CS FOR SENATE BILL NO. 100(L&C) "An Act relating to enhanced 911 surcharges imposed by a municipality." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Green informed the Committee that the forthcoming committee substitute was developed as the result of public testimony to a similar bill she had sponsored the previous Legislative session. The committee substitute changes are detailed in a Memorandum from her office, dated April 5, 2005 [copy on file]. The Memorandum also corrects inadvertent language omissions in Sections 4 and 5, as requested by the bill drafter. These changes would allow the bill "to apply to all municipalities, regardless of organization, equally". Co-Chair Wilken moved to adopt the aforementioned committee substitute, CS SB 100(FIN), Work Draft Version 24-LS0407\S as the working document. Co-Chair Green objected for purposes of explanation. She reviewed the changes as outlined in the Memorandum as follows. Work Draft to CSSB 100 (FIN) "Version S" Section 1. AS 29.10.200(37) is amended to include the enhanced 911 system under Home Rule applicability. Section 2. AS 29.35.131(a)911 surcharge Page 2 square4 Line 11 - $1.50 surcharge for wireline and wireless (from $2.00) square4 Line 23 - requires notification by the municipality when the surcharge is assessed and when it is changed. square4 Line 27 - links the 911 surcharge to the federal definitions. square4 Line 29 - requires the Borough to reimburse the municipalities for their expenses first and that reimbursement shall occur at least every three months. Section 3. AS 29.35 is amended to include Private Branch Exchange (PBX) phone identification to ensure that responders go to the actual location of the caller. Section 4. AS 29.35 is amended to apply to home rule and general law municipalities. Section 5. AS 29.35.131(h) is repealed (home rule applicability). Co-Chair Green noted that the proposed change to lines four and five of Section 1, are supported by the bill's drafter. The customer notification language being proposed in Section 2, page two, beginning on line 23 is included because, historically, the telephone utility has borne the responsibility for explaining to their customers that they did not increase the rate on their own; the cost of providing Enhanced 911 (E-911) is allowed to be passed on to the ratepayer. In addition, aligning state definitions with federal definitions would further clarify to municipalities the proper usage of the E-911 or 911 "funds for the purposes for which they were intended". This is specified in Section 2(a), page two, beginning on line 27. This expense reimbursement language would clarify that Boroughs with multiple Public Safety Answering Points (PSAPs) municipal service areas within their boundaries and in which the Borough is the primary collector of the E-911 surcharge, must distribute those funds to the municipalities. She noted that the primary purpose of E-911 systems is to provide emergency responders both the location of the caller and the caller's phone number. Senator Bunde, the bill's sponsor, noted that SB 100 was developed at the request of municipalities who, while being required to comply with E-911 service regulations, had no funding mechanism in place through which to pay the associated expenses. This bill would provide that funding mechanism. He noted that several testifiers were available to further explain the situation. 9:16:36 AM JIM ROWE, Executive Director, Alaska Telephone Association, testified via teleconference from Anchorage in support of the Version "S" committee substitute on behalf of the Association's fourteen-member companies that serve Rural Alaska. The hope is that the bill would be adopted this Legislative Session. While the original version of SB 100 proposed a $2.00 maximum surcharge limit for E-911 services, the Association is in support of the $1.50 surcharge proposed in Version "S". "This is double the amount that is currently charged". Language in Section 2(a), line 16, page two would address "parity in the payment between wireless telephone service and wireline telephone system". This issue is very important to the members of the Association because of the competition between wireless and wireline service carriers. "Competitive neutrality is important" and if one service is required to implement a rate increase on its service, then "the competing service should also be required to do that". The language incorporated into line 24, page two of Section 2(a) that would require a municipality to inform the utility's customers about the rate increase is important, as it would further clarify the reason for the increase. Mr. Rowe stated that the PBX and other telephone system language identified in Section 3, page three, is an area that could easily invoke confusion. In layman's terminology, there are "dumb PBXs" and "smart PBXs". Smart PBXs are systems that are able to communicate both the caller's phone number and location. There would be costs associated with upgrading or replacing the older "dumb" PBXs. Consideration should be given to specifying a time frame in this legislation in which entities that provide telephone systems must implement the required upgrade. In conclusion, the