MINUTES SENATE FINANCE COMMITTEE April 7, 1999 8:01 AM TAPES SFC-99 #80, Side A & Side B CALL TO ORDER Co-Chair John Torgerson convened the meeting at approximately 8:01 A.M. PRESENT Co-Chair Torgerson, Senators Dave Donley, Loren Leman, Al Adams and Lyda Green were present when the meeting was convened. Senators Gary Wilken, Randy Phillips, Pete Kelly and Co-Chair Sean Parnell arrived shortly thereafter. Also Attending: DWIGHT PERKINS, Deputy Commissioner, Department of Labor; JIM ROW, Director, Alaska Telephone Association (ATA), Anchorage; ALLISON ELGEE, Deputy Commissioner, Department of Administration. Teleconferenced: JUDY WARWICK, Regional Manager for External Affairs, GCI, Anchorage; TOM MEADE, Vice President of Regulatory Affaires, TEL ALASKA, Anchorage; JIMMY JACKSON, Regulatory Attorney, GCI, Anchorage; GREG BERBERICH, Vice President of Corporate Services, Matanuska Telephone Association (MTA), Mat-Su; KAY BURROWS, Director, Division of Senior Services, Department of Administration, Anchorage. SUMMARY INFORMATION SB 8-SEXUAL PARITY IN PLUMBING FACILITIES SB 8 was heard and rescheduled for Committee hearing for the evening of 4/07/99. The bill was HELD in Committee. SB 52-LOCAL EXCHANGE TELEPHONE SERVICE SB 52 was HEARD and HELD in Committee for further discussion. SB 57-CARE FOR VULNERABLE ADULTS CS SB 57(FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Administration dated 4/02/99. SENATE BILL NO. 8 "An Act relating to the number of toilets in women's restrooms in certain facilities." CS FOR SENATE BILL NO. 8(STA) "An Act relating to the minimum plumbing fixtures required for females and males in the state plumbing code; and providing for an effective date." Senator Donley explained SB 8 would amend the existing plumbing code in AS 18.60.705 to more closely resemble the national standard and increase the minimum number of women's and men's bathroom facilities in assembly places. He noted that SB 8 would allow women to attend large public events in buildings constructed after January, 2000 without enduring the line they have inevitable had to face, thus unfairly impacting their enjoyment of the event they are attending. Through the bill, the ratio of women's to men's facilities would be increased, bringing fairness to the situation. The current statute adopts the entire most recent Uniform Building Code, except table A-29-A, which is an older version of the code that provides fewer plumbing facilities for women. The bill would also amend current statute and specifically address the number of facilities provided for men and 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. He stated that SB 8 would amend table A-29-A currently in statute relating to females and include Table 4.1 from the 1997 Uniform Building Code for men. Senator Donley concluded that SB 8 would correct a situation that has plagued women since indoor events have been held in the State of Alaska. He believed that it would be a step in the right direction and would give women the opportunity to enjoy the event they are attending rather than spending the majority of their time in line for the bathroom. Senator Green asked if Senator Donley would consider using the numbers in the Uniform Building Code. Senator Donley agreed that would be a better than the current number of the facilities, however, pointed out that the need is even greater. He stated that within current code, at an event with over four hundred participants, the difference would be that in current Uniform Building Code would provide for twelve facilities, whereas, SB 8 would provide for sixteen. Co-Chair Torgerson questioned Page 1, Line 6. "unless the department adopts by regulation a later edition of the following publication". He suggested that a "later edition" might not include the intention of the bill. Senator Donley responded that he had been working with the Department on the legislation and never considered that the Department would go "backwards". The Department does support increasing the number of the facilities. The way the law is written provides that type of flexibility to either increase or decrease the number of facilities. He reiterated that the Department is committed to increasing the facilities. Senator Green recommended that the Department could adopt the Uniform Code or make the changes through statute. Senator Donley understood that the State had adopted only a portion of the code. Co-Chair Torgerson asked for clarification of the exempted assembly areas. Senator Donley said the older code required fewer facilities. A drafting was necessary to place the older system within the new law and still maintain the simplicity desired by the public. DWIGHT PERKINS, Deputy Commissioner, Department of Labor, explained that the 1997 plumbing code Table 4.1 was included. [Copy on File]. Last year, the Labor and Commerce Committee changed the language by deleting table 4.1. and inserting the A-29 Code. That table is less complex and easier to use. Any future codes being adopted by regulation would still remain in statute and that the Legislature would have authority to change it. Senator Leman asked about new construction, expansion and remodels. He inquired if the new code would apply to increasing all facilities. Mr. Perkins responded, providing two scenarios. If