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CORRECTED
8/12/2014
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ARIZONA HOUSE OF REPRESENTATIVES
Forty-fifth Legislature – Second Regular Session
Minutes of Meeting
House Hearing Room 5 -- 9:00 a.m.
(Tape 1, Side A)
Chairman Hatch-Miller called the meeting to order at 9:08 a.m. and attendance was noted by the secretary.
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Mr. Camarot |
Mrs. Leff |
Mr. Tully |
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Mr. Cooley |
Mr. Lugo |
Mr. Farnsworth, Vice-Chairman |
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Mr. Graf |
Mr. Soltero |
Mr. Hatch-Miller, Chairman |
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Ms. Laughter |
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H.B. 2082 - DPA S/E (6-3-0-1) |
H.B. 2399 - HELD |
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H.B. 2521 - DP (6-2-0-2) |
H.B. 2622 - DPA S/E (9-0-0-1) |
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H.B. 2641 - HELD |
H.B. 2693 - DPA S/E (9-0-0-1) |
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H.B. 2587 - HELD |
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Todd Sanders, Majority Research Analyst
Michael Goodwin, representing self
Donald Vance, representing American Association of Retired Persons (AARP)
Warren Whitney, Assistant Secretary of State (SOS)
Mara Kelly, representing MCI WorldCom
Phil MacDonnell, representing Arizona Newspapers Association
Michelle Ahlmer, Executive Director, Arizona Retailers Association
Meg Wuebbels, representing Arizona Attorney General’s Office (AGO)
Robert Bud Annan, representing self
Names of persons recognized by the Chairman who support H.B. 2693 who did not testify
(Page 7)
Glenn Steiger, President, Distributed Energy Association of Arizona
Jeff Schlegel, representing Southwest Energy Efficiency Project (SWEEP)
Names of persons recognized by the Chairman who oppose H.B. 2693 who did not testify
(Page 8)
Russell Smoldon, Manager of Government Relations, Salt River Project (SRP)
Ethel Demarr, Manager of Renewable Energy Program, Salt River Project (SRP)
Larry Lucero, representing Tucson Electric Power (TEP)
Jim Norton, representing British Petroleum (BP)
Brooklyn Cambron, Majority Intern
Michael Hunter, Vice-President, Arizona Tax Research Association
Representative Knaperek, sponsor
Barbara Robey, Government Relations Manager, Arizona School Boards Association
Representative Landrum Taylor, sponsor
Richard Bark, representing the Arizona Chamber of Commerce
Derrick Johnson, representing the Arizona Association of Professional Firefighters
Names of persons recognized by the Chairman who support H.B. 2622 who did not testify
(Page 11)
Guest List (Attachment 1)
Chairman Hatch-Miller announced that H.B. 2587 will be held.
Chairman Hatch-Miller announced that H.B. 2641 will be held.
Todd Sanders, Majority Research Analyst, summarized H.B. 2082 (Attachment 2) by stating that the bill prohibits unsolicited commercial e-mail messages to an email address in Arizona.
Mr. Sanders reviewed the 10-page Hatch-Miller strike-everything amendment to H.B. 2082 (Attachments 3 and 4) dated 3/15/02. By July 1, 2003, the Secretary of State (SOS) shall establish and maintain the Arizona No Contact List for the purpose of compiling a database of telephone numbers, fax numbers, e-mail addresses and residential addresses of those who do not wish to be contacted by solicitors. The SOS may contract with a private vendor to perform all or part of the requirements of this program. As part of the program, the SOS shall establish the Arizona No Contact List fund to collect fees from individuals requesting to be placed on the list and from solicitors purchasing access to the list. The civil penalty of not more than $250 shall be collected from any seller that willfully violates this section. Any subsequent violation will be charged not more than $500.
The strike-everything amendment provides that the Attorney General may investigate and take appropriate action pursuant to the Arizona Consumer Fraud Act. All monies collected as fines and civil penalties shall be credited to the Consumer Protection/Consumer Fraud Revolving Fund.
