VOLUME 15, NUMBER 10             March 28, 2013

To: Members

From: David Crothers, Executive Vice President

The Association was pleased yesterday afternoon when members of the House of Representatives passed Senate Bill 2234, which urges the Legislative Council to study the impact of Voice over Internet Protocol (VoIP) and IP technology on the State’s regulatory and taxation regimes. As originally written, however, the language in SB 2234 called for the complete deregulation of IP transmitted communications and prohibited political subdivisions from making any rules impacting the entry, rates or regulation of IP communications.

The Association argued before the Senate Industry, Business and Labor Committee that any such approach was inappropriate in North Dakota when the Federal Communications Commission was studying the very same issue. Members of the independent industry also argued that AT&T and other of the legislation’s proponents were not offering any services regulated by the State today and passing the bill was meaningless.

In response to the Association’s arguments, the Senate committee replaced all of the bill’s language and converted it to a study resolution.

Members of the Association were surprised, however, when the legislation had its hearing in the House Industry, Business and Labor Committee and a handful of members expressed an interest in reinserting the original language of the bill. At the request of Representative Jim Kasper (R-Fargo) a subcommittee was created to further study the issue. The Association met with Representative Kasper and also testified before the subcommittee to assure them that waiting two years before adopting any new laws would not negatively impact either the State’s telecom carriers or business environment of North Dakota.

Yesterday, the full House adopted the identical language that passed in the Senate by an 88-5 margin. Because Senate Bill 2234 was not amended in the House of Representatives it will not go to the Governor for his signature.

The Association was also gratified by the Legislature’s passage of House Bill 1359, which substantially revamps the State’s One-Call (call before you dig) rules. Independent telecommunications companies in North Dakota have experienced dramatic increases in the number of calls throughout the State, although they have exploded in oil country. The changes to the law will extend the number of days a locate is “good” for from 10 to 21 days, limit calls to excavators who are actually disturbing the soil beneath the proscribed depths and add other protections for underground facilities owners.

The bill was delayed coming out of the Senate Political Subdivisions Committee because of strong opposition by the soil testers in North Dakota. Representatives of that industry initially asked for an exemption to the law and later modified their request to allow them to bore to 24 inches without calling for a locate. The Committee, and subsequently the full Senate, declined to give that exemption citing safety.

Please also note that the industry’s effort to recreate the sales tax exemption for investment in telecommunications infrastructure (Senate Bill 2142) was addressed in the Senate on Tuesday. Members of the Senate concurred with an amendment the House of Representatives adopted that places a four year sunset on the law. The bill will now go to the Governor for his signature.

The Association worked closely with managers and staff of the independent telecom industry to determine the significance of this legislation for your efforts to extend infrastructure and improve the quality and capacity of broadband for your members. The Association was able to share the impact this legislation for telephone cooperatives and small commercial companies in the State.

Members of the Legislative Committee include: Derrick Bulawa, BEK Communications; Paul Schuetzler, Consolidated Telcom and NTCA Region 6 director; Keith Larson, Dakota Central; Jeff Wilson, Dickey Rural Telephone; Ralph Greer, Dickey Rural Telephone; Tyler Kilde; MLGC; Hilman Anderson, Reservation; Stan Vangsness, SRT and NDATC president; Jim Newman, SRT and Bonnie Krause, West River Telecommunications. Members of the Association are extremely appreciative of their efforts.

Please contact me at any time regarding any of the legislation or any other matter of concern. I can be reached at work at 701-663-1099; cell: 701-471-3838 or dcrothers@yahoo.com.


HB 1049- The legislation updates the traditional standards and guidelines of Public Safety Answering Points (PSAP’s) in North Dakota. It will require all PSAP’s to be staffed continuously during their hours of operation. The bill also requires PSAP’s to have the ability in the next two years to dispatch first responders from a separate, independent location. It also requires by July 1, 2015 that PSAP’s have the ability to use longitude and latitude to direct responders.

