HOUSE LABOR AND COMMERCE STANDING COMMITTEE May 7, 1999 3:26 p.m. MEMBERS PRESENT Representative Norman Rokeberg, Chairman Representative Andrew Halcro, Vice Chairman Representative Jerry Sanders Representative Lisa Murkowski Representative John Harris Representative Tom Brice Representative Sharon Cissna MEMBERS ABSENT All members present COMMITTEE CALENDAR CS FOR SENATE BILL NO. 8(FIN) "An Act relating to the minimum plumbing fixtures required for females and males in the state plumbing code; and providing for an effective date." - HEARD AND HELD CS FOR SENATE BILL NO. 133(RLS) am "An Act creating and relating to the Regulatory Commission of Alaska and transferring to it certain powers and duties of the Alaska Public Utilities Commission; repealing the Alaska Public Utilities Commission; relating to the powers of the chair of the Regulatory Commission of Alaska; relating to regulatory cost charges for public utilities and pipelines; relating to the appellate procedures of the Regulatory Commission of Alaska; relating to the Alaska Oil and Gas Conservation Commission; and providing for an effective date." - MOVED HCS FOR CSSB 133(FIN) HOUSE BILL NO. 183 "An Act relating to the powers and duties of the chair of the Alaska Public Utilities Commission; relating to membership on the Alaska Public Utilities Commission; and relating to the annual report of the Alaska Public Utilities Commission." - SCHEDULED BUT NOT HEARD (* First public hearing) PREVIOUS ACTION BILL: SB 8 SHORT TITLE: MINIMUM REQUIRED PLUMBING FACILITIES SPONSOR(S): SENATOR(S) DONLEY, Kelly Tim, Wilken Jrn-Date Jrn-Page Action 1/19/99 15 (S) PREFILE RELEASED - 1/8/99 1/19/99 15 (S) READ THE FIRST TIME - REFERRAL(S) 1/19/99 15 (S) STA, FIN 3/04/99 (S) STA AT 3:45 PM BELTZ ROOM 211 3/04/99 (S) 3/09/99 (S) STA AT 3:30 PM 3/09/99 (S) HEARD AND HELD 3/09/99 (S) MINUTE(STA) 3/18/99 (S) MINUTE(STA) 3/23/99 646 (S) STA RPT CS 2DP 2NR NEW TITLE 3/23/99 646 (S) NR: WARD, ELTON; DP: PHILLIPS, WILKEN 4/07/99 (S) FIN AT 8:00 AM SENATE FINANCE 532 4/07/99 (S) HEARD AND HELD 4/07/99 (S) MINUTE(FIN) 4/08/99 (S) RLS AT 11:40 AM FAHRENKAMP 203 4/08/99 (S) MINUTE(RLS) 4/08/99 820 (S) ZERO FISCAL NOTE TO CS (DOT) 4/08/99 820 (S) FIN RPT CS 5DP 3NR 1AM NEW TITLE 4/08/99 820 (S) DP: TORGERSON, PARNELL, PHILLIPS, 4/08/99 820 (S) WILKEN, DONLEY; AM: GREEN; NR: PETE 4/08/99 820 (S) KELLY, ADAMS, LEMAN 4/08/99 820 (S) PREVIOUS ZERO FN TO CS (DOT) 4/09/99 845 (S) RULES TO CALENDAR AND 1 OR 4/9/99 4/09/99 848 (S) READ THE SECOND TIME 4/09/99 848 (S) FIN CS ADOPTED UNAN CONSENT 4/09/99 848 (S) ADVANCED TO THIRD READING 4/09/99 848 (S) UNAN CONSENT 4/09/99 848 (S) READ THE THIRD TIME CSSB 8(FIN) 4/09/99 848 (S) COSPONSOR(S): WILKEN 4/09/99 849 (S) PASSED Y14 N5 E1 4/09/99 849 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 4/09/99 849 (S) ELLIS NOTICE OF RECONSIDERATION 4/12/99 884 (S) RECONSIDERATION NOT TAKEN UP 4/12/99 885 (S) TRANSMITTED TO (H) 4/13/99 785 (H) READ THE FIRST TIME - REFERRAL(S) 4/13/99 785 (H) L&C 5/07/99 (H) L&C AT 3:15 PM CAPITOL 17 BILL: SB 133 SHORT TITLE: REGULATORY COMMISSION OF ALASKA SPONSOR(S): SENATOR(S) PEARCE Jrn-Date Jrn-Page Action 4/01/99 771 (S) READ THE FIRST TIME - REFERRAL(S) 4/01/99 771 (S) RES, FIN 4/12/99 (S) RES AT 3:00 PM BUTROVICH 205 4/12/99 (S) MINUTE(RES) 4/12/99 (S) MINUTE(RES) 4/21/99 (S) RES AT 3:00 PM BUTROVICH 205 4/21/99 (S) 4/26/99 (S) RES AT 3:00 PM BUTROVICH 205 4/26/99 (S) MOVED CS(RES) OUT OF COMMITTEE 4/26/99 (S) MINUTE(RES) 4/27/99 1132 (S) RES RPT CS 1DP 3NR 1AM NEW TITLE 4/27/99 1133 (S) NR: HALFORD, PARNELL, LINCOLN; 4/27/99 1133 (S) DP: PETE KELLY; AM: GREEN 4/27/99 1133 (S) FISCAL NOTE (ADM) 4/29/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/29/99 (S) HEARD AND HELD 4/29/99 (S) MINUTE(FIN) 4/30/99 (S) FIN AT 9:00 AM SENATE FINANCE 532 4/30/99 (S) MOVED CS(FIN) OUT OF COMMITTEE 4/30/99 (S) MINUTE(FIN) 4/30/99 1185 (S) FIN RPT CS 1DP 3NR 1AM NEW TITLE 4/30/99 1185 (S) DP: TORGERSON; NR: GREEN, PETE KELLY, 4/30/99 1185 (S) ADAMS; AM: DONLEY 4/30/99 1185 (S) FISCAL NOTE TO CS (ADM) 5/03/99 (S) RLS AT 11:20 AM FAHRENKAMP 203 5/04/99 (S) RLS AT 11:30 AM FAHRENKAMP 203 5/04/99 (S) MINUTE(RLS) 5/04/99 1222 (S) RLS TO CAL W/CS 1 OR 5/4 NEW TITLE 5/04/99 1223 (S) PREVIOUS FN TO CS (ADM) 5/04/99 1227 (S) MOVED TO BOTTOM OF CALENDAR 5/04/99 1233 (S) READ THE SECOND TIME 5/04/99 1233 (S) RLS CS ADOPTED UNAN CONSENT 5/04/99 1233 (S) AM NO 1 NOT OFFERED 5/04/99 1234 (S) AM NO 2 OFFERED BY DONLEY 5/04/99 1234 (S) AM NO 2 FAILED Y5 N14 E1 5/04/99 1234 (S) AM NO 3 OFFERED BY DONLEY 5/04/99 1234 (S) AM NO 3 DIVIDED 5/04/99 1235 (S) AM NO 3A FAILED Y6 N13 E1 5/04/99 1235 (S) AM NO 3B FAILED Y8 N11 E1 5/04/99 1237 (S) AM NO 4 OFFERED BY PEARCE 5/04/99 1237 (S) AM NO 4 ADOPTED UNAN CONSENT 5/04/99 1237 (S) ADVANCED TO THIRD READING 5/04/99 1237 (S) UNAN CONSENT 5/04/99 1237 (S) READ THE THIRD TIME CSSB 133(RLS) AM 5/04/99 1237 (S) PASSED Y15 N4 E1 5/04/99 1238 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 5/04/99 1238 (S) DONLEY NOTICE OF RECONSIDERATION 5/05/99 1250 (S) RECON TAKEN UP - IN THIRD READING 5/05/99 1250 (S) AM NO 5 ADOPTED UNAN CONSENT 5/05/99 1250 (S) CHANGES TITLE OF LEGISLATION 5/05/99 1251 (S) PASSED ON RECONSIDERATION Y16 N4 5/05/99 1251 (S) EFFECTIVE DATE(S) SAME AS PASSAGE 5/05/99 1262 (S) TRANSMITTED TO (H) 5/06/99 1193 (H) READ THE FIRST TIME - REFERRAL(S) 5/06/99 1194 (H) L&C, FINANCE 5/07/99 (H) L&C AT 3:15 PM CAPITOL 17 WITNESS REGISTER HANS NEIDIG, Legislative Administrative Assistant to Senator Dave Donley Alaska State Legislature Capitol Building, Room 508 Juneau, Alaska 99801 Telephone: (907) 465-6581 POSITION STATEMENT: Presented CSSB 8(FIN) on behalf of the bill sponsor. DWIGHT PERKINS, Deputy Commissioner Department of Labor P.O. Box 21149 Juneau, Alaska 99802-1149 Telephone: (907) 465-2700 POSITION STATEMENT: Provided department position on SB 8. JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg Alaska State Legislature Capitol Building, Room 24 Juneau, Alaska 99801 Telephone: (907) 465-4968 POSITION STATEMENT: Explained W.1 amendment to CSSB 8(FIN). SENATOR DRUE PEARCE Alaska State Legislature Capitol Building, Room 111 Juneau, Alaska 99801 Telephone: (907) 465-4993 POSITION STATEMENT: Sponsor of SB 133. PAT CARTER, Legislative Assistant to Senator Drue Pearce Alaska State Legislature Capitol Building, Room 111 Juneau, Alaska 99801 Telephone: (907) 465-4993 POSITION STATEMENT: Answered questions on SB 133 as staff to bill sponsor. JIMMY JACKSON, Regulatory Attorney GCI 2550 Denali Street Anchorage, Alaska 99503 Telephone: (907) 265-5545 POSITION STATEMENT: Testified on SB 133. MARK VASCONI, Director of Regulatory Affairs AT&T Alascom 210 East Bluff Drive Anchorage, Alaska 99515 Telephone: (907) 264-7308 POSITION STATEMENT: Testified on SB 133. JIM ROWE, Executive Director Alaska Telephone Association 201 East 56th Avenue Anchorage, Alaska 99518 Telephone: (907) 563-4000 POSITION STATEMENT: Testified on SB 133. PAT DAVIDSON, Legislative Auditor Division of Legislative Audit Legislative Agencies and Offices P.O. Box 113300 Juneau, Alaska 99811-3300 POSITION STATEMENT: Available during SB 133 hearing for questions on Representative Gail Phillips' proposed amendment regarding the audit. GINNY FAY, Legislative Liaison Office of the Commissioner Department of Commerce and Economic Development P.O. Box 110800 Juneau, Alaska 99811-0800 Telephone: (907) 465-2503 POSITION STATEMENT: Provided Administration position on CSSB 133(RLS) am. ERIC YOULD, Executive Director Alaska Rural Electric Cooperative Association, Incorporated 211 Fourth Avenue Juneau, Alaska 99801 Telephone: (907) 463-3636 POSITION STATEMENT: Testified on SB 133. ACTION NARRATIVE TAPE 99-54, SIDE A Number 0001 VICE-CHAIRMAN ANDREW HALCRO called the House Labor and Commerce Standing Committee meeting to order at 3:26 p.m. Members present at the call to order were Representatives Halcro, Murkowski, Harris and Brice. Representatives Cissna, Sanders and Rokeberg arrived at 3:30 p.m., 3:45 p.m. and 4:51 p.m., respectively. Vice-Chairman Halcro noted Chairman Rokeberg was delayed in another committee hearing. There are three items on the meeting's agenda: SB 8, SB 133, and, if possible, a continuation of the hearing on HB 183. CSSB 8 - MINIMUM REQUIRED PLUMBING FACILITIES Number 0104 VICE-CHAIRMAN HALCRO announced the committee's first order of business is CSSB 8(FIN), "An Act relating to the minimum plumbing fixtures required for females and males in the state plumbing code; and providing for an effective date." He indicated the intention is to hear from the legislation's sponsor, discuss and possibly adopt a amendment proposed by Chairman Rokeberg, but not move the bill at this hearing. Number 0119 HANS NEIDIG, Legislative Administrative Assistant to Senator Dave Donley, Alaska State Legislature, came forward on behalf of the bill sponsor. Mr. Neidig informed the committee that Senator Donley had been detained in the Senate Finance Standing Committee and sent his apologies. Mr. Neidig indicated his testimony would be brief because of other business before the committee. He pointed out that Dwight Perkins, Deputy Commissioner, Department of Labor, and Al Dwyer [Director, Division of Labor Standards and Safety] of the department, were present to assist with technical questions. Mr. Neidig explained that SB 8 would amend existing plumbing codes to increase the number of women's facilities in assembly places. The legislation would only to apply to new construction and buildings where capacity would be increased after remodeling. Senator Donley believes that such a measure is necessary to respond to the congestion women experience in women's facilities at a public events and in public buildings. MR. NEIDIG noted he is sure everyone has witnessed or experienced that congestion, whether attending a sporting event, concert, convention or any other public event. He said Senator Donley believes that this is not a satisfactory situation and the problem must be remedied. Referring to the sponsor statement, Mr. Neidig commented there are a number of good reasons why this legislation is needed but indicated he would not read these reasons to the committee in the interests of time. He noted Senator Donley believes this legislation is reasonable in light of the evidence collected. Washington State has the highest ratio of women's to men's facilities at 4 to 1. Senate Bill 8 only calls for 2.7 women's facilities to 1 men's facility, at its highest ratio. The legislation only represents a modest increase in the number of women's facilities but the sponsor believes these increases are in the best interests of Alaskans. [The sponsor statement for CSSB 8(FIN) read: Senate Bill 8 amends existing plumbing code in AS 18.60.705 to more closely resemble the national standard and increase the minimum number of women's toilet facilities in assembly places. SB 8 will only apply to new construction and buildings that have been remodeled to increase occupancy capacity. Senate Bill 8 amends current statute and specifically addresses the number of toilet facilities provided for women in "assembly places." The current table in statute does provide a slightly elevated number of facilities for women in comparison to those provided for men, but the ratio does not meet the demand. SB 8(FIN) will amend table A-29-A currently in statute to increase the minimum number of women's toilets. Common sense tells us there is a serious problem with a shortage of female facilities in large assembly buildings. Extremely long lines outside the women's restroom at sporting events, concerts and other events are common. Senate Bill 8 will reduce the current excessive waiting time to use the facilities for women who attend large public events in buildings constructed or expanded after January 1, 2000. The basis of the current building code for plumbing fixtures, water flows and usage is from research done in 1924 by the U.S. Bureau of Standards. Our society has changed significantly since 1924 when women rarely ventured outside the home. In 1999, women are in public every day. They go to ballgames, festivals, concerts, stadiums, arenas, assembly halls, conference halls, plays, movie theatres, churches, etc.... Unlike 1924, in 1999 there are no public places or places or work that you will not find women. Women have health problems that require their more frequent use of restroom facilities. One study reported that 50% of women over the age of 18 have an incontinence problem. Childbirth is the largest contributing factor to this and when such women are forced to stand in long lines to use the bathroom, they can be in considerable pain. Additionally, it physically takes longer for women to use restroom facilities. A study done by Cornell University determined men averaged 45 seconds and women averaged 80 seconds to "go to the bathroom." Another similar survey found that men average 47 seconds in the restroom while women take 91 seconds. Other states have already enacted "potty parity" laws. In Tennessee and six other states, the ratio is 2:1. In Texas the ratio is not less than 2:1 in facilities where the public congregates. Minneapolis and St. Paul, Minnesota have a 3:1 ration while Pittsburgh, Pennsylvania has a ratio of 3.75:1. Washington State has the highest ratio of women's to men's facilities of 4:1 in all public buildings. SB 8(FIN) only requires up to a 2.7:1 ratio depending on the size of the facility.] Number 0270 REPRESENTATIVE MURKOWSKI asked the difference between a water closet and a lavatory. MR. NEIDIG replied it is his understanding a lavatory is a wash basin or sink, and a water closet would be the toilet facility. REPRESENTATIVE MURKOWSKI confirmed from Mr. Neidig, however, that they are still called water closets. Number 0345 DWIGHT PERKINS, Deputy Commissioner, Department of Labor, came forward. He stated the department's staff in the field has heard these concerns. The department has no opposition to the bill and thinks it is a good piece of legislation. VICE-CHAIRMAN HALCRO confirmed no one wished to testify on SB 8. The vice-chairman requested that Ms. Seitz, aide to the House Labor and Commerce Standing Committee, explain the proposed amendment and its merits. The proposed amendment, labeled 1-LS0074\W.1, Bannister, 4/26/99, read: Page 2, line 5: Delete "casinos"" Insert "casinos," when the category is applied to auditoriums, convention halls, stadiums, and casinos," Number 0482 JANET SEITZ, Legislative Assistant to Representative Norman Rokeberg, Alaska State Legislature, came forward to explain the amendment as aide to the House Labor and Standing Committee. She stated the proposed amendment is "W.1" in the committee members' bill packets. She indicated the May 6, 1999, opinion from Terry Bannister, Legislative Counsel, Legislative Legal and Research Services, Legislative Affairs Agency, and the April 27, 1999, memorandum from Al Dwyer, Director, Division of Labor Standards and Safety, Department of Labor, might be helpful in explaining the terms. [Ms. Bannister's 5/6/99 memorandum read: You have asked how dance floors and lodge rooms would be treated if the amendment described above as "W.1" were adopted. The following is my reading of the bill and the amendment. The bill changes the plumbing fixture requirements of one category of Table A - 29 - A of the 1997 edition of the Uniform Building Code. That category establishes plumbing fixture requirements for auditoriums, convention halls, dance floors, lodge rooms, stadiums, and casinos. As the bill reads now, the bill's proposed plumbing fixture ratios apply to all of these facilities in the category. If the proposed amendment W.1 is added to the bill, the ratios identified in the bill will apply only to auditoriums, convention halls, stadiums, and casinos. For the other subjects not covered by amendment W.1 (dance floors and lodge rooms), the ratios in Table A - 29 - A, unchanged by the bill, would apply.] [Mr. Dwyer's 4/27/99 memorandum read: There is no definition of "dance floor" or "Lodge room" in the UBC [Uniform Building Code]. However, based on my own experience as a Building Official and on advice from Chris Roust, CBJ [City and Borough of Juneau] Building Official, a dance floor is a portion of the floor area specifically designated for dancing. A lodge room is a room in a private club that is used for club rituals, wedding receptions etc. (usually not the bar area).] MS. SEITZ explained that the amendment would remove dance floors and lodge rooms from the entities covered by the new table in SB 8. She indicated the path to this end is a somewhat roundabout. The language on page 2, lines 4 and 5, of the legislation refers to assembly places and lists the various types [CSSB 8(FIN), page 2, lines 4-5: ""Assembly places--Auditoriums, convention halls, dance floors, lodge rooms, stadiums and casinos" the ratios"]. According to the bill drafter [Ms. Bannister], this language must remain in its current form because this is the term used on the table, Table A-29-A. Therefore, Ms. Bannister's suggestion to accomplish Chairman Rokeberg's purpose is to insert a comma after "casinos" on line 5 and add the amendment language, "when the category is applied to auditoriums, convention halls, stadiums, and casinos,", thus leaving out dance floors and lodge rooms. Ms. Seitz noted Ms. Bannister's memorandum points out that this would leave dance floors and lodge rooms under the current table, not under the legislation's revised table. Number 0600 REPRESENTATIVE MURKOWSKI mentioned "dance floor", noting that is not a room or an auditorium, it is a floor. She commented there