The strike-everything amendment states that it is unlawful for a person to knowingly send commercial e-mail messages from a computer located in Arizona or to an e-mail address held by a person in this state if: a) the message uses a third party’s domain name without their permission; b) the sender misrepresents the point of origin of the message or c) the message contains false or misleading information in the subject line.
Chairman Hatch-Miller explained he worked with the sponsor on the drafting of the strike-everything amendment. Over the course of the last three years, he has tried to deal with unwanted solicitation via fax and e-mail. Under the current system, there is no easy way to remove a name from a solicitation list. In some cases, when the company is notified that the person doesn’t want to receive solicitation, they get placed on a list for increased contacts. He provided several examples of unwanted solicitations he has received in the past.
Mrs. Leff asked how the state could enforce this on companies outside of Arizona. Chairman Hatch-Miller replied there is no system currently in place to identify and prosecute telemarketers who call people that don’t want calls. Mrs. Leff said she will reserve her question for a representative of the Attorney General’s office, adding that this bill may be setting consumers up to think that they will never receive any kind of solicitation if they subscribe to the do not call list.
Michael Goodwin, representing self, spoke in favor of the strike-everything amendment. He said he was a legislator in the 1970’s who worked on legislation to eliminate unwanted solicitation. This measure is very thorough and will get the job done.
Donald Vance, representing American Association of Retired Persons (AARP), spoke in favor of the strike-everything amendment. He stated AARP supports the telemarketing portion of the measure. The other items in the measure have not yet been reviewed. AARP has asked all the states to pass measures similar to this one. AARP is opposed to the charging of a fee to have a name placed on the no call list. AARP would like to see the hours that calls can be placed limited even further than it already is.
Warren Whitney, Assistant Secretary of State (SOS), said the SOS would be responsible for the management of the do not call list. While there are provisions for a do not call list in statute, there is no state managed list. The list in the provisions needs to be maintained by the telemarketers. The telemarketing industry is still being educated on how to comply with the requirements of the list.
The SOS supports the concept of the list. There are some concerns about the data having integrity and enforceability by the Attorney General’s Office. It is going to be very difficult to determine if an e-mail address is an Arizona e-mail address.
He is unaware if there are exemptions for door-to-door sales. If a citizen gives the SOS their address, it is reasonable for them to expect that people will not be knocking on their door.
Chairman Hatch-Miller said that, unlike the similar Senate bill, there are no exemptions for door-to-door sales. Under this measure, if a citizen does not want contact, there is no contact.
Mr. Whitney remarked that there needs to be more clarity on that portion of the amendment. If a consumer subscribes to the list, they could think that it means that no one is going to knock on their door, regardless of the solicitor’s age or intent.
Mrs. Leff said she thinks the list would work for telemarketers and faxes. Mr. Whitney concurred, adding that the SOS could determine and confirm if fax numbers are Arizona fax numbers without a cost to the consumer. There is sufficient capacity in the telemarketing industry to pay for the program.
Mr. Soltero asked how the SOS would implement the program. Mr. Whitney responded as he understands the amendment, the language gives the SOS the ability to develop the process by which the data is collected and managed. With the addition of some software, the program could be managed in-house.
In response to inquiry by Mr. Camarot, Chairman Hatch-Miller replied the bill doesn’t affect children going trick-or-treating. There are exemptions in the bill for door-to-door contact by very small operations or for people that have a personal relationship with the list subscriber.
Mara Kelly, representing MCI WorldCom, spoke in opposition to the strike-everything amendment. She stated as a whole, the industry favors the idea of a do not call list. S.B. 1296 is similar to this legislation but has had substantial deletions since it was first heard. The items that were deleted in S.B. 1296 are in place in the strike-everything amendment. This amendment does not address that there is nothing in place for telemarketers to get an updated do not call list on a regular basis. There is no provision for a group like Direct Marketers Association (DMA) to receive the list. DMA already keeps track of do not call lists in other states and could disseminate the information among telemarketers.