Jan. 8 Introduced in House.
Jan. 24 Political Subdivisions Committee Recommended “Do Pass” 12-0.
Jan. 28 House Passed 86-2.
Feb. 12 Introduced in Senate.
Feb. 28 Political Subdivisions Committee Recommended “Do Pass” 6-0.
Mar. 6 Senate Passed 46-0.
Mar. 27 Signed by Governor.





HB 1121- The legislation establishes a new statute that would mandate that individuals owning land next to a highway facility right-of-way not do anything that would impact that right-of-way without getting permission from the government entity with control over it. It was introduced at the request of the State’s Department of Transportation. The Association has been told that dumping of rocks and other materials on the rights-of-ways is becoming a greater and greater problem.

Jan. 8 Introduced in House.
Jan. 21 Transportation Committee Recommended “Do Pass”, as amended, 11-2
Jan. 23 House Passed 53-38.
Feb. 12 Introduced in Senate.
Feb. 22 Transportation Committee Hearing.





HB 1202- The legislation provides an exemption for emergency services, including Public Safety Answering Points (PSAP’s), from using the facilities provided by the State’s Information Technology Department (ITD). The bill is strongly supported by Century Link. The reason this issue has gotten so much attention is that Congress and the Federal Communications Commission have mandated that emergency providers migrate to an Internet Protocol (IP)-based technology that allows PSAP’s to receive voice, data and video transmissions. There is speculation that such a change would cause customers to move their traffic from existing circuits provided by local exchange carriers to the State’s network.

Jan. 14 Introduced in House.
Feb. 8 Government and Veterans Affairs Committee Recommended “Do Pass” 13-1.
Feb. 15 House Passed 85-4.
Feb. 25 Introduced in Senate.
Mar. 21 Political Subdivisions Committee Recommended &ldquoDo Pass”, as amended, 4-2.
Mar. 27 Senate Passed 44-2.





HB 1359
Legislation that seeks to make substantial changes to the State’s “call before you dig“ legislation, which is often referred to as the “one-call“ statutes in North Dakota. The problems with the existing law has been exacerbated by all of the activity in “oil country“ and the non-stop excavations that are increasingly becoming commonplace throughout the State. One of the greatest difficulties facing rural telecommunications providers in identifying their facilities for excavators was the time, money and effort required to “re-spot“ the underground lines. Members of the Association were doing the same work over and over when excavators did not finish their work in the designated time. The first initiative to minimize that burden is language that extends the time from 10 days to 21 days that excavators may do their work without calling for facilities to be remarked. Secondly, it prohibits excavators from calling for larger “locates“ from underground facility owners than the work they can actually do in the 21 day period. Third, it allows facility owners who have marked an area designated by an excavator, but where no work has taken place to charge the excavator after the second such instance. Fourth, it prohibits excavators from asking for facility marks where their work has already been completed. Finally, it makes the excavator responsible for maintaining the markings. The rural telecommunications industry was represented in multi-industry negotiations prior to the introduction of House Bill 1359 by Brooks Goodall of Reservation Telephone of Parshall and Dean Rustad of Northwest Communications Cooperative in Ray. Mr. Goodall is also the “telecommunications representative“ on the North Dakota One-Call board of directors. They were wonderful and effective advocates for the rural industry.

Jan. 21 Introduced in House
Feb. 7 Industry, Business and Labor Committee Recommended “Do Pass, As Amended, 14-0.
Feb. 12 House Passed 82-7.
Feb. 25 Introduced in Senate.
Mar. 19 Political Subdivisions Committee Recommended “Do Pass” 6-0.
Mar. 21 Senate Passed 45-0.



HB 1407
An effort to address a lack of awareness by many of the individuals in North Dakota who are signing easements for gas or liquid transmission lines. The language implements a number of consumer protections for those individuals. The problem was publicized during Consolidated Telcom’s biennial legislative luncheon when legislators from western North Dakota joined the telco’s board of directors to discuss issues impacting Consolidated’s customers and the difficulty of delivering next generation services. Primary among them was the inability to access rural residents due to a number of oil companies using “exclusive“ easements which prohibited others from traversing the facility. HB 1407 requires a cover page on all easement agreements with gas transmission owners to explain the landowner’s rights, prohibits confidentiality agreements regarding negotiations and provides for mediation, among other provisions.

