 AM                                                                                                                   
                                                                                                                                
Ms. Carnot  counseled that while "a  sales pitch" would be  required                                                            
to garner borough  wide support of  the bill and increasing  the 911                                                            
surcharge, "selling the  issue of bringing emergency 911 services to                                                            
people in your  borough is a lot easier than what  local communities                                                            
often have to sell in terms of increasing fees or taxes".                                                                       
                                                                                                                                
Co-Chair Wilken  agreed, but noted  that his concern centers  on the                                                            
fact that, as his second-class  borough does not have safety powers,                                                            
it would  be unable "to tax  for those powers  in order to  transfer                                                            
monies  from the  borough  to the  provider,  which is  the City  of                                                            
Fairbanks".                                                                                                                     
                                                                                                                                
Ms. Carnot  conveyed  the understanding  that  this situation  would                                                            
fall  under  "what is  defined  as  the Enhanced  911  System".  She                                                            
referred the  Committee to Sec. 2(a),  page one line seven,  as this                                                            
language would  specify that "A municipality  may, by resolution  or                                                            
ordinance,  elect  to  provide  an  enhanced  911  system  …".  This                                                            
language might  address Co-Chair Wilken concern, as,  by definition,                                                            
the enhanced-911  system would  include the  entire service  area of                                                            
the borough beyond the borders of the municipality.                                                                             
                                                                                                                                
Co-Chair  Wilken  understood  therefore   that  "Fairbanks  may,  by                                                            
resolution  or  ordinance,  elect to  provide  enhanced  911 to  the                                                            
entire borough".                                                                                                                
                                                                                                                                
Co-Chair  Green  clarified  that in  order  for  the service  to  be                                                            
provided, an agreement  between the borough and the city must exist.                                                            
The terms  of the agreement  between the City  of Fairbanks  and the                                                            
North Star  Borough could include  such things as who would  conduct                                                            
the election.                                                                                                                   
                                                                                                                                
Ms. Carnot  noted that  current language  in the Statute  definition                                                            
section, AS 29.35.137,  specifies that an enhanced  911-service area                                                            
"means the area  within a municipality's jurisdiction  that has been                                                            
designated  to receive enhanced 911  services". This language  would                                                            
allow whatever  provisions are agreed upon by the  City of Fairbanks                                                            
and the North Stat Borough to apply.                                                                                            
                                                                                                                                
Co-Chair  Wilken continued  to voice concern  regarding whether  the                                                            
powers of the  Legislature or the  powers of the City could  "bleed"                                                            
over to each  other in regards to  authority or the disbursement  of                                                            
funds from  the citizens of  the Borough to  the City. It should  be                                                            
clarified  as to  whether the  City could  collect  fees from  users                                                            
outside of  the City, and,  could the Borough  funnel money  back to                                                            
the City. The concern continues  about whether people in the Borough                                                            
would support  a proposal  to begin paying  for 911 services,  since                                                            
that is not currently  the case. He would await input  from the City                                                            
in this regard.                                                                                                                 
                                                                                                                                
Co-Chair  Green asked for  confirmation that  there is currently  no                                                            
collection of 911 fees outside of the City of Fairbanks.                                                                        
                                                                                                                                
Co-Chair Wilken affirmed that to be correct.                                                                                    
                                                                                                                                
Senator  Bunde asked  whether  language in  Sec.  3(i), page  three,                                                            
lines one  through four,  would prohibit  municipalities from  using                                                            
the surcharge  revenue to lease or  purchase new facilities  for its                                                            
911 call centers;  the funds could  only be utilized "to  rejuvenate                                                            
or remodel existing structures".                                                                                                
                                                                                                                                
