CS FOR SENATE BILL NO. 100(L&C) "An Act relating to enhanced 911 surcharges imposed by a municipality." This was the third hearing for this bill in the Senate Finance Committee. 11:28:27 AM Co-Chair Green noted that her staff had assisted Senator Bunde's staff in the development of this bill. Senator Bunde, the bill's sponsor, moved for the adoption of CS SB 100 (FIN), Version 24-LS0407\R as the working document. Co-Chair Green objected for explanation. KIM CARNOT, Staff to Senator Green, noted that a memorandum from Co-Chair Green's office, dated April 18, 2005 [copy on file] had been distributed. It detailed the changes included in the Version "R" committee substitute as follows. Section 1. AS 29.10.200(37) is amended to include the enhanced 911 system under Home Rule applicability. Section 2. AS 29.35.131(a) 911 surcharge is amended Page 2 · Line 11 -- $1.50 surcharge for wireline and wireless · Line 13 - 15 --L&C version language allowing for vote to go about cap remains in the bill. · Line 15 - 17 -- requires parity between wireless telephone and wireline telephone surcharge · Line 24 - 26 -- requires notification by the municipality when the surcharge is assessed and when it is changed. Section 3. AS 29.35.131 is amended by adding two new sections · (i) Page 2 Line 30 - Page 3 Line 26 defines appropriate use of the enhanced 911 surcharge · (j) Page 3 Line 27 - Page 4 Line 3 requires enhanced 911 providers to execute an agreement addressing the duties and responsibilities of each and establishing the priorities for the use of the E-911 surcharge revenue. Section 4. Amends AS 29.35 to allow municipalities to require implementation of E-911 from a multi-line telecommunications system. Section 5. AS 29.35 is amended to apply to home rule and general law municipalities. Section 6. AS 29.35.131(h) is repealed (home rule applicability). Ms. Carnot noted that Sections 1, 5, and 6 would make structural changes in order "to make the bill generally applicable to any form of government; any form of community in the State". Ms. Carnot stated that the majority of the changes made are in Sec. 2 of the bill. While a $1.50 limitation would be imposed, language in Sec. 2 would allow the decision to increase the surcharge above that amount to be made locally. In addition, parity in the surcharge amount must occur in regards to wireless and wired phone service. There would also be a requirement that a municipality rather than the telephone company must notify phone customers at the time a surcharge was imposed or changed. Ms. Carnot continued that Sec. 3 would define the appropriate use of the E-911 surcharge funds so that the funds would not be "mismanaged or misused". Both federal and other states' requirements were considered in the development of this section. Sec. 3(j) would require an agreement to be entered into when another provider in lieu of the local municipality, provides the service. Such an agreement would clarify how the funds would be utilized and would allow for regional planning efforts between, for example, a borough and its municipalities. The agreement should also include the Alaska State Troopers were their service provided in the area. The purpose of subsection (j) would be to help communities coordinate planning on how to utilize "the money wisely" and accommodate system growth. Ms. Carnot stated that Sec. 4 would require multi-line telecommunication systems, often referred to as Private Branch Exchange (PBX) systems, to implement technology through which emergency responders would be notified of the location of the caller. However, concern was voiced regarding this requirement and in response, rather than specifying a timeline in State Statute, the language was included that would allow a municipality to develop an ordinance and regulate the timeline. 11:32:15 AM Senator Bunde conveyed that the federal Enhanced-911 requirements "are costing our communities a lot of money". Absent the ability to raise the E-911 surcharge amount, as would be provided by the legislation, communities would be required to increase local property taxes and other sources. It is also important to take into consideration the increasing use by wireless phones of the 911- service and require them to make "a larger contribution". It is "a fairness issue". This would be likened to asking those who use something to pay for it. Co-Chair Wilken noted that the City of Fairbanks had written a letter dated April 7, 2005 [copy not provided] regarding PBXs and the fact that this Legislation might incur significant expense to some businesses, such as hotels, that currently own PBX systems, as some older versions are not up-gradable. To that point, he asked whether his understanding of the situation was correct. Ms. Carnot responded that language in Sec. 4, page four, lines five and six of Version "R" would provide a municipality the option of whether or not to require the implementation of such technology. The requirement would be a local decision that would allow for public comment and consideration. Co-Chair Green noted that others had also raised this concern. Efforts to accommodate it were made. Co-Chair Wilken noted that a technical correction might be required as the word "with" appears to be missing between "guide" and "valid" in language in Sec. 4, page four, line nine. Co-Chair Green suggested that rather than the word "with" being inserted, a comma might suffice. Co-Chair Green stated that the bill's drafter would review the language. 11:36:00 AM Co-Chair Wilken noted that a copy of the Version "R" committee substitute had recently been provided to the Mayor of the City of Fairbanks, and a response is expected. Continuing, he expressed that the City "is very, very concerned about the $1.50 cap" limitation. According to the City's calculations, a level ranging between $2.50 to $3.50 would be required. Therefore, he requested that consideration be given to allowing the local governing bodies to determine the level that would be needed to support their service. Co-Chair Wilken asked whether "the issue about who controls what" in regards to cities within boroughs had been rectified. Co-Chair Green affirmed that that issue had been addressed in Sec. 3(j) on page three, beginning on line 27. That language specifies that an "agreement must be reached between overlapping geography." 