05/17/2003 09:15 AM House JUD
| Audio | Topic |
|---|
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE JUDICIARY STANDING COMMITTEE
May 17, 2003
9:15 a.m.
MEMBERS PRESENT
Representative Lesil McGuire, Chair
Representative Tom Anderson, Vice Chair
Representative Jim Holm
Representative Dan Ogg
Representative Ralph Samuels
Representative Les Gara
Representative Max Gruenberg
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 160(HES)
"An Act relating to civil liability for use or attempted use of
an automated external defibrillator; and providing for an
effective date."
- MOVED CSSB 160(HES) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 168(FIN) am
"An Act relating to issuance and revocation of licenses for the
importation, sale, distribution, or manufacture of cigarettes
and tobacco products; relating to a tax refund or credit for
unsaleable, returned, or destroyed tobacco products; relating to
restrictions on and penalties for shipping or transporting
cigarettes; relating to records concerning the sale of
cigarettes; amending and adding definitions relating to
cigarette taxes; relating to the payment of cigarette taxes;
relating to penalties applicable to cigarette taxes; relating to
the definition of the wholesale price of tobacco products;
relating to payment of cigarette taxes through the use of
cigarette tax stamps; relating to provisions making certain
cigarettes contraband and subject to seizure and forfeiture;
relating to certain crimes, penalties, and interest concerning
tobacco taxes and stamps; relating to cigarette sales; and
providing for an effective date."
- MOVED CSSB 168(FIN)AM OUT OF COMMITTEE
SENATE BILL NO. 53
"An Act relating to disposition of a traffic offense involving
the death of a person; providing for the revocation of driving
privileges by a court for a driver convicted of a violation of
traffic laws in connection with a fatal motor vehicle or
commercial motor vehicle accident; amending Rules 43 and 43.1,
Alaska Rules of Administration; and providing for an effective
date."
- MOVED SB 53 OUT OF COMMITTEE
HOUSE BILL NO. 111
"An Act extending the termination date of the Regulatory
Commission of Alaska; and providing for an effective date."
- MOVED CSHB 111(JUD) OUT OF COMMITTEE
HOUSE BILL NO. 106
"An Act amending the definition of 'lobbyist' in the Regulation
of Lobbying Act, and as it applies in the act setting standards
of conduct for legislators and legislative employees, to define
'regular' and 'substantial' as those terms describe activities
for which a person receives consideration for the purpose of
influencing legislative or administrative action."
- MOVED CSHB 106(JUD) OUT OF COMMITTEE
[Note to the reader: CSHB 106(JUD) became HB 106 -
Telecommunications & RCA Actions.]
CS FOR SENATE BILL NO. 175(JUD)(efd fld)
"An Act relating to civil liability for inherent risks in sports
or recreational activities."
- SCHEDULED BUT NOT HEARD
CONFIRMATION HEARING
Regulatory Commission of Alaska
Kate Giard - Anchorage
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: SB 160
SHORT TITLE:CIVIL LIABILITY FOR DEFIBRILLATOR USE
SPONSOR(S): SENATOR(S) OLSON
Jrn-Date Jrn-Page Action
03/28/03 0610 (S) READ THE FIRST TIME -
REFERRALS
03/28/03 0611 (S) HES, JUD
04/11/03 (S) HES AT 1:30 PM BUTROVICH 205
04/11/03 (S) Moved CSSB 160(HES) Out of
Committee
04/11/03 (S) MINUTE(HES)
04/14/03 0834 (S) HES RPT CS 4DP SAME TITLE
04/14/03 0834 (S) DP: DYSON, GREEN, WILKEN,
DAVIS
04/14/03 0834 (S) FN1: ZERO(LAW)
04/14/03 0843 (S) COSPONSOR(S): WILKEN, DYSON,
DAVIS,
04/14/03 0843 (S) SEEKINS, BUNDE, COWDERY,
GREEN, WAGONER
04/30/03 (S) JUD AT 1:45 PM BELTZ 211
04/30/03 (S) Moved CSSB 160(HES) Out of
Committee
MINUTE(JUD)
05/01/03 1074 (S) JUD RPT CS(HES) 3DP
05/01/03 1074 (S) DP: SEEKINS, THERRIAULT,
FRENCH
05/01/03 1074 (S) FN1: ZERO(LAW)
05/02/03 1106 (S) RULES TO CALENDAR 5/2/2003
05/02/03 1106 (S) READ THE SECOND TIME
05/02/03 1106 (S) HES CS ADOPTED UNAN CONSENT
05/02/03 1106 (S) ADVANCED TO THIRD READING
UNAN CONSENT
05/02/03 1106 (S) READ THE THIRD TIME CSSB
160(HES)
05/02/03 1107 (S) COSPONSOR(S): OGAN
05/02/03 1107 (S) PASSED Y17 N2 E1
05/02/03 1107 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/02/03 1114 (S) TRANSMITTED TO (H)
05/02/03 1114 (S) VERSION: CSSB 160(HES)
05/05/03 1306 (H) READ THE FIRST TIME -
REFERRALS
05/05/03 1306 (H) JUD
05/12/03 (H) JUD AT 1:00 PM CAPITOL 120
05/12/03 (H) <Bill Hearing Postponed to
Tues. 5/13/03
05/13/03 (H) JUD AT 3:30 PM CAPITOL 120
05/13/03 (H) -- Meeting Canceled --
05/14/03 (H) JUD AT 1:00 PM CAPITOL 120
05/14/03 (H) Scheduled But Not Heard
05/15/03 (H) JUD AT 8:30 AM CAPITOL 120
05/15/03 (H) -- Meeting Canceled --
05/15/03 (H) JUD AT 1:00 PM CAPITOL 120
05/15/03 (H) -- Meeting Postponed --
05/17/03 (H) JUD AT 9:00 AM CAPITOL 120
BILL: SB 168
SHORT TITLE:CIGARETTE SALE/DISTRIBUTION
SPONSOR(S): LABOR & COMMERCE
Jrn-Date Jrn-Page Action
04/04/03 0691 (S) READ THE FIRST TIME -
REFERRALS
04/04/03 0692 (S) L&C, FIN
04/15/03 (S) L&C AT 1:30 PM BELTZ 211
04/15/03 (S) Heard & Held
04/15/03 (S) MINUTE(L&C)
04/24/03 (S) L&C AT 1:30 PM BELTZ 211
04/24/03 (S) Moved CSSB 168(L&C) Out of
Committee
04/24/03 (S) MINUTE(L&C)
04/28/03 0993 (S) L&C RPT CS 2DP 3NR NEW TITLE
04/28/03 0994 (S) DP: BUNDE, SEEKINS;
04/28/03 0994 (S) NR: DAVIS, FRENCH, STEVENS G
04/28/03 0994 (S) FN1: (REV)
04/28/03 0994 (S) FN2: ZERO(LAW)
05/05/03 1154 (S) FIN RPT CS FORTHCOMING 4DP
1NR
05/05/03 1155 (S) DP: WILKEN, TAYLOR, BUNDE,
STEVENS B;
05/05/03 1155 (S) NR: OLSON
05/05/03 1155 (S) FN1: (REV)
05/05/03 1155 (S) FN2: ZERO(LAW)
05/05/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
05/05/03 (S) Moved Out of Committee
MINUTE(FIN)
05/06/03 1179 (S) FIN CS RECEIVED NEW TITLE
05/08/03 1250 (S) RULES TO CALENDAR 5/8/2003
05/08/03 1250 (S) READ THE SECOND TIME
05/08/03 1250 (S) FIN CS ADOPTED UNAN CONSENT
05/08/03 1251 (S) AM NO 1 OFFERED
05/08/03 1252 (S) AM TO AM 1 FAILED Y6 N14
05/08/03 1253 (S) AM NO 1 ADOPTED Y17 N3
05/08/03 1253 (S) ADVANCED TO THIRD READING 5/9
CALENDAR
05/09/03 1282 (S) READ THE THIRD TIME CSSB
168(FIN) AM
05/09/03 1283 (S) PASSED Y18 N2
05/09/03 1283 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/09/03 1283 (S) OLSON NOTICE OF
RECONSIDERATION
05/10/03 1309 (S) RECON TAKEN UP - IN THIRD
READING
05/10/03 1310 (S) PASSED ON RECONSIDERATION Y19
N- E1
05/10/03 1310 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/10/03 1311 (S) TRANSMITTED TO (H)
05/10/03 1311 (S) VERSION: CSSB 168(FIN) AM
05/12/03 1553 (H) READ THE FIRST TIME -
REFERRALS
05/12/03 1553 (H) JUD, FIN
05/15/03 (H) JUD AT 1:00 PM CAPITOL 120
05/15/03 (H) -- Meeting Postponed --
05/17/03 (H) JUD AT 9:00 AM CAPITOL 120
BILL: SB 53
SHORT TITLE:REVOKE DRIVER'S LIC. FOR FATAL ACCIDENT
SPONSOR(S): SENATOR(S) OGAN
Jrn-Date Jrn-Page Action
01/31/03 0090 (S) READ THE FIRST TIME -
REFERRALS
01/31/03 0090 (S) TRA, JUD
02/18/03 (S) TRA AT 1:30 PM BUTROVICH 205
02/18/03 (S) Moved Out of Committee --
02/18/03 (S) MINUTE(TRA)
02/19/03 0220 (S) TRA RPT 2DP 3NR
02/19/03 0220 (S) DP: COWDERY, LINCOLN;
02/19/03 0220 (S) NR: WAGONER, THERRIAULT,
OLSON
02/19/03 0220 (S) FN1: (ADM)
02/19/03 0220 (S) FN2: INDETERMINATE(ADM)
02/19/03 0220 (S) FN3: ZERO(LAW)
02/19/03 0220 (S) FIN REFERRAL ADDED AFTER JUD
02/19/03 0228 (S) COSPONSOR(S): DYSON
04/02/03 (S) JUD AT 1:30 PM BELTZ 211
04/02/03 (S) Scheduled But Not Heard
04/02/03 (S) MINUTE(JUD)
04/07/03 (S) JUD AT 1:30 PM BELTZ 211
04/07/03 (S) Heard & Held
04/07/03 (S) MINUTE(JUD)
04/09/03 (S) JUD AT 1:30 PM BELTZ 211
04/09/03 (S) Moved Out of Committee
04/09/03 (S) MINUTE(JUD)
04/10/03 0778 (S) JUD RPT 4DP 1NR
04/10/03 0778 (S) DP: SEEKINS, OGAN, FRENCH,
ELLIS;
04/10/03 0778 (S) NR: THERRIAULT
04/10/03 0778 (S) FN1: (ADM)
04/10/03 0778 (S) FN2: INDETERMINATE(ADM)
04/10/03 0778 (S) FN3: ZERO(LAW)
04/25/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
04/25/03 (S) Moved Out of Committee
04/25/03 (S) MINUTE(FIN)
04/25/03 0965 (S) FIN RPT 2DP 5NR
04/25/03 0965 (S) DP: GREEN, WILKEN; NR:
TAYLOR, HOFFMAN,
04/25/03 0965 (S) OLSON, BUNDE, STEVENS B
04/25/03 0965 (S) FN1: (ADM)
04/25/03 0965 (S) FN2: INDETERMINATE(ADM)
04/25/03 0965 (S) FN3: ZERO(LAW)
04/30/03 1049 (S) RULES TO CALENDAR 4/30/2003
04/30/03 1049 (S) READ THE SECOND TIME
04/30/03 1049 (S) ADVANCED TO THIRD READING
UNAN CONSENT
04/30/03 1049 (S) READ THE THIRD TIME SB 53
04/30/03 1049 (S) PASSED Y19 N- E1
04/30/03 1050 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
04/30/03 1050 (S) COURT RULE(S) SAME AS PASSAGE
04/30/03 1059 (S) TRANSMITTED TO (H)
04/30/03 1059 (S) VERSION: SB 53
05/01/03 1228 (H) READ THE FIRST TIME -
REFERRALS
05/01/03 1228 (H) TRA, JUD
05/06/03 (H) TRA AT 1:30 PM CAPITOL 17
05/06/03 (H) Moved Out of Committee
05/06/03 (H) MINUTE(TRA)
05/07/03 1390 (H) TRA RPT 5DP
05/07/03 1390 (H) DP: OGG, KOOKESH, KOHRING,
FATE, HOLM
05/07/03 1390 (H) FN1: (ADM)
05/07/03 1390 (H) FN2: INDETERMINATE(ADM)
05/07/03 1390 (H) FN3: ZERO(LAW)
05/13/03 (H) JUD AT 3:30 PM CAPITOL 120
05/13/03 (H) -- Meeting Canceled --
05/14/03 (H) JUD AT 1:00 PM CAPITOL 120
05/14/03 (H) Scheduled But Not Heard
05/15/03 (H) JUD AT 8:30 AM CAPITOL 120
05/15/03 (H) -- Meeting Canceled --
05/15/03 (H) JUD AT 1:00 PM CAPITOL 120
05/15/03 (H) -- Meeting Postponed --
05/17/03 (H) JUD AT 9:00 AM CAPITOL 120
BILL: HB 111
SHORT TITLE:EXTEND REGULATORY COMMISSION OF ALASKA
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
02/19/03 0250 (H) READ THE FIRST TIME -
REFERRALS
02/19/03 0250 (H) L&C, FIN
02/19/03 0250 (H) FN1: (CED)
02/19/03 0250 (H) GOVERNOR'S TRANSMITTAL LETTER
03/10/03 (H) L&C AT 3:15 PM CAPITOL 17
03/10/03 (H) Heard & Held
03/10/03 (H) MINUTE(L&C)
03/17/03 (H) L&C AT 3:15 PM CAPITOL 17
03/17/03 (H) <Bill Hearing Postponed to
3/19>
03/19/03 (H) L&C AT 3:15 PM CAPITOL 17
03/19/03 (H) Heard & Held <Subcommitte
Assigned>
03/19/03 (H) MINUTE(L&C)
03/27/03 (H) L&C AT 1:00 PM CAPITOL 120
<Subcommittee Meeting>
03/27/03 (H) MINUTE(L&C)
04/10/03 (H) L&C AT 2:00 PM CAPITOL 120
04/10/03 (H) <Subcmte Meeting Canceled>
04/15/03 (H) L&C AT 1:00 PM CAPITOL 120
<Subcommittee Meeting>
04/15/03 (H) MINUTE(L&C)
04/23/03 (H) L&C AT 3:15 PM CAPITOL 17
04/23/03 (H) Heard & Held
MINUTE(L&C)
04/25/03 (H) L&C AT 3:15 PM CAPITOL 17
04/25/03 (H) Moved CSHB 111(L&C) Out of
Committee
MINUTE(L&C)
04/28/03 1150 (H) L&C RPT CS(L&C) NT 1DP 1DNP
4NR 1AM
04/28/03 1150 (H) DP: ANDERSON; DNP: LYNN; NR:
CRAWFORD,
04/28/03 1150 (H) GATTO, DAHLSTROM, ROKEBERG;
04/28/03 1150 (H) AM: GUTTENBERG
04/28/03 1151 (H) FN1: (CED)
05/05/03 (H) FIN AT 1:30 PM HOUSE FINANCE
519
05/05/03 (H) <Bill Hearing Postponed>
05/12/03 (H) FIN AT 1:30 PM HOUSE FINANCE
519
05/12/03 (H) Moved Out of Committee
05/12/03 (H) MINUTE(FIN)
05/13/03 1588 (H) FIN RPT 4DP 5NR 1AM
05/13/03 1588 (H) DP: MEYER, WHITAKER, FOSTER,
WILLIAMS;
05/13/03 1588 (H) NR: HAWKER, KERTTULA,
BERKOWITZ,
05/13/03 1588 (H) MOSES, HARRIS; AM: STOLTZE
05/13/03 1588 (H) FN1: (CED)
05/14/03 1661 (H) JUD REFERRAL ADDED AFTER FIN
05/15/03 (H) JUD AT 1:00 PM CAPITOL 120
05/15/03 (H) -- Meeting Postponed --
05/16/03 (H) JUD AT 10:00 AM CAPITOL 120
05/16/03 (H) Heard & Held
MINUTE(JUD)
05/16/03 1745 (H) RULES TO CALENDAR PENDING
REPORT
05/16/03 1745 (H) IN JUDICIARY
05/17/03 (H) JUD AT 9:00 AM CAPITOL 120
BILL: HB 106
SHORT TITLE:DEFINITION OF LOBBYING
SPONSOR(S): JUDICIARY
Jrn-Date Jrn-Page Action
02/14/03 0216 (H) READ THE FIRST TIME -
REFERRALS
02/14/03 0216 (H) JUD
02/28/03 (H) JUD AT 1:00 PM CAPITOL 120
02/28/03 (H) Heard & Held
02/28/03 (H) MINUTE(JUD)
03/17/03 (H) JUD AT 1:00 PM CAPITOL 120
03/17/03 (H) Heard & Held
MINUTE(JUD)
05/17/03 (H) JUD AT 9:00 AM CAPITOL 120
WITNESS REGISTER
SENATOR DONNY OLSON
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 160.