Chairman Hatch-Miller remarked that DMA could go to the SOS, download the information and disseminate the information to its members. Ms. Kelly responded that without language in the bill the information would not have to be provided.
Phil MacDonnell, representing Arizona Newspapers Association, spoke in opposition to the strike-everything amendment. He related free newspapers are totally paid for by advertising. Free newspapers depend on distribution by delivery to people’s houses and sell their advertising space based on where they deliver the newspapers. If they are prohibited by this legislation from approaching a home to drop off a newspaper, they are going to lose a great deal of advertising business.
Chairman Hatch-Miller asked if there is a mechanism currently in place whereby someone who is going on vacation can stop the placement of free newspapers at their home. Mr. MacDonnell replied in the negative.
Mr. MacDonnell continued that S.B. 1296 has exempted newspapers and requests that the same be done with H.B. 2082.
Michelle Ahlmer, Executive Director, Arizona Retailers Association, spoke in opposition to the strike-everything amendment. She remarked while people may not want to be interrupted by someone selling something at their door, they may still want free newspapers or coupons. Some items left on doors cannot be tracked. Door hangers are the only way some small businesses can compete.
Meg Wuebbels, representing the Arizona Attorney General’s Office (AGO), voiced concerns about the enforceability of H.B. 2082. The nature of e-mail and the inability to track where it originated from will be problematic. The solicitor may not know they are e-mailing someone in Arizona. This bill sets up an expectation by the consumer that they won’t ever receive any unwanted phone calls, faxes, door hangers, etc. The AGO does not have the enforcement ability to back up this expectation.
Chairman Hatch-Miller declared there has to be a way the AGO can protect consumers with children from receiving unsolicited pornographic e-mails. Ms. Wuebbels maintained that the AGO is working on trying to address pornography on the Internet and children. This has proven difficult as there are First Amendment issues that need to be contended with. The AGO will do whatever they can to protect children from receiving unwanted pornography via the internet. It is also difficult for the senders to know if they are sending the messages to children.
(Tape 1, Side B)
Chairman Hatch-Miller opined that the process by which the citizen can report pornographic e‑mail needs to be streamlined. Currently, the citizen must accumulate a great deal of evidence and file reports at the AGO. The do not call list would simplify this process. If the person doesn’t want to receive the email, they subscribe to the list and they won’t get the messages anymore.
Mr. Tully asked if the AGO has been in contact with the Washington Attorney General’s Office as to how they are handling their new email law. Ms. Wuebbels responded she is not aware that contact has been made. Mr. Tully suggested Washington may be able to provide some valuable insight as their law has been in place for some time.
Ms. Wuebbels mentioned it would take more staff to investigate email complaints. As the bill is written, there is no provision for additional staff. Chairman Hatch-Miller added there is a funding mechanism built into the bill.
In response to Mrs. Leff, Ms. Wuebbels said if a message is received by someone in Arizona from someone out of state, Arizona not only has the ability to prosecute but also has the ability to collect fines interstate.
Vice-Chairman Farnsworth stated he doesn’t think this is an issue of jurisdiction. The difficulty is going to be trying to prosecute a nameless, faceless entity. Ms. Wuebbels concurred.
Chairman Hatch-Miller expressed that when some of the more damaging computer viruses were spread, the perpetrators were apprehended within 48 hours of the release of the virus. Catching the email solicitors will be difficult but not impossible.
Mr. Tully declared it was not his intent in the original bill to go after unknown entities. If someone receives an unwanted message from XYZ Company, for example, the AGO knows to go after XYZ Company.
Vice-Chairman Farnsworth remarked there will always be people who will not comply with any law. There cannot be an expectation created that someone will never receive an unwanted message if they subscribe to a list. Ms. Wuebbels agreed.
Vice-Chairman Farnsworth moved that H.B. 2082 do pass.
Vice-Chairman Farnsworth moved that the 10-page Hatch-Miller strike‑everything amendment to H.B. 2082 (Attachment 4) dated 3/15/02 be adopted. The motion carried.
Vice-Chairman Farnsworth moved that H.B. 2082 as amended do pass. The motion carried by a roll call vote of 6-3-0-1 (Attachment 5).