color schemes needed to be changed, there would be no increase in the number of restroom facilities. However, if there were a change in the size of the assembly area, there would then have to be an increased number of facilities. He advised that at present, the law addresses only the new facilities. Senator Wilken commented that the proposed bill was different from the one presented in the State Affairs Committee. He requested to receive testimony from an architect regarding the increased costs. Senator Donley commented that he had not seen any studies regarding that concern. From personal experience and feed back, he sensed that the addition of forty toilets to a new arena would not "make or break" costs. Senator Wilken pointed out that the new law would add one hundred twenty-eight (128) toilets to a ten thousand-seat facility. Senator Donley agreed that there were ways in which the matter could be resolved and that those options could be discussed later. Senator Leman commented, checking a quick calculation, it would cost approximately $500 thousand dollars more for the additional toilets. Senator Green explained that she did not understand the need to establish a higher standard than the one established in the current building codes. She noted that she would not support the bill as written. She proposed an amendment which would adopt the Uniform Building Codes. Senator Green MOVED to adopt Table 4.1 of the Uniform Building Code as a guideline for the number of water closets necessary per the number by occupancy. Senator Donley OBJECTED. Senator Donley noted that the advantage would be lost with this simpler approach and that the motion would significantly reduce the number of facilities provided. He suggested a "better" alternative would be to modify Page 2, Line 16, to lower the standard. He believed that action could modify having two additional water closets for each 125 females. Senator Green pointed out that for every four hundred women, presently, there are built eight water closets. The bill would increase that number by six. She questioned why Alaska was more unique than the rest of the states and needed to have more facilities. Senator Leman explained that he did not understand the proposed amendment. He agreed that table 4.1 was not necessary and that A-29A should be kept in place. Senator Green clarified that the intent of her motion was to adopt Table 4.1. She pointed out that Table 4.1 had already been adopted regarding men's restroom concerns. Therefore, she recommended that in order to make it consistent, Table 4.1 should be adopted for both men and women. Senator Donley reiterated that he proposed reducing the numbers on Page 2, Line 16, as the alternative. A roll call vote was taken on the motion. IN FAVOR: Leman, P. Kelly, Green, Phillips OPPOSED: Donley, Torgerson, Parnell, Wilken, Adams The MOTION FAILED (4-5). Senator Donley MOVED to adopt Amendment #2. He explained on Page 2, Line 16, delete "two" and insert "one" and delete "125" and insert "100". Senator Wilken recommended that the Committee seek further help and assistance regarding the ramifications of the bill. Senator Wilken and Senator Green OBJECTED to Amendment #2. Senator Wilken calculated that in a five thousand-seat arena, eighty-two water closets would be added. He noted that Amendment #2 would add forty-one more. That would be a significant change. A roll call vote was taken on the motion to adopt Amendment IN FAVOR: Torgerson, Parnell, Donley, Leman, Adams, P. Kelly, Phillips OPPOSED: Wilken, Green The MOTION PASSED (7-2). Co-Chair Torgerson questioned if the Department could answer technical questions of the Committee. Mr. Perkins offered that the Department could have testimony available at a time specified. Co-Chair Torgerson noted that the bill would be revisited at the evening meeting. SB 8 was HELD in Committee for further consideration. SENATE BILL NO. 52 "An Act relating to competition in the provision of local exchange telephone service; and providing for an effective date." CS FOR SENATE BILL NO. 52(L&C) "An Act relating to competition in the provision of local exchange telephone service; and providing for an effective date." Senator P. Kelly explained that SB 52 would require the Alaska Public Utilities Commission (APUC) to adopt regulations permitting the local telephone competition in areas having 5,000 or more lines by July 1, 1999. History has proven competition gives consumers lower costs, increased technology and more choices. He continued, in 1996, Congress passed the Telecommunications Act allowing and promoting local telephone competition nationwide. The APUC exempted Fairbanks and Juneau from full local competition because of fears that competition might harm the existing phone monopoly (PTI). PTI was purchased in 1997 by Century Telephone which has its headquarters in Louisiana. The purchased of PTI made Century the 10th largest phone company in the United States. Century has since sold its local telephone services to Alaska Communication Systems and affiliated companies (pending regulatory approval). Senator Kelly continued, the fears that promoted the APUC to delay full competition in Fairbanks and Juneau are the same fears that cause the APUC to delay long distance competition in Alaska for many years. As