MICHAEL LEVY, M.D., Medical Director
Emergency Medical Services
Anchorage Fire Department (AFD)
Municipality of Anchorage (MOA)
Anchorage, Alaska
POSITION STATEMENT: Provided comments and responded to a
question during discussion of SB 160.
JENNIFER APP, Alaska Advocacy Director
American Heart Association
Anchorage, Alaska
POSITION STATEMENT: Testified in support of SB 160; testified
in support of SB 168 on behalf of Alaskans for Tobacco-Free
Kids.
MATTHEW D. ANDERSON, Health Program Manager III
Injury Prevention Unit
Community Health & Emergency Medical Services
Department of Health & Social Services (DHSS)
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 160.
SENATOR SCOTT OGAN
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 160; testified
as the sponsor of SB 53.
SENATOR CON BUNDE
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented SB 168 as chair of the Senate
Labor and Commerce Standing Committee, sponsor.
JOHANNA BALES, Revenue Auditor
Audit Group I
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Provided comments and responded to
questions during discussion of SB 168.
MICHAEL J. ELERDING, President
Northern Sales Company of Alaska, Inc.
(Address not provided)
POSITION STATEMENT: Testified in support of SB 168.
LEONARD A. STEINBERG, General Counsel
Alaska Communications Systems, Inc. (ACS)
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 111, provided
comments and responded to questions; provided comments and
responded to questions during discussion of HB 106, Version S.
DANA TINDALL, Senior Vice President
Legal, Regulatory, and Governmental Affairs
General Communications Incorporated (GCI)
Anchorage, Alaska
POSITION STATEMENT: During discussion of HB 111, provided
comments and responded to questions.
DAVE HARBOUR, Commissioner
Regulatory Commission of Alaska (RCA)
Anchorage, Alaska
POSITION STATEMENT: Responded to questions during discussion of
HB 111 and suggested an amendment to Version N.
TINA M. PIDGEON, Vice President
Federal Regulatory Affairs
General Communications Incorporated (GCI)
Washington, D.C.
POSITION STATEMENT: Responded to questions during discussion of
proposed Conceptual Amendment 6 to Version N of HB 111; provided
comments and responded to questions during discussion of HB 106,
Version S.
ACTION NARRATIVE
TAPE 03-66, SIDE A
Number 0001
CHAIR LESIL McGUIRE called the House Judiciary Standing
Committee meeting to order at 9:15 a.m. Representatives
McGuire, Anderson, Holm, Ogg, Samuels, Gara, and Gruenberg were
present at the call to order.
SB 160 - CIVIL LIABILITY FOR DEFIBRILLATOR USE
Number 0087
CHAIR McGUIRE announced that the first order of business would
be CS FOR SENATE BILL NO. 160(HES), "An Act relating to civil
liability for use or attempted use of an automated external
defibrillator; and providing for an effective date."
Number 0095
SENATOR DONNY OLSON, Alaska State Legislature, sponsor, said
that SB 160 addresses civil liability for use of an automated
external defibrillator (AED). He offered that 250,000 people
die every year in the U.S. as a result of sudden cardiac arrest,
and that immediate defibrillation is the most important
treatment for over half of the people suffering from sudden
cardiac arrest. He remarked that AEDs have evolved
significantly over the past several years; thus the current
generation of AEDs is much safer and easier to use. Because
these new devices have the ability to discern between
"shockable" and "nonshockable" rhythms within the heart, it is
literally impossible to shock a person who does not require it,
he opined. Under SB 160, businesses and municipalities
interested in making AEDs more accessible would be able to do
so, free from civil liability. In conclusion, he encouraged
passage of the bill.
SENATOR OLSON, in response to a request, assured the committee
that modern AEDs are foolproof, that they cannot be activated
accidentally, and that he has not heard of any of them
malfunctioning.
REPRESENTATIVE HOLM said he was thrilled that Senator Olson has
brought this legislation forth, and noted that the Fairbanks
assembly had decided not to make AEDs available until the
liability issue was addressed.
REPRESENTATIVE GARA thanked Senator Olson. He relayed, however,
that he has a concern about waiving liability for medical
professionals using AEDs on the job. He said he would support
SB 160 as long as he is guaranteed that no one will be hurt by
an AED.
Number 0455
MICHAEL LEVY, M.D., Medical Director, Emergency Medical
Services, Anchorage Fire Department (AFD), Municipality of
Anchorage (MOA), said he has supported putting AEDs in virtually
all of Anchorage's police units, has supported an AED program at
the Ted Stevens Anchorage International Airport, and has been
approached to support putting an AED outside of the governor's
office. The bottom line, he remarked, is that modern AEDs are
as safe as a light switch, adding that there is absolutely no
reason to be concerned about the intrinsic safety of these
devices, which have an extensive body of literature on them. He
explained that AEDs are applied to people who show no signs of
life and who would otherwise not survive. He emphasized that
AEDs are very important; Aircraft now carry AEDs, and they are
widely distributed. Turning to Representative Gara's concern,
he said that a person cannot be injured by an AED, even if the
use of one was not warranted.
REPRESENTATIVE GRUENBERG asked whether current law requires AEDs
in public buildings.
SENATOR OLSON said no, and opined that without immunity from
civil liability, municipalities would be uncomfortable making
AEDs available in public buildings.
REPRESENTATIVE GRUENBERG asked Senator Olson whether he would be
willing to consider requiring AEDs in public buildings.
SENATOR OLSON indicated that he would first want to see SB 160
enacted; then, perhaps such a mandate wouldn't be necessary.
Number 0988
JENNIFER APP, Alaska Advocacy Director, American Heart
Association, said that the American Heart Association fully
supports SB 160, which would reduce the liability risk
associated with both using and providing automated external
defibrillators (AEDs). She explained that the defibrillator is
the only known way to pull someone out of cardiac arrest. Brain
death and permanent death start to occur in just four to six
minutes after someone experiences cardiac arrest. This means
that when a person goes into cardiac arrest, every second
counts, and the proximity of an AED is a crucial element in that
person's survival. She went on to say:
Defibrillators play a critical part in what the
[American] Heart Association has called the chain of
survival. The chain of survival is a four-step
process that hopefully will occur when someone goes
into cardiac arrest in an ideal situation. The first
step is recognizing that the cardiovascular emergency
exists. The second step is early CPR [cardiopulmonary
resuscitation]. The third step is early
defibrillation. And the fourth step is early advanced
care. The [American] Heart Association has concluded
that the third step, early defibrillation, is the most
critical step in this four-part chain of survival. A
cardiac arrest victim who is not defibrillated within
eight to ten minutes has virtually no chance of
survival. What Senate Bill 160 does is remove some of
the perceived barrier in placing AEDs in strategic
places around our communities. This bill is a great
idea; we fully support it ....
Number 1094
MATTHEW D. ANDERSON, Health Program Manager III, Injury
Prevention Unit, Community Health & Emergency Medical Services,
Department of Health & Social Services (DHSS), said that he
would be speaking in favor of SB 160. One of the strengths of
SB 160, he said, is that it lays out exactly what needs to be
done, by those contemplating acquisition of an AED, to make them
effective. This includes information about training, notifying
emergency medical services or agencies, placement, and making
notification available. He said that [the DHSS] strongly
supports SB 160.
REPRESENTATIVE GRUENBERG asked how much an AED costs.
MR. ANDERSON said the cost ranges between $1,300 and $2,500. He
noted that some models have alarms that, when opened,
automatically dial 911.
Number 1201
SENATOR SCOTT OGAN, Alaska State Legislature, said that he
supports SB 160. He noted that a defibrillator has brought him
out of full cardiac arrest, and that AEDs are amazingly simple
devices to use. He encouraged passage of SB 160, adding that
without a defibrillator, he might not have survived.
Number 1335
CHAIR McGUIRE, after determining that no one else wished to
testify, closed public testimony on SB 160.
Number 1339
REPRESENTATIVE HOLM moved to report CSSB 160(HES) out of
committee with individual recommendations and the accompanying
[zero] fiscal note. There being no objection, CSSB 160(HES) was
reported from the House Judiciary Standing Committee.
SB 168 - CIGARETTE SALE/DISTRIBUTION
Number 1356
CHAIR McGUIRE announced that the next order of business would be
CS FOR SENATE BILL NO. 168(FIN) am, "An Act relating to issuance
and revocation of licenses for the importation, sale,
distribution, or manufacture of cigarettes and tobacco products;
relating to a tax refund or credit for unsaleable, returned, or
destroyed tobacco products; relating to restrictions on and
penalties for shipping or transporting cigarettes; relating to
records concerning the sale of cigarettes; amending and adding
definitions relating to cigarette taxes; relating to the payment
of cigarette taxes; relating to penalties applicable to
cigarette taxes; relating to the definition of the wholesale
price of tobacco products; relating to payment of cigarette
taxes through the use of cigarette tax stamps; relating to
provisions making certain cigarettes contraband and subject to
seizure and forfeiture; relating to certain crimes, penalties,
and interest concerning tobacco taxes and stamps; relating to
cigarette sales; and providing for an effective date."
Number 1407
SENATOR CON BUNDE, Alaska State Legislature, presented SB 168 on
behalf of the sponsor, the Senate Labor and Commerce Standing
Committee, which he chairs. He indicated that SB 168 would
bring added revenue to the state. The genesis for the bill, he
explained, was his hearing a radio commercial that offered to
send people untaxed cigarettes. After hearing that commercial,
he said he asked the Department of Revenue (DOR) to look into
the issue; according to the DOR, there is a significant "gray
market" of untaxed cigarettes coming into the state. During a
recent attempted court action against a Washington company that
was sending untaxed cigarettes into Alaska, it came to light
that this company had "hundreds and hundreds" of Alaskan
customers. Subsequently, the DOR notified those customers that
they were "busted" and owe cigarette tax to the state. He
noted, however, that it appears that if Alaska doesn't have a
tax stamp on its cigarettes, the federal government will not aid
the state in prosecuting illegal interstate trade to avoid
taxes.
SENATOR BUNDE, after saying that SB 168 is a "tax stamp and
minimum pricing" bill, held up an example of a tax stamp for
members to view. When the DOR goes into a store that sells
cigarettes, unless there is a tax stamp, there is virtually no
way to tell which products have had taxes paid on them. He
opined that SB 168 is a distributor-friendly bill. And although
Internet sales are significant, Internet companies are unable to
verify the age of those purchasing tobacco products. The bill
will require that all cigarettes in Alaska have a tax stamp, and
this will allow the federal government to assist the state in
prosecuting those that seek to avoid paying Alaska's cigarette
tax. He mentioned that the DOR anticipates, with the adoption
of SB 168, an additional $3 million to $3.5 million in revenue,
that Hawaii saw a 25-percent increase in cigarette-tax revenues
after enacting a tax stamp, and that Michigan saw an increase of
9 percent. According to the DOR, he relayed, for every 1
percent that collections go up, the state will gain $400,000.
Number 1649
SENATOR BUNDE noted that SB 168 includes a provision for minimum
pricing, and that this provision was requested by Alaska's
tobacco distributors. He mentioned that although these same
companies testified during hearings of the legislation initially
raising the tobacco tax that doing so would have no impact on
tobacco use among youth, they now claim that raising the price
will have a substantial impact. Inclusion of the minimum price
provision is one of the reasons Alaskan distributors favor SB
168; this provision will prevent large stores from using
cigarettes as a loss leader, and discourage cigarette "fire
sales." In conclusion, Senator Bunde described SB 168 as a win-
win bill, adding that it is supported by the American Heart
Association as well as Alaska-based tobacco distributors. He
asked the committee to give SB 168 favorable consideration.
REPRESENTATIVE GARA asked whether SB 168 would raise as much
money as would a bill sponsored by Representative Harry
Crawford.
SENATOR BUNDE said he is not familiar with Representative
Crawford's legislation.
REPRESENTATIVE SAMUELS asked who collects the tax.
SENATOR BUNDE said that wholesalers pay for the tax stamp. He
added that a provision in SB 168 defers a portion of the tax in
order to help wholesalers pay for stamping and recordkeeping.
REPRESENTATIVE GRUENBERG asked Senator Bunde whether he is
familiar with something called "tobacco sampling."
SENATOR BUNDE indicated that he does not support tobacco
sampling.
[Chair McGuire turned the gavel over to Vice Chair Anderson.]
Number 1899
JOHANNA BALES, Revenue Auditor, Audit Group I, Tax Division,
Department of Revenue (DOR), explained that since the tax
increase went into effect in 1997, the state has seen an
approximate 20-percent decrease in taxable cigarette sales;
there are now between 40 million and 42 million packs sold each
year. She mentioned that Internet companies are now actively
advertising that they can send Alaskans untaxed cigarettes;
these companies do not follow federal laws pertaining to the
sale of cigarettes, one of which is called the "contraband
cigarette trafficking Act" and which does not apply to anything
that doesn't have a state tax stamp. She, too, remarked that
adoption of a state tax stamp would allow the federal government
to assist the state in prosecuting those that commit tax fraud.
Without a tax stamp, that assistance will not be forthcoming.
MS. BALES relayed that there are approximately 150 Internet
sellers of cigarettes, and that 46 other states currently
require a tax stamp. Kentucky's tax is 3 cents per pack, and
Virginia's tax is 2.5 cents per pack, but even with such low tax
rates, those states have found the tax stamp to be an invaluable
enforcement tool. Currently, only four states do not have a tax
stamp, and Alaska is one of them. It is very important for
Alaska to adopt a tax stamp, she opined. With regard to
Representative Crawford's bill, she said that that bill is
essentially the same bill that was introduced last year by
Governor Knowles, and that the same language is included in SB
168.
[Vice Chair Anderson returned the gavel to Chair McGuire.]
REPRESENTATIVE HOLM asked for information regarding the fiscal
note.
MS. BALES said that the current fiscal note contains an estimate
of possible revenue collections. When the tax rate increased in
1997, it was estimated that there would be a 17-percent drop in
consumption; however, the actual drop in sales has turned out to
be approximately 20 percent, and so the DOR has based its latest
estimate on that actual data. She mentioned that the current
fiscal note reflects the addition of five positions, and this is
expected to increase the amount of revenue collected. She
offered that when Hawaii put its tax-stamp program in place, it
resulted in an increase in revenue of approximately 50 percent
in the first year; however, Hawaii also filled 11 fulltime
positions that did nothing but tax-stamp enforcement. If Alaska
is to see similar increases in revenue, it will also have to
have an active enforcement program, she predicted.