Association supports the bill. 9:20:35 AM TIM ROGERS, Alaska Municipal League (AML), testified via teleconference from an offnet site and noted that, while he does not have access to a copy of the Version "S" committee substitute and therefore could not address it specifically, AML does not take issue with the customer notification process that would be required of municipalities. AML is, however, concerned about the proposal to reduce the surcharge from $2.00 to $1.50, as AML considers $2.00 to be a more reasonable amount based on some of the local government needs. Nonetheless, the bill would be acceptable. DON SAVICH, Wasilla Police Department, City of Wasilla, testified via teleconference from an offnet site in support of the bill. 9:23:09 AM BILL DOOLITTLE, Contract Project Manager, Municipality of Anchorage 911 System, testified in Juneau and informed the Committee that two components of the bill could generate "significant impediments to 911 programs within the State". The first, located in Section 2(a) line 26, page two, is the language specifying that "The municipality may only use the enhanced 911 surcharge for phase I and phase II enhanced 911 services, as described in 47 CFR 10.18 as revised?" That specific code of federal regulations "only applies to wireless carriers". This would, in effect, "block using the 911 surcharge for even a basic 911 system within the State". Mr. Doolittle explained that the initial step in developing a 911 system is "the basic" 911 system, which allows 911 calls to be made. An E-911 system, which is built upon the basic system, would provide both the phone number and the address of the caller. Wireless phase I capability, which would provide the address of the cell site transmitting the call, and Wireless phase II capability, which would provide the latitude and longitude of the handset making the call, are programs developed upon the basic 911 and E- 911 systems. Mr. Doolittle noted that the second significant matter involves the issue of reimbursement to the municipality, as specified in Section 2(a), line 28, on page two. The language specifies that "A borough must use the enhanced 911 surcharge to fully reimburse each city within the borough for expenses borne by the city for the enhanced 911 services before the enhanced 911 surcharge may be used for other expenses of the enhanced 911 system". He noted that "there are necessarily some area-wide types of expenses, such as the "the database management piece", that must be put in place" prior to the 911 system becoming operational. "The database management piece aggregates the subscriber records from all the carriers" for the location identification capabilities for the E-911 system. "This is generally a super-jurisdictional area", and in addition to its one- time start-up fee, continuous monthly expenses would be associated with the maintenance of those records. Mr. Doolittle continued that trunking and circuitry from each of the carriers to the primary PSAP would also be necessary. In a situation where there might be multiple PSAPs, there could be the opportunity to identify municipal-specific expenses; "but they would be equally reimbursable to all municipalities or a borough's 911 center". He offered "as an alternative" the ability "to determine precedence of cost" of such things as database costs, infrastructure costs, and technology costs. These components would be less expensive were they aggregated among agencies. Doing so would allow for some of the surcharge revenues to reimburse call- taking and operational expenses associated with the 911-program. The current challenge is that the existing surcharge program does not allow reimbursement for many of these costs, and, as a result of an inadequate surcharge, many 911 programs are operating at a deficit. Co-Chair Green asked what specific changes would be required to address these concerns. The purpose of this legislation is to remind the collectors and the recipients of the 911-surcharge that the funds are generated for "specific use", as defined in federal law. Mr. Doolittle pointed out that there are two classes of carriers: local exchange carriers who are regulated at the local level and wireless carriers who are regulated by the Federal Communications Commission (FCC). Therefore, two sets of rules govern such things as surcharges and collections. The federal government has allowed each state to establish its own 911 program. As a result, 50 unique programs exist in the nation, and 27 states impose differing rates for the two carrier systems. Therefore, State "statute is what directs or allows what a local level 911 program would be". As a result of interaction with numerous municipalities and boroughs in the State, it has been determined that "one of the challenges" is achieving an inter-local agreement about the scope of services and the scope of the 911 program. Current statutes provide wide latitude to municipalities in that regard. "Many municipalities and boroughs are challenged" in regards to specifying the roles and responsibilities and the allocation of surcharges. "The priority of those costs could be specified on a Statewide basis based on the reality of how you make those