11:37:12 AM Co-Chair Wilken asked for further clarification about how a community vote on an E-911 issue would transpire in the case of a city within a borough, in which the city operates the 911-system. 11:37:28 AM Ms. Carnot responded that this is a two-part issue. Sec. 3(j) would establish the agreement between the primary Public Safety Answering Point (PSAP) and the secondary PSAP. She explained that the surcharge funds collected by the local telephone company are transferred to the designated primary responder. In the Mat-Su area, for example, which emergency responder would respond to the call would be determined by the type and location of the call. Either the Alaska State Troopers or the municipality could respond. Therefore, the language in Sec. 3(j) would develop the mechanism through which those communities could work to form an agreement in regards to how services would be provided in addition to how the E- 911 surcharge would be utilized. Ms. Carnot stated that the people being served in the E-911 service area would vote on the surcharge level issue. She was unsure regarding which entity would be responsible for coordinating the election. 11:39:09 AM Co-Chair Green asked whether the City of Fairbanks was the Fairbanks North Star Borough's primary PSAP. Co-Chair Wilken understood that the City provides the E-911 service, as the Fairbanks North Star Borough is a second-class borough and as such "does not have public safety powers". Therefore, the City "shoulders" the expense of the service, borough-wide. Financial assistance would be welcome as the City has a three million dollar deficit in that regard. Co-Chair Wilken noted however, that while further clarification of the voting process would be sought, he would not object to the bill moving forward. 11:40:07 AM Co-Chair Green asked whether the language in Sec. 3(j) would apply to the Fairbanks area, as she doubted that any of the area's 911- funds were directed to any budget other than that of the City's primary PSAP service budget. Co-Chair Wilken understood that the City supported the Fairbanks' E-911 service in its entirety. He worried that voters living outside of the City but within the Borough might decide not "to support moving that responsibility from the City to Borough-wide". Uncertainty in regards to how this might pan out was the reason that he had sought further advice from the Mayor of Fairbanks. Co-Chair Green understood that "the entire universe of who is served by the system" would pay. In other words, anyone whose emergency calls transit through that system should support it. Ms. Carnot stated that both Co-Chair Wilken and Co-Chair Green's "understanding of the situation are correct". 11:42:29 AM Ms. Carnot counseled that while "a sales pitch" would be required to garner borough wide support of the bill and increasing the 911 surcharge, "selling the issue of bringing emergency 911 services to people in your borough is a lot easier than what local communities often have to sell in terms of increasing fees or taxes". Co-Chair Wilken agreed, but noted that his concern centers on the fact that, as his second-class borough does not have safety powers, it would be unable "to tax for those powers in order to transfer monies from the borough to the provider, which is the City of Fairbanks". Ms. Carnot conveyed the understanding that this situation would fall under "what is defined as the Enhanced 911 System". She referred the Committee to Sec. 2(a), page one line seven, as this language would specify that "A municipality may, by resolution or ordinance, elect to provide an enhanced 911 system …". This language might address Co-Chair Wilken concern, as, by definition, the enhanced-911 system would include the entire service area of the borough beyond the borders of the municipality. Co-Chair Wilken understood therefore that "Fairbanks may, by resolution or ordinance, elect to provide enhanced 911 to the entire borough". Co-Chair Green clarified that in order for the service to be provided, an agreement between the borough and the city must exist. The terms of the agreement between the City of Fairbanks and the North Star Borough could include such things as who would conduct the election. Ms. Carnot noted that current language in the Statute definition section, AS 29.35.137, specifies that an enhanced 911-service area "means the area within a municipality's jurisdiction that has been designated to receive enhanced 911 services". This language would allow whatever provisions are agreed upon by the City of Fairbanks and the North Stat Borough to apply. Co-Chair Wilken continued to voice concern regarding whether the powers of the Legislature or the powers of the City could "bleed" over to each other in regards to authority or the disbursement of funds from the citizens of the Borough to the City. It should be clarified as to whether the City could collect fees from users outside of the City, and, could the Borough funnel money back to the City. The concern continues about whether people in the Borough would support a proposal to begin paying for 911 services, since that is not currently the case. He would await input from the City in this regard. Co-Chair Green asked for confirmation that there is currently no collection of 911 fees outside of the City of Fairbanks. Co-Chair Wilken affirmed that to be correct. Senator Bunde asked whether language in Sec. 3(i), page three, lines one through four, would prohibit municipalities from using the surcharge revenue to lease or purchase new facilities for its 911 call centers; the funds could only be utilized "to rejuvenate or remodel existing structures". Co-Chair Green opined that the language would not allow the funds to be used to construct new facilities as the language specifies that, "The surcharge revenue may not be used for constructing buildings, leasing buildings, maintaining buildings, or