Number 2159
MICHAEL J. ELERDING, President, Northern Sales Company of
Alaska, Inc., said simply that he supports SB 168 and would
provide the committee with additional written testimony. He
added that his company has never done "cigarette sampling," and
asked that the committee vote in favor of the bill.
Number 2224
JENNIFER APP, Alaska Advocacy Director, American Heart
Association, said that she is testifying in support of SB 168 on
behalf of Alaskans for Tobacco-Free Kids, a youth tobacco policy
coalition that includes the American Heart Association, the
American Lung Association of Alaska, the American Cancer
Society, and the Alaska Native Health Board. She said that all
of these organizations support SB 168 because it will do two
important things. She elaborated:
First, it will decrease the ability of individuals and
businesses to illegally avoid the current tobacco tax.
And second, it will help keep cigarettes out of the
hands of youth. The ongoing increase in Internet and
mail order sales of cigarettes is a major challenge to
public health efforts to reduce smoking. Non "state
to state" sales will account for 14 percent of all
tobacco sales by 2005; that's just ... two years from
now. By failing to require adequate age verification,
the sharply growing number of mail order and web sites
selling cigarettes makes it easier and cheaper for
kids to buy cigarettes.
The mail order offers, and web sites also offer,
smokers a way to avoid paying the state tobacco taxes,
thereby keeping cigarette prices down and smoking
levels up, and depriving the state of a very
legitimate source of revenue. In conclusion, the bill
allows legitimate commerce to continue unimpeded,
while closing existing loopholes. The bill allows the
state to more easily collect existing legitimate
taxes, and at the same time, the bill helps make sure
that individual consumers can't access cigarettes
without an adequate age verification process. Thank
you very much for this opportunity to testify ....
CHAIR McGUIRE, after determining that no one else wished to
testify, closed public testimony on SB 168.
The committee took an at-ease from 10:00 a.m. to 10:02 a.m.
Number 2302
REPRESENTATIVE ANDERSON moved to report CSSB 168(FIN)am out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSSB 168(FIN)am was
reported from the House Judiciary Standing Committee.
SB 53 - REVOKE DRIVER'S LIC. FOR FATAL ACCIDENT
Number 2335
CHAIR McGUIRE announced that the next order of business would be
SENATE BILL NO. 53, "An Act relating to disposition of a traffic
offense involving the death of a person; providing for the
revocation of driving privileges by a court for a driver
convicted of a violation of traffic laws in connection with a
fatal motor vehicle or commercial motor vehicle accident;
amending Rules 43 and 43.1, Alaska Rules of Administration; and
providing for an effective date."
Number 2340
SENATOR SCOTT OGAN, Alaska State Legislature, sponsor of SB 53,
said that he has been working on this legislation for nine
years. He noted that last year, Governor Knowles introduced
this bill, and although it passed the House, it didn't have time
to pass the Senate. Senate Bill 53 would give the Alaska
Supreme Court the ability to establish rules that require a
court appearance for a fatal car accident that resulted from a
traffic violation.
TAPE 03-66, SIDE B
Number 2392
SENATOR OGAN said that this bill was engendered by an accident
that took the lives of two dear friend's sons. Because the
person responsible for causing that fatal accident had only
violated a traffic law, he had six points taken off his driver's
license, had to perform community service, and had to pay a
minimal fine. He mentioned that in order to be charged with
manslaughter, there has to be a culpable mental state. Thus,
merely running a red light or engaging in some other traffic
violation could not reach that level of charge even if a
resulting accident caused another's death. What SB 53 would do
is it would allow for more than just a small fine and community
work service if a person violated a traffic law and any
resulting accident caused another's death. He relayed that at
one point, someone provided testimony that a person who'd caused
a fatal accident by running a red light had only gotten a $50
fine.
SENATOR OGAN indicated that adoption of SB 53 is simply a matter
of justice. In addition to requiring a court appearance, the
bill provides the court with the discretion to revoke a driver's
license for up to three years and grant limited licenses in
hardship cases. He opined that SB 53 is a balanced bill, and
noted that it does not alter existing language. He asked the
committee for its support of the bill.
REPRESENTATIVE SAMUELS opined that SB 53 is a good idea. He
thanked Senator Ogan for bringing it forward.
REPRESENTATIVE GRUENBERG mentioned that he's had very close
friends of his die in an accident that was caused by someone
who'd been watching a DVD while driving an RV. He also
mentioned that several states have made it a crime to operate a
vehicle while watching a DVD. He asked whether a similar
provision could fit into SB 53.
SENATOR OGAN relayed that the person responsible for that
accident was charged with manslaughter.
REPRESENTATIVE GRUENBERG said that he wanted to specifically
make it against the law to operate a vehicle while watching a
DVD.
SENATOR OGAN suggested that perhaps legislation to that effect
could be introduced next year.
REPRESENTATIVE GRUENBERG agreed.
Number 2176
REPRESENTATIVE ANDERSON moved to report SB 53 out of committee
with individual recommendations and the accompanying fiscal
notes. There being no objection, SB 53 was reported from the
House Judiciary Standing Committee.
The committee took an at-ease from 10:13 a.m. to [11:20 a.m.]
HB 111 - EXTEND REGULATORY COMMISSION OF ALASKA
[Contains reference to HB 106, Version S.]
Number 2163
CHAIR McGUIRE announced that the next order of business would be
HOUSE BILL NO. 111, "An Act extending the termination date of
the Regulatory Commission of Alaska; and providing for an
effective date."
CHAIR McGUIRE noted that in addition to CSHB 111(L&C), which was
adopted as the working document on 5/16/03, the committee also
had before it for consideration two proposed committee
substitutes: Version 23-GH1049\N, Craver, 5/17/03; and Version
23-GH1049\J, Craver, 5/17/03. She observed that although both
of the proposed committee substitutes are a bit rough, they
provide the committee with starting points. She remarked that
Version J closely parallels CSHB 111(L&C), and that Version N,
in contrast, asks the Regulatory Commission of Alaska (RCA) to
come back to [the legislature] with answers pertaining to
specific subject areas.
The committee took an at-ease from 11:24 a.m. to 11:25 a.m.
Number 2067
LEONARD A. STEINBERG, General Counsel, Alaska Communications
Systems, Inc. (ACS), said he would describe Version J as a
streamlined version of [CSHB 111(L&C)]. Section 1 of Version J
now deals with retail tariff exemptions for competitive service
areas, and this language is slightly modified from what was
contained in CSHB 111(L&C). One of the more important
modifications, he remarked, is that it clarifies that it is
applicable to retail tariffs only. Thus retail services would
be deregulated in competitive service areas. Section 1 also
contains proposed AS 42.05.435, which is language pertaining to
the pricing of unbundled network elements.
CHAIR McGUIRE asked Mr. Steinberg to describe Version J in terms
of how its provisions would change what currently happens and
why such changes should be made.
MR. STEINBERG, referring to the exemption from retail tariffs
provision, said that currently, ACS has been required to go
through what he called a significant and expensive rate case for
the purpose of justifying, based on the company's costs, what it
could charge consumers. He said that ACS's concern is that this
process was applied only to ACS and not its primary competitors.
CHAIR McGUIRE noted, however, that this process was applied to
ACS because it was deemed to be the incumbent dominant carrier.
MR. STEINBERG acknowledged that point, but argued that the rate
case to which he is referring applied to all of ACS's holdings,
even in areas where ACS wasn't the incumbent dominant carrier,
and was required as a result of ACS's acquisition of various
companies in 1999. He added that any rate increases ACS might
want to make in the future would have to be justified to the RCA
based on the company's costs, which themselves would have had to
be approved by the RCA; in contrast, competitors of ACS don't
have those same obligations.
CHAIR McGUIRE asked whether ACS has ever filed a petition to
have its status as a dominant carrier in particular markets
changed.
Number 1882
MR. STEINBERG said ACS has not done so with the RCA, though it
has filed similar petitions with the Federal Communications
Commission (FCC). He remarked that the FCC has made a finding
that the Anchorage market is competitive.
REPRESENTATIVE GARA asked why ACS has not filed a petition with
the RCA to get a change of status.
MR. STEINBERG said that ACS does not believe, under current
rules, that there would be substantial benefits justifying the
cost. In response to another question, he said that currently,
with 30 days notice, ACS can lower its rates in competitive
areas without having to file cost justification. He added,
however, that the RCA has requested cost justification in
certain situations.
REPRESENTATIVE GARA noted that in Version N, carriers can lower
rates, subject to antitrust laws, without RCA approval.
MR. STEINBERG remarked that for years, Alaskans have been
enjoying some of the lowest rates in the country. He opined
that in competitive service areas, there is a need for rate
flexibility in order for companies to adjust to market
conditions. Currently, he said, ACS is constrained in that
regard. He added that when the aforementioned rate case is
settled, ACS will end up with rates in 2004 that are based on
year 2000 circumstances; in a competitive market place like
Anchorage, those rates will have no relevance.
REPRESENTATIVE GARA said he would be amenable to a provision
that said the rules for raising rates shall be applied equally
to phone companies in a competitive areas. He offered his
belief that the RCA does have a role in reviewing rate
increases.
MR. STEINBERG said that there have been times when ACS has been
frustrated by the length of time it takes the RCA to review a
proposed tariff. He mentioned that at one point, the Alaska
Public Utilities Commission (APUC) had ordered structural
separations between ACS's local group and its long distance
group. Unfortunately for ACS, he added, those are one-sided
rules that don't apply to ACS's competitors.
CHAIR McGUIRE asked how ACS's competitors go about adjusting
rates.
MR. STEINBERG said he would prefer to let representatives from
those companies address that question.
Number 1597
REPRESENTATIVE GARA asked whether ACS feels that the process it
must go through to reduce rates is cumbersome.
MR. STEINBERG said that according to ACS's understanding of
current RCA regulations, rate reductions should require absolute
minimal review. However, ACS has found that such is not the
case; instead, the RCA has demanded justification for ACS's rate
reductions. He encouraged the committee to give consideration
to where the industry is going, particularly given the fact that
there is now substantial competition in much of Alaska. He said
ACS's understanding is that the federal government's promise to
bring competition to the state included the promise of
deregulation. He likened mixing competition and regulation to
mixing oil and water.
REPRESENTATIVE GARA noted, however, that regulation is federally
mandated.
MR. STEINBERG suggested that deciding state policy still remains
to be done, and that retail tariffs are entirely managed by
state policy. He predicted that the state could follow federal
regulations and still find for deregulation in markets where
there is competition.
CHAIR McGUIRE mentioned that the Telecommunications Act of 1996
does have provisions addressing the role of state and local
government. She said she's heard criticisms that the
Telecommunications Act of 1996 was designed more for the Lower
48 and, thus, didn't really address Alaska's specific issues.
The question, she suggested, is now one of how to fit the Act's
provisions with Alaska's needs. The RCA has interpreted aspects
of the Telecommunications Act of 1996 in a fashion different
from other state's regulators.
MR. STEINBERG opined that probably all parties would agree that
the issue of retail prices has traditionally been within the
states' purview, and that federal law wouldn't affect anything
regarding retail pricing or conditions of service to consumers.
REPRESENTATIVE GARA said that Section 1 of Version J causes him
concern because it allows the carrier itself to determine
whether it is servicing a competitive market and thereby be
relieved of any rate-setting requirements. Another concern he
said he has with Section 1 is that it would nullify a
determination made by the RCA that currently keeps consumer
rates low. He offered his belief that adoption of Section 1
would result in consumer rates rising.
Number 1262
MR. STEINBERG opined that the issue of determining whether a
service area is competitive should not be controversial, and
noted that the RCA would still have the opportunity to review
whether a carrier actually is in a competitive service area,
which, he pointed out, is defined in Version J. He said that
ACS believes that if consumers have a choice of facilities-based
carriers, then there is competition and it would be appropriate
to deregulate. He suggested that the question is whether there
should be a significant regulatory proceeding to determine
something that is commonly known such as that Anchorage is a
competitive service area. He acknowledged, however, that there
may be alternative ways of achieving Section 1's goals. What
ACS sought to avoid was a long, drawn out adjudication of
something easily determined.
CHAIR McGUIRE said that her concern centers around the fact that
if a carrier is deregulated in one portion of a service area, it
is deregulated in all of that area regardless of whether there
is competition in the other portions, for example, as would be
the case with Kodiak. She noted that proposed AS
42.05.433(d)(1) defines a competitive service area as one in
which 50 percent of its customers have a choice of facilities-
based service providers.
MR. STEINBERG replied that for the most part, it is already
known that Anchorage, Fairbanks, and Juneau are competitive
service areas. Thus the rules proposed by Section 1 regarding
deregulation in competitive service areas would not apply to
Kodiak. He opined that the language in Section 1 is broad
enough to allow the RCA to address such an issue in Kodiak if
and when it occurs.
REPRESENTATIVE GARA said he doesn't believe the language in
Section 1 is broad enough to do so. Instead, he argued, the
language will mandate that a service area be called competitive
even in communities without competition. Adoption of the
definition in Section 1 will institute a rule that says
monopolies shall be unregulated in those communities, he opined.
Therefore, although it might be more efficient for a company to
come forward and certify that it is [in a competitive service
area], allowing such will exempt that carrier from all tariff
rules until the RCA proves by a preponderance of the evidence
that the carrier was wrong. He suggested that the public would
not be served by a provision that lets a company make its own
determination regarding whether it is in a competitive service
area. Instead, such a determination should be made by [the
RCA].
REPRESENTATIVE OGG pointed out that according to the language in
Section 1 of Version J, a carrier's certification that it is in
a competitive market becomes effective immediately upon filing,
and it is then up to the RCA to find, in writing, based on a
preponderance of the evidence, that the "competitive service
area" standard has not been met. And because the certification
goes into effect right away, the carrier is immediately exempted
from AS 42.05.361, 42.05.371, 42.05.381, 42.05.391, 42.05.411,
42.05.421, and 42.05.431 until the RCA goes through its denial
process. This means that the carrier is exempted from filing a
tariff, it doesn't have to make its rates just and reasonable,
it no longer has to comply with 45-day/30-day notice
requirements, it is exempted from having the RCA conduct a
hearing based upon a complaint, and it is exempted from the RCA
fixing the rates.
Number 0778
DANA TINDALL, Senior Vice President; Legal, Regulatory, and
Governmental Affairs, General Communications Incorporated (GCI),
in response to the question of what GCI's burden is regarding
tariff filing, said that GCI, as a competitive non-dominant
carrier, is subject to all of the same provisions of law that
ACS, as the dominant carrier, is seeking to be exempted from via
Section 1: AS 42.05.361, 42.05.371, 42.05.381, 42.05.391,
42.05.411, 42.05.421, and 42.05.431. The only difference is
that GCI is not required to have a rate case in order to raise
rates. She pointed out that the "exemption from retail tariffs"
portion of Section 1 is not the provision that addresses the
differences between regulating a dominant carrier and regulating
a non-dominant carrier. The only difference, she reiterated, is
that GCI, as the non-dominant carrier, does have the power to
raise rates without a rate case.
MS. TINDALL noted that under current RCA regulations, ACS could
come before the RCA and get that same ability simply by applying
for a change in dominant-carrier status. She said the
difference between what ACS could get by having the RCA grant a
change in status versus what it could achieve via the language
in Section 1 is that the RCA would only deregulate ACS as the
non-dominant carrier in the specific market where there is
competition, such as Anchorage, whereas by seeking to be
deregulated via Section 1, Representatives Gara and Ogg are
correct in that the entire company would be deregulated and,
thus, all of its service areas would deregulated even where
there is no competition. She remarked that ACS serves many,
many, communities that are outside of Anchorage's competitive
service area.
MS. TINDALL then surmised that Mr. Steinberg's comment that the
benefits of seeking a change in status from the RCA are not
justified by the cost is simply a reference to the fact that ACS
would not be able to increase its rates in noncompetitive areas.