Todd Sanders, Majority Research Analyst, summarized H.B. 2693 (Attachment 6, page 1) by stating that the bill provides for energy conservation measures in state buildings, distributed generation renewable energy portfolio standards for Agricultural Improvement Districts as well as the creation of a study committee on renewable resources.
Mr. Sanders summarized the 5-page Graf strike-everything amendment to H.B. 2693 (Attachment 9) dated 3/11/2002. The Department of Commerce would be required to establish an Energy Efficiency Council to prescribe energy efficiency criteria for the purpose of reducing energy use in new state buildings by January 1, 2007 and will allow the Corporation Commission to adopt rules relating to in-state distributed generation facilities.
Mr. Sanders summarized the 5-line Graf amendment dated 3/19/02 to the 5-page Graf strike‑everything amendment to H.B. 2693 (Attachment 7) and the 5-line Farnsworth amendment dated 3/19/02 to the 5-page Graf strike-everything amendment to H.B. 2693 (Attachment 8). The amendments are in conflict so only one may be adopted.
(Vice-Chairman Farnsworth assumed the Chair)
Robert Bud Annan, representing self, spoke in favor of the strike-everything amendment. He said he has spent 35 years in the energy field. The energy industry in Arizona is a $4 billion industry that delivers over 10 million megawatt hours annually. The increase in the number of power plants, growing dependence on fossil fuels and de-emphasis of energy efficiency could lead to price increases and supply interruptions. With a concerted effort by the state in relation to their buildings, and by utilities to increase use of renewable energy, Arizona could be a leader in diversified fuel supply by the year 2007.
For example, if the new Sandra Day O’Connor Federal Building in downtown Phoenix had photovoltaic panels rather than just plain glass on its façade, it could generate its own electricity. Sierra Vista has been utilizing renewable energy in their new buildings, and their library recently won an award for its energy efficiency.
Large power plants placed in close proximity to cities and towns are creating a great deal of controversy. Small distributed systems closer to the end use would alleviate this problem. The Western Governors Association recommended small distributed systems in a policy statement last year.
The amendment will place a requirement on Salt River Project to derive 1.1 percent of its electricity from renewable energy sources, with 50 percent of that coming from solar energy. This is identical to the requirement placed on investor owned utilities last year by the Arizona Corporation Commission (ACC). This action by the ACC has caused Tucson Electric Power to install this country’s largest solar power plant in Springerville. Arizona Public Service is expected to install solar power at their Prescott plant.
The requirement of the Department of Commerce to develop a consumer education program will help educate consumers that conservation is a great way to decrease dependency on fossil fuels.
Vice-Chairman Farnsworth asked why a surcharge for users of current forms of energy is going to be created if costs for implementing what is suggested in the strike-everything amendment are minimal. Mr. Annan replied this provision was created for investor owned utilities by the ACC.
Vice-Chairman Farnsworth said he doesn’t have a problem with investigating renewable sources of energy. He does have a problem with the surcharge as it is passing the costs on to consumers.
(Chairman Hatch-Miller resumed the Chair)
Chairman Hatch-Miller acknowledged the presence of those who support H.B. 2693 who did not testify:
Susan Culp, representing Arizona League of Conservation Voters
Sandy Bahr, representing the Sierra Club
Michael Neery, representing Arizona Solar Energy Industries Association
Doran Dalton, representing Native Sun
Sean Sietz, representing American Solar Electric, Inc.
Lincoln Dahl, representing Kyocera Solar, Inc.
Jim Walsh, representing Grand Canyon Trust
Glenn Steiger, President, Distributed Energy Association of Arizona, spoke in favor of the strike-everything amendment. He said Arizona is falling behind in the movement to shift toward distributed generation. In the future, this could leave Arizona in a precarious position in terms of the balance between supply and demand. Other states are recognizing the clear value of distributed generation in the area of taking pressure off transmission line construction and encouraging choice among energy users.