are no water closets or lavatories anywhere on a dance floor. REPRESENTATIVE CISSNA questioned that a dance floor is a portion of a room. MS. SEITZ answered that Mr. Dwyer's memorandum indicates there is no definition of "dance floor" or "lodge room" in the building code. She referred to Mr. Dyer's explanations of both terms. Ms. Seitz explained Chairman Rokeberg feels organizations like the Moose Lodge, for example, which are usually small groups, would be better off with the old table if they wished to renovate, or build a new building. Ms. Seitz communicated that this is because the old table requires fewer plumbing facilities and would therefore result in lower building costs. REPRESENTATIVE MURKOWSKI indicated she still had some confusion regarding water closets and dance floors, but was not going to be concerned about it. VICE-CHAIRMAN HALCRO confirmed there were no further questions for Ms. Seitz. He stated he would entertain a motion to adopt Amendment 1. Number 0710 REPRESENTATIVE MURKOWSKI moved to adopt Amendment 1, 1-LS0074\W.1, Bannister, 4/26/99. There being no objection, Amendment 1 was adopted. VICE-CHAIRMAN HALCRO announced SB 8 would be held. CSSB 133(RLS) am - REGULATORY COMMISSION OF ALASKA [Contains discussion of HB 183.] Number 0740 VICE-CHAIRMAN HALCRO announced the committee's next order of business is SB 133, "An Act creating and relating to the Regulatory Commission of Alaska and transferring to it certain powers and duties of the Alaska Public Utilities Commission; repealing the Alaska Public Utilities Commission; relating to the powers of the chair of the Regulatory Commission of Alaska; relating to regulatory cost charges for public utilities and pipelines; relating to the appellate procedures of the Regulatory Commission of Alaska; relating to the Alaska Oil and Gas Conservation Commission; and providing for an effective date." He invited the bill sponsor, the Senate President, forward. Number 0779 SENATOR DRUE PEARCE, Alaska State Legislature, came forward accompanied by Mr. Pat Carter, Legislative Assistant. She thanked the committee for bringing up SB 133 in a timely manner and proceeded to describe the legislation, basing her comments on the sponsor statement for CSSB 133(RLS) am. Senator Pearce said she knows the committee is familiar with many of the issues from its work on a piece of similar legislation, HB 183, although HB 183 cannot be considered a companion bill, per se. Commenting that SB 133 has changed considerably since its introduction, Senator Pearce listed a number of items the legislation does not do. Senate Bill 133: 1) Does not combine the Alaska Public Utilities Commission (APUC) and the Alaska Oil and Gas Conservation Commission (AOGCC) into one commission at present. 2) Does not deregulate garbage. 3) Does not transfer pipeline regulation to the AOGCC. 4) Does not make any policy changes to either commission. 5) Does not transfer any function from one to commission to the other. 6) Does not alter the number of commissioners on either commission. SENATOR PEARCE reviewed the legislation. The following changes would be made to the APUC. The APUC would be repealed and the Regulatory Commission of Alaska (RCA) created, effective July 1, 1999. All commissioners shall be either reappointed or replaced. All staff shall remain. Regulations and pending matters before the commission shall be carried forward to the new commission. The new commission will be composed of five commissioners. The five shall be members of the general public; there are no requirements in this legislation at present for areas of specific expertise. After working through a number of possibilities in terms of specific expertise, the conclusion was reached that attempting to figure out the proper round and square holes to fit people into becomes limiting, and the public interest is best served by having the maximum flexibility in acquiring qualified individuals from the general public to serve on this extremely important commission. Number 0911 SENATOR PEARCE stated the legislation strengthens the position of the chairperson. He or she would have limited authority over the other commissioners, would have oversight of all commission staff, would assign the work of the commission and staff, would set time lines by which a matter shall be resolved, and would determine when advocacy staff is required, given certain standards. A number of items have also been inserted into the legislation that would streamline the actual hearing process the commission undertakes in considering its dockets: 1) The chairman would have the ability to empanel any three or more commissioners as a hearing panel to decide each docket. This would allow the chairman the flexibility to assign the applicable number of commissioners depending upon the size of the case, so that not all five commissioners would be required to hear every case. 2) The appeals process has been limited so that it would only be considered when a decision taken is contrary to a precedent made by the commission. 3) The legislation would mandate the commission to promulgate timeliness standards. SENATOR PEARCE recalled her experience as a freshman legislator and member of the House Labor and Commerce Standing Committee; they had had the sunset of the APUC before them for the entire two years. She remembered complaints at that time about the lack of timeliness by the commission in terms of receiving even a commission hearing, much less an actual order. She also remembered, in order to clarify that some progress has been made since then, that one of the electric utilities had complained that the commission, in an order, had told the utility what color it had to paint its trucks. Therefore, perhaps the commission has made some progress in all those years, since that sort of complaint is no longer before them. However, there is certainly still a timeliness problem, which she is sure the committee is aware of. Senate Bill 133 mandates that the commission promulgate timeliness standards, depending on the complexity of the docket, for the types of cases which come before the commission. Senator Pearce noted that certainly not all the cases are the same in type or complexity. The APUC handles telecommunications, electric utilities, gas utilities, pipelines, joint cases on joint boards with both the Federal Trade Commission (FTC) and the Federal Energy Regulatory Commission (FERC), and finds itself from time to time in other matters and rulemaking. Senator Pearce indicated, therefore, it has been her opinion that specific time lines should not be inserted into statute, and they should not attempt to determine in statute time lines for every type of case which comes before the commission. However, the commission would be required to promulgate its own timeliness standard, and the regulations be adopted by December 31, 1999. In that way, if a specific case comes before the commission where parties agree that the time lines should be changed, the commission would have the opportunity to do emergency regulations to address the situation at hand. Number 1099 SENATOR PEARCE commented that a provision has also been established for formal hearings to be held before an arbitrator in appropriate cases. This gives the commission another tool to hopefully make its process more efficient and more effective. Within the commission, a separate advocacy group would be established to represent the public interest when necessary. Senate Bill 133 instructs the commission to adopt a time management system. This suggestion goes back to the LB&A [Joint Committee on Legislative Budget and Audit] 1977 audit, and has been in every audit since. This time management system is to ensure accurate accounting for time billed on each aspect of the commission's functions. Senator Pearce noted she thinks all are familiar with the regulatory cost charge (RCC) structure put into place for the commission in 1991. To date, the APUC does not use industry or utility codes on payroll time sheets and, therefore, workloads are approximated using rough estimates. A time management system would provide improved accuracy when assessing regulatory cost charges to individual sectors of the utility industry. It should also assist in ensuring that the cost causer is the cost payer. SENATOR PEARCE explained that the current version of SB 133 would make only two changes to the AOGCC. The physical move of the AOGCC is being required to the same location as the new RCA. The legislation asks for this to happen no later than July 1, 2000. The Department of Administration has testified that it hopes to have that move finished by September of 1999. The AOGCC's current building is inadequate and a move was already being worked on. Senator Pearce noted there is space in the present APUC building. The two commissions would then be able to share record-keeping facilities and clerical staff under the legislation. The AOGCC would also have access to hearing officers once the move has happened, and after July 1, 1999 [the effective date]. The AOGCC has not had access to hearing officers in the past. The belief is that with some of the issues arising in the merger of BP [BP Exploration (Alaska) Incorporated] and ARCO [ARCO Alaska, Incorporated], and other important dockets and issues that will be coming before the AOGCC, this commission could also streamline its ability to function if it had access to a hearing officer. Therefore, even though the commissions would not be combined, access [to hearing officers] has been allowed. Number 1233 SENATOR PEARCE informed the committee she understands there is one hearing officer at the APUC presently who has handled every pipeline case for nearly the past 20 years. This person has a tremendous amount of knowledge which could, and probably should, be shared with the AOGCC as some of these issues arise. This legislation authorizes LB&A to prepare a transition report to be brought back the next legislative session to the legislature and the Governor. The request is that the report address both commissions and their functions, making recommendations on any other structural changes which might serve in the state's best interests. Senator Pearce indicated this is in substitution for the combination [of the APUC and AOGCC] she had originally envisioned. The legislation asks the Governor to appoint one commissioner from each commission to work with LB&A on the transition report. SENATOR PEARCE mentioned she is aware the chair of LB&A [Representative Gail Phillips] has requested that this language be deleted because LB&A already has the authority to compel the Administration's cooperation on such a study. Senator Pearce stated she has no problem with that. She thinks SB 133 will improve their ability to protect the long-term public interest through increased functional efficiencies of both commissions. Senator Pearce added that all the recommendations in terms of changes to the way the commission, the new RCA, does business in Alaska came from either the internal audit - the NRRI [National Regulatory Research Institute] report the APUC had done the previous fall - or from the legislature's own LB&A audits. She stated they did not reinvent any wheels in this bill. Senator Pearce indicated that concluded her testimony and she would be happy to answer any questions, indicating Mr. Carter might provide assistance. Senator Pearce expressed her hope the legislation would move at this hearing; however, if the committee should meet the following day [Saturday, May 8], Mr. Carter will be before the committee but she, unfortunately, will not be able to attend. Number 1342 VICE-CHAIRMAN HALCRO noted one of Senator Pearce's opening comments that this legislation does not combine the two commissions [APUC and AOGCC] into one. Therefore, if the legislation were to take effect, AOGCC would move into the same building as APUC on July 1. The vice-chairman noted there are five APUC commissioners; he questioned how many commissioners AOGCC has. SENATOR PEARCE answered three. She clarified the legislation requires the move to take place by July 1, 2000, but the Department of Administration is hoping to have the two commissions in the same building by September 1999. They are on an accelerated time frame because they have to get the AOGCC out of its present building as soon as possible. VICE-CHAIRMAN HALCRO questioned how LB&A would do the analysis of how the two should be combined. He noted there are five commissioners here and three here; they are not going to be combined into one, but how is that analysis is going to be done? SENATOR PEARCE answered that the language in the legislation has been deliberately changed in order to not predispose LB&A to recommend that the two commissions be combined; LB&A would be asked to come back with an analysis of what the best structure for regulatory commissions for Alaska would be, and whether it makes sense to combine the two entities. Senator Pearce described some of the other states' structures: Oklahoma has a combined commission with divisions - it only has three regulatory commissioners for the entire state, Texas has the "Texas Railroad Commission" - it also regulates all the state's utilities, Kansas has a combination commission, and some state has an actual corporate commission where even all the business licenses are under the same commission. Therefore, there are a number of methods out there. The expectation is that the auditors, as they are highly qualified to do, would look at Alaska, the sorts of cases that come before both [commissions], the interests of both the people and the businesses of the state, and then inform the legislature if there are changes to the regulatory structure that could be made which would make the entire structure more efficient and effective. Number 1479 VICE-CHAIRMAN HALCRO referred to the time management system and public testimony on HB 183 that one of the industries has 23 percent of the workload but pays 50 percent of the commission's costs. Therefore, obviously, the time management system is designed to improve the assurance that the cost causer becomes the cost payer ["cost user" stated]. SENATOR PEARCE responded that when the initial legislation was passed which set up the first regulatory cost charge, the expectation was that each utility would pay for its own issues. Senator Pearce indicated she thought the initial legislation had come from either the Senate Finance Standing Committee or from former-Senator Pourchot. The telecommunications industry, electric utilities, gas utilities, and the pipelines were all expected to pay for their own issues. In fact, however, the pipeline industry was "at the door knocking" saying it did not want to have to pay for phone wars or any other wars. Therefore, the RCC was created and it was always the legislature's intention that the cost be apportioned out by who actually caused the costs back to the users. Senator Pearce said it has not worked that way; that is why they are coming back, making the further change, and mandating it in law. VICE-CHAIRMAN HALCRO noted debate in the discussion of HB 183 regarding time limits - 30 days or 60 days depending of the complexity of the issue. There had been some debate about what a practical time frame is, 30 or 60. Senate Bill 133 gives the commissioners time to decide their own standards. Number 1577 SENATOR PEARCE replied CSSB 133(RLS) am would require the commission to promulgate regulations that set time lines by the end of calendar year 1999. They examined standards at the FTC and FERC, for example, in an attempt to determine good standards to include in the legislation because Senator Pearce also believes the people and utilities of the state have the right to receive hearings and decisions in a timely manner. This is an ongoing problem with the APUC; there is no doubt about that. The other side of the issue is that it is always difficult to write statutes which meet each and every individual case. Therefore, after being unable to come up with specific language that was going to be able to deal with all the different cases and all the different industries, they decided not to include specific time lines in this legislation. They also found that while the FTC does, Senator Pearce believes, have some time lines written into its regulations, the FTC is having some problems as well and is in the process of attempting to reevaluate those. SENATOR PEARCE said her initial thought had been to take the FTC standards, telling Alaska's commission that when it adopts its standards, the standards must be at least as timely as those of the FTC, FERC, or some other federal agency that would be specified. However, since those standards are not apparently working well at the moment, this did not seem like such a good idea. Therefore, without knowing all the right numbers, Senator Pearce expressed her concern with the expectation that the commission would always be able to get orders out in 60 days. She thinks the commission is given enough tools that it should be able to have hearings within the time in the proposed amendment. However, she is not sure about actually having the orders out. Senator Pearce does not know that there is a correct date; she would just point out to the committee that the Alaska Supreme Court is more than two years behind in getting decisions out, and this is also an adjudicatory process. Indicating she is not saying the legislature should slow the commission down, she, however, expressed her doubt about the desirability of putting 60 days into statute; she does not want to force bad decisions in the interest