REPRESENTATIVE GARA asked whether, for the Anchorage service
area, ACS is considered the competitive dominant carrier.
MS. TINDALL indicated that it is, and again reiterating that the
only difference between a competitive dominant carrier and a
competitive non-dominant carrier is that the competitive
dominant carrier cannot raise rates without a rate case.
REPRESENTATIVE GARA asked whether ACS and GCI could agree that
all carriers should be subject to the same rules for raising
rates in competitive service areas like Anchorage.
Number 0502
MS. TINDALL replied:
For retail-rate purposes, GCI would not [oppose] a
finding of ACS as non-dominant in Anchorage and, as a
matter of fact, we have proposed it in ... the
proceeding the [RCA] is having on local competition
deregulation. To address another comment that Mr.
Steinberg made: Mr. Steinberg points out that where
they raise rates in competitive areas, there is no
danger because there's competition and then consumers
will have a choice. There's two issues with that.
Again, this gives them the power to raise rates where
there is no competition. And ... the next section
enables ACS to raise GCI's costs, so it enables them
to hedge their bets a bit in competitive areas where
they're not raising their rates into the face of
competition; they're forcing their competitor to raise
their rates as well. And so it makes it much less
risky to raise your rates in competitive situations
... if you can also force your competitor's rates to
go up.
CHAIR McGUIRE asked Mr. Steinberg whether he sees any way to
narrow the language in Section 1 so that it only does what all
could agree is fair, which is that in truly competitive areas, a
dominant carrier wouldn't have to go through a rate case to
raise rates. She said that a concern is whether, in defining
"competitive service area", is ACS reaching out more broadly in
order to allow itself to act as a dominant carrier in areas
without competition and yet not be subject to regulation.
MR. STEINBERG said that ACS has no intention of raising rates in
noncompetitive areas, and doesn't have that understanding of the
language in Section 1. He acknowledged, however, that there
probably are ways to alter the language in order to clarify that
these provisions of Section 1 are intended to only apply in
those service areas where competition exists.
CHAIR McGUIRE opined that in service areas where ACS is still
the dominant carrier, ACS ought to be regulated in order to
protect consumers. But in truly competitive areas, among
carriers that are equal in certain markets, it would be fair for
both carriers to be treated the same. She said she would feel
more comfortable if the language in Section 1 was more narrowly
drawn.
MR. STEINBERG said he believes that a few wording changes could
accomplish the chair's goal.
REPRESENTATIVE GARA pondered whether the RCA should still have a
role in setting rates in areas where there are only two phone
companies. When there is only a little competition, for
example, when there are only two companies competing against
each other, that is essentially an oligopoly, which perhaps
might still need to be regulated to prevent price fixing.
MR. STEINBERG suggested that a policy question for the
legislature to address is, "Do we believe that in the drive
towards market forces and competition, we should continue to
have regulation, or do we believe that ... we should head
towards deregulation?" And in addressing that issue, the
question of whether consumers are adequately protected should
also be considered. He noted that in Anchorage, there are
currently several local exchange companies, three of which are
major providers.
TAPE 03-67, SIDE A
Number 0001
MR. STEINBERG remarked that since 1997, there has been zero
evidence of oligopolistic behavior; instead, Anchorage has what
he calls cutthroat competition. He opined that it is highly
unlikely that two phone companies are going to collude in price
fixing.
MS. TINDALL opined that the RCA should have the full power of
regulation until there is more competition in the market. She
added that GCI would accept having its rates capped such that it
couldn't raise rates.
REPRESENTATIVE GARA said he would be much more comfortable with
a provision which said that if there is competition, both
companies shall be treated equally. In other words, if one
company has to ask permission to raise rates, so should the
other company. He added that he would not be comfortable with a
provision which simply said that the RCA couldn't regulate
either company.
REPRESENTATIVE SAMUELS opined that once competition starts, "we
need to start taking the shackles off and let the marketplace
work." He asked whether the [majority of the] money is made in
business lines or in residential lines.
MR. STEINBERG indicated that in the time of regulated
monopolies, business rates, in part, subsidized low residential
rates. In addition, urban dwellers, by and large, paid more
than did those living in rural areas. This system worked fine
in the context of a regulated monopoly because the company was
guaranteed that on the whole, it would be made whole. However,
in going to a competitive model, that system falls apart. He
admitted that although business rates are higher, in most cases
the cost of serving a business customer is no greater than the
cost of serving a residential customer. In the Lower 48, most
competition is oriented only towards business customers because
they are the "high margin" customers, and this results in
competitors getting to "cherry pick."
MR. STEINBERG mentioned that one piece of the Telecommunications
Act of 1996 could relate to retail rates in that it called for
making all implicit subsidies explicit subsidies. He added that
"that" hasn't really occurred yet. Businesses still pay more
than their fair share in order to keep residential rates low,
and urban dwellers pay more than their fair share in order to
keep rural rates low.
Number 0536
MS. TINDALL, on the issue of competitors in the lower 48 coming
in and cherry picking just business customers, agreed that this
has not happened in Alaska; GCI has equal market share in both
business and residential markets. She surmised that in talking
about relief from implicit subsidies in rural areas, since there
isn't competition in rural areas, Mr. Steinberg is actually
talking about lowering rates where there is competition and
raising them where there is none. So while business customers
probably do subsidize residential customers, deregulating retail
rates in Anchorage would deregulate both business rates and
[residential] rates and, thus, if ACS so chooses, it could raise
rates to [residential] customers and lower rates to business
customers.
MS. TINDALL said she is confused as to why Mr. Steinberg says
that the Telecommunications Act of 1996 had no impact on
consumers' rates, because if that were really the case,
Anchorage ratepayers would be paying 24 percent more than they
are now. When ACS raised its rates, GCI did not follow suit,
and so consumers "voted with their feet" by switching carriers.
She urged the committee to be careful, when talking about
"biz/res", to draw a broad circle around the area that is
specifically competitive, and deregulate [only] within that
broad circle, not companywide. She posited that if such is
done, then consumers will be protected and businesses will reap
benefits.
[Chair McGuire turned the gavel over to Vice Chair Anderson.]
REPRESENTATIVE HOLM asked whether, if carriers are deregulated
in the Anchorage market, it would mean that "subsidies" would be
transferred to rural areas or to the other districts that the
carriers serve.
MR. STEINBERG said no. He added that he takes great issue with
the suggestion that ACS would raise rates in noncompetitive
areas in order to subsidize rates in competitive areas. To
illustrate his point, he said that ACS would not raise rates on
Farm Loop Road, for example, after lowering rates in Fairbanks
proper.
REPRESENTATIVE HOLM asked whether costs would be transferred to
one service area for the privilege of keeping rates competitive
in another area.
Number 0840
MR. STEINBERG said no; the RCA won't allow ACS the freedom to
shift costs it incurs in a competitive area to a noncompetitive
area.
[Vice Chair Anderson returned the gavel to Chair McGuire.]
MS. TINDALL said that Mr. Steinberg is correct in that
currently, ACS cannot lower rates in competitive areas and
transfer subsequent costs to noncompetitive areas. She opined,
however, that the language in Version J would enable ACS to do
that, regardless of whether ACS intends it. She pointed out
that in Mr. Steinberg's example of the Fairbanks service area,
the reason rates could not be raised on Farm Loop Road is
because it is considered the same market as Fairbanks and thus
competitive. "That's a good example of why ... you cannot adopt
this legislation: there needs to be a boundary drawn firmly
around a competitive area so that you have your high-cost and
low-cost areas within that area, that are all competitive, and
so that you can't transfer costs," she stated, adding that
Version J would enable ACS to raise costs in Bethel while
lowering them in Anchorage.
CHAIR McGUIRE relayed what the committee would be discussing
upon return from a recess.
Number 1014
The meeting was recessed at 12:32 p.m. to a call of the chair.
TAPE 03-68, SIDE A
[Please note, a new tape was inserted at this point.]
[Not on tape, but reconstructed from the committee secretary's
log notes, was:
CHAIR McGUIRE called the meeting back to order at 4:00 p.m.
Present at the call back to order were Representatives McGuire,
Anderson, Holm, Ogg, Samuels, and Gara. Representative
Gruenberg arrived as the meeting was in progress.
REPRESENTATIVE SAMUELS moved to adopt the proposed committee
substitute (CS) of HB 111, Version 23-GH1049\N, Craver, 5/17/03,
as the working document. There being no objection, Version N
was before the committee.]
Number 0088
CHAIR McGUIRE indicated that the committee is in agreement that
the RCA's sunset ought to be extended for another two years, and
noted that the sunset provision is located in Section 1, though
currently the language calls for only a one-year extension.
Section 2 contains language requiring the RCA to thoroughly
review its rules and regulations governing telecommunications
rates, charges between competing telecommunications companies,
and competition in telecommunications. As part of the review,
the RCA shall hold public hearings and shall issue proposed
regulations no later than October 15, 2003. In addition,
Section 2 provides the RCA with some guidelines it must follow
during that review process. In creating these guidelines, the
committee considered what would be fair to the consumer and the
telecommunications industry, without bias towards a particular
carrier. Version N asks the RCA to clarify certain issues in
the law, and does so without mandating specific language.
CHAIR McGUIRE relayed that the principles outlined in subsection
(b) of Section 2 say that the public shall be protected; that
the rates charged to the public shall be fair; that the
incumbent carrier may not be placed at an unfair competitive
disadvantage; that businesses which provide local and long
distance telecommunications services shall be treated as fairly
as possible; that competition among telecommunications companies
shall be encouraged; that the development of a modern
telecommunications infrastructure in the state shall be
encouraged; and that it is desirable to promote competition and
to take steps, if fair to the public, to encourage more rather
than fewer businesses to enter and remain in the
telecommunications business in the state.
CHAIR McGUIRE relayed that subsection (c) of Section 2 states
that the legislature does not take a position on the propriety
of existing commission rulings or regulations. She said that
this is an important provision because the legislature wants to
encourage the RCA to take a fresh look at exiting rules and
regulations using the aforementioned principles.
Number 0315
CHAIR McGUIRE relayed that subsection (d) of Section 2 states
that the proposed regulations required by subsection (a) must
include regulations that implement the following policies:
there shall be fair payment by a user carrier for use of another
carrier's equipment and facilities, including existing and newly
constructed equipment and facilities; in determining whether a
carrier is the dominant carrier for the purposes of setting
consumer rates, it is not relevant that the carrier in a
competitive market is the incumbent carrier; all
telecommunications carriers may unilaterally reduce consumer
rates, subject to state and federal antitrust laws; and a
definition of "competitive service areas" shall take into
account whether actual competition exists in an area
CHAIR McGUIRE opined that if the aforementioned policies were
actually put into regulation, it would provide carriers with a
more certain playing field; such regulations could be commented
upon by the public and changed from time to time as the RCA sees
fit. This would provide the RCA with an alternative to simply
waiting for a situation to erupt and then reacting to it. She
also relayed that Section 3 provides for an immediate effective
date.
CHAIR McGUIRE offered that Version N resulted from a lot of hard
work by the committee, and while it may not include everything
the committee wished the RCA to look at, it is a starting point.
She said that the committee wants to see the RCA give new
thought and reflection on these issues in order to ensure that
consumers and carriers are getting the best regulations possible
and that the telecommunication infrastructure is developed to
its fullest. She then thanked all who contributed to the
process.
Number 0601
REPRESENTATIVE GARA made a motion to adopt Amendment 1, which
read [original punctuation provided]:
Page 2, line 16, after "regulations.":
Insert: "New regulations under (a) of this
subsection may be issued without regard
to whether they differ or conflict with
prior commission rulings or
regulations."
Page 2, line 28, insert new numbered subsections:
"(5) Depreciation. The commission
shall determine a fair method of
depreciation that takes into account
the true life of depreciated equipment
and facilities.
(6) Rate Increase Applications. In an
area where there is significant
competition between carriers,
competitors shall be allowed to
increase rates under equal rules. The
commission shall retain its existing
authority to deny rate increases to
protect the public."
Number 0615
REPRESENTATIVE SAMUELS objected for the purpose of discussion.
REPRESENTATIVE GARA indicated that the first portion of
Amendment 1 clarifies the legislature's intentions regarding
subsection (c) of Section 2, that in considering new
regulations, the RCA is to proceed without regard to differences
or conflicts with prior rulings or regulations. The second
portion of Amendment 1 adds two topics - depreciation and rate-
increase applications - to the list of policies to be
implemented by regulation.
Number 0766
CHAIR McGUIRE asked whether there was [still] objection to
Amendment 1. There being none, Amendment 1 was adopted.
Number 0785
REPRESENTATIVE SAMUELS made a motion to adopt Amendment 2, on
page 1, line 6, delete "2004" and insert "2005". There being no
objection, Amendment 2 was adopted.
REPRESENTATIVE GARA asked for input from the RCA regarding
whether Version N, as amended, appears to be free of errors.
Number 0850
DAVE HARBOUR, Commissioner, Regulatory Commission of Alaska
(RCA), indicated that he did not yet have that document in hand.
He assured the committee, however, that the RCA's decision-
making process is based on fairness and justice. He said that
the RCA supports the governor's request for an extension without
amendments. He reminded members that he is unable to speak to
many of the issues that have been raised by HB 111 because they
are similar to issues being addressed in the RCA's open dockets.
He promised the committee that the RCA would abide by whatever
legislation is adopted and signed by the governor. He
suggested, however, that the October 15 deadline be extended to
at least December 15 because the RCA already has a huge amount
of work to accomplish, work that is of extreme importance,
particularly that which pertains to rural carriers and to
"universal service fund" calculation.
CHAIR McGUIRE pointed out, however, that at the bill's prior
hearing, Mr. Harbour had indicated that a deadline of October 15
was doable.
MR. HARBOUR replied that he'd intended to qualify that remark by
saying that meeting an October 15 deadline was dependant on the
number of issues involved.
CHAIR McGUIRE said she is going to trust the RCA to do the right
thing. She went on to say:
We cannot come in and overturn your rulings, we cannot
come in and remove people on your commission; all we
have is the extension of a sunset to send a message to
you that we are concerned. We are not sending a
message to one carrier over the other. We are not
sending a message that you've been doing a poor job.
We are sending you a message that we believe that
market conditions have changed and that we want you to
reexamine this - again, as Representative Gara said -
without pride or bashfulness toward earlier rulings.
I will be deeply concerned if that's a part of it -
the need to protect the status quo, the need to
protect what's already been done, and so on. I am
asking you to use your life experience; you have new
commissioners and yourself to dig in, roll up your
sleeves, and work on an issue that is of ... immediate
importance. And I'm hoping that you will do so,
respectfully from this legislature.
Number 1190
REPRESENTATIVE GARA posited that since it is not the public that
is in such a great hurry for regulations, as long as the
carriers are not averse, the RCA ought to be given more than an
October 15 deadline.
CHAIR McGUIRE suggested that a compromise might be to have a
deadline of November 15, 2003. She asked whether the RCA would
be amenable to such a change.
MR. HARBOUR said that the RCA will do its best to follow
whatever legislation is signed into law.
CHAIR McGUIRE said she would trust the RCA to do the best it
can.
MR. HARBOUR asked whether what's before the committee contains
language that recognizes that the RCA's work may be delayed due
to motions from interested parties.
CHAIR McGUIRE explained that Version N simply asks the RCA to
make a good-faith start in the direction of issuing proposed
regulations; she then read some of Version N's language to Mr.
Harbour. She said that her hope is that the RCA will devote as
much time as possible to this endeavor.
Number 1360
REPRESENTATIVE SAMUELS made a motion to adopt Amendment 3, Page
1, line 14, replace "October 15, 2003" with "November 15, 2003".