Jeff Schlegel, representing Southwest Energy Efficiency Project (SWEEP), spoke in favor of the strike-everything amendment. He attested he is especially in favor of the standards for state buildings to reduce energy use by ten percent and the distributed resources plan. Energy efficiency doesn’t have to cost more if it is incorporated into the design of new structures.
Chairman Hatch-Miller acknowledged the presence of those who oppose H.B. 2693 who did not testify:
Henry Evans, representing Hohokam Irrigating District
Gretchen Kitchel, representing Pinnacle West Capital Corp.
Mr. Cooley opined he does not understand why government needs to step into the process if the private sector is already beginning to utilize renewable energy. If renewable energy proves to be cost effective, the private sector will move toward renewable energy on their own. There doesn’t seem to be consensus on this measure, which further necessitates the need for a study committee.
Larry Lucero, representing Tucson Electric Power (TEP), spoke in opposition to the strike-everything amendment. He stated TEP has long been a proponent of renewable energy, utilizing solar and methane recovery in some of its electricity generation. He would recommend approving the Farnsworth amendment to the strike-everything amendment.
Jim Norton, representing British Petroleum (BP), spoke in favor of the strike-everything amendment. He said while BP is the leading producer of oil and gas in the United States, they are also the leading producer of photovoltaic solar panels. He endorses the idea of a study committee and would like to be invited to participate.
Mr. Graf commented he has been working on this measure since the beginning of the year. The argument could be made that various levels of government have always been involved in the energy business and should be involved in the renewable energy process. SRP is not truly a private vendor in the energy business. He doesn’t agree that the surcharge is equivalent to a back door tax. Arizona needs to become less reliant on fossil fuels.
(Tape 2, Side A)
Upon inquiry by Chairman Hatch-Miller, Mr. Sanders said the Graf amendment to the strike-everything amendment removes Section 2 and makes a technical correction. The Farnsworth amendment removes Sections 1-8 but leaves the study committee aspect of the strike-everything amendment intact.
Mr. Cooley reiterated a study committee makes more sense at this point due to all the issues that were raised today.
Mr. Soltero stated he is going to support the Farnsworth amendment to the strike-everything amendment.
Vice-Chairman Farnsworth said he doesn’t oppose the sponsor’s efforts with the bill. It is premature to use the mechanisms suggested in the measure. The fees that are being suggested are a back door tax that will be passed on to the consumer. He thinks the study committee is the way to go at this point.
Mr. Graf asserted the fees are not a back door tax. The government has subsidized energy on different levels in the past.
Vice-Chairman Farnsworth moved that H.B. 2693 do pass.
Vice-Chairman Farnsworth moved that the 5-page Graf strike-everything amendment to H.B. 2693 (Attachment 9) dated 3-11-02 be adopted.
Vice-Chairman Farnsworth moved that the 5-line Farnsworth amendment to the 5-page Graf strike-everything amendment to H.B. 2693 (Attachment 8) dated 3-19-02 be adopted. The motion carried.
Vice-Chairman Farnsworth moved that the 5-page Graf strike-everything amendment to H.B. 2693 (Attachment 9) dated 3-11-02 as amended be adopted. The motion carried.
Vice-Chairman Farnsworth moved that H.B. 2693 as amended do pass. The motion carried by a roll call vote of 9-0-0-1 (Attachment 10).
Brooklyn Cambron, Majority Intern, summarized H.B. 2521 (Attachment 11) by stating that the bill amends current statute relating to school district finance by capping the amount that may be budgeted for excess utilities costs to that of FY 2001-02. Proposition 301 placed an expiration date of FY 2008-09 on the school excess utilities.
Michael Hunter,
Vice-President, Arizona Tax Research Association, spoke in favor of the
bill. He said Proposition 301 included a provision to eliminate excess
utilities as of the end of FY 2009. This has been a serious problem for
several years. There is no incentive for school districts to economize their
expenditures. A base level was set for the school districts in
FY 1985 that was allowed to grow annually with increases in budget capacity.
Budget capacity expands based on population growth. School districts are not
weaning themselves from the excess utilities.