we have all seen, those fears were unfounded and long distance competition produced better quality, new services and lower prices for consumers throughout the State. Co-Chair Torgerson questioned the use of "should" on Page 2, Line #6. He recommended it be changed to "shall". Senator P. Kelly replied that concern had been addressed in the intent language. Co-Chair Torgerson inquired if study areas would be established. Senator P. Kelly noted that Mr. Jackson from GCI was available on teleconference to answer those questions. Senator Adams stated that even without the present legislation, APUC would still be able to provide full focus on this matter. He questioned the need for the legislation. Senator P. Kelly explained that APUC had not been able to make regulatory decisions and receive compensation until legislation had been passed in 1990. Senator Adams reiterated that the proposed legislation was not essential. Senator Wilken referenced Page 2, Lines 13 through 16, questioning which portions of the State would be affected. Senator Kelly replied Juneau, Fairbanks, Mat-Su and a portion of Kenai. JUDY WARWICK, Regional Manager for External Affairs, GCI, Anchorage, testified via teleconference. She noted that Senator Steve Frank introduced the original legislation. The State Regulatory Commission was assigned the responsibility to promote instate competition. GCI applied every year and in 1991, long distance in State became a reality. Because of the success with in-State long distance, GCI assumed that there would be no "hurdles" with local competition. With the exception of Anchorage, all local exchange carriers are designated rural exchange carriers. The rural designation automatically exempts the incumbent carriers. Congress and the FDC did find and established the criteria for terminating the rural exemption. Ms. Warwick stated that on September 10, 1997, GCI requested that APUC terminate the exemption for the local exchange carriers serving Fairbanks and Juneau. On October 23, 1997, APUC denied the request of termination. They denied the request even though they did not find that the request was technically unfeasible or that it would result in economic injury beyond that associated with competitive entry. TAPE SFC-99 #80, SIDE B Ms. Warwick continued. She noted that the Telecommunications Act was implemented to promote competition. Only major markets have been available for competition in the State of Alaska. Ms. Warwick stressed that the bill does not mandate competition. She emphasized that the consumer will choose what is in their best interest. Ms. Warwick stated that Jimmy Jackson, Corporate Council, GCI, was available in Anchorage via teleconference to answer any questions of the Committee. Senator Adams referenced Page 2, Lines 29 and 30, and asked why GCI would want to change the timeline. Ms. Warwick stated that nothing has occurred since the Telecommunications Act was passed. She recommended that the Committee speak with Mr. Jackson to better explain this concern. Co-Chair Torgerson noted that question would be held until Mr. Jackson could testify. TOM MEADE, Vice President of Regulatory Affaires, TEL ALASKA, Anchorage, testified via teleconference from Anchorage. Mr. Meade testified in opposition to SB 52. He noted that his company provides local exchange telephone service in rural locations across the State. He commented that Mr. Jackson, the attorney from GCI, would probably disagree as to the legality of the bill. Mr. Meade stated that the bill goes contrary to the Telecommunications Act, in that it ignores the process that is required by the Act for rural exemption. He suggested that the legislation had been offered under false premises. He emphasized that the propaganda has suggested that service would be improved and that rates would be reduced. He stressed that it is misleading information to believe that toll rates will decrease. Mr. Meade questioned how large would the market need to be to support competition. The year before GCI went into local competition in Anchorage, it had a net income of $7.5 million dollars. During local competition for two years, the current financial statement indicates that it lost $6.8 million dollars. He acknowledged that after GCI came into the market, toll rates did drop because most costs were shifted to the local exchanges. He stated that if the bill does pass, it would be subject to court challenges, which would not be in the public's best interest. Mr. Meade urged Committee members not to pass the legislation. Senator P. Kelly commented to the time frame, noting that most of the regulations were in place before the act was implemented. He emphasized that there have been many delays on the bill. Senator Adams stated that APUC does not have a time line even with the functions of the bill. He pointed out that APUC does not acknowledge that the bill is necessary. JIMMY JACKSON, Regulatory Attorney, GCI, testified via teleconference from Anchorage. He stated the study area is well defined by the Federal Communication Commission (FCC), and that it is a construct of that Commission. In most cases, the study area is the same as the local utility service area. However, there are a few companies in Alaska that have their service areas divided into more than one study