There being no objection, Amendment 3 was adopted.
Number 1388
REPRESENTATIVE OGG made a motion to adopt [Amendment 4], "to
delete Section 2."
Number 1394
REPRESENTATIVE ANDERSON objected.
REPRESENTATIVE OGG suggested that deleting Section 2 from
Version N of HB 111 will result in the same language that the
committee will be proposing later when it takes up HB 106.
CHAIR McGUIRE said that synopsis is incorrect.
The committee took an at-ease from 4:50 p.m. to 5:20 p.m.
Number 1432
CHAIR McGUIRE remarked that a couple of other proposed
amendments might be forthcoming. She explained that one of the
proposed amendments [which was later referred to as Conceptual
Amendment 5] would clarify that the regulatory review required
by subsection (a) does not apply to "current open dockets
pending review."
The committee took an at-ease from 5:21 p.m. to 5:22 p.m.
CHAIR McGUIRE suggested that [Conceptual Amendment 5] could be
inserted on page 2, line 16, after the language added via the
first portion of Amendment 1.
Number 1491
CHAIR McGUIRE made a motion to adopt [Conceptual Amendment 5],
which would clarify that the regulatory review required by
subsection (a) does not apply to "current open dockets pending
review."
Number 1496
REPRESENTATIVE OGG pointed out that his motion [to adopt
Amendment 4], which would delete Section 2, was still pending.
Number 1508
CHAIR McGUIRE indicated that she would set aside her motion
regarding [Conceptual Amendment 5] until [Amendment 4] is dealt
with.
REPRESENTATIVE OGG indicated that it would be alright with him
if the representatives from ACS and GCI provided further
testimony first.
MS. TINDALL thanked the committee for all of its work and in-
depth discussion of the changes proposed by certain bill
versions. She opined that Version N is far superior to other
versions that have been before the committee. She added that
although she would prefer "a clean bill," she is not opposed to
the language contained in Version N. She recommended, however,
that the committee consider giving the RCA a four-year extension
rather than a two-year extension.
REPRESENTATIVE HOLM asked why the committee should provide a
four-year extension.
MS. TINDALL replied:
I am sure ..., [whether it's a two-year extension or a
four-year extension], you will find that phone wars
don't change much. But I do believe that the RCA has
done a fairly good job - I think they've been upheld
on appeal - I know that there is disagreement from my
competitors on that subject, but I think in contrast
to last year's debate, this year's debate ... [is]
much more about the ability to get deregulated, rather
than any bias or any problems on the commission
itself. The governor has appointed three new
commissioners, out of five, this year, and so there's
been a 60 percent turnover.
I do believe that these phone wars, where the
commission essentially has an axe hanging over its
head, is chilling on their ability to do their work
and regulate. I think it has an adverse effect on
staff, and ... I'm impressed that there are still
people who want to serve on the commission. And I
also think that ... the legislature has the ability,
at any time, to come in with legislation or directives
and ask for reports, ... [or] change the statute; ...
you are there to oversee the commission.
The problem with the sunset legislation is, because it
has to pass, it turns into this Christmas tree, and it
becomes phone wars. ... It's the nature of the beast
that if you have a bill that has to pass, then you get
amendments, that otherwise may not pass on their own,
hung on it. And that is really kind of what spawns
this problem. So ... beyond the fact that ... we're
all tired of phone wars, I think there are good public
policy reasons for extending the commission for four
years rather than two.
Number 1745
REPRESENTATIVE HOLM said he is concerned about being able to
exert legislative control over the RCA; thus, for the purpose of
determining whether the legislature is satisfied that the RCA is
fulfilling its responsibilities, a two-year extension seems to
be better than either a one-year extension or a four-year
extension.
MS. TINDALL said she believes that the legislature has the
ability, before the sunset issue comes before it again, to pass
legislation asking the RCA for a report, or to pass legislation
pertaining to intent language. And if the legislature does so
without it being a sunset year, the legislature might find the
parties in general to be a whole lot more reasonable and easier
to deal with, she predicted. In addition, without the sunset
axe hanging over the RCA's head, the RCA's processes might be
better public processes.
REPRESENTATIVE GARA suggested that a three-year sunset might be
a good compromise.
REPRESENTATIVE GRUENBERG said he would support such a change,
particularly if it included a provision asking for a Joint
Committee on Legislative Budget and Audit report halfway through
the extension.
REPRESENTATIVE SAMUELS mentioned that a similar report was to
have been presented to the legislature this year but has still
not been provided.
MS. TINDALL noted that last year, too, GCI was in support of a
clean, four-year extension. She suggested that these same
problems are again before the legislature because last year's
legislation became a one-year extension.
Number 1991
REPRESENTATIVE ANDERSON said he disagreed, and remarked that as
chair of the House Labor and Commerce Standing Committee, he
would not have given the interested parties as much latitude as
Chair McGuire has. He suggested that a three-year extension
plus report might not be the best solution, adding that although
he might support a two-year extension, he would oppose a three-
year extension. He said he wanted to next hear ACS's comments.
MR. STEINBERG said that Version N does not contain much of the
"policy guidance" that ACS sought from the legislature.
Consequently, he added, ACS doesn't have much to say about
Version N. He opined that Version N does not solve any of ACS's
problems. He elaborated:
Today, in Anchorage, we believe we have to subsidize
GCI to the tune of about $500,000 a month plus by
having to provide them facilities at lease rates which
are considerably below what we think the proper rates
ought to be. This doesn't solve that problem. This
version does not provide any kind of guidance to the
RCA ... that would tell them that it should be
analyzed; it says to be fair. Well, what I can tell
is, based on all of the decisions we've seen out of
the commission so far, they think they are being fair.
Well, if they're being fair, then we're not going to
get any relief.
So, consequently, we don't believe this solves the
problem. We don't believe this solves the problem of
Fairbanks where we have [a] loop that on average costs
us about $32 per line per month that we have to lease
to GCI for about $19 per month. Is that fair? Well,
I can tell you that the RCA has told us it is. It
doesn't seem fair to me; I would be surprised if it
seemed very fair to many of you. This bill does not
solve that problem. The problem that exists is a
problem of short-sided and one-sided policies that
have been adopted over the period of years by the
commission, [and they've] been adopted by a variety of
different commissioners; changes in the
commission/commissioners has not changed their
positions on these issues. There've been studies
before - there's been lots of studies.
Number 2221
Last year, the state conducted its own study, and
there was a report that was generated as a result and
it pointed out some of these kinds of problems. There
was the legislative group - it's true, the House did
not participate, but the Senate did - and the Senate
produced a report. ... The commission had these
studies available to it. Did it do anything with
them? Did the commission change any of its policies
as a result? Did the commission propose new
regulations? Well, in some cases it has, sure. The
commission has initiated some rulemakings that have
been going on and rulemakings that can go on for a
lengthy period of time. I understand that this
proposal has an October 15 deadline, but that's an
extremely accelerated basis; I would be surprised if
much of substance can happen in that point of time.
CHAIR McGUIRE clarified that the deadline is now November 15,
2003.
MR. STEINBERG remarked:
That's fine - another $500,000 loss by ACS in
Anchorage. This just doesn't solve the problem. This
basically is legislation which calls for more studies
and more investigations and more reports back. Well,
there's been a lot of time for that. These problems
that we're talking about are not new; ... they may
seem new to some of you, but these problems have been
before the legislature ... for years and they've also
been before the commission for years. If the
commission thought that there was something that
needed change, it had lots of opportunity to do so.
[It] hasn't done so.
Now, with all due respect to the fact that we have new
commissioners, there is a need for some guidance on
important state policies. We believe that just as the
FCC has indicated that in areas where there's
competition, depreciation rates should be accelerated
- and the Illinois legislature found that that should
be the case - we think that this legislature should
announce that as one of its state's policies. Let the
regulators figure out how to implement it; there's
plenty of room for implementation.
Number 2324
MR. STEINBERG indicated that the remainder of his comments apply
to HB 106.
REPRESENTATIVE GARA said he understands ACS's position, which he
surmised as being that ACS would prefer a different version of
HB 111 and doesn't support Version N. He asked Mr. Steinberg to
comment on whether Version N will treat any carriers differently
or unfairly, or harm the consumer.
MR. STEINBERG offered that by keeping the exiting regulatory
policies in place, particularly the one regarding lease rates,
both ACS and consumers are harmed.
REPRESENTATIVE GARA said he wanted to speak in defense of the
committee's hard work on this issue. Just a flat
reauthorization didn't provide the committee with any comfort,
and neither did the proposals brought forth by ACS; therefore,
if ACS has problems, he said, he believes that the company
should not have gone overboard and asked for more than perhaps
it should have. He remarked that there were proposals that
would allow monopolists to not be regulated - he said he cannot
tolerate such proposals; proposals that would not allow the RCA
to require a utility to upgrade phone lines and Internet service
for people in the bush - he said he believes that such a duty is
integral to the RCA's job of protecting the public and providing
it with modern communications infrastructure; and proposals that
would allow a phone company, on its own, to declare itself as
being in a competitive market even if it might not be, and the
public would be subject to the effects of that declaration until
the RCA has a chance to go through a denial process.
TAPE 03-68, SIDE B
Number 2390
REPRESENTATIVE GARA opined that those proposals were not well
written, and that the committee, in creating Version N, did the
best it could when it saw proposals it could not support. He
remarked that a lot of business interests come before the
legislature and ask for things that go too far, which is why he
did not support the other version of HB 111. He said he felt
frustration because the committee was stuck between a rock and a
hard place and given the choice of picking only from things that
wouldn't work.
CHAIR McGUIRE noted that the committee has before it Version N
and the question of whether to adopt [Amendment 4].
REPRESENTATIVE OGG indicated that he does not comprehend what
the impact of some of the language in Section 2 will be or the
direction it will take. He said he feels that the RCA policies
currently in statute are sufficient to cover most of the points
in Section 2; thus Section 2 is merely clarification. He asked
members to support the removal of Section 2 and thereby send on
a "clean" bill.
REPRESENTATIVE ANDERSON said he thinks there is merit in the
review infrastructure set forth in subsection (a) of Section 2,
but agrees with Mr. Steinberg that the changes suggested by ACS
are not encompassed in Version N. He indicated that he would
vote to keep the review process in the bill, but would prefer to
see statutory changes to the RCA's process.
CHAIR McGUIRE said that the committee recognizes that there is a
problem and a need for changes to the current situation, and
that she trusts the RCA to implement those changes in the manner
set forth in Version N, which she characterized as the middle
ground.
Number 2200
A roll call vote was taken. Representative Ogg voted in favor
of Amendment 4. Representatives Anderson, Holm, Samuels, Gara,
Gruenberg, and McGuire voted against it. Therefore, Amendment 4
failed by a vote of 1-6.
Number 2192
CHAIR McGUIRE again made the motion to adopt [Conceptual
Amendment 5], to page 2, line 16, following the first portion of
Amendment 1, clarifying that the regulatory review required by
subsection (a) does not apply to "current open dockets pending
review."
Number 2166
REPRESENTATIVE GARA suggested that the language of [Conceptual
Amendment 5] instead say: "regulations under this section shall
not apply to dockets open for review prior to the effective date
of this Act". He remarked, however, that perhaps Chair
McGuire's language is better.
CHAIR McGUIRE explained, though, that in requesting this
clarification, the goal of the RCA was to not have to duplicate
its efforts; with the open dockets that the RCA will be ruling
on, the RCA does not want to duplicate the review process, which
it would be required to do under subsection (a).
REPRESENTATIVE GARA said that Chair McGuire's point is well
taken, and indicated that he has no objection to [Conceptual
Amendment 5 as stated by Chair McGuire].
Number 2062
CHAIR McGUIRE asked whether there were further objections to
[Conceptual Amendment 5]. There being none, Conceptual
Amendment 5 was adopted.
CHAIR McGUIRE turned attention to [Conceptual] Amendment 6. She
relayed that via [Conceptual] Amendment 6, she and
Representatives Gara and Samuels are proposing that a new
[paragraph] regarding regulations pertaining to "fill rates" be
added to page 2, line 28, after the new [paragraph] in Amendment
1 that pertains to depreciation, and that the remaining language
be renumbered accordingly. She elaborated: "The title will be
'Fill Rates' ... and the question will be, of which we would
like a regulation issued on, how fill factors should be applied
in setting unbundled network element rates".
Number 2008
CHAIR McGUIRE [made a motion to adopt] Conceptual Amendment 6,
and asked whether there were any objections.
REPRESENTATIVE OGG asked for an explanation from ACS and GCI on
this issue.
Number 1984
TINA M. PIDGEON, Vice President, Federal Regulatory Affairs,
General Communications Incorporated (GCI), explained that the
term "fill factors" is one that applies to network design, and
is the amount of the network necessary to serve some sort of
defined customer base. The fill factor itself is not
necessarily a static number; one would always want to have, in
designing a network, what could be called additional network but
is also necessary network that could go into use if a piece of
copper line, for example, is no longer working and needs to be
replaced. Fill factors themselves are used when two carriers -
for example, ACS and GCI - are first negotiating and then often
arbitrating the rates that ACS will charge GCI for use of the
network components needed for GCI to serve its customers. The
fill factor, in the context of unbundled network elements, is
actually an input into a larger data set that, together,
produces the output, which would be the unbundled network
element rates. The unbundled network element rates themselves,
and how they are applied, constitute an issue that has been
reviewed and litigated ever since the federal Telecommunications
Act of 1996 was first passed.
MS. PIDGEON said that Sections 251 and 252 of the
Telecommunications Act of 1996 tasked the FCC with establishing
regulations that would be applied by state commissions when two
carriers are first negotiating and then often arbitrating the
rates that will apply when one carrier has use of the other
carrier's network and actually leases unbundled network
elements. What the RCA has done in the past, she relayed, when
the two carriers have been in arbitrations, which are fairly
long and detailed proceedings, is apply the regulations that
have been established by the FCC and upheld by the U.S. Supreme
Court, and among those regulations are guidance and requirements
that would apply to the setting of fill factors. In response to
a question, she said that according to her understanding,
Conceptual Amendment 6 asks for a report or a statement from the
RCA about how it has established fill factors and how it will
establish fill factors in the future when two companies are
arbitrating rates between one another, and so to the extent that
Conceptual Amendment 6 asks for feedback and report from the RCA
to clarify the fill factors that are being used, GCI has no
objection to the amendment.
MR. STEINBERG, after reiterating that ACS does not support
[Version N], concurred that there are many components that go
into calculating the rates at which ACS is obligated to lease
its facilities. There are many opportunities for artificially
depressing those rates, he opined, by assuming "this or that,
which is not consistent with reality." He said that ACS feels
it would be appropriate for the legislature to stipulate that
fill factors should reflect reality, and is concerned that the
RCA will require ACS to "underbill" the network. He opined that
nothing in the proposed language will change the RCA's current
approach to the fill factor issue.
Number 1777
CHAIR McGUIRE noted that there were no objections to Conceptual
Amendment 6. Therefore, Conceptual Amendment 6 was adopted.
Number 1762
REPRESENTATIVE ANDERSON moved to report the proposed CS for HB
111, Version 23-GH1049\N, Craver, 5/17/03, as amended, out of
committee with individual recommendations and the accompanying
fiscal note.
REPRESENTATIVE OGG asked about the sunset date.
CHAIR McGUIRE explained that Amendment 2 extended the sunset
date to June 30, 2005.
REPRESENTATIVE OGG noted there had been later discussion about
perhaps extending it further.
CHAIR McGUIRE invited Representative Ogg to offer an amendment
to that effect
Number 1601
REPRESENTATIVE ANDERSON offered to withdraw his motion for the
purpose of considering another amendment.
