Draft Only
Approval Pending
SUMMARY of
PROCEEDINGS
J O IN T C OR P OR A T IO N S , E LE C T IO N S & P O LIT IC A L S U B D IV IS IO N S C O M M IT T E E
COMM ITTEE
M E E TI N G I N F O R M AT I O N
April 12, 2011
Room 302, Capitol Building
Cheyenne, Wyoming
COMM ITTEE
M EMBERS PRESENT
Senator Cale Case, Cochairman
Representative Pete Illoway, Cochairman
Senator John Hines
Senator Wayne Johnson
Senator Marty Martin
Senator Charlie Scott
Representative Gregg Blikre
Representative Jim Byrd
Representative Allen Jaggi
Representative Kendell Kroeker
Representative John Patton
Representative Jim Roscoe
Representative Lisa Shepperson (via telephone)
Representative Tim Stubson
L E G I S L ATI V E S E R V I C E O F F I C E S T AF F
Lynda Cook, Staff Attorney
Kelly Shepp, Associate Research Analyst
O T H E R S P R E S E N T AT M E E TI N G
Representative Lorraine Quarberg
Please refer to Appendix 1 to review the Subcommittee Sign-in Sheet
for a list of other individuals who attended the meeting.
The Committee Meeting Summary of Proceedings (meeting minutes) is prepared by the Legislative Service Office
(LSO) and is the official record of the proceedings of a legislative committee meeting. This document does not
represent a transcript of the meeting; it is a digest of the meeting and provides a record of official actions taken by
the Committee. All meeting materials and handouts provided to the Committee by the Legislative Service Office,
public officials, lobbyists, and the public are on file at the Legislative Service Office and are part of the official
record of the meeting. An index of these materials is provided at the end of this document and these materials are
on file at the Legislative Service Office. For more information or to review meeting materials, please contact the
Legislative Service Office at (307) 777-7881 or by e-mail at [email protected]. The Summary of Proceedings for each
legislative committee meeting can be found on the Wyoming Legislature’s website at http://legisweb.state.wy.us.
PAGE 2 OF 8
E X E C U T I V E S U M M AR Y
The committee met in Cheyenne and discussed insurance department regulations and telecommunications
regulations, including state universal service funds and voice over internet protocol. The committee also
began the process of consideration of redistricting based on the 2010 census.
CALL TO ORDER
Co-Chairman Cale Case called the meeting to order at 8:05 a.m. The following sections summarize the
Committee proceedings by topic. Please refer to Appendix 2 to review the Committee Meeting Agenda.
AP PR OV AL
OF
MINUTES
Minutes from the November, 2010 Committee meeting were approved.
DEP ARTM ENT
OF INS UR ANCE
Ken Vines, Insurance Commissioner, Linda Johnson, Chief Examiner and Jim Mitchell, Chief Counsel
testified.
Accreditation Legislation
Mr. Vines explained that statutory changes need to be made to the Risk Based Capital statutes and
Hazardous Financial Condition statutes to maintain state accreditation. (Appendix 3). Mr. Vines
explained why accreditation is important.
With respect to Risk Based Capital, the insurance department proposes a revision to the trend test for life
insurance companies. Risk Based Capital is a test to assess risk for solvency for each company. The
department’s proposal is to change the trend test from between 200% and 250% to between 200% and
300%. The proposal would also add a trend test to health insurance companies’ RBC that is similar to
that required for property and casualty insurance companies.
With respect to Hazardous Financial Conditions, the proposal is to add several items to the list of issues
that the insurance commissioner can consider when determining if an insurer’s continued operation is
hazardous to its policy holders, creditors and the general public. The list includes audit reports, NAIC
financial analysis solvency tools, actuarial opinions and summaries, material adverse loss reserve
development and holding company transactions. The proposal also adds several new actions that the
insurance commissioner can take in order to address these issues. These actions include disallowing
certain asset valuations, requiring improvements to corporate governance practices, requiring business
plans and requiring the insurer to adjust its non-life premium rates.