of time. She indicated the argument could be lengthy on both sides. Number 1704 VICE-CHAIRMAN HALCRO added he thinks the argument comes from the fact that the major criticism of the commission is the time limits, and the need to receive a response in certain market conditions where a response is needed. SENATOR PEARCE noted she understands that, and commented that has been one of her major criticisms of the APUC. REPRESENTATIVE MURKOWSKI questioned what SB 133 does with the executive director position. SENATOR PEARCE confirmed that position would no longer exist. REPRESENTATIVE MURKOWSKI noted, then, the current role or responsibility of the executive director has been shifted to the chair. SENATOR PEARCE answered yes and no. What they have given to the commission, and through the commission to the chair, is direct authority over the staff. The commission can decide if it wants to have an administrative manager; it can choose the form of staffing it wishes in order to be the most efficient possible. However, the statutorily-defined provinces of the executive director the commission has no ability to effect would be eliminated. Number 1764 REPRESENTATIVE BRICE commented that if this is passed the Governor would have to appoint five new members. SENATOR PEARCE noted the Governor would appoint five members, indicating the members wouldn't necessarily have to be new. REPRESENTATIVE BRICE questioned what the effect would be on the dockets currently before the public utilities commission if five new members are appointed. SENATOR PEARCE commented that the actual dockets, all pending matters, and the staff transfer "along with the regulations transfer." The real effect is that there would be some period of time at the beginning of fiscal year (FY) 2000 where it could be expected that the new commission members would be playing catch-up and reading through the dockets. Senator Pearce said there is no perfect time for making the change. On the other hand, she would hope that the quality individuals who would be appointed and then confirmed by the legislature, would be able to quickly understand the basic issues and make good decisions in, frankly, a more timely manner than the present commission has been able to do, even though some of the present commissioners have been there for a long time. Senator Pearce stated, "They are so dysfunctional that a couple of months of catch-up is certainly not going to put us in any worse shape." REPRESENTATIVE BRICE questioned if the sponsor saw the requirement to establish the time lines by the end of this calendar year, in addition to everything else, as an additional burden which put "them in that much more of a crunch." Number 1865 SENATOR PEARCE answered not really. She knows that internally in the commission and amongst commission staff, feasible time lines have been discussed. Promulgating regulations, even though the Administrative Procedures Act must be used, does not have to be a burden. However, Senator Pearce indicated she thinks it is absolutely imperative an ethic of timely completion of items is expected from the commission; if it takes the commission awhile to set those sorts of regulations, then that is fine. Three of the commissioners are either already at the end of their terms, have retired, or are approaching the end of their terms. There will already be a major change. Considering that a majority of the commission is required to make decisions, five people reading the records, rather than three people, is certainly not necessarily going to slow things down when the majority of members could possibly be turning over. Senator Pearce indicated the majority turnover was a possibility, but not necessarily what could happen. REPRESENTATIVE CISSNA asked for an explanation of how the public advocacy concept works. SENATOR PEARCE indicated the NRRI report contained questions brought forward by a number of the utilities and by the commission employees. Alaska has an interesting situation: there is no consumer protection section in the state's Department of Law. Therefore, the consumer protection power of the commission and duty toward Alaskans is extremely important, perhaps even more so than elsewhere. A perception of conflict of interest can be construed when there is not a separate section advocating for the general public. The NRRI report recommended that there be separate advocacy and advisory functions. The people who give the direct advice, work with the commission on writing the orders, and work with the commission to provide the commission, should work directly for the commission. The advocates who have an ex parte role, who are actually in front of the commission arguing on behalf of the people of the state against utility rate increases, should stay ex parte. Therefore, the legislation creates a separate section [for this purpose]. Number 2007 REPRESENTATIVE CISSNA questioned how that works; she asked how many new positions the sponsor saw that being and if there is a fiscal note with this. SENATOR PEARCE confirmed there is a fiscal note. She explained it would work exactly the way the FTC and the FERC work, and the way many other commissions in the states work; there is a separate advocacy section within the commission led by an attorney (indisc.) a hearing officer. This section develops the record on the advocacy side, and develops the arguments if an advocate is assigned to the particular docket or rulemaking. Some current commission staff has the necessary expertise. In some cases, these people are attempting to be both advocates and advisors at the same time; there is no way to truly separate those functions even though the individuals do the best they can to avoid a conflict of interest. However, by definition, those are inherently conflicted activities. The NRRI report recommended the establishment of separate sections. Senator Pearce said it is her opinion that if the public utilities commission needs a few more staff to establish a separate advocacy section and gain that expertise, this is for the protection of Alaskan consumers and is exactly what should be done. That is the entire point of an advocacy section: protecting the public. REPRESENTATIVE CISSNA noted she is still trying to conceptualize this. She questioned what kind of staff and resources this section would have in terms of having the same body of knowledge. SENATOR PEARCE commented they have subpoena power and access to all the same documents. They can already ask, by law, for discovery; SB 133 does not change that. The public utilities commission staff has an enormous amount of power to compel the regulated utilities to provide them with the documents that back-up the rate increases or tariffs being requested. Senator Pearce added that the commission sometimes presently contracts out for this sort of expertise - it doesn't have to be done internally - and this would still be possible under SB 133. She indicated the staff has the same ability to ask for whatever information they desire from the utilities when a rate case is brought to the commission. Number 2158 PAT CARTER, Legislative Assistant to Senator Drue Pearce, Alaska State Legislature, added that the way the public utilities commission adjudicates a particular issue or docket would not be changed. Currently, staff may work on several different items/dockets throughout a day; a person may be an advisor on one, an advocate on another. The NRRI report spoke of the creation of a "Chinese Wall" in a person's mind: where he/she is acting as advisor to a commissioner on one hand, but is not able to convey a message to the commissioner on a similar issue where that person is acting as an advocate because those things need to be separate in an adjudicatory function. However, even if those things could be separated, where regulations are being set which affect all the cases being worked on, when the person comes back before the commission on rulemaking, Mr. Carter thought it would be virtually impossible to not bring some level of bias to that, depending on the person's role. By separating the two roles and staff, the intent is to bring more uniformity to each issue. SENATOR PEARCE commented on their thought process through this. She indicated her first thought had been that if the commission is supposed to be representing the people of Alaska and if there are public members on the commission who are supposed to be protecting the consumers, there would be no need for advocates; they should be eliminated and the commission just be allowed to do its job. Senator Pearce noted the Department of Law was pretty unhappy with that idea and so was the APUC. Then, in order to have the "Chinese Wall" and the separate section as called for in the NRRI report, and as other commissions do, so that there would never be a perception of conflict [of interest], the suggestion was made to move the advocates into the Department of Law. The Department of Law did not think that would be the proper place; it did not want to become the utility consumer section. Therefore, after working through several other possible solutions, they have returned to setting up a separate section within the commission. Senator Pearce indicated the Administration recommends this option. Number 2270 REPRESENTATIVE MURKOWSKI appreciated the need for the "Chinese Wall" in dealing with the advocacy issue. She wonders, then, if the same type of separation is being envisioned with regards to this communications carriers section. Representative Murkowski questioned if that would be staff specifically dedicated to working within those areas, a kind of a commission within the commission. She wondered how integrated it is. MR. CARTER answered that the communications carriers section is something which is currently in statute; aside from the separation of the advocacy section, it will largely continue to function as is. He noted there was some discussion whether to even have a communications carriers section, or whether it should be removed entirely. REPRESENTATIVE MURKOWSKI asked, then, if there is existing staff who work on nothing but those communication issues. SENATOR PEARCE commented there is a separate section, but she cannot say if they work only on those cases. REPRESENTATIVE MURKOWSKI indicated, then, it is not as if an area of expertise has been developed in that section, with the wish to keep this staff separate and not utilize them for other aspects of commission work. SENATOR PEARCE noted the section already exists and no attempt is being made to further isolate that staff; however, the attempt is being made to isolate the advocates. VICE-CHAIRMAN HALCRO announced the committee would proceed to take some teleconference testimony from Anchorage. Number 2342 JIMMY JACKSON, Regulatory Attorney, GCI [General Communications Incorporated], testified next via teleconference from Anchorage. He provided the following testimony: "My name is Jimmy Jackson, and I am an attorney for GCI. I would like to thank you for the opportunity today to testify on SB 133. We would like to propose two amendments to [SB] 133. The first is to delay the effective date for a couple of months, in order to provide for a smoother transition. The current effective date would require that new commissioners be in place less than 45 days after the bill is passed and becomes law. That seems to be an awful short time to get at least several new commissioners, have them leave whatever it is that they're doing now and be ready to take on these new responsibilities. A couple of month[s] delay to August or September would seem to ease this and work a little better. "The second issue where we would like to propose changes concerns the topic which has just been discussed in some detail, which is the change in the existing role of the commission staff. Presently, staff acts as a party in some cases; for example, if a utility asks for a rate increase, that increase is decided through a hearing procedure which is very similar to a trial, and staff acts as a party to represent the public interest, opposing the rate increase if it's deemed to be excessive. It's necessary to have staff assume this role, because without it the commission would have to make a decision based solely on the evidence presented by the utility. In these cases where staff members are parties to the case, they cannot have ex parte contacts with the commissioners about that case. In other proceedings, the same staff members are available to the ... commissioners in an advisory capacity. This system has been in place for many, many years and it works. I have been on both sides of the system, 10 years at the commission and 5 years since I left the commission, and from both sides, I believe that it works quite well." Number 2426 "SB 133 proposes to change this structure by creating a separate 'advocacy staff' within the commission. This advocacy staff would be separate, it would have only the advocacy role, and they would never be advisors to the commission. Although this is a structure which is used in some commissions, and in theory it can work, we believe it would require a significant increase in personnel at the staff [? commission], because of efficiencies which would be lost. We do not believe that it can work with the current level of employment on staff, and the increase in cost that would be passed to utilities and to consumers to make it work is unnecessary and undesirable. "... I'll give one example which fits in with some of the questions regarding the common carrier section [communications carriers section]. The common carrier section has three people at this point in time. They have expertise in telecommunications, and each of the three persons has a slightly different expertise. Under the current structure, in some cases they can be parties, and all three of them can lend their expertise to the party function. In other cases where they are advisors, all three of them can lend their expertise to the commission as advisors. If you split those three and put one or two in the advocacy group, both the advocacy group and the advisory group will have the short end of the stick. [Neither would have all the resources and expertise they would need in a particular case (from draft testimony)] ..." [TESTIMONY INTERRUPTED BY AUTOMATIC TAPE CHANGE] TAPE 99-54, SIDE B Number 0001 MR. JACKSON continued his testimony: "... other sections of the commission. Now, I would distinguish this from what the NRRI report talks about in terms of the attorneys, where they talk about ensuring that you don't have an attorney who represents one side of the case, has to defend on appeal a decision which they argued against. I would totally agree that that should be structured so that an attorney does not have to represent in court a position which he opposed when it was before the commission. "Another reason that we believe that it's not a good idea to change this role of staff at this time is that the other changes embodied in this bill will obviously have a significant short-term impact on the commission, which was discussed, and it will take a while for new commissioners to get up to speed. It seems undesirable to layer the change in the role of staff on top of the other changes, which would cause more disruption problems, at least in the short term. For these reasons we would encourage you to amend the bill to retain the current role of staff. Again, I want to thank you and I'd be happy to answer any questions." Number 0051 VICE-CHAIRMAN HALCRO noted Mr. Jackson had mentioned repercussions if a separate advocacy/advisor situation is created. The vice-chairman commented Senator Pearce testified she felt, in the interest of serving the consumer, that hiring additional staff if needed for the advocacy side would be a good idea. Vice-Chairman Halcro indicated one of the overwhelming items heard in the discussions on HB 183, sort of the cousin bill to SB 133, is the timeliness issue - the time it takes to get a decision. He questioned if hiring more staff wouldn't expedite decisions and provide more flexibility to the commission as far as getting work done and cases heard. MR. JACKSON replied he guesses he would say that even in the commission's present configuration, it may well be true that the commission needs additional staff. He would not argue this point, and said that, if necessary, they should be added. Mr. Jackson commented that if the legislature makes this change regarding the role of staff, he thinks it would then add another increment of people who would be necessary. He believes the staff does a good job of protecting the public interest in the current situation. If the legislature makes this additional change, the public will pay for the additional staff members; that cost flows to the consumer through the regulatory cost charges paid by the utilities. He stated that they truly just do not believe it is necessary to incur the additional cost. It is a small commission because Alaska is a small state. The efficiencies work pretty well now; he thinks a lot will be lost and, therefore, there will be some fairly significant additional costs passed on to consumers if the change in staff is made. VICE-CHAIRMAN HALCRO asked Mr. Jackson to speak a bit about possible perceptions of conflict with the advocacy/advisor role. Number 0140 MR. JACKSON answered he believes there may at times be that perception. He said it is probably also true that the perception comes from the utilities. Mr. Jackson indicated part of the nature of the process when the desired decision is not received is the possible feeling that something somehow went wrong which