VOLUME 15, NUMBER 4             February 8, 2013

To: Members

From: David Crothers, Executive Vice President

Legislation containing much needed changes to North Dakota’s “call before you dig” or “One-Call” statutes advanced this week when the House Industry, Business and Labor Committee recommended “Do Pass” to House Bill 1359. The bill extends the valid time a locate is good for from 10 to 21 days, allows facilities’ owners to charge for their markings when they do their work but no excavation has occurred and makes the excavators responsible for the markings. A more complete analysis of the legislation can be found below.

Shane Hart of Reservation Telephone and Jason Hill from Northwest Communications Cooperative testified on behalf of the Association. They testified about the tremendous expense each had incurred in complying with the existing law and the abuses that were taking place under the current system. By all accounts, both Mr. Hart and Mr. Hill did a wonderful job.

Yesterday, the committee met and recommended a “Do Pass” by a 14-0 vote.

Also yesterday, House Bill 1202 was heard by the House Government and Veteran’s Affairs Committee. The bill is Century Link’s effort to ensure that private telecommunications carriers are eligible to carry next generation 911 traffic and that service does not automatically default to the State of North Dakota’s “StageNet”. Century Link had a tremendous amount of support amongst members of the committee prior to the hearing yesterday. Also, they amended the bill during their testimony yesterday to narrow the scope from all “emergency communications” to just “enhanced 911 and next generation 911 communications services”. The amendment had the effect of prohibiting other state agencies from leaving “StageNet” when they asserted they were providing “emergency services”.

At the conclusion of the hearing, members of the committee gave House Bill 1202 a 13-1 “Do Pass” recommendation.

Next week will mark AT&T’s official efforts to deregulate Voice over Internet Protocol (VoIP) services in North Dakota. Their legislation, Senate Bill 2234, will be heard on Monday morning before the Senate Industry, Business and Labor Committee. The company has devoted a significant amount of resources to passing this bill in the State. Specifically, they have been recruiting chambers’ of commerce, business groups and others to support their legislative efforts.

North Dakota is AT&T’s latest arena to attempt to deregulate all VoIP traffic. A similar bill is about to pass in Wyoming, it is being negotiated in Colorado and similar efforts are under way in Nevada. The company asserts that VoIP language has been adopted in approximately 25 other States. However, they have not attempted to have the bill passed in Montana, South Dakota, Minnesota, Nebraska or Iowa during their legislative sessions this year.

Following discussion with the Association’s board of directors, legislative committee and members, it is our intention to oppose AT&T’s efforts. Members of the Association believe the North Dakota legislature should wait for the Federal Communications Commission’s determination on this very issue before completely deregulating the technology in the State.

A legislative committee will also take testimony next week on efforts to start collecting 911 monies from the sale of prepaid wireless phones in the State. That industry has long disregarded any obligation to contribute to 911 expenses and has prevailed on a number of occasions when policymakers attempted to assess them.

The Senate Appropriations Committee will hear proponents of Senate Bill 2261 on Monday morning speak to the necessity of collecting 911 fees from prepaid wireless carriers. The legislation assesses a 2 percent gross receipts tax on the amount of minutes purchased by a customer and makes the retailer responsible for remitting the tax to the State of North Dakota. The legislation was heard last week by the Senate Finance and Taxation Committee.

Finally, the Association was also called on yesterday afternoon to testify before the Senate Appropriations Committee as it debated the merits of Senate Bill 2142, which recreates the 5 percent sales tax exemption that expired on December 31, 2012. The exemption applies to telecommunications companies for materials used to expand and improve their infrastructure. As you will recall, SB 2142 was heard last week in the Senate Finance and Taxation Committee, but because it has an impact on the State’s treasury it must go to the appropriations committee before going to the floor. Specifically, the Association was asked to address issues such as universal service funds, network infrastructure and consumer broadband demand.

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 Recommended “Do Pass” 13-1.





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.



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 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.



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. 11 Industry, Business and Labor Committee Hearing - 10:00 a.m.



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 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
Feb. 5 Finance and Taxation Committee Recommended “Do Not Pass” 5-2.