Jan. 21 Introduced in House
Feb. 4 Energy and Natural Resources Committee Recommended “Do Not Pass” 9-3.
Feb. 5 House Defeated 72-20.



SB 2021
The bill is the Information Technology Department’s appropriations language, as well as a new provision requiring state agencies planning information technology projects in excess of $100,000 to include ITD in the planning of the initiative. Higher Education is exempt from the planning and approval requirement. The spending in North Dakota for ITD is significant. The agency spends some $171 million every biennium to operate the office and implement to new services. However, a reading of SB 2021 shows only an appropriation of $20 million. The reason is that ITD charges its “customers“ such as the State agencies, counties, schools and others for their telecom services.

Jan. 8 Introduced in Senate
Jan. 11 Appropriations Committee Recommended “Do Pass”, as amended, 13-0.
Jan. 19 Senate Passed 47-0.
Feb. 21 Introduced in House.
Mar. 15 Appropriations Committee Hearing.



SB 2033
A measure that gives the State’s Information Technology Committee more flexibility in approving “major” technology projects for North Dakota government. The bill removes one of the definitions of such projects and simply defines one as costing “more than five hundred thousand dollars”.

Jan. 8 Introduced in Senate
Jan. 21 Government and Veteran’s Affairs Committee Recommended “Do Pass” 7-0.
Jan. 22 Senate Passed 45-0.
Jan. 23 Introduced in House.
Mar. 12 Appropriations Committee Recommended “Do Pass” 21-0.
Mar. 13 House Passed 94-0.
Mar. 20 Signed by Governor.



SB 2034
The legislation creates new executive steering committees for information technology projects. The language provides that a State agency creating a “major information technology project” enlist the Attorney General’s office, Office of Management and Budget and the sponsoring agency work together to establish contracting procedures. Each “major information technology project” will have its own “executive steering committee”. An amendment was adopted during the Senate committee hearings confirming that the bill will not apply to higher education projects.

Jan. 8 Introduced in Senate
Jan. 18 Government and Veteran’s Affairs Committee Recommended “Do Pass”, as amended, 7-0.
Jan. 22 Senate Passed 45-0.
Feb. 15 Introduced to House.
Mar. 12 Appropriations Committee Recommended “Do Pass” 20-0.
Mar. 13 House Passed 94-0.
Mar. 20 Signed by Governor.



SB 2055-
The legislation changes the way the Public Service Commission must deliver bills to telecommunications companies when hearings are held and the agency incurs expenses. The Commission has authority to bill telecom companies for their expenses when they hire experts, engineers, auditors and attorneys for complaints or conduct investigations. SB 2055 does not change the scope of the PSC’s authority, though. The bill simply eliminates the requirement that the agency deliver that invoice for expenses by certified mail and, instead, allows for electronic or paper mail. Because of the unique wording of the legislation, the Association has visited with PSC attorneys to confirm that telecommunications companies are not losing any of their rights to appeal invoices rendered by the agency. The PSC has confirmed that SB 2055 only removes the “certified mail” requirement. The Association will continue to attend the Committee hearings to ensure that no language added that will adversely affect the telecommunications industry.

Jan. 8 Introduced in Senate
Jan. 14 Natural Resources Committee recommended “Do Pass“ 7-0.
Jan. 15 Senate Passed 46-0.
Feb. 15 Introduced in House.
Mar. 6 Industry, Business and Labor Committee Recommended “Do Pass” 13-1.
Mar. 7 House Passed 90-1.
Mar. 15 Signed by Governor.