renovating buildings, except for the modification of an existing building to the extent that is necessary to maintain the security and environmental integrity of the public safety answering point and equipment rooms". Senator Bunde commented that this clarification should be on "the record" as some might otherwise interpret enhanced 911 service to allow such expansion. Ms. Carnot noted that the funds could be used to modify an existing building. Senator Bunde acknowledged that modifications would be permissible. Co-Chair Wilken conveyed to the Committee that a recent Fairbanks Daily News Miner newspaper editorial [copy not provided] had assisted in clarifying the question, as it attests that were the bill to become law, "local governments" such as the Fairbanks North Star Borough Assembly "would be allowed, after holding a public hearing, to raise the E-911 surcharge to a maximum of $2.00, now $1.50 per wireline and cell phones. In the Fairbanks Borough, the extra money raised, about a million [dollars] would largely go the City of Fairbanks since it is the primary E911 provider. The City, in turn, would be able to reduce its property tax rate cause it's no longer subsidizing…." He stated that the editorial addressed his concern as it conveys "that money could be taken from the Borough and move it to the City". Co-Chair Green removed her objection to the adoption of the Version "R" committee substitute. There being no further objection, the Version "R" committee substitute was ADOPTED as the working document. Conceptual Amendment #1: This amendment inserts a new subsection into Section 3 of the bill as follows. "call taker" means a person employed in a primary or secondary answering point whose duties include the initial answering of 911or enhanced 911 calls and routing the calls to the agency or dispatch center responsible for dispatching appropriate emergency services and a person in a primary or secondary answering point whose duties include receiving a 911 or enhanced 911 call either directly or routed from another answering point and dispatching appropriate emergency services in response to the call. The term "call taker" is synonymous with the term "dispatcher" in that it is inclusive of the functions of both answering the 911 or enhanced 911 calls and dispatching emergency services in response to the call. Co-Chair Green moved for the adoption of Amendment #1 and objected for clarification. Ms. Carnot explained that, during discussion on the bill, it was determined that the term "call taker" should be defined in State Statutes as its inclusion would allow for continued funding of that position with the 911 surcharge funds. The term currently appears in Sec. 3(i)(3) and Sec. 3(i) (4) of Version "R", page three, lines 18 and 21. She read the definition of call taker as depicted in the amendment. Co-Chair Wilken noted, for the record, that, the information provided on an Alaska Municipal League (AML) handout titled "E-911 Dispatch Center Costs and Revenues Selected Alaska Cities", which depicts current call centers' operating costs, the current E-911 revenues received, and the current revenue shortfalls being experienced in Anchorage, Fairbanks, Kenai, Juneau, and Kodiak, depicts that Anchorage and Fairbanks, for instance, are each currently experiencing an approximate four million dollar shortfall; Kenai is experiencing an approximate $1.8 million shortfall; Juneau has an approximate $900,000 shortfall; and Kodiak has an approximate $550,000 shortfall. When the $1.50 surcharge rate being proposed is applied to the number of telephone lines in each community, Anchorage would experience a surplus of approximately $2.4 million dollars. However, Fairbanks' would continue to have a deficit of approximately $2.4 million; Kenai would have a deficit of approximately one million dollars; and Juneau would have an approximate $100,000 deficit, and Kodiak would have an approximate $350,000. These figures would explain the reason there had previously been a cut-off at the 100,000- population level. Co-Chair Wilken stated that this should be a consideration, as this legislation would not assist "my town at all; and that's why they're so upset about" it. In addition to the fact that a $1.50 surcharge would be insufficient, the community of Fairbanks would also incur the expense of an election. He empathized with the community's "distress" regarding the bill. 11:53:46 AM Co-Chair Wilken remarked that the forthcoming October 2005 local election in Fairbanks would already include "contested, acrimonious, and expensive" mayoral and city council elections. Furthermore, since local governments are prohibited from spending money to further ballot issues, the charge of garnering support for the E-911 surcharge ballot issue would fall on local citizen volunteers. While the 911 emergency system is available to any caller, only a small percentage have used it and know the value of it; therefore, convincing people to approve such a surcharge on each phone line could be a difficult task. To that point, he voiced the preference that rather than a community vote occurring, any decision regarding the local 911 service, including the surcharge level, should be a determination made by the local assembly. While he appreciated the intent of the legislation, he voiced having "grave reservations about it". 11:55:54 AM Co-Chair Green reiterated that Amendment #1 is a conceptual amendment. The bill drafter would review both the language in the amendment and the language identified earlier by Co-Chair Wilken. [NOTE: While Co-Chair Green did not formally remove her objection to Conceptual Amendment #1, its removal was implied.] Amendment #1 was ADOPTED without further objection. Senator Bunde moved to report the bill, as amended, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, CS SB 100(FIN) was REPORTED from Committee with previous fiscal note #1, dated February 15, 2005 from the Department of Public Safety and previous fiscal note #2, dated February 15, 2005 from the Department of Commerce, Community and Economic Development. AT EASE 11:56:59 AM / 11:57:58 AM