should not have gone wrong, and that may be an easy thing to point to. As he has said previously from his experience on both sides of the fence for fairly lengthy periods of time, Mr. Jackson noted he has never seen anything which causes him to believe that is the source of any unfairness. REPRESENTATIVE BRICE questioned what the impact of this change would be on GCI's current dockets before the APUC. In response to Mr. Jackson's request, Representative Brice clarified he is referring to the entire bill, SB 133. MR. JACKSON indicated that GCI is experiencing somewhat of a lull right now in current cases before the APUC. Mr. Jackson commented he does not have as many cases in front of the commission as perhaps he has had in the past. He agreed with Senator Pearce that there would be a short-term period with some disruption. He guesses the hope is, and he would join in that hope, that in the longer run it would be faster and by some time in the fall they would be ahead of where they would otherwise be. Mr. Jackson indicated, however, this could not be known in advance. VICE-CHAIRMAN HALCRO confirmed there were no further questions for Mr. Jackson. Number 0240 MARK VASCONI, Director of Regulatory Affairs, AT&T Alascom, testified next via teleconference from Anchorage. He provided the following testimony, based on a written statement: "Good afternoon. My name is Mark Vasconi and I am testifying on behalf of AT&T Alascom, where I serve as Director of Regulatory Affairs. As you know, AT&T Alascom is one of the largest public utilities in Alaska, with an extensive network of telecommunications facilities throughout the state. Alascom has been regulated by the APUC for almost 30 years and has been directly involved in many of the most significant cases in the commissions's history. We have a detailed knowledge of how utility regulation in Alaska works, born of long experience. My brief comments today are about some of the shortcomings we see in SB 133 and are based on that experience. "Before turning to the specific problems we see with SB 133, I think it is important to state the principal goals that AT&T Alascom believes the legislature should aim for in making any changes to the public utilities commission. These goals are efficiency, professionalism, and objectivity. We believe the commission should be composed of trained professionals who, ideally, have some knowledge of the technical complexities of utilities regulation and who are not beholden to any industry group or political party. Those professionals should be required to live by a clear set of guiding principles, established by the legislature, which promote competition, protect the public interest, and promote fair decision-making on the merits. We are concerned with at least three provisions of the current version of SB 133, as they may unintentionally undermine these goals of professionalism, efficiency, and objectivity. "Our first concern is with the elimination of the requirement that commissioners have at least minimal professional education and training. The current requirement that there be one lawyer seat, one engineering seat, one business seat, and two citizen seats may need to be expanded or made more flexible, but we question whether abolition of any professional qualifications is wise. "AT&T Alascom's second concern is over the provisions dealing with the Public Advocacy Section. In Section .070(c), it says that the chairman shall direct the Public Advocacy Section to participate in a proceeding when the chair believes it to be in the public interest. Section .150, however, appears to conflict with .070 by requiring the Public Advocacy Section to participate whenever 'it is in the public interest to do so,' without saying who decides when that is. This provision of the bill goes on to say that the Public Advocacy Section 'shall operate separately from the rest of the commission.' Does that mean separately from the chairman? If so, who decides what is in the public interest and when participation is appropriate? Is it the head of the Public Advocacy Section? Is there a head of the Public Advocacy Section? The way the bill reads now, the chairman has the power to set this group in motion, but he or she does not have the power to stop it from striking out on its own. At a minimum, this confusing allocation of responsibility needs clarification. We also think that the addition of personnel to the Public Advocacy Section and to the advisory staff would be necessary if this section of the bill is enacted." Number 0385 "The third aspect of the bill that AT&T Alascom believes could be significantly improved is Section .080(b), which creates an internal appeal procedure whereby an aggrieved party could appeal the decision of a three-commissioner panel to the full five-member commission. AT&T Alascom thinks that this is an entirely unnecessary layer of additional procedure. It will do nothing but increase the agency's case backlog and delay prompt resolution of disputes. An additional layer of procedure is directly at odds with the goal of enhanced efficiency. We strongly recommend that this provision be eliminated from the bill if it is going to be passed into law. "These are just three of the most significant shortcomings we see in the bill as currently drafted. There are other ambiguities - for example, the chair is appointed by the governor for a four-year term. Can a new governor appoint a new chair before the four-year term expires? It isn't clear - all of which leads us to the conclusion ... that more time should be taken to permit industry and the public to digest this legislation. We urge the legislature to clarify the ambiguities and carefully consider some of the unintended consequences that may result from the changes SB 133 makes to the existing APUC structure. Otherwise, AT&T Alascom believes that there is a real danger that the perceived problems with the APUC may only be aggravated by this legislation, and that hasty passage of this bill may result in unforeseen consequences that hinder efficient and objective decision-making by the new commission. Thank you for considering these comments and I am available for any questions." Number 0465 REPRESENTATIVE MURKOWSKI noted Mr. Vasconi had mentioned the professional qualifications [for commissioners] and the fact that they have been eliminated from SB 133. She questioned if he is suggesting they return to the existing professional qualifications or if he is suggesting any addition to those. MR. VASCONI said he thinks the qualifications, at a minimum, might want to contain some clarification with respect to a college degree. Mr. Vasconi thought it might make some sense to maintain those particular areas which have been in statute, and it also might make sense to expand those qualifications to areas where people have had experience or education in public policy making. VICE-CHAIRMAN HALCRO confirmed Mr. Vasconi was aware the legislature has to confirm any appointees [to the commission]. Commenting on the obvious removal in SB 133 of the current required qualifications for commissioners, the vice-chairman noted, however, that the legislature's role as a line of defense against what could be termed poor appointees makes him rest somewhat easier. MR. VASCONI responded he understands the legislature's role regarding its ability to confirm appointees. Any additional requirement which might come into the professional qualifications could be seen as a "belt and suspenders" set of rules which would further ensure professional qualifications to a body that often has to deal with quite technical economic, engineering and legal matters. Number 0564 JIM ROWE, Executive Director, Alaska Telephone Association (ATA), testified next via teleconference from Anchorage. Mr. Rowe provided the comments of the ATA. He appreciates the time the legislature has spent this session examining the matters of the APUC. He was in Juneau a number of times when ideas of restructuring and impetus were before the House Special Committee on Utility Restructuring (URS). Many of those items they discussed were adopted, both in the House version [HB 183] and in SB 133. Mr. Rowe indicated ATA is very much in favor of some of the issues discussed at this current hearing that both Mr. Jackson and Mr. Vasconi are not in favor of. The Alaska Telephone Association believes in the separation of advocacy of staff; this is an issue ATA has brought before the legislature for a number of years. Removing the professional qualifications of the commissioners is an attribute; it allows the governor to appoint whomever he thinks is the best person and allows the legislature to decide on that as well. Mr. Rowe indicated the best candidate would not be precluded because of professional qualification requirements. He noted he is concerned whether many of the changes in SB 133 will really work, as quickly as they have gone through this. The current version of SB 133 has had many changes since the version that existed a month ago. Mr. Rowe indicated ATA has spent quite a bit of time going over some of the items and the association is very excited about some of the direction the legislation is taking. However, ATA is concerned that they have not looked at the legislation long enough, and that SB 133 might contain items which would not be advantageous for the industry or the public when cast into law. One item discussed is the ability of the governor to appoint new people and the legislature to confirm those new appointees to the commission. He noted the current commission members were all appointed by a governor and confirmed by a legislature. MR. ROWE referred to the three common carrier section [communications carriers section] staff being either parties or advisors to the commission, as Mr. Jackson had mentioned and as has been discussed. Mr. Rowe indicated that sometimes all three act as party, which is exactly why ATA has said to the legislature that there should be separation. This is because there are no advisors to be staff to the commission when all three are parties. He indicated the ATA thinks the public is not served by the lack of staff in all those positions, both to advise those who are going to make the decision, and to act as party on behalf of the public at the same time. Mr. Rowe noted ex parte [communication] has been a concern and it has been mentioned a number of times. He indicated the possibility of adverse decisions regarding ATA members attributed to ex parte, mentioned "sour grapes," and indicated sometimes industry has complained the commission was too slow when industry did not received the desired answer. In summary, Mr. Rowe indicated he is mostly coming before the committee to thank the legislature for what is in CSSB 133(RLS) am, the work done in both houses, and the direction the legislation is going, but informing the legislature of his apprehension. Although most of what is in the legislation is good, if all of it is not good, he is not sure either the public or industry will be served. He is worried about the loss of institutional knowledge there would be with a "clean sweep," but is sure they would struggle along with it. Mr. Rowe also commented he thinks there will be lull in getting dockets closed, and part of that is just human; the new commission, or any new commissioner that will be acting in the decision-making process, will have to read the record, and that takes time. Mr. Rowe indicated that concluded his testimony. VICE-CHAIRMAN HALCRO confirmed there were no questions for Mr. Rowe and no further witnesses on SB 133 at the Anchorage Legislative Information Office (Anchorage LIO). He requested the testimony of Pat Davidson. Number 0798 PAT DAVIDSON, Legislative Auditor, Division of Legislative Audit, Legislative Agencies and Offices, came forward in Juneau. Ms. Davidson stated she is present to answer questions on the amendment ["motion"] from Representative Gail Phillips regarding the audit. She would remain present in case needed. Number 0834 GINNY FAY, Legislative Liaison, Office of the Commissioner, Department of Commerce and Economic Development (DCED), came forward. Ms. Fay commented the Administration has been working with Senator Pearce since the legislation's introduction. The Administration has worked closely with Senator Pearce and feels the number of initial concerns it had with the bill have all been addressed. The Administration is content with CSSB 133(RLS) am. Number 0873 ERIC YOULD, Executive Director, Alaska Rural Electric Cooperative Association, Incorporated (ARECA), came forward. Mr. Yould noted ARECA is the trade association for the electric utility industry in the state of Alaska. He stated that, very basically, ARECA is in favor of this bill. When it first came up in the Senate it had sort of a shotgun marriage associated with AOGCC, however he thinks the manner in which the Senate has decided deal with a good, comprehensive assessment of the desirability of that marriage satisfies ARECA - that whatever the ultimate future outcome is, it is something that will be better for the state of Alaska. Mr. Yould noted ARECA has some concerns regarding transition, institutional memory, change resulting in an unknown period of time; however, he indicated ARECA feels the commission will be able to get through this with good, dedicated people. Mr. Yould listed some of the positive items ARECA sees in CSSB 133(RLS) am. He noted the staff time tracking system. Back in 1979, "a very group such as yours" recommended to APUC that it have a time tracking system. This never happened. In 1995, "a same group such as yours" made the same recommendation and again it never happened. Currently there is still no time tracking system. This legislation finally requires that a time tracking system be put into place; ARECA thinks that is positive. The current legislation also requires that there be a management information system accessible through the Internet; ARECA thinks this is a very positive addition to APUC management tools. MR. YOULD continued that CSSB 133(RLS) am stipulates the use of hearing officers established by the commission, plus arbiters if appropriate. The legislation establishes time lines by the commission for dockets. However, ARECA notes that there is an amendment before the committee [1-LS0771\XA.4, Cramer, 5/7/99] that attempts to establish some definitive time lines; it actually came out of actions out of this committee. Mr. Yould said ARECA, as a general rule, would like to see that amendment passed. The legislation gives more power to the chair to exercise authority over staff. An item that the electric utility industry is interested in is an allocation of the RCC [regulatory cost charge] based on the level of effort committed to each individual industry as opposed to simply an average amount for the entire utility sector. Therefore, basically, the electric utility industry, for instance, would be paying for the services that were actually provided to the industry (indisc.) regulation. ARECA thinks that is good. ARECA is in favor of the establishment and set-up of the independent public advocacy section. The section is independent and assures ex parte. Although it might require extra staff, Mr. Yould expressed that the cost for this additional staff translated to the individual on a bill would represent approximately a few pennies more, a very insignificant increase. He said the real question is whether the legislature wants to authorize those additional positions or not. It does set up a "Chinese Wall" ARECA feels is valuable; he thinks staff in an ex parte position sometimes carry that over to their function when they are in an advisory position. ARECA feels there is some value in the way it is set up. Mr. Yould stated ARECA does support this legislation, although it is concerned about the institutional memory. However, ARECA is willing to move forward with a bill it feels imparts a number of management changes. He indicated there is question whether these management changes will work, but he expressed the belief that if there are good, dedicated commissioners and staff who want to make these changes work, they will work, to the betterment of the industry. Number 1089 REPRESENTATIVE HARRIS noted the references by more than one witness to the loss of institutional memory. He questioned if it would be the staff loss, noting it does not seem like there would probably be any loss of institutional memory (indisc.) on the commission, since there is the possibility of three of the commission members changing in the near future. Under this legislation, the Governor has the opportunity to reappoint those people, if he so chooses, or appoint new people. Representative Harris asked why the concern. MR. YOULD said he frankly agrees with Representative Harris' comment; ARECA does not envision significant change in staff. He would suspect that very few staff would not be carried forward. Perhaps all would be carried forward, he does not know; it would be up to the commission to closely examine its own staff, perhaps doing its own management audit. Mr. Yould commented on the ability this would allow for redefinition and staff changes, if desired. As a general rule, he would tend to agree that he does not think there would be a large loss of institutional knowledge from the staff. However, it is an open question on the commission. It is hard to say how many new commissioners they would have. Mr. Yould commented the electric utility industry likes the present chairman. Mr. Yould indicated that perhaps the chairman has been hampered by commission chemistry in his