Co-Chair Green  opined that the language  would not allow  the funds                                                            
to be used  to construct  new facilities  as the language  specifies                                                            
that,  "The surcharge  revenue  may  not  be used  for constructing                                                             
buildings, leasing  buildings, maintaining buildings,  or renovating                                                            
buildings,  except for the modification  of an existing building  to                                                            
the  extent  that   is  necessary  to  maintain  the   security  and                                                            
environmental  integrity of  the public safety  answering point  and                                                            
equipment rooms".                                                                                                               
                                                                                                                                
Senator Bunde  commented that this  clarification should  be on "the                                                            
record" as  some might otherwise interpret  enhanced 911  service to                                                            
allow such expansion.                                                                                                           
                                                                                                                                
Ms. Carnot noted that the  funds could be used to modify an existing                                                            
building.                                                                                                                       
                                                                                                                                
Senator Bunde acknowledged  that modifications would be permissible.                                                            
                                                                                                                                
Co-Chair Wilken  conveyed to the Committee  that a recent  Fairbanks                                                            
Daily  News  Miner  newspaper  editorial  [copy  not  provided]  had                                                            
assisted  in clarifying the  question, as it  attests that  were the                                                            
bill to become law, "local  governments" such as the Fairbanks North                                                            
Star Borough  Assembly  "would be  allowed, after  holding a  public                                                            
hearing,  to raise the E-911  surcharge to  a maximum of $2.00,  now                                                            
$1.50 per wireline  and cell phones.  In the Fairbanks Borough,  the                                                            
extra money raised,  about a million [dollars] would  largely go the                                                            
City of Fairbanks  since it is the primary E911 provider.  The City,                                                            
in turn, would  be able to reduce  its property tax rate  cause it's                                                            
no longer subsidizing…."  He stated that the editorial addressed his                                                            
concern as  it conveys "that money  could be taken from the  Borough                                                            
and move it to the City".                                                                                                       
                                                                                                                                
Co-Chair Green removed  her objection to the adoption of the Version                                                            
"R" committee substitute.                                                                                                       
                                                                                                                                
There  being  no  further  objection,  the  Version   "R"  committee                                                            
substitute was ADOPTED as the working document.                                                                                 
                                                                                                                                
Conceptual  Amendment #1:  This amendment  inserts a new  subsection                                                            
into Section 3 of the bill as follows.                                                                                          
                                                                                                                                
     "call taker" means  a person employed in a primary or secondary                                                            
     answering  point whose duties include the initial  answering of                                                            
     911or  enhanced 911 calls and  routing the calls to  the agency                                                            
     or  dispatch center  responsible  for  dispatching appropriate                                                             
     emergency  services  and a  person in  a primary  or  secondary                                                            
     answering  point  whose  duties  include  receiving  a  911  or                                                            
     enhanced  911  call  either directly  or  routed  from  another                                                            
     answering point and  dispatching appropriate emergency services                                                            
     in response  to the call. The  term "call taker" is  synonymous                                                            
     with  the term  "dispatcher"  in that  it is  inclusive of  the                                                            
     functions  of both answering the 911 or enhanced  911 calls and                                                            
      dispatching emergency services in response to the call.                                                                   
                                                                                                                                
Co-Chair Green  moved for the adoption of Amendment  #1 and objected                                                            
for clarification.                                                                                                              
                                                                                                                                