REPRESENTATIVE OGG indicated that having a short sunset period
might make it difficult for the RCA to do its work, and that
having a longer sunset period or no sunset period, as with the
Board of Fisheries, might be more beneficial. He offered an
analogy of what might happen were the Board of Fisheries subject
to a sunset provision. He opined that even without a sunset
date, the legislature still has the power to fix whatever
problems might arise with the RCA.
CHAIR McGUIRE again invited Representative Ogg to make a motion
to that effect.
Number 1601
REPRESENTATIVE ANDERSON, for the purpose of considering another
amendment, withdrew his motion to report the bill from
committee.
Number 1593
REPRESENTATIVE OGG [made a motion to adopt Amendment 7,] to
remove the sunset clause altogether.
Number 1587
REPRESENTATIVE ANDERSON objected.
Number 1581
REPRESENTATIVE OGG withdrew his motion to adopt Amendment 7.
Number 1575
REPRESENTATIVE ANDERSON moved to report the proposed CS for HB
111, Version 23-GH1049\N, Craver, 5/17/03, as amended, out of
committee with individual recommendations and the accompanying
fiscal note. There being no objection, CSHB 111(JUD) was
reported from the House Judiciary Standing Committee.
HB 106 - DEFINITION OF LOBBYING
[Contains discussion of some of the issues raised during the
hearings on HB 111, and mention that language from Version J of
HB 111 has been incorporated into Version S of HB 106.]
Number 1541
CHAIR McGUIRE announced that the final order of business would
be HOUSE BILL NO. 106, "An Act amending the definition of
'lobbyist' in the Regulation of Lobbying Act, and as it applies
in the act setting standards of conduct for legislators and
legislative employees, to define 'regular' and 'substantial' as
those terms describe activities for which a person receives
consideration for the purpose of influencing legislative or
administrative action."
Number 1535
REPRESENTATIVE ANDERSON moved to adopt the proposed committee
substitute (CS) for HB 106, Version 23-LS0405\S, Craver,
5/17/03, as the work draft. There being no objection, Version S
was before the committee.
Number 1484
CHAIR McGUIRE noted that Version S of HB 106 is now "An Act
relating to retail tariffing standards in a competitive local
exchange service area; and to exemptions from retail tariff
filing requirements and certain other provisions in competitive
telecommunications markets; setting a policy regarding unbundled
network elements in the telecommunications market; relating to
depreciation expense rates for certain telecommunications
utilities; requiring the Regulatory Commission of Alaska to
conduct an investigation, take certain actions, withhold certain
actions, and issue a report; and providing for an effective
date."
CHAIR McGUIRE relayed that Version S of HB 106 contains all of
the elements of HB 111, Version J. She asked to hear testimony
regarding proposed AS 42.05.435 - which begins on page 3, line 2
- the provision pertaining to the pricing of unbundled network
elements.
Number 1383
LEONARD A. STEINBERG, General Counsel, Alaska Communications
Systems, Inc. (ACS), said that that provision deals with the
prices at which ACS sets its lease rates. He then asserted that
comments made by Christopher J. Wright, former FCC General
Counsel, at yesterday's hearing on HB 111 were erroneous in that
state regulators do still have a role in setting prices. He
acknowledged that the decisions made by the Regulatory
Commission of Alaska (RCA) regarding prices can be contentious;
for example, ACS has been arguing over Anchorage's lease rates
for more than three years. He said that it is in the areas for
which the state still has discretion that ACS is seeking policy
guidance for the RCA.
MR. STEINBERG opined that nothing in Version S of HB 106 is
inconsistent with federal law; in fact, he offered, ACS has a
letter from its FCC counsel attesting to that. He noted that
language in proposed AS 42.05.435 does refer to "forward-looking
incremental costs" and a "reasonable profit", and that the
Telecommunications Act of 1996 allows for reasonable profit; ACS
believes it should have, as part of its lease rate calculation,
the ability to obtain a reasonable profit, and for this reason,
the word "shall" is included in the provision under discussion.
He also noted that the language in this provision will result in
the RCA approaching this issue differently than it has in the
past, which included using national average default costs rather
than future projections of current costs. He opined that this
provision is appropriate and allowed under federal law.
MR. STEINBERG noted that the issue of fill factors is also
addressed in this provision.
REPRESENTATIVE GRUENBERG asked whether the term "labor", as used
on page 3, line 11, includes recognition of any existing labor
contracts.
Number 1167
MR. STEINBERG remarked that existing labor contracts are an
important factor in calculating what labor costs will be in the
future. The RCA, however, has rejected current labor costs, as
well as other current costs, in its calculations of lease rates.
He suggested that this is due to the RCA interpreting current
law differently than ACS feels it should, and that the RCA is
doing so in error. He went on to say:
The FCC rules ... [have] adopted something called the
"hypothetical network" rule. We don't necessarily
believe this is the right way to price our facilities,
but it is the federal law and we do not dispute it.
... The hypothetical network rule, however, talks
about the design of a network; it talks about
designing a network ... that ... is a hypothetical,
most-efficient network. ... It says that ... if thirty
years ago you would have put copper in, but today you
would put [in] fiber-optic cable, then you should
design that network with fiber-optic cable. It says
that if thirty years ago you would have used some
little cross-connect box to connect customers in the
network, but today you use an integrated digital loop
carrier, that you should use those digital loop
carriers throughout your network. That's what the
hypothetical network rule says, we believe; it talks
about the design.
REPRESENTATIVE GRUENBERG suggested adding "including the
existence of any labor management agreements" after "labor", on
page 3, line 11.
MR. STEINBERG said that change would add to the legislation.
Number 1000
REPRESENTATIVE GRUENBERG [made a motion to adopt Amendment 1],
to add after "labor" on page 3, line 11, the words "(including
any labor management agreements)".
Number 0983
REPRESENTATIVE GARA objected. He opined that labor costs
already include labor contract costs.
REPRESENTATIVE GRUENBERG said he wanted the language to be
crystal clear on that point.
REPRESENTATIVE GARA acquiesced.
Number 0960
CHAIR McGUIRE, after agreeing with Representative Gruenberg,
asked whether there were any other objections to [Amendment 1].
There being none, Amendment 1 was adopted.
REPRESENTATIVE GARA offered his understanding that one of the
federal mandates is that lease rates cannot exceed what it would
cost a competitor to come in and build a network using the most
efficient technology available. He suggested that the language
on lines 14 and 15 of page 3 conflicts with the federal mandate
because the language in the bill reads: "(3) the most efficient
technology the telephone utility has actually deployed, which
shall be presumed to be the most efficient technology
available".
MR. STEINBERG opined that that language doesn't conflict with
federal law; instead, there is simply an ambiguity in federal
law that allows what's being proposed. He recommended that the
committee looks specifically at paragraphs 683-685 of the "FCC's
First Report and Order," which he characterized as a lengthy
description of what the FCC is trying to accomplish. He said
that those paragraphs of that document refer to using the most
efficient technology actually employed. He acknowledged,
however, that other portions of that document simply refer to
the most efficient technology available. Because of this
discrepancy, he predicted, different carriers will continue to
argue over whether the language in the bill is allowed under
federal law.
MR. STEINBERG went on to say:
Let me tell you what the consequences of this are. In
Fairbanks, we provide a lot of services to our
competitor; we lease facilities and we provide
services. Today, we have to provide "provisioning and
ordering" services; those services cost ACS about $12
to $14 every time somebody places an order. ... That's
what our cost is, of taking that order, doing the
paperwork, doing the data input, [and so on]. What do
we get to charge for that? We get to charge our
competitor $1 ... for something that costs us $12.
Number 0773
Well why is that? Well, the reason that is, is
because the RCA assumed that we had a fully integrated
electronic operations support system that would do all
this in a fully integrated way - electronically, ...
very efficiently. And if we had that, it would only
cost us $1. Well in fact, we don't have that. In
fact, there are no carriers the size of ACS that have
any such thing. But it was assumed because it was
something that somebody had [somewhere] and it was
more efficient than what we have today. We don't
think that's the right way to set the prices for our
facilities and services, and we don't think the FCC
requires it.
MR. STEINBERG noted that fill factors have been addressed by the
Illinois [legislature], and opined that it did so properly. He
suggested that similar language would be a good thing for
Alaskan policy as well. He then referred to the language on
page 3, lines 16 and 17, which read, "(4) the cost of capital
that reflects the risks associated with competitive market"; and
to the language in Section 3, which pertains to depreciation.
He said, "Both of these issues ... have been addressed by the
FCC in the press release for their long-awaited triennial review
order. The press release was issued in February ..."
REPRESENTATIVE GRUENBERG interjected to turn attention back to
the language on lines 14 and 15. He said: "You have a
presumption in here. That means it's a rebuttable presumption,
and it can be rebutted. Now, I'm a sharp lawyer on the other
side; I find some technology somewhere that's available - you're
back where you started."
MR. STEINBERG said that in theory, he does not disagree with
Representative Gruenberg, although, in that scenario, the
competitor would have the burden of showing that that technology
would be appropriate and more efficient.
REPRESENTATIVE GRUENBERG agreed, but reiterated that ACS would
still be back where it started.
MR. STEINBERG indicated that he would be agreeable to a change
in language.
Number 0591
REPRESENTATIVES GRUENBERG and HOLM, and CHAIR McGUIRE discussed
the fact that what is meant by the word "available" is ever
changing, both temporally and geographically; and that it is
used in statutes pertaining to natural resources, and often
engenders debate.
REPRESENTATIVE GRUENBERG noted that just because a technology is
said to be "available" does not mean that it is "reasonably
available" or "commercially reasonably available."
MR. STEINBERG said those points are well taken, adding that ACS
feels that "this whole issue" is the one that is most easily
abused. In fact, he surmised, it is the reason "we have $19
prices for loops in Fairbanks" even though ACS's cost is $32.
It is because somebody saw that somewhere, a carrier was able to
do "that" for that price, and didn't take into account what it
actually costs "to do it" in Fairbanks. He opined that such an
approach is not required by federal law and is incorrect. He
offered that the language, "most efficient technology available"
is "almost verbatim from the federal rules."
REPRESENTATIVE GRUENBERG asked how the "feds" interpret it.
MR. STEINBERG replied:
The feds largely have not interpreted it. Again, this
is a "Rube Goldberg" system of regulation. The FCC
has adopted -- and if you want to look, it's at "47
CFR 51.505," but what happens is, is that these rules
are promulgated to provide guidance to the states as
to how the states should set rates. The federal
government doesn't set rates. So the FCC established
these rules, and then told the states to go out and
set rates. ... And [so] it's each state making its own
interpretation of what these rules have to say.
REPRESENTATIVE GRUENBERG asked how the states interpret it.
Number 0394
TINA M. PIDGEON, Vice President, Federal Regulatory Affairs,
General Communications Incorporated (GCI), replied:
Well, let me say first of all that what we're really
talking about, in this section, are not the actual
prices, not the actual dollar [amount] that comes out,
but the methodology that's used to determine what
those rates are. And it should be of no surprise that
I do disagree with Mr. Steinberg that there is
confusion about that methodology. If I might read to
you from the FCC's "First Report and Order," paragraph
679, what the FCC describes was a rejection of exactly
what Mr. Steinberg has supported here, and that is to
base the cost ... [upon which it bases] the prices
that it charges its competitor for the use of its
network, the only network in the ground, based on -
you might hear it called - "actual costs," "historic
costs," [or] "imbedded costs."
These were all costs that were recorded, maybe,
somewhere, sometimes maybe they weren't, and they were
all incurred at a time when "rate of return"
regulation [was used] - in [a] sense, ... [a] type of
inefficient investment because, under rate of return
regulation, the more money you put in the ground, the
more costs you have, the greater your return is, the
greater amount that you receive in return from your
rate payors. And by direction of Congress, the FCC
looked at this issue, and what they determined is,
they had to develop a pricing methodology that
addressed those issues.
And what the FCC found was that Congress recognized,
in the [Telecommunications Act of 1996], that access
to the "incumbent LEX" bottleneck facilities - the
only facilities available - is critical to making
meaningful competition possible. As a result of the
availability to competitors of the incumbent LEX
unbundled elements at their economic cost, consumers
will be able to reap the benefits of the incumbent LEX
economies of scale and scope, as well as the benefits
of competition, because a pricing methodology based on
forward-looking costs stimulates the conditions in a
competitive marketplace. It allows the requesting
carrier to produce efficiently and to compete
effectively, which should drive retail prices to their
competitive levels.
Number 0207
MS. PIDGEON also said:
Now, I'm sure that my description of fill factors was
tremendously scintillating to everybody, but these are
the kind of detailed issues that go into applying the
methodology that the FCC has established and that the
[U.S.] Supreme Court has upheld. And in fact, the
[U.S.] Supreme Court has squarely rejected the
description of costs that Mr. Steinberg has offered
here today.
What the [U.S.] Supreme Court said in Verizon
Communications Inc. v. FCC was ...: "As for an
embedded-cost methodology, the problem with a method
that relies in any part on historical cost, the cost
the incumbents say they actually incur in leasing
network elements, is that it will pass on to lessees
the difference between most efficient cost and
embedded cost. ... Any such cost difference is an
inefficiency, whether caused by poor management
resulting in higher operating costs or poor investment
strategies that have inflated capital and
depreciation. If leased elements were priced
according to embedded costs" - which is what ACS is
essentially seeking - "the incumbents could pass these
inefficiencies to competitors in need of their
wholesale elements, and to that extent defeat the
competitive purpose of forcing efficient choices on
all carriers whether incumbents or entrants. The
upshot would be higher retail prices consumers would
have to pay."
This is an issue that the FCC has squarely addressed
and that the [U.S.] Supreme Court has upheld, and I
know that GCI and ACS have had very detailed
negotiations and arbitrations [with] the state
commission to determine the ... unbundled network
element rates that would be produced by that
methodology. And to the extent that ... ACS, in the
past, [has] had disagreements with the way perhaps the
inputs to that methodology were developed, or to the
rates that were produced thereafter, there's an entire
process set out for them to appeal: they go ...
straight to federal district court, [and] it's
provided in Section 252 of the federal Act.
These are the types of issues that the state
commission has the expertise to determine, and there
is ample process available to ACS when it feels that
the RCA has gotten it wrong. And if I might add just
one more thing, that this is the methodology that is
being applied by state commissions across the country,
and the outcome of those rates, when applied by the
RCA, have been in line with or higher than the average
of what other states have produced.
TAPE 03-69, SIDE A
Number 0001
MS. PIDGEON continued:
[The following bracketed portion was not on tape, but
was taken from the Gavel to Gavel recording on the
Internet] And so to say that the RCA has done
[something that just doesn't seem] right to ACS is not
consistent with ... what has been produced by the RCA
in comparison to what other states have done as well.
My last statement ... to this point is on the Illinois
legislation. That legislation, which was just passed
last week, has already been subject to a complaint in
federal district court based on the theory that it is
preempted by federal legislation. In my opinion, that
argument is likely to prevail, and I think yesterday
when we had Chris Wright, who was here on
[teleconference] with you as a former general counsel
of the FCC, that's exactly the commentary that he was
giving as well.
[Chair McGuire turned the gavel over to Vice Chair Anderson.]
REPRESENTATIVE GARA asked whether GCI would have any objection
to the provision on lines 14 and 15 if it had additional
language which clarified that it involves a rebuttable
presumption.
MS. PIDGEON replied:
I'm not sure why there is something that that language
would give ACS that ACS doesn't already have. There
is a specific process [set] forth in Section 252 of
the "federal communications Act" that provides for an
extended period of negotiation and arbitration to
enter into interconnection agreements between the two
carriers. So in those negotiations and arbitrations,
the companies discuss practically every single piece
of hundreds of inputs that go into the model that
reflects the methodology that [has] been adopted by
the FCC. And the process provides that the parties
take their separate positions, the RCA makes a
decision, and if either of the parties isn't happy
with that decision, they take a petition for
reconsideration to the RCA, or an appeal.