expenditures. But really the needs and configurations of dispatch centers within a borough or municipality ? is a local selection". The local public safety agencies "get to choose who will dispatch for them". This would include decisions regarding whether to have a radio dispatch center and 911-call taking and service area responsibilities. Mr. Doolittle concluded that some alternative language regarding these issues could be developed and provided to the Committee. However, being unsure as to whether the Committee wished to further delay the bill, he noted that there "is great support for the bill as written today", and his comments could be viewed as cautionary in regards to how some of the language is written and the challenges it might create. Co-Chair Green voiced the desire to correct the bill in Committee rather than allowing it to move out of Committee "flawed". Co-Chair Green noting that Mr. Doolittle's first concern dealt with the federal regulations, asked for further clarification regarding his second concern. Mr. Doolittle verified that the federal concern involved tying the surcharge to Phase I and Phase II. His second concern dealt with "reimbursement to municipalities as a priority". Co-Chair Green acknowledged and asked whether Mr. Doolittle understood the issue the legislation was intended to address. Mr. Doolittle assured that he understood, as he has worked with a number of municipalities. There "is a question regarding program scope and accountability to municipalities within boroughs", as not all 911 programs hold monthly, quarterly, and annual meetings. The scopes of many programs are not published and explicit. "It would be very easy to have that requirement. It is very simple and straight forward to do that on a local level." Co-Chair Green asked how the issue could be addressed in State Statute. Mr. Doolittle suggested that there be a requirement "that a 911 program explicitly document the scope of the program and reimbursement to agencies". This would establish "the groundwork" for establishing a mechanism through which to address "a bona fide request" for reimbursement from an agency. 9:31:15 AM AT EASE 9:31:41 AM / 9:39:45 AM Co-Chair Green stated that upon the conclusion of today's public testimony, staff would work with "experts" to further develop the bill's language. Co-Chair Wilken voiced being pleased that the bill would be further refined as he has a few problems with it; specifically whether a surcharge level of $1.50 would be appropriate. Continuing, he asked regarding the home rule city within second-class borough situation that exists in Fairbanks; if the City of Fairbanks is responsible for the 911/E-911 system and they wished to adjust the rate, the question is who would vote on the issue: the residents of the City or the residents of the Fairbanks North Star Borough. Co-Chair Green asked for further clarification as to which entity manages the 911-system. Co-Chair Wilken affirmed that the City does. Senator Bunde speculated that the vote would depend on who the subscribers of the telephone utility system were: whether the subscriber base was limited to the City or included other areas of the Borough. Co-Chair Wilken noted that he would ask the community to provide the answer to this question. STEVE HEBBE, Lieutenant, Anchorage Police Department, Municipality of Anchorage testified in Juneau and agreed with Senator Bunde that anyone assessed the surcharge would vote on it. Therefore, were the surcharge borough-wide, there would be a borough-wide vote. Allowing only the City subscribers to vote on an Areawide surcharge would prevent the borough-wide subscribers from having a voice in the matter. Co-Chair Green understood therefore that anyone residing in the telephone service area should be provided the ability to vote on the issue. It should not be limited solely to the residents of the City of Fairbanks. Lieutenant Hebbe affirmed that anyone to whom the surcharge rate is charged should have the right to vote on it. Co-Chair Green asked Mr. Rogers his position on the issue. Mr. Rogers concurred with Lieutenant Hebbe that the entire service area should vote. Co-Chair Wilken stated that his office would develop a definitive answer to the question. Co-Chair Green agreed, as she recalled the issue of whom should be charged the surcharge was the crux of Fairbanks residents' discussions last year during the discussions on her bill. 9:44:18 AM Senator Bunde commented that the intent of the language, as drafted, was to provide "that combination of flexibility for the municipality and protection from the municipality" in that the people in the service areas would be allowed to vote regarding the surcharge assessment. How this would affect other divisions in the area should be further clarified. CHUCK KOPP, Kenai Police Department, testified via teleconference from Kenai and recounted that, in 1985, the Kenai Peninsula Borough included three home rule cities: Kenai, Homer, and Seward and one first class city: Soldotna. Each had their own 911 program supported by residents of that particular city. Eventually, all four cities transferred their individual authorities to a singe borough-wide authority to which all