Ms. Carnot  explained that,  during discussion  on the bill,  it was                                                            
determined  that the term  "call taker" should  be defined  in State                                                            
Statutes as its inclusion  would allow for continued funding of that                                                            
position with  the 911 surcharge funds.  The term currently  appears                                                            
in Sec. 3(i)(3) and Sec.  3(i) (4) of Version "R", page three, lines                                                            
18 and 21. She read the  definition of call taker as depicted in the                                                            
amendment.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  noted,  for  the  record,  that,  the information                                                             
provided on an  Alaska Municipal League (AML) handout  titled "E-911                                                            
Dispatch Center  Costs and Revenues  Selected Alaska Cities",  which                                                            
depicts  current call centers'  operating  costs, the current  E-911                                                            
revenues  received,   and  the  current  revenue  shortfalls   being                                                            
experienced  in Anchorage,  Fairbanks,  Kenai,  Juneau, and  Kodiak,                                                            
depicts  that  Anchorage  and  Fairbanks,  for  instance,  are  each                                                            
currently   experiencing   an  approximate   four   million   dollar                                                            
shortfall;  Kenai  is  experiencing   an approximate   $1.8  million                                                            
shortfall; Juneau has an  approximate $900,000 shortfall; and Kodiak                                                            
has an  approximate  $550,000 shortfall.  When  the $1.50  surcharge                                                            
rate being proposed  is applied to the number of telephone  lines in                                                            
each   community,   Anchorage   would  experience   a   surplus   of                                                            
approximately  $2.4  million  dollars.  However,   Fairbanks'  would                                                            
continue  to have  a deficit of  approximately  $2.4 million;  Kenai                                                            
would  have a  deficit of  approximately  one million  dollars;  and                                                            
Juneau would have an approximate  $100,000 deficit, and Kodiak would                                                            
have  an approximate  $350,000.  These  figures  would  explain  the                                                            
reason  there  had  previously   been  a  cut-off  at  the  100,000-                                                            
population level.                                                                                                               
                                                                                                                                
Co-Chair Wilken stated  that this should be a consideration, as this                                                            
legislation  would  not  assist "my  town  at  all; and  that's  why                                                            
they're so  upset about" it.  In addition to  the fact that  a $1.50                                                            
surcharge would  be insufficient,  the community of Fairbanks  would                                                            
also  incur the  expense  of an  election.  He empathized  with  the                                                            
community's "distress" regarding the bill.                                                                                      
                                                                                                                                
11:53:46 AM                                                                                                                   
                                                                                                                                
Co-Chair  Wilken remarked  that the forthcoming  October 2005  local                                                            
election   in   Fairbanks   would   already   include   "contested,                                                             
acrimonious,  and expensive"  mayoral  and city  council  elections.                                                            
Furthermore,  since local governments  are prohibited from  spending                                                            
money to further ballot  issues, the charge of garnering support for                                                            
the  E-911  surcharge  ballot  issue would  fall  on  local  citizen                                                            
volunteers.  While  the 911  emergency system  is  available to  any                                                            
caller, only a  small percentage have used it and  know the value of                                                            
it; therefore,  convincing  people to  approve such  a surcharge  on                                                            
each phone line could be  a difficult task. To that point, he voiced                                                            
the preference  that  rather than  a community  vote occurring,  any                                                            
decision regarding  the local 911  service, including the  surcharge                                                            
level, should  be a determination made by the local  assembly. While                                                            
he appreciated  the  intent  of the  legislation,  he voiced  having                                                            
"grave reservations about it".                                                                                                  
                                                                                                                                
11:55:54 AM                                                                                                                   
                                                                                                                                
Co-Chair  Green  reiterated   that  Amendment  #1  is  a  conceptual                                                            
amendment.  The bill drafter would  review both the language  in the                                                            
amendment and  the language identified  earlier by Co-Chair  Wilken.                                                            
                                                                                                                                
[NOTE: While  Co-Chair Green did not  formally remove her  objection                                                            
to Conceptual Amendment #1, its removal was implied.]                                                                           
                                                                                                                                
Amendment #1 was ADOPTED without further objection.                                                                             
                                                                                                                                
Senator Bunde  moved to report the bill, as amended,  from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There  being  no  objection,  CS  SB  100(FIN)   was  REPORTED  from                                                            
Committee  with previous  fiscal note  #1, dated  February 15,  2005                                                            
from the Department  of Public Safety  and previous fiscal  note #2,                                                            
dated February  15, 2005 from the Department of Commerce,  Community                                                            
and Economic Development.                                                                                                       
                                                                                                                                
AT EASE 11:56:59 AM / 11:57:58 AM                                                                                           
                                                                                                                                

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