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Public Utilities and Technology Interim Committee

MINUTES OF THE

    
PUBLIC UTILITIES AND TECHNOLOGY INTERIM COMMITTEE

May 21, 1997 - 9:00 p.m. - Room 223 State Capitol


Members Present:
    Sen. Lorin v. Jones, Co-Chair
    Rep. Beverly Ann Evans, Co-Chair
    Sen. Mike Dmitrich
    Sen. John P. Holmgren
    Sen. Alarik Myrin
    Rep. Ralph Becker
    Rep. Orville D. Carnahan
    Rep. Gary F. Cox
    Rep. Christine R. Fox
    Rep. Brent H. Goodfellow
    Rep. Byron L. Harward
    Rep. Tom Hatch
    Rep. Dennis H. Iverson
    Rep. David M. Jones
    Rep. Jack Seitz
    Rep. Daniel H. Tuttle
    

Members Absent:
    Sen. Craig A. Peterson
    Rep. Jeff Alexander
    Rep. J. Brent Haymond

Staff Present:
    Mr. Richard North,
     Research Analyst
    Ms. Tani Pack Downing,
     Associate General Counsel
    Ms. Wendy Bangerter,
     Committee Secretary

Note:    A list of others present and a copy of materials distributed in the meeting are on file in the Office of Legislative Research and General Counsel.

1.    Call to Order - Rep. Evans called the meeting to order at 9:10 a.m.

2.     Public Service Commission Audit

        Wayne Welsh introduced Jim Behunin and Rick Coleman, the audit manager and supervisor. Mr. Behunin stated the purpose of the audit is to help the State with the transition to a quasi-legislative structure from a quasi-judicial structure of regulation. He noted the responsibility of the Legislature is going to be to set the pace at which the State moves into market competition and how that might be done. The audit recommended the Legislature review the regulatory structure. Mr. Coleman stated that they are looking at what kinds of changes are going to be needed in the future and that they strongly recommend a strategic planning process for the Public Service Commission (PSC).

    Commissioner Mecham, PSC, commented on the audit. He referred the members of the Public Utilities and Technology Interim Committee (PUT) to the PSC's response on page 50 of the audit. He requested that the PUT allow the PSC the opportunity to lead the strategic planning effort, if it is undertaken.
    Claire Geddes, United We Stand, commended the PSC and their expertise. She expressed her desire to see the independence and continuity of the Committee of Consumer Services maintained.
    
    Georgia Barker, League of Women Voters, spoke in support of the PSC and stated that she feels they are being pro-active in their efforts.

3.    Statewide Partnership For Telecommunication Services - Request For Proposal

    Mr. Gordon Peterson, Chief Information Officer for Utah, distributed and reviewed the Request for Proposal (RFP) and explained its purpose. He distributed a list of guiding principles for information technology for review. He expressed a need to promote competition and choice.
    
    Tom Warne, Utah Department of Transportation (UDOT), stated that high technology has been focused on the higher populated areas of the state, but is hopeful that the buying power of the Wasatch Front will enable technology to become more available in rural areas. He also distributed, for review, the "Statewide Telecommunication Services Initiative" and a statement summarizing the potential benefits of a fiber optic network.
    
    Neal Christensen, UDOT, described the RFP, its process, focus, and direction. He reviewed the sites that exist throughout the state and what areas they service.
    
    Kevin Taylor, U.S. West, reviewed the problems in providing services to the "end public" and the need to focus on the infrastructure that is necessary in order to support these services.

4.    Electrical Deregulation and Customer Choice Task Force

    Rep. Fox updated the Committee on the status of the Electrical Deregulation and Customer Choice Task Force (HB 313) with information about membership, meeting schedule, and direction. She stated their goal is to protect all electric users in Utah and provide competitive pricing. She asked for ideas regarding the task force study be submitted by June 4th . She also noted that they would be reporting to the PUT and Business Labor Interim Committees in November.

5.    Utah: An Information Technology Freeport/Taxation of Telecommunication

    Peter Genereaux, Utah Information Technology Association, distributed a handout on Utah as a "Freeport" on the Information Superhighway. He reviewed the concept and legislative benefit of not extending sales taxation to usage of telecommunication services. He also reviewed the benefits and possible misconceptions of a "Freeport."
    
    Greg Freede, Utah Taxpayers' Association, reviewed the scenerio of Utah becoming a "Freeport" center. He also reviewed some of the inequities he felt would be eliminated, and encouraged the Committee to declare Utah a "Freeport" in which there would be no taxes on telecommunication as a process, but there would be taxation on transactions that take place over telecommunication systems.

    Ruth Ann Hamilton, Salt Lake Area Chamber of Commerce, expressed support for the "Freeport."
    
    James Oyler, Chief Executive Officer for Evans and Sutherland, also spoke in favor of the "Freeport" option. He stated that Utah has the opportunity to become a leader in the world information technology industry.
    
    Claire Geddes, United We Stand, stated that taxes are never eliminated, they are only shifted and there is no guarantee that the public will receive any funds from these tax breaks. She expressed concern that Utah does not have a tax base large enough to cover the new growth that a "Freeport" would bring.
    
    Bill Asplund, Executive director of the Tax Review Commission, reported on the Tax Review Commission study of this topic. He stated that the Tax Review Commission is in full agreement that intermediary services should not be taxed. He encouraged the Committee to consider this issue carefully and move slowly. He distributed and reviewed a handout that indicated a history of which companies have been major players. He also distributed and reviewed a telecommunications study reported to the Tax Review Commission in May of 1996 and a summary of selected tables in "Sales Taxation of Telecommunications Service in the State of Utah."
    
    Ted Smith and Dennis Wood, of U.S. West, answered questions regarding taxing telephone calls. They agreed to present the extended area service topic at the next meeting.

7.     Adjourn

MOTION:    Rep. Carnahan made a motion to adjourn. The motion passed unanimously.

    The meeting was adjourned at 12:00 noon.

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