efforts. If there are five new commission members, however, there would be some institutional knowledge lost. REPRESENTATIVE HARRIS noted one other question which came to mind as he is reading through again; it is a question the committee has asked Mr. Yould before, and, in fact, something the committee has had a couple of amendments on before. Representative Harris stated, "This bill calls for 60 days, a decision must be made in 60 days. ... It does not - it does not, at least (indisc.) I can read, give any extension period ability. Does that bother you?" Number 1216 MR. YOULD said he guesses it does not bother him. Mr. Yould commented, as he has mentioned before, that if there are the resources to get the docket out within a timely finish then the docket can be gotten out. He noted the previous discussion regarding 30 and 60 days, and his support of 30 days. However, realistically, they can work with 60 days just fine. Mr. Yould said he does not think anybody knows what the proper time is. He is sure there are some dockets out there that may take longer, but he does not think the industry would have a problem with extensions beyond 60 days for cause. REPRESENTATIVE HARRIS noted, in follow-up, "And the other thing I think that it says in here is that you get five months from the time, I guess, (indisc.) have it on the docket, so to speak. Is that a problem?" MR. YOULD reiterated he had advocated amendments that would attempt to make that sort of an absolute: If you have to take up to five months, then do so. The previous amendment's drafting did not seem to have the cause and effect the electric utility industry really wanted to see. Again, as Representative Harris remembers, Mr. Yould noted he had offered up some amendments with punitive language which made everyone nervous, perhaps rightly so. He commented ARECA would like to see as many teeth in there as possible. Perhaps they could take some indication from FERC, which, as he understands, has certain time lines mandating when the commission shall act on certain issues. However, short of that, coming to the close of the legislative session, Mr. Yould said that if they could get this amendment, at least it is a step in the right direction. Certainly there is always the next session if they find they need to further tighten up on the time lines. He reiterated they would like to see time lines. Number 1319 REPRESENTATIVE BRICE commented there are communications carriers sections and public advocacy sections under this bill. He questioned if there is any [provision] for an electric utility section. MR. YOULD answered he does not think it is absolutely necessary, and he does not understand why there has to be a communications section. He does not know why they have to compartmentalize the telecommunications section. REPRESENTATIVE MURKOWSKI referred to Mr. Yould's comments regarding the opposition to the AOGCC "marriage" situation and the current acceptability now that it is simply a roommate situation. The legislation provides the AOGCC access to hearing officers. She questioned if Mr. Yould views this as a workable situation. MR. YOULD responded it somewhat depends on the attitude of the personnel: how motivated they are, how strong management is. He just has to feel that motivated people are going to try to get the job done. Mr. Yould said he guesses ARECA does not have a real problem with the marrying together of some of the [two commissions'] administrative functions. Number 1412 REPRESENTATIVE HARRIS asked Mr. Yould about the lack of required commissioner qualifications in the present legislation, noting he guesses it is up to the legislature to make sure it is happy with the governor's appointees. MR. YOULD noted ARECA agrees with this. He indicated in their testimony on HB 183, they had commented they did not necessarily see the need for the separate profession seats of lawyer, engineer and accountant. As a general rule, ARECA feels the governor will attempt to appoint the most capable individuals, and ultimately the legislature will have the authority to screen those people. VICE-CHAIRMAN HALCRO commented on the possible near-future turnover of three APUC commissioners, and the, he believes, 469-case backlog. He indicated there is always going to be this period of catch-up, even if there is only one new commissioner, and he questioned if that is a safe assumption. Number 1503 MR. YOULD replied he guesses it is a possibility that a problem exists there. As he understands the legislation, it would have staggered terms for future commissioners. This would somewhat alleviate that particular problem. However, he said there is no guarantee this particular commission will significantly change - maybe there will not be three new commissioners in the near future. Mr. Yould said ARECA does not have a problem with giving the Governor and the legislature the opportunity to examine the entire slate and deciding what is best. VICE-CHAIRMAN HALCRO invited Senator Pearce and Mr. Carter back to the table, stating he wished to provide them with an opportunity to respond to some of the expressed concerns. The first concern was a request to delay the effective date to provide more of a "cushion" regarding transition. Number 1608 SENATOR PEARCE indicated she believes the chances of passing SB 133 through the House and back to the Senate for concurrence before the 121st day of the legislative session are reduced unless the legislature believes it is also going to have the opportunity to confirm the new commissioners before the end of this session. It has certainly not been hers or anyone else's intention to establish a situation where the legislature passes a bill which completely repeals the APUC and there are possibly five new commissioners who do not go through any confirmation process for a full year. This is not good conduct for Alaska's public, in Senator Pearce's belief, and she thinks it could entertain all sorts of mischief. Having said that, Senator Pearce noted she does not see that much is gained by delaying the effective date of the change for two months. The present commission would continue to serve until the changeover date. She would think the legislators would want to confirm new people before leaving town, and have the confirmed commissioners on the job working to gain the knowledge and expertise just as soon as possible. Number 1700 MR. CARTER related they had briefly discussed the possibility initially, when the two-commission merger was still being considered, of retaining the existing commission at some level to act in an advisory role. However, this might work on paper but he thinks it would be a disaster in reality. He indicated the idea had been dismissed because of this belief. REPRESENTATIVE CISSNA commented the committee has spent a significant amount of time going over the House bill [HB 183] which seems to be quite different from this [CSSB 133(RLS) am]. Personally, she has a real distrust, a real question why things have to move that quickly. Representative Cissna questioned if she has understood correctly regarding the confirmation of the new commission in the next week and a half. SENATOR PEARCE responded that under CSSB 133(RLS) am the repeal and reenactment of the APUC to the RCA would take place on July 1. That assumes the new commissioners are named before July 1, and the legislature certainly would like to have the opportunity to confirm them. Therefore, Senator Pearce indicated Representative Cissna's understanding is correct. She noted that is somewhat the point of the legislation. Number 1800 REPRESENTATIVE CISSNA commented that pieces of this paper have just been placed in front of her at this moment, noting this is a substantial change. She questioned why so quick. SENATOR PEARCE replied, "I'm not trying to be flippant, but welcome to the legislature." REPRESENTATIVE CISSNA noted she is really asking a serious question. SENATOR PEARCE responded that she is providing a serious answer. She related there is a process: the bills go through the Senate and then they go through the House or vice versa. No one can control the opportunity of the public and affected parties to bring new comments to whatever committee at whatever step of the way. She added, "If you said, 'Oh, something new came along and therefore I can't move because there's a new idea in front of me,' frankly, this entire building would be shutdown, and that's an honest answer." Senator Pearce indicated her feeling that the present commission is dysfunctional and needs to be replaced. The only way to get to that is to repeal it. The only way to get to that, unless the legislature sets aside its duty of confirmation, is to get it done before the legislators leave town [after the end of the legislative session]. VICE-CHAIRMAN HALCRO noted there is a concern that splitting advocacy and advisory will cause unnecessary staff expenditures; that staff would have to be added, and the testifiers did not feel this was a wise move. Number 1908 SENATOR PEARCE referred to her belief expressed in her testimony that the advocates are extremely important because they are the people who are supposed to protect the interests of Alaskan consumers. She reiterated if that takes more staff, within reason, she is willing to entertain this. Senator Pearce mentioned the fiscal note, commenting they do have the money for the time management system. The Senate understood, as it passed the bill on a 16 to 4 vote, this was going to have additional costs on the capital side and it would represent new staffing levels. They have also supported new technical staff at the AOGCC. Senator Pearce agreed with the comments of ARECA and others that having the separate section is important enough that the needed expertise can be created without having to balloon the staff greatly. The information is available, and with staff expertise, this can be done. Senator Pearce noted it does not bother her to give the public utilities commission more staff; she approved more staff for the APUC two years ago when the present chairman requested, she believes, four new staff members. The APUC was before the legislature this year for another number; she believes the Finance Committees have entertained that request. Senator Pearce stated the legislature has responded to the utility commission in an effort to make the commission more efficient and more effective. She thinks it is also important the legislature responds in a manner which ensures that protection for the consumer. Number 2038 MR. CARTER added that they have not heard complaints about a separate advocacy section from groups such as AKPIRG [Alaska Public Interest Research Group] or other groups out there. They have heard from industry, but the public advocacy section is set aside to protect the public interest and this is what they would be tasked with. If it takes additional staffing levels to accomplish that goal, then so be it. REPRESENTATIVE BRICE asked about the relationship between the chair and public advocacy section. He asked how they envisioned resolving the paradox. SENATOR PEARCE said this is the first time that AT&T Alascom has brought written testimony to them, and she was just telling Mr. Gillespie [Ray Gillespie, Gillespie and Associates, lobbyist for AT&T Alascom] they are quite willing to work to clarify the language if it needs clarification. Senator Pearce commented she thinks his questions may be partly drafting style and due to the way the Alaska Statutes are written. However, she would envision the commission as a chairperson; through the chair the commission has oversight of the staff in terms of how they do their organization, who they hire, who they fire. Senator Pearce noted this is a problem at the present. There are some (indisc.) questions as to whether the commission or the executive director has the right to hire and fire staff, and it has been an ongoing thorn in an effort to get things done. Under this scheme, the commission, through the power they embody in the chair, would supervise the staff. The commission would also, under this bill, formally set standards for when advocates would be appointed for specific cases. This is something she understands the commission is already discussing informally. Advocates are not required for every single case. Therefore, the commission would set standards so that all of the utilities would have an idea of when to expect to have the advocates as an ex parte and when not. Then, under those kind of broad outlines, the chairman would chose to assign a certain docket to a certain group of commissioners, and choose to assign the advocates to that docket at that time. Senator Pearce assured the committee they will clarify that the language does indeed work in the way they have intended, and have no problem with that. VICE-CHAIRMAN HALCRO stated the next concern was over eliminating the professional qualifications of potential commissioners. Number 2258 SENATOR PEARCE said they had tried to come up with qualifications. She thinks that if one goes through the APUC over the years, one will find that some of the best, most notable commissioners the state has ever had have been the public members. She gave as first example of this, Susan Knowles, the state's First Lady, former [APUC] commissioner and former chair of NARUC [National Association of Regulatory Utility Commissioners], who served with distinction in both places. Senator Pearce indicated Ms. Knowles' appointment did not have to fill any specific professional qualifications. Senator Pearce related that they had looked at standards because she has an image of the sort of person she would like to have on the APUC; she suspects everyone in this room has an idea of what they would like to see. ARECA brought them some language which the telecommunications industry didn't like; the telecommunications industry brought them some language ARECA didn't like; the pipeline folks didn't like any of it. They worked through various and sundry suggestions. SENATOR PEARCE noted that as she said on the floor of the Senate and at every committee she has been before with this bill, they are willing entertain any sort of specific requirements people want to bring forward, but when one begins setting requirements, one makes it more difficult to find qualified people to take these positions. Recruiting has been a problem, and they want to ensure that they do not make it impossible to find the appropriate people. Senator Pearce emphasized she is open to ideas, mentioning the previous suggestion of someone with public policy experience. She does not want to ever deny the opportunity to someone who has worked in any one of these industries for a number of years to have the opportunity to be appointed because he or she had never been chair of his/her community council, or something. Therefore, to her that would be problematic. The idea was examined that a person would have to have a degree in business, accounting - some sort of a professional degree in some direction. Senator Pearce said she then noted her own degree is in biology and she thinks she could be a public utilities commissioner, however emphasizing that she does not want to be one ever. [TESTIMONY INTERRUPTED BY TAPE CHANGE] [Tape log notes indicate the testimony lost was a non-serious comment that former legislators should never be APUC commissioners.] TAPE 99-55, SIDE A Number 0001 VICE-CHAIRMAN HALCRO said, "... And the second to the last concern was about the power of the public advocacy section, and I think the concern there was does the chair have power? Are they an island unto themselves? If you could speak to that particular section, 42.04.150." [CSSB 133(RLS) am, Section 1, Article 3, read: Article 3. Public Advocacy Section Sec. 42.04.150. Public advocacy section. There is established within the commission a public advocacy section. The section shall participate as a party in matters that come before the commission to represent the public interest when it is in the public interest to do so. The public advocacy section shall operate separately from the rest of the commission.] SENATOR PEARCE responded she does not think much more clarification is needed beyond her previous comments. The staff has to work for somebody, so clearly they do work for the commission. However, assigning the advocacy section to a particular docket, case or rulemaking is a function of the commission chair through the power embodied by the commission. Once the advocacy staff is assigned, they do their work, act on an ex parte basis before the commission and make their recommendations. Senator Pearce noted they do that presently but without the "Chinese Wall." Therefore, she does not see that there will be some power-mad subsection of staff running amok. Number 0111 VICE-CHAIRMAN HALCRO noted the last expressed concern was the appeal process. SENATOR PEARCE commented that, as originally envisioned, when they had first put forward the idea of being able to empanel a subset of the full commission, it was a new idea in Alaska for regulatory commissions. She indicated it is, however, a technique used by the Court of Appeals. Because it was a new idea for regulatory commissions, the reaction was that all five commissioners were needed at everything. Senator Pearce related she then proposed giving the chair the ability to assign any three or more commissioners to each specific one. Noting this is a standard used by the Court of Appeals, Senator Pearce described the scenario that if the commission makes a decision which contravenes a previous commission decision, then the parties have the right to ask the full