Representative Knaperek, sponsor, spoke in favor of the bill. She said freezing the excess utilities rate at this year’s rate will only help school districts in the future. If the spending is allowed to continue at its current rate, school districts will need to make up the difference out of their own budgets after FY 2009.
In response to inquiry by Mr. Camarot, Mrs. Knaperek stated utility rates were quite large in the 1980’s. Prior to that, school districts were not allowed to go outside of their revenue control limit. Energy efficiency standards have been placed in the Students First program. Inflation is allowed for under Proposition 301.
Mr. Cooley said the state is currently spending a large amount of money to bring schools up to more modern energy standards. School districts need to be given an incentive to save energy, which in turn will give them more money to spend at their discretion.
Mr. Camarot observed he is going to need more information before he can support the bill.
Barbara Robey, Government Relations Manager, Arizona School Boards Association, spoke in opposition to the bill. She said the language on the ballot for Proposition 301 was very specific that the option to use excess utilities would end FY 2008-2009. Before excess utilities are eliminated, a comprehensive study needs to be done of the entire maintenance and operations formula. To simply put a cap on excess utilities without comprehensively looking at the formula is a detriment to school districts.
Mr. Soltero related he has concerns with the bill. He is concerned that the individual school districts and their school boards are being left out of this process.
Vice-Chairman Farnsworth moved that H.B. 2521 do pass. The motion carried by a roll call vote of 6-2-0-2 (Attachment 12).
11:39 a.m. Committee stands at recess.
4:42 p.m. Committee reconvenes with all Members present with the exception of Ms. Laughter.
Brooklyn Cambron, Majority Intern, summarized H.B. 2622 (Attachment 13) by stating that the bill relates to emergency planning and community right-to-know.
Ms. Cambron summarized the 2-page Camarot strike-everything amendment to H.B. 2622 (Attachments 14 and 15) dated 3/18/2002. The amendment states a facility located in a city or town with a population of more than 75,000 shall file hazardous materials inventory statements and management plans on a standardized form in a format determined by the fire department or fire district having jurisdiction. The form may be filed manually or electronically until January 1, 2005. Thereafter, the forms must be filled electronically.
Richard Bark, representing the Arizona Chamber of Commerce, spoke in opposition to the strike-everything amendment. He said the Chamber is going to work with the sponsor on Floor amendments.
In response to inquiry by Vice-Chairman Farnsworth, Mr. Bark said the Chamber has a problem with the requirement for mandatory electronic filing of the report by 2005. There is no problem with confidentiality as the information in the report is already filed for different reasons.
In response to inquiry by Vice-Chairman Farnsworth, Representative Landrum Taylor said the towns and cities with populations over 75,000 usually have fire departments that are fully staffed and can handle this type of electronic filing.
Derrick Johnson, representing the Arizona Association of Professional Firefighters, spoke in favor of the strike-everything amendment. He is willing to work with the sponsor on further Floor amendments.
Chairman Hatch-Miller acknowledged the presence of those who support H.B. 2622 who did not testify:
Jim Larsen, representing Intel
Sandy Bahr, representing the Sierra Club
Susan Culp, representing the Arizona League of Conservation Voters
Steve Brittle, representing self
Vice-Chairman Farnsworth moved that H.B. 2622 do pass.
Vice-Chairman Farnsworth moved that the 2-page Camarot strike everything amendment to H.B. 2622 (Attachment 15) dated 3-18-02 be adopted. The motion carried.
Vice-Chairman Farnsworth moved that H.B. 2622 as amended do pass. The motion carried by a roll call vote of 9-0-0-1 (Attachment 16).
Chairman Hatch-Miller announced that H.B. 2399 will be held.
Without objection, the meeting adjourned at 4:55 p.m.
___________________________________
Andrea Allen, Committee Secretary
March 29, 2002
(Original minutes, attachments and tape on file in the Office of the Chief Clerk.)
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COMMITTEE ON ENERGY
UTILITIES AND TECHNOLOGY
10
March 20, 2002
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