[Vice Chair Anderson returned the gavel to Chair McGuire.]
Number 0206
REPRESENTATIVE GARA [made a motion to adopt Amendment 2], to
clarify that the presumption that the incumbent carrier's
equipment is the most efficient equipment is a rebuttable
presumption.
MS. PIDGEON opined that doing so would be outside of what's
permitted under federal law and FCC regulation.
MR. STEINBERG wanted to know what language, specifically, would
be added via [Amendment 2].
REPRESENTATIVE GARA passed out the following handwritten
amendment as Amendment 2 [original punctuation provided]:
p.3 line 15
Delete:
"which shall be presumed to be the"
and insert:
"and there shall be a rebuttable presumption
this technology is"
Number 0356
REPRESENTATIVE GRUENBERG objected for the purpose of discussion.
He said: "I do think that's a matter of legal interpretation;
the use of the term "presumption" always means rebuttable."
CHAIR McGUIRE suggested they could simply adopt Amendment 2 for
the sake of clarity.
MS. PIDGEON mentioned that regardless of whether Amendment 2 is
simply a clarifying amendment, [GCI] does not support the
section it alters.
Number 0425
CHAIR McGUIRE asked whether there were further objections to
Amendment 2. There being none, Amendment 2 was adopted.
MR. STEINBERG said that ACS does not disagree with much of what
Ms. Pidgeon has said. There is no dispute that ACS is required
to abide by the federal law and to price its unbundled network
elements based on forward-looking economic costs. However, ACS
does dispute the contention that it is trying to use historic or
actual or imbedded costs. Instead, ACS is simply raising the
question, "How do you determine what something costs tomorrow?"
That is a fiction, he stated, adding, "we believe that that
fiction should be brought back home to reality as best as
possible." He offered that the language in Version S merely
suggests, when determining a forward-looking economic cost, what
the best way to do so shall be.
MR. STEINBERG turned attention back to the issues he'd started
to address earlier, that of depreciation and the cost of
capital. He said:
The FCC has touched on these issues in a press release
for the long-awaited triennial review. ... The press
release says ..., basically, that in calculating
unbundled network element ... prices, ... the risks
associated with the competitive market should be
included in the cost of capital, and that accelerated
depreciation mechanisms should also be included as a
result of the competitive nature and demands of that
market. And so that goes to explain the issues with
... regard to cost of capital and depreciation. I
would just like to point out ... that in Section 3 -
dealing with depreciation - on line 22, this draft of
depreciation language applies only to competitive
service areas. So, what that means [is], ... in so
far as Kodiak, for example, remains a regulated
monopoly area, that accelerated depreciation would not
be allowed by this Act under these provisions.
Number 0629
MS. PIDGEON, on the issues of depreciation and capital costs,
said:
On the issue of depreciation, what we're hearing from
Mr. Steinberg is that the FCC has issued a press
release and on the basis of that press release we
should change or adopt a particular provision of state
law. Number one, the [fact] that the FCC is
considering this issue - and although we don't know
what the exact rules are, it seems that by the press
release there is going to be some statement about
depreciation in the order when it ever comes out - I
think that, in and of itself, demonstrates that these
are exactly the types of rules and issues that have
been delegated to the FCC for application by the RCA.
As for the issue of the actual depreciation rates that
are cited in Section 3, ... I have to tell you that
the [phrase] "general depreciation system service
lives permitted by the United States Internal Revenue
Service" doesn't mean a whole lot to me. I mean I
just don't think that based on this language, it's
possible to know what the effect of these depreciation
lives are. What we do know is, is that when you
shorten depreciation life, it increases the cost of
depreciation and it allows for increases in rates.
And the fact that this section has the term
"competitive service area" in it, there is nothing in
the definition of "competitive service area" that
would sufficiently narrow [this provision] to ensure
that ACS could not use this provision to lower rates
in a competitive area and have those rates subsidized
in a noncompetitive area by increasing those rates.
The issue here is that ACS has very broad service
areas. Their service area, if you thought of it as a
Venn diagram, would be a big circle; the competitive
part of that service area would be a small part of
that circle. ...
Number 0767
MS. PIDGEON concluded:
One final ... point that I wanted make about the
previous section. Mr. Steinberg has said that they
are applying and abiding by the forward-looking
standard that has been adopted by the FCC and affirmed
by the U.S. Supreme Court. I submit to you that the
plain language of ... [paragraphs] (1), (2), (3), and
(4) really render the application of that term
meaningless. It talks about the utility's most
current cost, the actual total usage, ... the
technology that has actually been deployed. Those are
all historic, imbedded, actual costs, and they're just
simply not ones that would comply with the standards
and the methodology that have been set forth.
REPRESENTATIVE GRUENBERG asked what the term "imbedded cost"
means.
MS. PIDGEON replied:
Imbedded cost is ... sometimes used as a little bit of
a pejorative term, but what it means is ... the cost
that reflects the imbedded network, the historic
costs, the ones that ...
REPRESENTATIVE GRUENBERG interjected to ask: "Is it synonymous
with historic?"
MS. PIDGEON said yes. She then turned attention to the
applicability section of Version S. She surmised that this
section would permit ACS, without RCA review, to implement
changes in the rates GCI gets charged to access the network, and
is therefore not consistent with the arbitration process set
forth for when an incumbent carrier and a competitive carrier
determine the rates that the competitor gets charged to use the
incumbent carrier's facilities.
MR. STEINBERG disagreed. He offered his belief that the RCA
will retain continuing jurisdiction and authority over
interconnection agreements. He then read from the
aforementioned FCC press release: "The order declines to
mandate the use of a particular set of asset lives for
depreciation, but rather clarifies that the use of an
accelerated depreciation mechanism may present a more accurate
method of calculating economic depreciation." He interpreted
this to mean that the FCC will be speaking to what states ought
to do without mandating a particular course of action. He then
showed the committee an excerpt from Internal Revenue Service
(IRS) Publication 946 listing telephone depreciation rates.
Number 1011
CHAIR McGUIRE closed public testimony.
REPRESENTATIVE GRUENBERG noted that CSHB 111(JUD) and Version S
of HB 106 relate to each other. He asked whether the committee
ought to tie them together temporally; in other words, because
CSHB 111(JUD) contains both a two-year sunset provision and a
six-month reporting requirement, and because Version S of HB 106
would result in permanent changes to statute, should the
legislature require a review of the changes made by HB 106 - if
it is adopted - after the RCA makes its report to the
legislature in November.
CHAIR McGUIRE said she would accept that as a friendly
amendment.
REPRESENTATIVE ANDERSON argued that such a requirement would
nullify the work that the committee has done on the two bills.
CHAIR McGUIRE acknowledged that point.
REPRESENTATIVE GARA said that there are parts of HB 106, Version
S, that are good and there are parts that worry him. He offered
that Section 1 seems to make sense; the portion of Section 2
that's on page 2, however, worries him. Turning attention to
line 5, he surmised that in effect it says: "Even if you are a
monopolist, all you have to do is file a certification with the
[RCA] and automatically you're considered in a competitive
service area, and they can't tariff set any more." He said he
doesn't think that that is the right approach and is instead a
bad idea that will encourage abuse by carriers that are
monopolies.
REPRESENTATIVE GARA turned attention to language beginning on
page 2, line 18, and said that this language, which defines
"competitive service area", takes only a step in the direction
of ensuring that monopolies don't take advantage of preceding
language to avoid regulation. He indicated that what he wants
is for the definition of "competitive service area" to be worded
so as to ensure that there really is competition in all parts of
the service area. He opined that the current language still
leaves the problem of a carrier being deregulated in the entire
service area just by virtue of being deregulated in a
competitive portion of the service area, adding that he can't
support it as it is currently written.
Number 1231
REPRESENTATIVE GARA turned attention to the portion of Section 2
that begins on page 3, lines 2. He said he thought that perhaps
his concerns with that portion of the bill have been resolved.
Turning attention to Section 3, he said he has a problem with
that provision because "we're letting them pass off a higher
level of depreciation than actually exists." He offered his
understanding that HB 111 stipulates that the rate of
depreciation shall be based on the real life of the equipment.
Version S of HB 106, on the other hand, is saying that the
deprecation can be shorter than the real life. He predicted
that adoption of Section 3 will cost consumers more money "for
not a valid basis."
REPRESENTATIVE GARA turned attention to Section 4, the
applicability section, and said it causes him heartache because
it is open to gamesmanship. To illustrate his point he offered
the following scenario: "Let's say a monopolist comes in and
they want a rate adjustment, and they want a really big rate
adjustment, and there's no response within 90 days by the RCA -
the consumers get punished - the rates automatically go up."
That doesn't seem to be a good approach, he opined. He went on
to point out that Section 4 also says that if not acted upon
within 90 days by the RCA, any pending rate setting, tariff
filing, or other retail-rate-related proceedings shall be
dismissed, thus resulting in no regulation of rates.
REPRESENTATIVE GARA said he likes Section 5, and mentioned the
part of it that requires the RCA to provide the legislature with
a status report. He relayed that he would be making amendments
to remove the portions of Version S that still trouble him.
REPRESENTATIVE GRUENBERG suggested that on page 3, line 15, the
words "commercially reasonably" ought to be inserted before the
word "available". He asked the representatives from GCI and ACS
to comment on that suggested change.
MR. STEINBERG opined that such a change would be feasible, would
be a positive contribution, and would be allowable under federal
law because federal law is unclear in this area and thereby
leaves room for states to exercise discretion with regard to the
meaning of "available". He offered his belief that such a
change would make for good policy.
Number 1447
MS. PIDGEON said that on this point, she has to disagree with
the section as a whole. She elaborated:
On the issues of methodology, I do think there is an
issue ... in terms of a conflict with federal law.
And in fact, [Sec. 252(e)(3)] of the
[Telecommunications Act of 1996] specifically sets
forth a preservation of authority to state commissions
which says "... nothing in this section shall prohibit
a State commission from establishing or enforcing
other requirements of State law in its review of an
agreement, including requiring compliance with
intrastate telecommunications service quality
standards or requirements." I believe that reflects
an intention for the state commission to apply federal
standards when it is applying the methodology to set
rates for access to unbundled network elements, but
certainly preserves to the state certain other
authorities that do not reach the pricing standards.
REPRESENTATIVE GRUENBERG said he wanted to know how she felt
about his suggested change from a policy standpoint.
MS. PIDGEON replied that the term "most efficient technology"
has developed its own meaning through the course of both federal
law and the application of federal law and regulations by state
commission. Therefore, to add the term "commercially
reasonable" will depart from that terminology and perhaps inject
uncertainty where it wasn't intended, she opined.
REPRESENTATIVE GRUENBERG asked whether the term "most efficient
technology" embodies a concept of commercially reasonable.
MS. PIDGEON said she did not believe that the term "most
efficient technology" would include developments or equipment
that would not be available.
REPRESENTATIVE GRUENBERG remarked that Alaska is isolated, and
therefore might be a unique case.
MR. STEINBERG noted that line 7 of page 3 uses the term "To the
maximum extent possible". He offered his belief that such
language provides the legislature with the flexibility to pursue
a course of action that it believes appropriate. He reiterated
his earlier example regarding ACS's rates for "provisioning and
ordering" services in Fairbanks.
Number 1614
REPRESENTATIVE HOLM asked why the RCA has not taken into
consideration the points Mr. Steinberg has made to the
committee.
MR. STEINBERG said that ACS believes that it is because the RCA
has taken the approach that its job is to promote competition
and maintain low rates regardless of the impact on ACS, even to
the point of putting ACS out of business.
MS. PIDGEON pointed out that in making determinations regarding
"provisioning and ordering" service rates, which she referred to
as operation support systems (OSS), the RCA considers all of the
evidence brought before it, and that if a carrier is not happy
with the end results, it has the right to appeal the RCA's
decisions in federal district court or even, at times, state
court. She opined that the appeal process is the method of
redress when a carrier feels that standards have not been well
applied.
REPRESENTATIVE HOLM commented that it just seems unreasonable
that the RCA would consider bankrupting one carrier in an effort
to support a competing carrier.
Number 1811
REPRESENTATIVE GARA made a motion to adopt Amendment 3, to
delete language beginning on page 2, line 4, through page 3,
line 1.
Number 1821
REPRESENTATIVE ANDERSON objected.
CHAIR McGUIRE asked Mr. Steinberg whether competitive service
area could be more narrowly defined such that it would prevent a
carrier from overreaching.
MR. STEINBERG offered that perhaps saying a competitive service
area means either the entire service area or, if the entire
service area is not competitive, then specifically identified
communities within a service area.
CHAIR McGUIRE asked Representative Gara whether he would be
willing to set aside the question of adopting Amendment 3 for
the purpose of first adopting Mr. Steinberg's suggestion as a
separate amendment.
REPRESENTATIVE GARA said he would be willing to do so, but asked
whether instead they could simply delete the language as he is
proposing and then add back the language proposed by Mr.
Steinberg elsewhere in the bill.
MR. STEINBERG clarified that his suggestion would replace the
language currently on page 2, lines 18-23. He said that the
section being considered for deletion goes to the question of
whether, as a policy, regulation over consumer rates ought to be
continued or whether competition - market forces - should be
allowed to work to protect consumers. He opined that keeping
the language in would say that the legislature favors the
concept of allowing market forces to work to protect the public.
REPRESENTATIVE GARA said that because many other parts of the
language he wishes to delete are problematic, he would prefer to
see his amendment adopted, and then, if the committee comes up
with other language, they could insert it somewhere else in the
bill. The language being deleted by Amendment 3 would allow a
carrier, at its own discretion, to get out of tariff rate
setting, to get out of the "just and reasonable price" standard,
and to get out of all of the consumer protections referred to on
lines 15 and 16. He said he did not think that allowing a
carrier to do those things at its own discretion would be a good
idea. He added that he would not have an objection to
redefining "competitive service area" to mean areas that are
really competitive.
Number 2019
A roll call vote was taken. Representatives Ogg, Gara, and
Gruenberg voted in favor of Amendment 3. Representatives Holm,
Samuels, Anderson, and McGuire voted against it. Therefore,
Amendment 3 failed by a vote of 3-4.
Number 2024
CHAIR McGUIRE, after making a motion to adopt Amendment 4 - to
redefine "competitive service area" as suggested by Mr.
Steinberg - determined that the language on page 2, lines 18-23,
already incorporated his concept, and so withdrew Amendment 4.
REPRESENTATIVE SAMUELS commented: "I think they're still on the
hook. And that's the point that we all want to get to. They're
on the hook - they can't use competitive (indisc. - others
talking at the same time) monopolistic market."
REPRESENTATIVE GARA suggested that the word "may" on line 20
gives the RCA the discretion to consider a carrier as being in a
competitive service area even if it isn't. He offered that the
word "shall" should replace the word "may", and that the words
"that are competitive" should be added after "area" on line 23.
CHAIR McGUIRE surmised, then, that Amendment [5] would replace
"may" with "shall" on page 2, line 20, and add "that are
competitive" after "area" on page 2, line 23.
Number 2126
REPRESENTATIVE GARA made a motion to adopt Amendment [5].
REPRESENTATIVE OGG asked for clarification.
CHAIR McGUIRE explained, "it's either going to be the entire
service area or, if the entire service area is not competitive,
you're going carve out that area that is."
Number 2148
REPRESENTATIVE GRUENBERG requested that the question be divided.
He said that he liked what is being proposed for line 23, but
opined that the word "may" on line 20 is the correct word to
use.
REPRESENTATIVES GARA and CHAIR McGUIRE disagreed with
Representative Gruenberg.
CHAIR McGUIRE said that the word "shall" will mandate that it is
either the entire service area or only specifically identified
communities within the service area that are competitive.
