VOLUME 14, NUMBER 3             February 18, 2011

To: Members

From: David Crothers, Executive Vice President

The Senate Appropriations Committee this morning amended and gave their approval to Senate Bill 2171, which extends the sales tax exemption for materials used in building out telecommunications infrastructure.  Although the Senate’s Finance and Taxation Committee recommended a two year extension of the sales tax exemption, the Appropriations Committee expressed their concern that the telecommunications industry was seeking to extend the exemption in to perpetuity.  The appropriators sought to break that cycle with their amendment this morning that will only extend the exemption until January 1, 2013.  The Finance and Taxation Committee had recommended June 30, 2013.

Also this morning, House Political Subdivisions Committee Chair Nancy Johnson of Dickinson has released House Concurrent Resolution 3022, which expresses the concerns of the Sixty Second Legislative Assembly with elements of the National Broadband Plan proposed by the Federal Communications Commission.  Representative Craig Headland had testified before the Political Subdivisions Committee earlier and told them that the FCC’s initiative would severely harm the economic and educational futures of rural North Dakotans if it were adopted.

HCR 3022 asks Senator Conrad, Senator Hoeven and Congressman Berg to work with the FCC to mitigate the harm that will be caused if the agency does not make substantive changes to “The Plan”.

The rural telecom industry’s advocacy on the National Broadband Plan shifted gears last week when the FCC voted 5-0 to issue a Notice of Proposed Rule Making (NPRM) that will bring enormous changes to intercarrier compensation and universal service funding.   The NPRM is stunning in length…over 700 pages…and suggests a range of proposals within “near-term” and “long-term” time frames.  The Association is working with NTCA’s Legal and Industry Committee, as well as their Government Affairs Committee, to better understand the impact of these proposals on the rural telecom companies in North Dakota.

To call your legislator toll free the number is 1-888-635-3447.  Bismarck-Mandan residents should call 328-3373.


HB 1205- Legislation that requires wireless service providers to provide call location information to law enforcement agencies when there is a risk of serious harm or responding to a call for emergency services.  Although wireless companies provide this information on a regular basis to law enforcement agencies, this legislation will bring uniformity for both the government and wireless carriers.  There is also a provision within the proposal that gives indemnity to wireless companies when they are acting in good faith.

Jan. 10 Introduced in House.
Jan. 20 Political Subdivisions Committee Hearing.
Feb. 3 House Passed 94-0.



HCR 3022- A resolution addressing the concerns of rural telecom providers
regarding provisions of the National Broadband Plan.  The resolution was introduced by Representative Craig Headland of Dakota Central, Senator Randy Christmann of West River and Senator Randy Burckhard of SRT Communications.  The language of the resolution notes the dependence rural residents have on a state-of-the-art telecom network for educational opportunities, rural medicine and access to markets.    HCR 3022 ultimately urges the Federal Communications Commission to make “substantive” changes to the National Broadband Plan to avoid hampering future growth in rural areas of our nation.  It also encourages the State’s congressional delegation to work with the FCC to modify the current draft of the National Broadband Plan.

Jan. 24 Introduced in House. Referred to Political Subdivisions Committee.
Feb. 10 Political Subdivisions Committee Hearing.



SB 2016-This legislation is the appropriations bill for the North Dakota Adjutant General.  It also contains the funding for the National Guard and Department of Emergency Services.  It was this entity that endorsed the proposal from Flow Mobile in 2009.  Of particular interest to the Association is two line items in the appropriation that provide $4.3 million for “radio communications” and $2.1 million for a “state radio tower package”

Jan. 4 Introduced in Senate.
Jan. 10

Appropriations Committee Hearing.