Surplus Lines
Last session the legislature passed a bare bones bill that modified the surplus lines laws to adhere to
recent federal legislation. Mr. Vines testified that this interim they are seeking further legislation to make
uniform how insurance commissions deal with surplus lines on a national basis. (Appendix 4). The new
federal law allows for payment of premiums in one state and sharing of those premiums between states
affected by the risk being insured. Surplus lines are risks that are unique and separately insured such as
ski resorts, oil and gas operations, wind energy, etc.
The NAIC is still working on draft language. Mr. Vines expects to have specific language to propose
later in the summer and asked to work with LSO to bring draft legislation to the next committee meeting.
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 3 OF 8
Rep. Stubson asked about SlimPac laws. SlimPac is an interstate compact proposed by NCOIL. Mr.
Vines testified that the NIMA agreement proposed by NAIC is less complicated. He noted that the
legislation passed already this year is broad enough for the commissioner to enter into either and they are
analyzing both options. However, a compact is much less flexible than a multi-state agreement.
Dave Uchner, American Insurance commission, noted that they will follow the progress of the bills and
comment at a later date.
The committee asked staff to draft a bill for RBC and Hazardous Conditions. The committee also asked
staff to work with the commissioner on surplus lines legislation.
T E LE C OM M U N I C AT I O N S
Update on Mergers in the Industry
Mike Ceballos and David Gibson, Qwest, updated the committee on Qwest's merger with CenturyLink.
(Appendix 5). Mike Ceballos noted that he is retiring and introduced the replacement team. David
Gibson will be taking over Mr. Ceballos' position but will be located in Montana. Mr. Gibson introduced
Dave Johnson, Area Operations Manager and Kristen Lee, Wyoming Legislative and Regulatory
Relations Director. He also noted that Edie Ortega will become a local governments specialist and that
Gail Geringer will be on staff too.
Mr. Gibson testified that the target for full re-branding of the merged company is in August. Mr. Johnson
testified that they are excited to expand bandwidth to schools and state offices in accord with Governor
Mead’s broadband initiative.
Beth Canuteson, AT&T and Dave Picard discussed AT&T’s acquisition of the Al-Tel network and TMobile. She provided a map of the state’s current coverage and the new state coverage after the
acquisition. (Appendix 6). Mr. Picard explained the evolution of 4G networks and the advantages of
those networks.
Telecom regulation panel
Al Minier, Art Schmidt and Chris Petrie, Public Service Commission, testified. The panel is trying to
work through where the Universal Service Fund is and where the state wants to go. The fund is a tax on
phone service that is used to subsidize relatively high service rates. Mr. Minier explained how the USF
is paid out to service providers. He also explained the PSC's auditing procedures.
Mr. Minier explained the difference between fixed VoiP providers and nomadic VoiP providers. He
noted that Bresnan prices are not related to price to provide service like other providers. The PSC used
Qwest’s price for essential service in their core area as a better base number for Bresnan because Bresnan
doesn’t have the cost based pricing and they directly compete with Qwest in that area. He testified that
Bresnan does not provide services to the rural high cost areas. He also noted that cost information is now
out of date as a result of deregulation. Mr. Minier noted that it is not fair to provide USF funds to a
company that does not provide service to rural areas and not to the companies that do. He also noted that
the number of land lines is decreasing as the number of cell lines are increasing.
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 4 OF 8
Mr. Minier testified that when a company has both land and cell services, they can use all their USF
funding to support cell service. He noted that as long as there is a state USF Wyoming is in a better
position to leverage federal USF funds. The federal USF is proposing rules that would limit funding to
providers that provide broadband. Ultimately, if something is passed, Mr. Minier suggested that they
would need some statutory changes in the PSC authority to handle the changes. He noted that this would
not be this legislative session.
Senator Scott discussed the issues of fixed and variable costs. He also noted that coverage with wireless
has decreased with the national change from analog to digital. Mr. Minier noted that part of the problem
is they have too little information on costs to make informed decisions. Additionally, while cell
providers pay into the state USF, they have not taken funds from the program. That may be because of
the requirement that the provider provide unlimited local calling throughout the service area. The
committee discussed the pros and cons of changing the program to include building of cell towers. Mr.