borough-wide residents paid a surcharge. The situation in Fairbanks mirrors that of the Kenai Peninsula in that the City of Fairbanks has agreed to manage the 911-program for the entire Borough, Therefore, the entire borough would vote on the surcharge. A single unified 911 system should be the preferred choice instead of a "fragmented" system, which was originally the case in the Kenai Peninsula Borough. He appreciated the Committee's work in addressing this complicated issue and he supported moving the bill forward. Mr. Kopp supported Mr. Doolittle' comments regarding the establishment of program management guidelines. "Any borough that has 911 authority must have a program, documented, that explains how the program is managed", to include language addressing the program's reimbursement methodology. WALT MONEGAN, Police Chief, Municipality of Anchorage spoke in Juneau in support of the bill. He noted that the Anchorage Police Department is the manager of the Anchorage PSAP of which Lieutenant Hebbe was the commander. He voiced appreciation for the efforts being exerted regarding the surcharge. The bill is supported "in that every dollar that is now being utilized to subsidize the shortfall could be reallocated to its proper duties". Addressing the funding shortfall "would effectively enhance all public safety efforts within our municipality". Senator Olson asked Mr. Monegan his position in regards to the proposal to reduce the surcharge from two dollars to $1.50. Mr. Monegan voiced the preference for a two-dollar surcharge. Adopting a two-dollar levy would provide "more breathing room" for managers and would negate the expense of possibility being required to conduct an election to increase the fee over time. Senator Olson asked whether "a significant decrease in service" might occur absent that fifty-cents. Mr. Monegan replied "not at this point". JOHN FULLEMWIDER, Fire Chief, Municipality of Anchorage, spoke in Juneau and stated that a great deal of discussion has occurred in regards to the language in this bill and changes that should be made. While he, like Mr. Monegan, supported the bill as written, he opined that a few changes could be made to further enhance it and make it a "little bit more palatable from the borough's standpoint". He reiterated Lieutenant Hebbe's remarks to the effect that the Municipality of Anchorage "does not have a dog in that fight". Representatives of the Anchorage fire and police community are testifying today "because of public safety issue". When people call 911, they anticipate that the call would be answered and that the response would be to the correct location, regardless of whether the call is made from a hardwire or wireless phone. "That is what this legislation is all about ? it's the ability to turn the switch on so that we can find you or somebody else that has a cell phone and go forward". Anchorage has been "the first" to address the wireless issue, but the communities of Fairbanks, Kenai, Nome, and Juneau "are right behind us". He asked the Committee to support the legislation. Co-Chair Green requested that those willing to work on revising the bill's language to address the issues raised by Mr. Doolittle, work with her and Senator Bunde's staff in that regard. Senator Hoffman asked whether information could be provided in regards to how the Alaska State Troopers' Department of Public Safety, emergency services system operates on a statewide basis. STAN HERREA, Director/Chief Technology Officer, Enterprise Technology Services, Department of Administration responded that the Department's role in the 911 program is two-fold in that the Department of Administration and the Department of Military and Veterans Affairs jointly house the coordinator for the Statewide 911 program. The Department's role with regards to the 911- coordinator "is to ensure compliance with the law, or the statutes that are established, for 911". This would include such things as the collection of the surcharge and the compliance with the terms within the legislation. The Department of Public Safety's commissioner, William Tandeske, "has voiced concern about the affects of the collection of 911 surcharges; specific ? to the Mat- Su Borough and how that affects the PSAP and ? the role of the Alaska State Troopers in that". The question is "who is actually getting the funds verses who is having to provide the services". He stated that a Department representative would work with Co-Chair Green's staff to address language revisions. Senator Hoffman commented that 911 programs must be operated 24 hours a day, seven days a week, year-round. To that point, the question is how the Alaska State Trooper 911 program is manned and funded, specifically as it applies to responding to Rural calls for assistance from anywhere in the State. A response from the Alaska State Troopers would be appreciated. Co-Chair Green responded that the Troopers would be contacted for a response. Co-Chair Wilken asked to withdraw the motion to adopt Version "S". There being no objection, the motion to adopt Version "S" as the working document was WITHDRAWN. Co-Chair Green ordered the bill HELD in Committee in order to further modify its language. 9:56:29 AM