SB 2036-A bill to allow the Information Technology Department to establish “connections” to for purposes of “health information exchanges” in the State.   Currently, ITD can only provide service for specific entities in the State, including state agencies, cities, counties, school districts and other political subdivisions.  Their authority to provide telecom is in State law, as well as whom they may provide service to on the network.  Any expansion of that authority must be approved by the legislature.  The specific language in this legislation provided, “Connect to a wide area network service for health information exchange in accordance with federal requirements for health information exchange.”  Members of the Association were extremely concerned over expanding exemptions to the current law and participated in a conference call with the Information Technology Department, Attorney General’s Office and State’s Human Services Department.  Dave Dunning of Polar, Evan Hass and Seth Arndorfer from Dakota Carrier Network and Derrick Bulawa represented the independent industry in the State and said that believed the State’s proposal was overreaching and not necessary to achieve the requirements of health information exchanges.  Ultimately, ITD and the Attorney General’s office agreed.  Lisa Feldner, Chief Information Officer, in the State told the Senate Human Services Committee this week that the legislation was not needed and asked the committee for a “DO Not Pass” recommendation.

Jan. 4 Introduced in Senate.
Jan. 21 Human Services Committee Recommended "Do Not Pass 5-0.
Jan. 24 Senate Defeated 45-0.

SB 2171-
The legislation that removes the “sunset date” from the provision that exempts telecoms from paying sales and use tax for equipment used in telecommunications infrastructure in North Dakota.  As you will recall, the legislature adopted the law in 2009 that gave telcos the sales tax exemption, but the law was to “sunset” on June 30, 2011.  The legislation introduced this year takes away the sunset all together.  However, the bill was amended during a Senate Finance and Taxation Committee hearing to add a new sunset of June 30, 2013.

Jan. 11 Introduced in Senate.
Jan. 31 Finance and Taxation Committee Recommended "Do Pass", as amended, 7-0.
Feb. 1 Rereferred Appropiations.
Feb. 18 Appropriations Committee Recommended "Do Pass", as amended, 13-0.

SB 2246-
A revision to the State’s funding of emergency services which eliminates the necessity for counties to vote on renewing the existing charge every six years.    Under the proposal the fee adopted by voters in a county will remain in effect until it is put on the ballot again to increase, decrease or remove the fee.  The issue can be voted upon during any general, primary or special election.  While the Association’s Legislative Committee has not directed us to take any action on the matter, we will be monitoring the legislation and attending hearings to ensure the failed proposal by the Interim Tax and Finance Committee to eliminate E 911 fees on subscribers bills and to, instead, assess telecommunications companies a gross receipts tax to raise the money does not reappear as an amendment.

Jan. 19 Introduced in Senate.
Jan. 28 Political Subdivisions Committee Recommended "Do Pass", 5-0.
Jan. 31 Senate Passed 44-2.


SCR 4003-A resolution honoring Northern Tier Network by the legislature’s interim Workforce Management Committee.  The resolution notes that the legislature funded Northern Tier in 2007 and expresses the legislature’s support of the “Northern Tier Network Technology Initiative”.   The sponsors of the resolution have not attempted to add an appropriation on any of the existing bills and know they do not have the support of the Governor.  Both Governor Hoeven and Governor Dalrymple declined to include funding….despite Higher Education’s requests….in the budgets they present to the legislature.  Resolutions are also notoriously tricky to defeat because they are most often viewed as harmless pieces that are being forwarded by a member of the legislature.  Opposing a resolution, especially one that does not mandate the State to do anything or spend any money, is quite difficult and smacks of meddling.  However, Senator Randy Christmann was especially helpful to those that fear the resolution will be used for something more in the future when he asked Higher Education’s chief information officer during an appropriations committee hearing this week whether there was any objection to include the language from the State statute limiting Northern Tier to their “research and education” mission.  The witness did not object and said it would be fine if SCR 4003 was amended to include that language.  Members of the Association are indebted to Senator Christmann for his advocacy on their behalf.

Jan. 4 Introduced in Senate.
Feb. 10 Appropriations Committee Recommended "Do Pass", as amended 13-0.
Feb. 14 Senate Adopted.