commission to review it. The commission can say no, and then there would still be the right to court appeal. They were not trying to add a layer of bureaucracy; they were trying to allay the concerns some of the utilities had expressed early on in the process. This today, and the AT&T testimony, is the first time she has heard a concern about this, and she will be talking through it with them. However, Senator Pearce did not think the concern which was expressed is what they would actually see happen because there are specific times to ask for the appeal and the commission does not have to accept the appeal. Senator Pearce noted, though, she does not like always throwing everything to the courts. SENATOR PEARCE indicated she would like to add some comments regarding the time limits. She thinks she previously mentioned that they had also talked through a lot of iterations of this one. Senator Pearce noted, "I'm not sure that any of us have much understanding of how complex some of the cases which go before the PUC [Public Utilities Commission] are, particularly pipeline tariff cases." She informed the committee that years of discovery can go on. In her opinion, the time line in this amendment [1-LS0771\XA.4, Cramer, 5/7/99] would not work. It would not even be possible to get to discovery in time. Senator Pearce provided an example, stating, "We've had testimony by Tesoro at previous hearings over the possible transfer. Tesoro is before the PUC in a tariff case that has been before them now for how many years ... like five years, ... they're not complaining that the commission's going too slow, it has taken that long to get to all of the discovery. We're talking about the TAPS Pipeline ... and we do not want to tie the hands of our utilities commission so that we tell them they have to force a decision quickly, and they don't have an opportunity to do the work that we would really like them to do." Senator Pearce stated that is one of the many reasons she has been concerned all along about putting strict time lines in the statute, although she would be the first one to say that utilities have experienced inexcusable delays, noting she is referring to the electric utilities and the telecommunications companies, but not so much the pipeline companies. However, it always difficult to think of every case when attempting to put something in statute and it is often best to leave some flexibility. Number 0424 REPRESENTATIVE BRICE commented he had touched upon this with ARECA. He sees that having a specific communications carriers section as potentially leading to other separate sections, and he questioned the rationale for having a specific communications carriers section. SENATOR PEARCE answered that that is present law; it already exists in statute. MR. CARTER noted the section remains mostly as it is currently except the public advocacy section has been separated out. SENATOR PEARCE indicated the only reason the section shows in the legislation is because the public advocacy portion of it has been separated out. MR. CARTER indicated that section came from when the "White Alice" system was transferred from federal control to the private sector 20-some odd years ago. Mr Carter commented they have examined this and whether or not it is needed; this is still being debated. REPRESENTATIVE BRICE confirmed there was no federal requirement for this specific section. SENATOR PEARCE indicated her long-term expectation is it will be found that a more efficient system is probably possible if more of the state's regulatory agencies are at least combined under one umbrella, with resulting divisions like Oklahoma's structure. Oklahoma has a telecommunications division, utilities division, and an oil and gas division. In response to Representative Brice's mention of a water division, Senator Pearce responded that Oklahoma does not separate them that far down. However, Oklahoma does have this division structure. Returning to the communications carriers section, Senator Pearce reiterated that section already exists in law and the reason the language is in the bill is because of the way the legislation had to be drafted. [CSSB 133(RLS) am, Section 1, Article 2 read: Article 2. Communications Carriers Section. Sec.42.04.100. Communications carriers section. There is established within the commission a communications carriers section that shall develop, recommend, and administer policies and programs with respect to the regulation of rates, services, accounting, and facilities of communications common carriers within the state involving the use of wire, cable, radio, and space satellites.] Number 0563 VICE-CHAIRMAN HALCRO noted the presence of Chairman Rokeberg and returned the gavel. CHAIRMAN ROKEBERG welcomed the Senate President to the committee chambers. He apologized for his previous absence due to attendance at a Senate Resources Standing Committee hearing. The chairman asked if there were further questions of the sponsor. MR. CARTER noted there had been one question from Representative Harris regarding the loss of institutional knowledge brought up by one of the testifiers. Under the current system, there is probably going to be the loss of three commissioners and the retention of two. It is important to note that all of the staff would be carried forward. It would be up to the commission, as it is now, whether or not to make staffing changes and when to make those. This legislation does not do anything to the staff; the staff goes forward, as does all current regulatory authority, regulations and pending matters before the commission. Mr Carter said he thinks that embodied in the staff is the institutional knowledge which will be necessary to prepare all the new commissioners, however many there may be. Number 0689 CHAIRMAN ROKEBERG commented he had a couple of questions, several of which have probably been asked and answered in his absence. The chairman noted there are some amendments before the committee which the committee would like the sponsor's input on. He referred to the removal for cause section on page 2. [CSSB 133(RLS) am, Sec. 42.04.020(e) read: (e) The governor may remove a commissioner from office for cause, including incompetence, neglect of duty, or misconduct in office or because the member, while serving on the commission, is convicted of a misdemeanor for violating a statute or regulation related to public utilities or is convicted of a felony. A commissioner, to be removed for cause, shall be given a copy of the charges and afforded an opportunity to be publicly heard in person or by counsel in the commissioner's own defense upon not less than 10 days' notice. If a commissioner is removed for cause, the governor shall file with the lieutenant governor a complete statement of all charges made against the commissioner and the governor's finding based on the charges, together with a complete record of the proceedings.] CHAIRMAN ROKEBERG indicated he is curious about the formal structure for the type of hearing, unless there is something elsewhere in statute for the type of hearing. Noting the language, "an opportunity to be publicly heard in person or by counsel", he questioned if there is a formal hearing structure somewhere in statute that would allow this type of hearing. He commented it is rather unusual. SENATOR PEARCE replied this language is straight out of the AOGCC statute. In response to the chairman's comment that it has probably never been used, Senator Pearce noted she thinks it has been used. MR. CARTER added he also thinks it has been used but would defer to the Department of Law for that. Number 0787 SENATOR PEARCE stated that in terms of the hearing process she does not know where there is a separate statute which deals with the hearing process. She noted that, of course, there is the Administrative Procedure Act which does deal with hearing processes and there are also personnel laws in place. Senator Pearce stated they had deliberately taken the AOGCC language, with the language regarding violation of statute or regulation related to public utility and felony conviction added at the Department of Law's request. CHAIRMAN ROKEBERG commented he is sure the sponsor is absolutely correct and will just make a note to double-check that as the legislation progresses. As another question, the chairman referred to page 3, line 17, of CSSB 133(RLS) am, noting HB 183 contains the additional language, "by the commission", which gave a certain amount of currency and power to the commission, not just the chair. [This sentence in Sec.42.04.050 of CSSB 133(RLS) am, page 3, lines 15-17, read: "The commission chair may employ engineers, hearing officers, experts, clerks, accountants, and other agents and assistants considered necessary." Chairman Rokeberg indicated that in HB 183 the additional language, "by the commission", appeared at the end of that sentence]. The chairman noted that, in other words, the commission chair would do the employing of all the personnel, if they were believed to be necessary by the commission. He commented there was a joint consent issue there: the commission would find that the employment would be necessary and then the chairman would do the selection. He indicated he wondered if the sponsor thought this would diminish that. SENATOR PEARCE responded she thinks that is inherent in the language of lines 13 through 15, the preceding sentence, "The chair of the commission is responsible for directing the administrative functions of the commission and carrying out the policies as set by the commission.". She said one would assume that if the commission set and directed what the administration functions are going to be, the commission would also inherently decide the staffing levels. Senator Pearce noted that then also comes to the legislature as well. The desire is to have a commission without the sort of institutional disagreements the present commission has. Number 0940 CHAIRMAN ROKEBERG indicated his reason for asking the question was to ensure that power was not being invested in the chair regarding the hiring of personnel without the consultation of the commission. SENATOR PEARCE commented that no amount of statutory language is going to make people who do not like each other work together. CHAIRMAN ROKEBERG noted the point is well-taken. MR. CARTER explained there is currently some disagreement as to who the staff works for. He indicated this is addressed by removing the executive director from the equation, but the intent is to also eliminate confusion that one staffer could be working for one commissioner but not another; therefore, the chair oversees all. CHAIRMAN ROKEBERG said his take was that if the commission authorized a position then the chair would hire it, if that language was added. The chair would still maintain the selection process, et cetera, but consent from the commission would be needed to do the hiring. [Sec. 42.04.050 of CSSB 133(RLS) am, Sec. 42.04.050 read in its entirety: Sec. 42.04.050. Employment of commission personnel. (a) The chair of the commission is responsible for directing the administrative functions of the commission and carrying out the policies as set by the commission. The commission chair may employ engineers, hearing officers, experts, clerks, accountants, and other agents and assistants considered necessary. Employees of the commission who are not in the exempt service under AS 39.25.110, other than legal counsel, are in the classified service under AS 39.25.100.] Number 1015 SENATOR PEARCE said that in the language on lines 13 through 15 she referred to, she believes that, inherently, the commission has to approve the budget it submits to OMB [Office of Management and Budget, Office of the Governor]. Some one person has to be in charge; on the other hand, this person has to have the support of the members of his/her body, as does the Speaker of the House, and herself as President of the Senate. Therefore, she honestly believes the chairman's concerns are addressed by the language in lines 13 through 15, without attempting to make a more burdensome administrative process in statute. She questioned if it would be desirable to have to go to the commission every time a new clerk is hired; she does not think that is necessary. CHAIRMAN ROKEBERG commented, then, they have that on the record; it should be very clear in the future. He noted there is something of technical detail on page 5, line 4 - the use of the conjunctive word "and" rather than "or". Lines 2 through 5 of page 5 read, "A decision of a hearing panel under AS 42.05 may be appealed to the commission if there is an allegation that action or a decision taken by the commission is contrary to commission precedent and is not based on an intervening change in law." The chairman questioned whether it might not be desirable to use "or" rather than "and" in the phrase, "contrary to commission precedent and is not based on an intervening change in law". SENATOR PEARCE responded the question need to be addressed to Ms. Cramer [the bill drafter: Terry Cramer, Legislative Counsel, Legislative Legal and Research Services, Legislative Affairs Agency]. Number 1117 CHAIRMAN ROKEBERG indicated he thinks they would want the "or" allowance and it would be checked out. Noting the time of day, the chairman announced he would like to take up the amendments in a somewhat informal process to receive the sponsor's input. He noted the existence of an amendment from Representative Gail Phillips. The chairman commented this is intended as a friendly amendment from LB&A [Joint Committee on Legislative Budget and Audit]. He indicated LB&A thought the language was somewhat superfluous. The chairman asked Senator Pearce if she had any problems with this amendment. SENATOR PEARCE answered in the negative. CHAIRMAN ROKEBERG noted the amendment is "XA.3, Cramer, 5/6/99" and should be marked as Amendment 1. Amendment 1, labeled 1-LS0771\XA.3, Cramer, 5/6/99, read: Page 11, lines 18 - 21: Delete "The governor shall appoint one member from the Regulatory Commission of Alaska and one member from the Alaska Oil and Gas Conservation Commission to work with the Legislative Budget and Audit Committee on the report." Number 1199 REPRESENTATIVE HARRIS moved Amendment 1. There being no objection, Amendment 1 was adopted. CHAIRMAN ROKEBERG asked the committee to take up the amendment labeled "XA.4" to page 5, lines 9 through 12. This amendment, labeled 1-LS0771\XA.4, Cramer, 5/7/99, read: Page 5, lines 9 - 12: Delete all material and insert: "(c) On the filing of a petition, application, or complaint concerning a matter within the jurisdiction of the commission under AS 42.05 for which a hearing is clearly warranted, the chair of the commission shall assign a priority rating to the issue and promptly set a date for hearing. The hearing shall be expedited in accordance with the priority rating. Regardless of the priority rating, a hearing may not be scheduled to begin later than five months after the petition, application, or complaint was filed unless the commission approves an extension of time for good cause. After the conclusion of the hearing, the commission shall enter its order within 60 days." CHAIRMAN ROKEBERG noted this amendment concerns the procedures in terms of the timeliness of the commission hearings. He questioned if Mr Carter had had a chance to examine the amendment, mentioning some discussion. MR. CARTER responded they had discussed this at length and Senator Pearce has some rather strong feeling about putting time lines in statute. CHAIRMAN ROKEBERG said to Senator Pearce he notices the theory in SB 133 asks that the timeliness be had by regulatory promulgation by the commission and requested her opinion on this amendment. Number 1261 SENATOR PEARCE replied she does not support the amendment. She does not believe that the hands of the commission should be tied regarding the commission's opportunity to have the amount of time needed for some of the more complicated cases which come before it. On the other hand, she too believes the commission should act in a more timely fashion than has been seen, going all the way back to the audits of the 1970s. The legislation requires the commission to set regulations so that there are guidelines and expectations everyone can share. The guidelines would not necessarily have to be the same for each type of utility or each type of case, under the commission's ability to set regulations. She thinks that is definitely the sort of flexibility the commission should be allowed. Furthermore, if the commission does regulations and there is a case which does not fit in the time line set by the regulations, the commission has the power to do emergency regulations. Senator Pearce indicated she does not believe the opportunity would always exist to even do the discovery that is necessary for some of these complicated cases in the five months mentioned by the amendment. SENATOR PEARCE indicated the amendment would set a five-month deadline; some cases can move that quickly, but there are some cases which come before the commission that cannot possibly be handled in that amount of time. There are some joint board issues in cases. Senator Pearce indicated she does not know if the questions to be asked in discovery, what documents one would wish to request, could be determined in that amount of time. Therefore, she is attempting to give a new commission the amount of flexibility possible to set reasonable guidelines. The commission has much more knowledge about what comes before it than any of the members of the legislature. She indicated this is providing