SB 2142
The bill is an effort to continue the 5 percent sales tax exemption that telecommunications companies have been able to utilize for monies used to build out telecom infrastructure in North Dakota. The effort was successful in 2009 and 2011, although the last version adopted by members of the State’s legislature mandated the provision “sunset“ on December 31, 2012. The language provides that “tangible personal property“ used to create or improve telecom infrastructure is exempt from sales tax on that equipment. A telecom provider seeking the exemption may either receive a certificate from the State Tax Commissioner prior to purchasing the equipment or the company must pay the sales tax and later apply to the Tax Commissioner for a refund. The legislation, unlike earlier versions adopted by the State, seeks to make the exemption permanent. It also has language making SB 2142 retroactive to December 31, 2012 so that purchases made between January 1st of this year and the law’s implementation date - if successful - of July 1, 2013 would be included.

Jan. 10 Introduced in Senate
Jan. 30 Finance and Taxation Committee Hearing
Feb. 7 Senate Appropriations Committee Hearing Recommended “Do Pass” 11-2.
Feb. 20 Senate Passed 45-1.
Feb. 26 Introduced in House.
Mar. 13 Finance and Taxation Committee Recommended “Do Pass”, as amended, 11-0.
Mar. 15 House Passed 45-1.
Mar. 26 Senate Concurred with House Amendment 45-1.



SB 2234
The initiative is AT&T’s legislation that seeks to bar any “State entity or political subdivision“ from adopting any “rule, order or other means directly or indirectly“ any language regulating the entry, rates or conditions for Voice over Internet Protocol (VoIP) services. The legislation has been tempered somewhat by Century Link’s addition of language that assures AT&T and others will future State universal service fund (USF) programs, 911 assessments, TRS fees, access regulation by the Public Service Commission, interconnection obligations, Federal USF obligations and deceptive trade practices. Much of the language being added by Century Link comes from Wyoming and Nevada. Members of the Association’s board of directors and member-company managers have shared their concerns about the legislation.

Jan. 21 Introduced in Senate.
Feb. 15 Industry, Business and Labor Committee Recommended “Do Pass”, as amended, 7-0.
Feb. 18 Senate Passed 47-0.
Feb. 21 Introduced in House.
Mar. 12 Industry, Business and Labor Committee Recommended &ldquoDo Pass” 14-0.
Mar. 27 House Passed 88-5.



SB 2261
The bill requires retail sellers of prepaid wireless services to pay a 2 percent gross receipts tax on those sales in lieu of a 911 fee. The 2 percent charge is the obligation of the purchaser of the wireless service, although the retailer has the obligation to forward those monies to the State Tax Commissioner. The legislation also requires sellers of prepaid services to register with the Tax Commissioner. The taxes collected by the retailer shall be paid by the Tax Commissioner pursuant to existing “joint powers agreements“ in place between the State and counties.

Jan. 21 Introduced in Senate.
Jan. 30 Finance and Taxation Committee Hearing
Feb. 11 Appropriations Committee Recommended “Do Pass” 12-0.
Feb. 13 Senate Passed 47-0.
Feb. 18 Introduced in House.
Mar. 12 Finance and Taxation Committee Recommended “Do Pass” 11-0.
Mar. 13 House Passed 78-15.
Mar. 22 Signed by Governor.



SB 2262
The legislation is a far-reaching and dramatic approach to alter the funding and delivery of emergency services in North Dakota. The bill eliminates the ability of counties to charge the 911 fee, the obligation of wireline and wireless telecom users to pay the assessment and telecom providers to collect and remit the monies. Instead, SB 2262 appropriates $20 million from the State’s coffers to pay for emergency services. The legislation also provides that “The (Emergency Services Communications Coordinating) Committee shall make recommendations to the State Treasurer on factors to be used to allocate funds for emergency services communications systems“. The significance of this legislation, in the judgment of the Association, is that if the State takes over funding and the Treasurer has the discretion to allocate funds it will be the precursor to centralized control of emergency services in North Dakota and a reduction of public safety answering points, which are currently controlled by individual counties.

Jan. 21 Introduced in Senate
Feb. 5 Finance and Taxation Committee Recommended “Do Not Pass” 5-2.
Feb. 13 Senate Failed to Pass 20-27.