VOLUME 15, NUMBER 3             February 4, 2013


To: Members

From: David Crothers, Executive Vice President

The Association was active last week while attending hearings on Senate Bill 2261, Senate Bill 2262 and Senate Bill 2142. Those measures, if adopted, would require retailers to pay a 2 percent gross receipts tax on the sale of wireless phones, eliminate the 911 assessment from customers’ telephone bills and recreate the 5 percent sales tax exemption for telecommunications companies for materials used to construct or improve their telecom infrastructure, respectively.

While the Association did not testify on either of the 911 bills, we were active and testified before the Senate Finance and Taxation Committee on the benefits of Senate Bill 2142. Independent telecom companies in North Dakota have repeatedly told the Association of the value of that law - which expired on December 31, 2012 - has to them as they seek to push their network further and further out from the central office and increase the speed and capacity of broadband connections to customers. The Association also provided written testimony to the Committee. If you would like a copy of it, please contact Carla Schaner at cschaner@ndatc.com

This week in the legislature will be similarly important for members of the independent telecom industry in North Dakota. Of primary concern to the Association’s members is House Bill 1359, which is the effort of a number of us with underground facilities throughout the State to bring some fairness to the “call before you dig“ or One-Call“ statute in North Dakota. The proposal includes language to extend the time a locate is good for from 10 to 21 days, requires excavators to pay when they call an underground facility owner for the third time with no work being done on the site, limits the amount of land an excavator can ask be located to the actual work they can do in that time frame and requires the excavator to maintain the “marks“ during construction. Shane Hart of Reservation Telephone and Jason Hill of Northwest Communications Cooperative will be testifying on behalf of the Association.

Also this week, members of the House Government and Veteran’s Affairs Committee will be hearing testimony on House Bill 1202. The legislation will create an exemption to the requirement that a county’s telecom traffic be carried by the “StageNet“ product of North Dakota’s Information Technology Department for 911 and NextGen 911 services. It will allow those counties that wish to keep it on the local provider’s network to do so.

The window to introduce legislation has passed with fewer bills than most years introduced this session. In the House of Representatives, 468 bills and 30 resolutions have been introduced. In the Senate, there have been 375 bills and 17 resolutions. The 873 total is substantially less than the 1,100 total that have been frequent in recent years. There is a provision for additional bills to be introduced through a process known as “delayed bills“, but it is quite rare and must have the approval of the leadership in both houses.

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 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. 7 Government and Veterans Affairs Committee Hearing - 2:30 p.m.
   

 

 



 

 


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. 5 Industry, Business and Labor Committee Hearing - 8:00 a.m.
   

 

 






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
Jan. 31 Energy and Natural Resources Committee Hearing
   

 

 






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 Hearing.
   

 

 






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.
   

 

 






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 - 3:00 p.m.
   

 

 






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. Referred to Industry, Business and Labor Committee.
   

 

 






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
   

 

 






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
Jan. 30 Finance and Taxation Committee Hearing