the commission an opportunity to be flexible in those guidelines if necessary. If it does not work, (indisc.) the sunset process goes on, and the legislature will have the opportunity to set time lines in statute if it does not like the commission's regulations or amount of time the commission takes on something specific. She stated, "But I think you're asking a lot of a brand-new entity if you try to set some (indisc.) time lines." CHAIRMAN ROKEBERG indicated it seemed to him that time lines would be appropriate because a new entity is being created and the regulations might take a lengthy time to be promulgated. He commented that sometimes it takes longer than two legislative sessions. SENATOR PEARCE noted the legislation requires that those regulations be promulgated by December 31, 1999. CHAIRMAN ROKEBERG thanked the senator for refreshing his memory. However, he noted on the other hand this amendment is to direct the commission to follow the legislative dictate to operate in a more timely fashion. The committee did receive testimony on this amendment during the HB 183 hearings; it was actually agreed to by Mr. Lohr [Robert Lohr, Executive Director, Alaska Public Utilities Commission] and Mr. Zobel [Ron Zobel, Assistant Attorney General, Fair Business Practices Section, Civil Division (Anchorage), Department of Law] after some "arm-twisting." However, the chairman indicated they were not opposed because of the commission's ability to extend the time beyond the five months to meet the exigencies Senator Pearce has mentioned. SENATOR PEARCE reiterated that she does not support the amendment. Number 1470 CHAIRMAN ROKEBERG noted, given that, the amendment would be set aside. The chairman commented the committee would take up "XA.5." He indicated this amendment was new to him as well. It was to be marked Amendment 2. The chairman requested a motion on the amendment so they could have a (indisc.). Amendment 2, labeled 1-LS0771\XA.5, Cramer, 5/7/99, read: Page 12, following line 15: Insert a new bill section to read: "* Sec. 29. APUC ASSISTANCE TO RCA. The Alaska Public Utilities Commission shall, to the extent possible, transfer as many duties and activities as possible from members of the commission to commission staff in order to make the transition between the Alaska Public Utilities Commission and the Regulatory Commission of Alaska as smooth as possible." Renumber the following bill sections accordingly. Page 14, line 13: Delete all material and insert: "* Sec. 33. (a) Section 29 of this Act takes effect immediately under AS 01.10.070(c). (b) Except as provided in (a) of this section, this Act takes effect July 1, 1999." Number 1507 REPRESENTATIVE HARRIS moved Amendment 2. CHAIRMAN ROKEBERG and REPRESENTATIVE MURKOWSKI objected to the amendment. CHAIRMAN ROKEBERG noted he objected for discussion. He questioned if Mr Carter had had an opportunity to examine this amendment. MR. CARTER answered in the affirmative. CHAIRMAN ROKEBERG commented he did not know where the amendment originated. He noted it has to do with the transition provisions and questioned if Mr. Carter has an opinion on that. MR. CARTER replied that from his examination it does not seem to accomplish anything more than what the legislation already accomplishes. Certainly, he does not think the drafter of the amendment intended to transfer duties of a commissioner to staff. He commented he does not know if that could even be statutorily accomplished. CHAIRMAN ROKEBERG indicated his agreement with that. MR. CARTER continued that, given that all existing staff and pending matters before the commission would be carried forward, all the activities of existing dockets are going to be carried forward anyway. He does not know what the amendment accomplishes or what the intent is. CHAIRMAN ROKEBERG questioned if Senator Pearce would agree. SENATOR PEARCE stated she does not truly understand the language and what is trying to be accomplished with the amendment. One of the things they are attempting to do in the legislation is to not only give the commission more direction, but also more power and responsibility. To turn around and say that it should all be transferred back as the transition occurs seems counterproductive to her. CHAIRMAN ROKEBERG again expressed his lack of knowledge regarding the amendment's origin, commenting it does not sound like the amendment has a lot of support. REPRESENTATIVE HARRIS stated he would withdraw the amendment. Number 1614 CHAIRMAN ROKEBERG noted he has a conceptual amendment to offer which he hopes will not be as hostilely received by the sponsor as some of the prior amendments. He drew the committee's attention to page 7, line 31, of CSSB 133(RLS) am. The chairman noted he would like to insert language after the word "assigned" on line 31, adding "A decision of an arbitrator is not final until approved by the commission". [The affected section, Section 6, of CSSB 133(RLS) am, read: * Sec. 6. AS 42.05.171 is amended to read: Sec. 42.05.171. Formal hearings. A formal hearing that the commission has power to hold may be held by or before a hearing panel appointed under AS 42.04.080 [THREE OR MORE COMMISSIONERS], a hearing officer, or an administrative law judge designated for the purpose by the chair of the commission. In appropriate cases, a formal hearing may be held before an arbitrator designated for the purpose by the commission. The testimony and evidence in a formal hearing may be taken by the panel [COMMISSIONERS], by the hearing officer, by the arbitrator, or by the administrative law judge to whom the hearing has been assigned. A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of the commission. In determining the place of a hearing, the commission shall give preference to holding the hearing at a place most convenient for those interested in the subject of the hearing.] CHAIRMAN ROKEBERG commented he thinks they went through this before and staff has spoken about this. He questioned if the sponsor has any problem, noting he thinks this is actually a necessary amendment. Arbitration had been provided for here but it is necessary to have finality by the commission itself, not the arbitrator. MR. CARTER said he believes the intent was that it has to be approved by the commission to be an act of the commission. CHAIRMAN ROKEBERG noted that needs to be included. MR. CARTER commented he had also had some discussion with Ms. Cook from the legislature's legal department [Tamara Cook, Director, Legislative Legal and Research Services, Legislative Affairs Agency] where she had questioned the need for the language following that, where a commissioner who has not heard the (indisc.) the testimony. CHAIRMAN ROKEBERG questioned if Mr. Carter had received any feedback on that. MR. CARTER answered in the affirmative. He commented he does not have an amendment drafted yet, they were still discussing it. Noting the language, "A commissioner who has not heard or read the testimony ...", Mr Carter explained that apparently the rule of law states that in an adjudicatory function they have to consider the record. However, he noted this language was actually intended for the hearing officer, adding, "So an arbitrator -- so rather than saying a commissioner, it would say an arbitrator or a hearing officer or administrative law judge who has not heard or read the testimony may not participate in decision-making." Number 1720 CHAIRMAN ROKEBERG said this is a very important part, particularly because of its impact on the transitional provisions. He questioned that the sponsor's office had not been able to get the written opinion on that. MR. CARTER said they have not come to conclusion on that yet, answering no. SENATOR PEARCE commented, however, the first language the chairman is proposing is fine. CHAIRMAN ROKEBERG confirmed, then, there is no objection to the conceptual amendment from the sponsor. The chairman moved the Conceptual Amendment to page 7, line 31, after the word "assigned" to conceptually add "'A decision of an arbitrator is not final until approved by the commission' or words to that effect conceptually." Chairman Rokeberg commented this was in HB 183 and indicated he wondered if that was acceptable to the sponsor. MR. CARTER answered in the affirmative. Mentioning Legal Services' involvement with the capital budget, Mr Carter noted part of the question on this, and the ongoing debate, is that if the decision of an arbitrator has to be confirmed by the commission to be an act of the commission, does this also apply to the hearing officer and administrative law judge as well. The confusion they were having is what is the intent of having an expedited process by utilizing an arbitrator, hearing officer, or administrative law judge, if it has to go back before the full commission and the full commission has to hear or read all the testimony or the argument. Therefore, they were trying to clean up that language. Mr Carter indicate he thinks everyone understood the intent but there has not been time to have that clarified. Number 1825 SENATOR PEARCE pointed out that she believes the chairman's language refers only to the arbitrator but the section is speaking about hearings before an arbitrator, administrative law judge, or the commission. She explained the attempt is being made to discover the correct language to reach the point the chairman is trying to make. Senator Pearce added they have not had a chance to figure out the proper language with the Department of Law. CHAIRMAN ROKEBERG commented he thinks they are actually two different issues, although it could be expanded to include the hearing officer if desired. MR. CARTER agreed the conceptual amendment is fine; they had discussed this with Ms. Cook. However, Ms. Cook had just not thought that that was complete; that by doing so the hearing officer and the administrative law judge had been omitted. The question would be whether the hearing officers' or the administrative law judges' decisions were then final; do they actually act as the commission and is that then a decision of the commission? CHAIRMAN ROKEBERG thought they could conceptually add "hearing officers" and then would have to wait to see what "legal" came up with on the next sentence ["A commissioner who has not heard or read the testimony, including the argument, may not participate in making a decision of the commission."] MR. CARTER said to serve the purposes of the chairman, both the hearing officer and the administrative law judge needed to be added, if the intent is for them to be able to act in regards to the commission's decision. Number 1893 CHAIRMAN ROKEBERG noted, then, he would move an amendment to the amendment to that effect, adding the administrative law judge and hearing officer conceptually. SENATOR PEARCE added that while a conceptual amendment is being made, she would hope the committee is comfortable allowing the drafters to work out the proper legal way to make it all work. CHAIRMAN ROKEBERG responded it is conceptual in that regard also; he appreciates that and the point will be noted. SENATOR PEARCE indicated she has no problem. MR. CARTER reviewed the intent so that he could explain it to Ms. Cook: The intent is to expedite the process so we use an administrative law judge, hearing officer, arbitrator, and then the commission should come back, consider the record, and make a final decision. CHAIRMAN ROKEBERG agreed; the power to make the final decision vests in the commission, not the hearing officer, administrative law judge, or the arbitrator - they make recommendations. The chairman commented he does not think it is that substantive but they would be remiss in not having it. Chairman Rokeberg noted the real issue is "the reading the next sentence there." SENATOR PEARCE commented on that thought - that, in fact, considering the record does not necessarily mean reading every page or being required to have heard every word. She stated, "You've got some specific language here that is (indisc.)..." CHAIRMAN ROKEBERG injected that he finds it very troublesome, particularly given the transition issue. This brings to light the fact that they are mandating this type of thing. He indicated it does not mean only reading everything but also hearing the arguments, which would almost mean listening to the tapes. MR. CARTER made an indiscernible comment. Number 1999 CHAIRMAN ROKEBERG returned the pending conceptual amendment. He questioned if there were any objections to the Conceptual Amendment as amended. The chairman confirmed the committee did not wish him to restate the amendment. REPRESENTATIVE BRICE indicated he thinks what the committee is conceptually doing is requiring that a decision made on behalf of the commission by anyone who can hear, act or make a decision on the commission's behalf has to be finally approved by the commission. CHAIRMAN ROKEBERG indicated, there being no objection, the Conceptual Amendment as amended was adopted. [A handwritten photocopy of Chairman Rokeberg's Conceptual Amendment as amended was distributed to the committee and read: P7 line 31 after "assigned" add "a decision of an arbitrator, hearing officer, administrative law judge, is not final until approved by the Commission." Intent: Expedite the process Comm should consider record and make final decision] CHAIRMAN ROKEBERG informed the committee it has a decision to make regarding the legislation. The committee could do nothing and recommend that the next committee of referral take it up or "they could sit around here and muddy the waters further." The chairman noted that Mr Carter has been working on this and charged him with taking it up. MR. CARTER indicated he would make sure the committee members each received a copy of what would be done. Number 2055 REPRESENTATIVE BRICE questioned why the committee didn't just delete that next sentence or at least loosen that language up. He asked for a review of why that is included. SENATOR PEARCE indicated it is not desirable to have commissioners making decisions without ever having considered the record. On the other hand, it is probably not desirable to tie the commissioners' hands with these specifics. This is why Mr Carter has been working with Ms. Cook on different language. CHAIRMAN ROKEBERG questioned if Senator Pearce would like the committee to make a conceptual amendment to expedite the process or what her recommendation would be. SENATOR PEARCE expressed her preference to continue working with the drafters, indicating it something that must be addressed and the legislation has further referral to the House Finance Standing Committee. CHAIRMAN ROKEBERG said he agrees and appreciates the senator's point. He thinks they would just confuse the issue further by trying to conceptualize something that agreement could be found on. Number 2110 REPRESENTATIVE CISSNA questioned if the committee was past that topic. She noted a question had been raised that has not been addressed regarding a possible conflict in the language on page 4, line 23 though 27 [from Sec. 42.04.070, powers and duties of commission chair, CSSB 133(RLS) am]: (c) The chair of the commission shall direct the public advocacy section to participate as a party in a matter when the chair believe that (1) the matter has a major public policy implications; or (2) the financial interest of the public is at stake and the parties to the matter will not adequately represent the public interest. and the language on page 5, lines 19 ["20"] through 24: Article 3. Public Advocacy Section Sec. 42.04.150. Public advocacy section. There is established within the commission a public advocacy section. The section shall participate as a party in matters that come before the commission to represent the public interest when it is in the public interest to do so. The public advocacy section shall operate separately from the rest of the commission. REPRESENTATIVE CISSNA said there appears to be some possible lack of clarity in terms of what the public advocacy section's role is with the commission; whether it is a separate entity, or separate section and is operating separately. REPRESENTATIVE HARRIS noted he thinks the sponsor addressed that earlier in testimony. REPRESENTATIVE CISSNA commented she wonders about the wording. CHAIRMAN ROKEBERG said he had had some questions but had not wanted to bring it up because of his absence during the testimony. MR. CARTER responded he believes Senator Pearce had spoken to that point earlier. He believes AT&T Alascom was the entity that had brought this up. Mr Carter noted the intent is that the chair would decide when the public interest needed to be represented, and then it went to the advocate to represent that. If the drafting style needs to be clarified, Mr Carter indicated it would be taken care of. This is the first time that concern has been heard. Number 2209 REPRESENTATIVE HALCRO indicated he believes the senator had commented that of course the public advocacy section works for the chair. This should clear up any questions regarding whether the section is a power base unto itself or if there should there be any conflict. He expressed it seems to him that it was explained. SENATOR PEARCE added that they would be happy to check that the drafting style is correct, and she, as she has said, will be happy to work with AT&T Alascom on its specific questions. She emphasized, however, it is clear that the staff would work for the commission. She indicated that is not clear with the present commission. Senator Pearce added she had testified earlier that it is their understanding that the present commission and staff are already