area. Mr. Jackson noted that the proposed bill would not change the procedures under Federal law. In terms of what the bill does, the Attorney General testified before the Commission that there would not be a conflict. The bill would bring in competition in order to keep prices down. In those areas where there is only one carrier, that carrier would continue to be subject to the regulations of the APUC. Senator Adams questioned if all telephone companies in Alaska receive Federal subsidy to help with upgrading and buying new equipment. Mr. Jackson explained that all local phone companies in Alaska outside of Anchorage, receive universal service funds, which are paid based on their investment after the fact. Senator Adams noted that he was familiar with the telephone universal fund. He asked if GCI received a Federal subsidy to help with competition. Mr. Jackson responded that GCI did not get a subsidy from the Federal government. There is a slight exception in the Life Line Program, where when GCI provides service in Anchorage to a welfare recipient, that request receives a monthly reduction to their phone bill. He emphasized that is a very small program and that GCI gets no other federal subsidies. GREG BERBERICH, Vice President of Corporate Services, Matanuska Telephone Association (MTA), Mat-Su, testified via teleconference from Mat-Su. He said MTA was a member owned cooperative serving over 32,000 customers. He spoke in opposition to SB 52. Mr. Berberich stated that the legislation was targeted at specific companies and communities and is not in compliance with the spirit or intent of the Telecommunications Act. The legislation would apply to MTA even though they are classified as rural. He concluded that all Alaskans should have access to affordable telephone service which this bill would circumvent. [Testimony on File]. He urged a no vote on passage of the legislation. JIM ROW, Director, Alaska Telephone Association (ATA), Anchorage, spoke in opposition to the legislation. He stated that the term "rural exemption" makes it sound like any area conceived as rural is exempted from the opportunity of telecommunications competition. Every area in the United States has the opportunity for competition under that Act. That competition should bring benefit to the public. Mr. Row noted that the concern is how competition works in rural areas. He asked, would people in rural areas be able to have affordable access to telecommunications. He explained the rural exemption language. He warned that it is important to be careful in making this decision. Precautionary language should be added to make sure that the public is going to benefit. Mr. Row stressed that the intent is that individuals have access to affordable rates. Mr. Row urged Committee members to vote against passage of the proposed legislation. Senator Wilken inquired why this bill would negatively affect those living in rural Alaska. Mr. Row replied that if an artificial number is added to the Federal Act, those below that number will receive the benefits of competition. If the APUC procedure is in place, the rates would still be affordable. He spoke to the conflict within the Federal Act. Senator P. Kelly commented that if the bill should pass, the APCU would continue to be involved. That Commission would determine regulations and whether they work. They will no longer be responsible for making a policy call. The competition would be either "good" or "bad". Senator P. Kelly reminded members that the bulk of the regulations are already adopted and that the people of Alaska will benefit from the competition. Co-Chair Torgerson stated that SB 52 would be HELD in Committee for further consideration. SENATE BILL NO. 57 "An Act relating to vulnerable adults; and providing for an effective date." CS FOR SENATE BILL NO. 57(JUD) "An Act relating to vulnerable adults and to the functions of the office of the state long term care ombudsman on behalf of vulnerable adults and senior citizens; and providing for an effective date." Senator Green MOVED to adopt Amendment #2, 1-LS0135\G.2, Lauterbach, 4/06/99. [Copy on File]. Co-Chair Torgerson OBJECTED. Senator Green explained that language had been added to the bill in the Senate Judiciary Committee for the movement of the long term care ombudsman. In looking more deeply at that change, there is concern about that language. The Ombudsman Office has requested that the change be reversed. Co-Chair Torgerson WITHDREW his OBJECTION to adoption of the amendment. There being NO further OBJECTION, Amendment KAY BURROWS, Director, Division of Senior Services, Department of Administration, Anchorage, testified via teleconference from Anchorage. She offered to answer questions of the Committee and voiced her support of the bill. ALLISON ELGEE, Deputy Commissioner, Department of Administration, advised that the Department supported the legislation. Senator Wilken MOVED to report SB 57 out of Committee with individual recommendations and with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CS SB 57 (FIN) was reported out of Committee with a "do pass" recommendation and with a fiscal note by the Department of Administration dated 4/02/99. ADJOURNMENT Co-Chair Torgerson recessed the SFC Committee at approximately 9:40 a.m. SFC-99 (12) 4/07/99 a.m.