REPRESENTATIVE GRUENBERG argued that the word "may" is intended
to do just that.
CHAIR McGUIRE indicated that she now understood Representative
Gruenberg's point and thus agreed with it.
Number 2199
REPRESENTATIVE GARA indicated that he still disagreed. He
offered as an alternative replacing "may be" with "is".
REPRESENTATIVE GRUENBERG argued that the wording currently used
conforms to the "normal" style of drafting."
CHAIR McGUIRE agreed to divide the question.
MS. PIDGEON remarked that there is still great concern on two
fronts: One, who makes the determination of what is or isn't in
a competitive service area where there is competition; two, the
interaction of "this section" with the section pertaining to the
pricing of unbundled network elements. If Version S were to go
into effect as currently drafted, she opined, it would permit
ACS to raise, unilaterally, GCI's unbundled network element
rates. As a result, with essentially no oversight, ACS could
lower its rates to consumers in a competitive area while
simultaneously raising it rates to GCI and thus nullifying
competition once deregulation has been granted.
MR. STEINBERG disagreed, and insisted that the language in
question will only affect retail rates.
Number 2315
CHAIR McGUIRE announced that Amendment [5] will now be to
replace "may" with "shall" on page 2, line 20, and that there is
objection.
Number 2318
A roll call vote was taken. Representatives Gara and Anderson
voted in favor of Amendment 5. Representatives Holm, Samuels,
Gruenberg, Ogg, and McGuire voted against it. Therefore,
Amendment 5 failed by a vote of 2-5.
Number 2339
REPRESENTATIVE GARA made a motion to adopt Amendment 6, to add
"that are competitive" after "area" on page 2, line 23. There
being no objection, Amendment 6 was adopted.
Number 2351
REPRESENTATIVE GRUENBERG made a motion to adopt Amendment 7, to
page 3, line 15, to add "commercially reasonably" after the word
"technology". There being no objection, Amendment 7 was
adopted.
TAPE 03-69, SIDE B
[Not on tape, but taken from the Gavel to Gavel recording on the
Internet, was:
REPRESENTATIVE GARA made a motion to adopt Amendment 8, to page
3, line 10, add "reasonable" after "current". He said he was
sympathetic to the idea that a carrier ought to be able to
recover its most current reasonable costs, which ought not to
include something like excessive executive compensation.]
Number 2384
CHAIR McGUIRE asked whether there were any objections to
Amendment 8. There being none, Amendment 8 was adopted.
Number 2380
REPRESENTATIVE GARA [made a motion adopt] Conceptual Amendment
9, "to rewrite Section 3 to state that the depreciation rate
shall be based on the equipment and facilities' expected life,
not based on this IRS life."
Number 2358
REPRESENTATIVE HOLM objected. He said Conceptual Amendment 9
takes away the flexibility to alter depreciation on the basis of
the carrier's taxable situation. He remarked that he does not
know how that relates to the setting of rates, but he suspects
that the RCA can make that determination. He added, "What we
don't want to do is ... allow the depreciation to be accelerated
so that the rates are set, then, for whoever's leasing the
property from those who are accelerating, so they elevate the
rates too high." On the other hand, he said he didn't want to
"stretch them out so far that they cannot get economies of scale
or they cannot get a return [on] their investment within a
period of life that should be reasonable." He remarked that he
does not like the idea of telling a carrier what would be the
best thing for it to do, from a business standpoint, regarding
depreciation. Depreciation is a very big component in whether
or not businesses are profitable.
REPRESENTATIVE GARA said that from what he's heard, Section 3,
more than any other provision, will affect consumer rates
significantly. He went on to say:
And absolutely, if they are allowed expedited
depreciation, they will pass that cost off to
consumers, and this is one area where I think we will
be hit as legislators for raising consumer rates. ...
And I think it is reasonable to let them depreciate
based on the life expectancy. We don't want to
interfere with how they deduct their taxes - ... that
should be left alone, and that would be left alone -
but how they can pass those costs off to consumers, I
think we should do whatever.
MR. STEINBERG said he does not believe that Section 3 will have
any impact on consumer rates; instead, Section 3 applies only in
competitive service areas. If Version S passes as currently
written, all retail rates are exempt from tariff regulation in
competitive service areas, and the whole issue of how
depreciation impacts regulated ratemaking becomes moot - there
is no regulated ratemaking as to retail rates - it doesn't have
any impact on retail rates. In fact, he remarked, the whole
point of the retail tariff exemption is, retail rates are set by
the market, not really by regulators. So this really has no
impact on retail rates whatsoever, he assured the committee,
adding, however, that it will have an impact on the rates a
carrier can charge for the use of facilities, in a couple of
different ways: on "UNI's" and intrastate access charges.
Number 2251
MR. STEINBERG relayed that the FCC has said it is appropriate,
in a competitive environment, to have accelerated depreciation.
But aside from the FCC's view on this issue, thought also ought
to be given to the fact that in a competitive market, there are
increased demands for innovation, investment, and new services,
and so steps should be taken to ensure that carriers can act
competitively. He stated:
If you want ... [a carrier] to act competitively, you
have to provide [it] ... the opportunity to make those
kinds of investments, and you also have to accommodate
the risk that some of those investments are going to
be not useful anymore because the competitor has found
a way that makes them un-useful. So there are reasons
why, in a competitive environment, accelerated
depreciation is appropriate, but I do not believe
it'll have any impact on consumer rates.
MS. PIDGEON opined that Mr. Steinberg's comments underscore why
Section 3 is so troublesome. She elaborated:
[It's] because what it permits ACS to do would be to
accelerate depreciation rates for those services where
it has monopoly power, and therefore it can raise its
rates to GCI for unbundled network elements and for
access services, as Mr. Steinberg mentioned, and GCI
would ... be required to pay them because ACS is the
monopoly network. And if that happens, it's the same
issue that I mentioned previously about the retail
deregulation provision.
We can't just look at these sections one by one as if
they have no relationship to one another. When both
the retail market is deregulated and ACS is permitted
to raise its rates to GCI, it has the ability to harm
if not kill competition, and therefore it'll be left
having raised its rates to its competitor, taking away
the competitive environment or the competitive
opportunity to GCI, at the same time that it's been
deregulated from the rates that it charged consumers.
So once GCI is forced out of the market [and] ACS is
deregulated, rates can go up ... again. Where is that
competitive pressure on the retail rates?
Number 2167
REPRESENTATIVE HOLM said:
Isn't that what RCA's all about? Isn't that what we
want RCA to do, is to be the oversight of these
relationships between a monopoly and the people that
it's leasing to? And so, obviously, if I'm reading it
right, they should be taking those things into
consideration when in fact these rates go before RCA
to see if they're sufficient, or if they're onerous,
or whatever. So, I don't quite get to connect [with]
the complaint that it could be a problem, [because] we
have RCA that should keep that from being a problem
for you.
MS. PIDGEON replied:
The reason why it would be a problem or has the
potential to be a problem is because this provision
mandates a specific set of depreciation lives that
depart from the depreciation expense and the method of
calculating depreciation expense that has been
typically applied in a regulated environment. And so
it is ... applying accelerated depreciation to
services that are still monopoly services, and it is
telling the RCA to do it in that fashion.
MR. STEINBERG countered:
The references to monopoly and market power and so on
and so forth ... -- essentially, Representative Holm
is correct, we do have an RCA which sets these things.
But more importantly, it is precisely because we do
have competition in these markets that accelerated
depreciation is appropriate; it's where you have
competition. Ms. Pidgeon is absolutely correct: the
regulators do have a way that they have set
depreciation, historically. That's always been in the
monopoly context. The reason we're asking the
legislature to look at this issue and say the policy
should be different for competitive areas is because
it should be different for competitive areas. And so
far, our regulators have not recognized that.
Number 2071
REPRESENTATIVE GARA said he shares Representative Holm's concern
except that there is a problem:
The way this bill is written, once ACS is considered
to be in a competitive service area, they're going to
get themselves out of RCA regulation of prices. So
when you asked ...,"Well, isn't that where RCA will
protect us," RCA won't have any role in setting
prices. And then what's going to happen is, if ACS is
able to charge extra cost to GCI because of
accelerated depreciation - they'll pass those costs
off to GCI - GCI will increase its rates; when GCI
increases it's rates, ACS will be able to increase its
rates. And that's how it will cost the consumer more
money. The pressure for ACS to decrease its rates
will disappear once GCI has to raise its rates because
its had these extra accelerated costs passed off to
it. That's the way I see it.
REPRESENTATIVE HOLM said he agrees with that point although, on
the flip side, is it appropriate to have the rates depressed and
have to charge a lesser fee than would allow for cost recovery,
just for the purpose of depressing retail rates. "Is it in the
public's best interest to depress the profitability of one
company in that sense?" he asked.
REPRESENTATIVE GARA opined that basing depreciation on the true
life of the equipment would not do anything to artificially
depress rates. "We're actually saying, 'Use the reality, use
the real-world fact that this stuff is depreciating over a long
term.' If we were ... forcing them to extend the depreciation
life longer than its real life, then we would be unfairly
regulating ACS." If allowed to accelerate depreciation, a
carrier will benefit at the expense of consumers, he concluded.
Number 1979
REPRESENTATIVE HOLM asked Representative Gara whether he
dislikes the term "to the maximum extent allowed by law" and, if
so, what he would prefer in its place.
REPRESENTATIVE GARA replied, "Based on the equipment and
facilities' expected life."
REPRESENTATIVE HOLM said he did not have a problem with that.
MR. STEINBERG remarked that the reason why the IRS allows for
accelerated depreciation is because it promotes investment;
businesses are able to get their money back a little bit sooner
and are then able to make investments "in the future." He
opined that Section 3 will accomplish this goal.
MS. PIDGEON, in further response to Representative Holm's
concerns, said:
By its language, although it states that the proposed
depreciation rates would apply in a competitive
service area, ... it would permit for the change of
those depreciation rates for all rates in that
competitive service area. I think one of the things
that has to be emphasized here is that in every
instance that we're talking about a service area,
we're really talking about two major markets. One is
the retail market for the customers, and the other is
the wholesale market as between the carriers.
And so, if depreciation rates are accelerated for all
rates, which includes unbundled network element rates
and access rates, which are noncompetitive services,
there [are] ... no competitive effects to keep those
rates down once you've accelerated depreciation. And
we do have a tax expert here, actually, who can
describe why the [IRS] has accelerated depreciation
for federal income tax computations as opposed to
what's generally used for ratemaking purposes.
CHAIR McGUIRE asked Representative Gara to repeat what
Conceptual Amendment 9 would do.
REPRESENTATIVE GARA said that Conceptual Amendment 9 would be to
rewrite Section 3 to allow the depreciation rate to be based
upon the equipment and facilities' life expectancy.
Number 1861
REPRESENTATIVE ANDERSON said he objects.
CHAIR McGUIRE asked what GCI uses for depreciation rates.
MS. PIDGEON asked for what purposes.
CHAIR McGUIRE replied "Life of equipment."
MS. PIDGEON said she did not have that information. She added,
however, that GCI is the competitive carrier, so when it
establishes its retail rates, it does so to compete in the
market. "And so, as Mr. Steinberg said, when there is a
competitive service area or a competitive provider, the issue of
depreciation is a component of rate setting and doesn't really
factor in," she also added.
REPRESENTATIVE ANDERSON remarked that ACS and GCI are almost the
same size in terms of their customer base, and offered his
belief that the two carriers had different depreciation rates.
He asked Ms. Pidgeon whether she would agree on those points.
MS. PIDGEON replied:
Again, I have to emphasize that this section applies
for all rates established by the commission in the
competitive service area. It doesn't only apply to
retail rates where you might find that there's
competition between the two carriers. It would also
apply to rates for those services that continue to be
monopoly services.
CHAIR McGUIRE asked about the possibility of changing the
language in Section 3 to clarify that it applies only to retail
rates, where, she surmised, ACS believes it is at a disadvantage
in the "retail rate setting area."
Number 1791
MR. STEINBERG responded:
We believe that it is essential that this depreciation
issue apply, in fact, to the establishment of
unbundled network element lease rates. Why is that?
Well, these lease rates are supposed to be the rates
that are set on a forward-looking basis, on the basis
of what a new company would be spending if it were
coming in to make this investment. Well, what do you
think a new company would be spending if it came in to
make this investment? Well, it would be using
accelerated depreciation rates. That's exactly what a
new company would be doing if it were coming in to
make this investment. And quite frankly, we believe
it is perfectly appropriate in that context; that is
what a forward-looking economic cost for depreciation
would be.
REPRESENTATIVE HOLM said that in his business, he uses
accelerated depreciation for the purpose of improving his
technology.
MR. STEINBERG said that Representative Holm is correct. He went
on to say:
It really is an important issue, a policy for this
state, about whether it wants to encourage investment
in telecommunications going forward, or whether it
doesn't. And accelerated depreciation certainly is an
incentive for investment in new and improved
facilities. ... In Anchorage, where we have a rate
case going on concerning retail rates - and this is
different than a "UNI" setting, I understand, but we
are obviously in a very competitive environment in
Anchorage - the RCA has established very long asset
lives for some of our assets, such as 30 years for the
basic copper wire in the ground. We asked GCI what
service lives they use for the very same assets, and
the answer we got from GCI was 12 years. So again,
GCI has an incentive to make those investments because
they depreciate their materials quite a bit more
quickly than we're allowed to.
Number 1683
REPRESENTATIVE ANDERSON called the question.
Number 1670
A roll call vote was taken. Representative Gara voted in favor
of Conceptual Amendment 9. Representatives Samuels, Anderson,
Ogg, Holm, and McGuire voted against it. Therefore, Conceptual
Amendment 9 failed by a vote of 1-5.
Number 1652
REPRESENTATIVE GARA [made a motion to adopt] Amendment 10, to
delete the applicability section located on page 4, lines 1-8.
He opined that this section, if the RCA doesn't act within 90
days, gives one party the ability to get out of rate setting,
adding that he believes that rate setting protects the public.
CHAIR McGUIRE remarked that perhaps that 90-day deadline would
encourage efficiency on the part of the RCA.
Number 1612
REPRESENTATIVE ANDERSON and CHAIR McGUIRE objected to Amendment
10.
REPRESENTATIVE GRUENBERG noted that Amendment 10 would delete
Section 4.
Number 1565
A roll call vote was taken. Representatives Gara, Gruenberg,
and Ogg voted in favor of Amendment 10. Representatives
Anderson, Holm, Samuels, and McGuire voted against it.
Therefore, Amendment 10 failed by a vote of 3-4.
REPRESENTATIVE GRUENBERG, noting that he'd been out of the room
during the vote on Conceptual Amendment 9, said he wished to
speak to the issue of Section 3. He said:
Section 3, the issue of depreciation, is a very
technical issue in this part of the law - I know that.
And I was concerned about us getting into this at all
because it is so technical. And I was just wondering
what the feeling would be just to delete Section 3?
[After some discussion among members, it was decided that that
suggestion would not be considered as an amendment at this
time.]
Number 1490
REPRESENTATIVE ANDERSON moved to report the proposed CS for HB
106, Version 23-LS0405\S, Craver, 5/17/03, as amended, out of
committee with individual recommendations and any forthcoming
fiscal notes.
Number 1460
REPRESENTATIVE GARA objected.
Number 1450
A roll call vote was taken. Representatives Gruenberg,
Anderson, Ogg, Holm, Samuels, Gara, and McGuire voted in favor
of reporting Version S, as amended, out of committee.
Therefore, CSHB 106(JUD) was reported out of the House Judiciary
Standing Committee by a vote of 7-0.
ADJOURNMENT
Number 1444
The House Judiciary Standing Committee was recessed at 7:45 p.m.
to a call of the chair. [The meeting never was reconvened.]
| Document Name | Date/Time | Subjects |
|---|