working on internal guidelines regarding what cases should have advocates appointed. In the legislation, the commission is being asked to formalized those "sideboards" so that the public and the utilities have some expectation in knowing when ex parte advocates will be appointed. REPRESENTATIVE CISSNA commented the other part of that does seem to be a conflict that perhaps the sponsor has answered, but she still wonders about part of the language she has referred to. Representative Cissna noted page 4, line 24, "participate as a party in a matter when the chair believes that" and page 5, part of lines 22 and 23, "when it is the public interest to do so". She said it does seem to be contradictory. SENATOR PEARCE explained that when statutes are drafted that place a commission into being like this, there are sections such as Article 3, the public advocacy section, that set out what is established and what the sections' purpose is. This is pretty much what Article 3 does. Section 42.04.070, powers and duties of the commission chair, clarifies when and where the chairman directs the people in that section to act, and under what circumstances. Senator Pearce believes the question Representative Cissna is asking is the same question AT&T Alascom asked and they will make sure they do not have conflicting language. Number 2339 CHAIRMAN ROKEBERG mentioned his quick perusal of the bill and questioned if the public advocacy section is the one that handles consumer complaints. SENATOR PEARCE answered in the negative. The public advocacy section acts as the representative of the consumer before the commission in the dockets and the cases that are before the commission. CHAIRMAN ROKEBERG asked, then, where consumer complaints are handled. He questioned if that is in existing law. SENATOR PEARCE responded that consumer complaints are not specifically in the legislation. Consumers can complain to the commission and the commission deals with complaints in its own matter. The commission is not being instructed on how to handle these complaints. CHAIRMAN ROKEBERG noted, however, the commission currently has a consumer complaint group. MR. CARTER commented that is not being altered. CHAIRMAN ROKEBERG questioned if this is in existing statute. He indicated the legislation would not repeal all the statute. SENATOR PEARCE noted the commission does have some personnel who handle complaints but she does not know if they are in statute. CHAIRMAN ROKEBERG said his opinion is that it is just conspicuous by its absence and that is his reason for bringing the question up. The chairman said he wondered if it was part of the existing statutory scheme that would be left in place, because it is in statute. He mentioned the revisor instructions [CSSB 133(RLS) am, Section 31] MR. CARTER stated it is not part of what is being repealed. In response the chairman's comment, Mr. Carter restated that the intent was never to repeal that particular statute and he does not believe it is being repealed. CHAIRMAN ROKEBERG noted, then, it is Mr Carter's testimony is that it is not repealed. MR. CARTER responded that they have taken no specific action on the public complaint section. He confirmed for the chairman that that would still be in the law. [An item was apparently handed to the bill sponsor by the committee aide.] CHAIRMAN ROKEBERG questioned if it was another amendment. SENATOR PEARCE answered in the negative. She said, "This is just the language that you had in House Bill 183 on the obligation to hearing, read all testimony." CHAIRMAN ROKEBERG asked if there were further questions of the sponsor. Number 2437 REPRESENTATIVE HARRIS questioned if the committee would be considering amendment XA.6. CHAIRMAN ROKEBERG indicated it was not his wish to take the amendment up. [This amendment, labeled 1-LS0771\XA.6, Cramer, 5/7/99, read: Page 4, lines 23 - 27: Delete all material. Page 5, lines 13 - 18: Delete all material. Page 5, line 19: Delete "Article 3" Insert "Article 2" Page 11, line 10: Delete "42.05.123,"] CHAIRMAN ROKEBERG stated, "Mr. Carter, I guess Mr. Zobel wants you to take..." [TESTIMONY INTERRUPTED BY AUTOMATIC TAPE CHANGE] [From tape log notes: 'will it to you'] TAPE 99-55, SIDE B Number 0001 REPRESENTATIVE MURKOWSKI confirmed that Amendment 1 had been addressed previously. Number 0050 REPRESENTATIVE BRICE indicated that amendment XA.6 had come from Mr. Zobel and he (Representative Brice) is interested in part of this: the deletion of lines 13 through 18 on page 5, and the change on page 5, line 19 from "Article 3" to "Article 2". CHAIRMAN ROKEBERG questioned if Representative Brice is offering an amendment. REPRESENTATIVE BRICE answered in the affirmative. Representative Brice's amendment, as excerpted from the 1-LS0771\XA.6, Cramer, 5/7/99 amendment, read: Page 5, lines 13 - 18: Delete all material. Page 5, line 19: Delete "Article 3" Insert "Article 2" Multiple committee members questioned if that was the amendment that had just been "trashed." REPRESENTATIVE BRICE disagreed, commenting there is a lot of other stuff here too. In response to the chairman's request to speak to his amendment, Representative Brice stated the reason is that the new commission deals with all the utilities. He indicated that his understanding, according to the sponsor's testimony is that it [the communications carriers section] is sort of a throwback to a transitional period in the state's history 20 to 30 years ago. Representative Brice indicated the amendment would remove the communications carriers section on page 5 of the legislation. [The language to be deleted on page 5 by the first portion of Representative Brice's amendment read: Article 2. Communications Carriers Section. Sec.42.04.100. Communications carriers section. There is established within the commission a communications carriers section that shall develop, recommend, and administer policies and programs with respect to the regulation of rates, services, accounting, and facilities of communications common carriers within the state involving the use of wire, cable, radio, and space satellites.] REPRESENTATIVE BRICE commented if they do get to a time where they want to establish specific sections for specific utility functions, then maybe that could be considered. He thinks this section is somewhat of an appendix; it is his understanding that there is no great need to divide up the commission in this manner. CHAIRMAN ROKEBERG indicated he wished to hear the sponsor's comments. Number 0122 SENATOR PEARCE responded she would not agree with Representative Brice's representation of Mr. Carter's comments. Mr. Carter did not say that this was a throwback to some former time. He did say that the communications carriers section was first put in place at the commission by the legislature when the "White Alice" system transferred; this is present statute. This does not mean that there is not a place for the communications carriers section. Indeed, communications are highly technical; they are different from pipelines and gas lines. They are becoming more like electric utilities every day as the electrics are putting in fiber optic and carrying communications in their system. Senator Pearce emphasized there has not been any audit or recommendation made by the legislative auditors or by the NRRI study that would lead her to believe it would make sense to get rid of the communications carriers section "just because we want to." Senator Pearce indicated they stayed with recommendations from the audits in the creation of the legislation. The communications carriers section only appears in this bill because the public advocacy section is being set up in Article 3. The present law speaks to public advocacy under the communications carriers section. Therefore, it only appears in the legislation because of drafting requirements. Senator Pearce commented that does not meant that they just want to eradicate it without knowing what they are doing. CHAIRMAN ROKEBERG questioned, "The practical effect is to provide this section so there is a split of personnel and responsibility between the advocacy section that has a different function and responsibility, in one hand, in terms of who they're representing, and the carriers section." SENATOR PEARCE said it would seem to her that the people who have been defending technical expertise in a particular industry, as Mr. Jackson [GCI] did, would not want to eliminate further technical expertise in the telecommunications industry. She said it does not make a lot of sense that that section would be removed. Senator Pearce asked if there could be some sharing of staff and if some day they would see the telecommunications and electric industries so intertwined because of the computer age that the difference could not be distinguished. She indicated this might happen in the future. Number 0233 CHAIRMAN ROKEBERG commented that is a good case in point. He noted the definition of the communications carriers section of all wire, cable, radio, and space satellites. The chairman questioned if they had missed "UHF" or other types of cellular transmission that are not on the space satellites, or if these are being defined as radio. SENATOR PEARCE noted she would just ask the committee if it has a good reason to delete a section she does not think the committee has heard any testimony on; whether the committee should just get rid of a section. One utility has testified that the public advocacy section should not be established. There was testimony from all of the other entities that there should be a separate public advocacy section. However, she did not hear anyone say that the communications carriers section should be eliminated. Senator Pearce commented that section appears to be working just fine. CHAIRMAN ROKEBERG asked, "Then the balance of the staffing would be on all other utilities that would be under the purview, is that correct or they have the pipeline section ...?" SENATOR PEARCE replied that she is not telling them how to set up their staff. CHAIRMAN ROKEBERG noted, then, it is up to the commission and the chair to organize it as they see fit. The chairman questioned if that is Senator Pearce's testimony. SENATOR PEARCE answered that is true. However, there is presently a communications carriers section in statute and at the commission that neither the auditors nor the NRRI have indicated there was any reason to eliminate. She questioned why the committee would want to eliminate the section at 5:55 p.m. when there has been no other testimony. CHAIRMAN ROKEBERG asked Representative Brice why he wished to get rid of it. Number 0307 REPRESENTATIVE BRICE responded that if he had been called on 10 minutes previously he would have just said he withdraws the amendment, but he guesses they have had a good talk and now the importance of the communications carriers section is on the record. Representative Brice stated he withdraws. MR. CARTER informed the committee, for the record, that while the public advocacy section is to act separately/independently from within the commission, the communications carriers section does not contain that language. It is the sponsor's understanding that the staff can be utilized by the entire commission in whatever capacity it wants. CHAIRMAN ROKEBERG asked about the crossover regarding the potential of electrical transmission and telecommunications coming down the same cabling. MR. CARTER noted that, as he had stated, they [the communications carriers section] are not set aside to act independently or separately from the rest of the commission. Number 0368 REPRESENTATIVE MURKOWSKI indicated she has a question in a different area. In HB 183, one of the items which was apparently important was that members of the commission not be engaged in a political activity, lobbying, attending fund-raisers, et cetera. She commented on the absence of any political discussion in SB 133, although she noted there are restrictions on commission members regarding what they can do after leaving the commission, and there is also a section on restrictions [Sec. 42.04.060, restrictions on members and employees]. Representative Murkowski wondered if there had been any discussion about prohibitions on political activity and whether, in the sponsor's opinion, this is needed. SENATOR PEARCE replied that there was discussion but she indicated no motion had been made in any previous committee. The public utility commissioners do not act and, in her opinion, should not act as political appointees or advocates. Having said that, the only three places she can think of where strict limitations exist in law on the political activities of board and commission members are in the Select Committee on Legislative Ethics, the oversight committee over the "Administrative Ethics Act," and the "reapportionment folks." She indicated that there is a political party component for at least the reapportionment board. Senator Pearce stated her personal opinion is that one should not, cannot, and it makes no sense, to take away the First Amendment rights of people to act in a political manner as they see fit. She cannot recall any past case of a public utilities commissioner acting inappropriately in terms of campaigns, and she certainly does not think that restrictions should be added regarding partisanship to membership on the commission itself. Senator Pearce said she sees no public policy that is served by telling a public utility commissioner he/she cannot be a part of the political process; there is not a nexus there, in her opinion. Number 0474 REPRESENTATIVE MURKOWSKI commented that the restrictions presently in HB 183 are very similar to those a judge would have. Therefore, Representative Murkowski said she made that assumption that a commissioner is sitting in a quasi-judicial capacity, practically. SENATOR PEARCE agreed they are quasi-judicial, but they are not quasi-judicial over the state's elected body - the 60 legislators, the 2 statewide offices, and the 3 delegation members. The commissioners do not have oversight of elected officials. Judges do, and that is why she thinks that is included in the judicial system. Senator Pearce expressed that she does not see that restricting a public utilities commissioner from making a contribution or going to a political activity makes any difference to the public good for Alaska. CHAIRMAN ROKEBERG asked if there were further questions of the sponsor or if anyone else wished to testify on SB 133. There being no further witness, Chairman Rokeberg closed the public hearing. The chairman noted he has one final question for the sponsor. He asked Senator Pearce how she would propose that the new appointments be made, and in what type of a time frame, because of the relationship between the legislature and the Governor, and the fact that the legislature would, in essence, be terminating the existing commission, thereby requiring the appointment of new commissioners. The chairman said he was not sure if she had spoken to that earlier, but he would like to hear. Number 0578 SENATOR PEARCE responded that they had spoken to that because of a question from Representative Cissna. Senator Pearce said that she has, as recently as Wednesday [May 5] spoken personally with the Governor. She related that she had informed the Governor of the legislation's progress and her belief that the bill could still be passed [this legislative session]. She had asked if the Governor was ready to name his commissioners so they could be confirmed by the legislature before it leaves town. Senator Pearce related that the Governor had said that that was still his intention. Senator Pearce reiterated she does not believe the legislature would be well-served by passing the bill and not having the opportunity to confirm the [commission] members before the legislators leave. She does not think it is in the state's best interest to have a brand-new commission established with as many as five new members appointed and no confirmation process for what is effectively a full year, since the legislature never goes to confirmations until the end of the legislative session. CHAIRMAN ROKEBERG noted he appreciates the senator's candor. He stated it is the committee's intention to continue to work on HB 183, indicating he has fears regarding SB 133's progress. The chairman asked the committee's will, noting the committee meeting scheduled for the next day [Saturday, May 8] is dependent on the action regarding this legislation. SENATOR PEARCE indicated she has not put in a kind or unkind word for anyone regarding the appointment of commissioners. That is not her responsibility. However, she noted that the Governor said he would not forward names without first having a meeting with the Speaker of the House and herself, the Senate President, to discuss his probable appointments so that any possible confirmation problems could be pointed out. Senator Pearce commented that is the end of the promises made or promises kept. Number 0726 REPRESENTATIVE HARRIS made a motion to move to CSSB 133(RLS) am, as amended, with individual recommendations and the attached fiscal notes. REPRESENTATIVE CISSNA objected. A roll call was taken. Representatives Rokeberg, Sanders, Harris, Murkowski and Halcro voted in favor of moving the bill. Representatives Brice and Cissna voted against it. Therefore, HCS CSSB 133(L&C) moved from the House Labor and Standing Committee by a vote of 5-2. CHAIRMAN ROKEBERG announced the committee's meeting scheduled for the next day was canceled. ADJOURNMENT Number 0771 CHAIRMAN ROKEBERG adjourned the House Labor and Commerce Standing Committee meeting at 6:05 p.m.