Minier expressed concern about putting the PSC in the position of grant making.
Chairman Illoway asked if the state has outgrown the need for a state USF. Mr. Minier testified that we
have not – there are still places in this state that do not have adequate service and the state needs the state
program if the changes to the federal program come to pass.
Mr. Schmidt explained the state USF program and compared the program to the federal USF program.
Six companies get USF funds, three have been consistent throughout the years. More could receive funds
but opt not to because the administrative costs would outweigh the amount they would receive. The
benchmark for receipt of funds has been fairly consistently around $32 per month.
Larry Wolfe, Adam Falk & Shawn Beqaj, representing Bresnan and Cablevision, testified. Mr. Falk
testified about the history of Cablevision and Bresnan, which merged last year. He testified that a market
based approach to regulation leads to better services. He testified that the USF needs to be reexamined to
provide a level playing field. He suggested the current program is unfair because fixed providers pay into
the fund while nomadic providers do not. He also suggested that the fund is not efficient in meeting the
needs of the customers. The program does not adequately reflect the availability of competition and
subsidizes the incumbent carriers to the detriment of others. Mr. Falk suggested a better program would
provide the subsidies directly to the consumer rather than to the provider.
Mr. Falk testified that any regulation of VoiP should be consistent between fixed and nomadic providers.
The committee discussed the policy issues of providing subsidies.
Edie Ortega, Liz Zerga, Don Jackson and Jason Hendrix, representing independent local carriers testified.
Ms. Ortega testified that a state USF is important and eliminating it or significantly changing it will
change how telecommunications are provided in this state. Ms. Ortega noted that with the taking of USF
funds come responsibilities and obligations to provide service of last resort. She noted that traditional
telephone regulation does not work for the industry as it exists today. She suggested that the committee
should look at what is eligible service, how certification occurs and what responsibilities come with
acceptance of the funds.
Ms. Zerga testified that for her companies the biggest concern is the changes to the federal USF and how
that will affect the needs from the state USF. She noted that those federal changes will shape what the
group is looking for in terms of changes to the state program. With respect to VoiP she expressed
preference for lack of regulation but would like to see those providers contribute to the USF and 911 fees.
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 5 OF 8
Don Jackson explained the proposed changes to the federal USF. The federal agency wants to extend the
federal USF to cover broadband but they do not want to increase the fund. They want to shift funds away
from current recipients to midsize and larger companies. The federal changes propose to remove rate of
return regulation. They are also attempting to bring about consolidation of rural telephone service.
Beth Canuteson, AT&T, echoed the comments already received. She suggested a wait and see approach
in order to see what the federal changes will be and how they will affect the need for state funds. She
would like to see a move from implicit subsidies to explicit subsidies.
Denise Parrish, Office of Consumer Advocate, testified that they are interested in this topic and will
participate in this discussion as it progresses.
REDISTRICTING
Matt Obrecht, Dan Pauli and Matt Sackett, LSO, testified. Mr. Obrecht provided a memo outlining the
current state of the law regarding redistricting. (Appendix 7). The basic principle of redistricting is one
person one vote. To achieve that goal, legislative districts should fall within a standard deviation of no
more than 10%. Mr. Obrecht explained the concepts of communities of interest and the requirements of
the Voting Rights Act. He noted that political gerrymandering is when one party draws districts that do
not meet redistricting principals in order to keep that party in office. Mr. Obrecht explained the legal
constructs of redistricting and the following dominant redistricting principals. Districts should be
contiguous, compact and should follow recognized geographic boundaries. Census blocks are the
smallest geographic entity and cannot be split in a redistricting plan. Voting districts are a collection of
census blocks put together by the Census Bureau with the input of the county clerks. The Wyoming
constitutional requirement that each county be a separate district has been held null and void in violation
of the one man one vote concept. Nested districts are house districts which fall completely within one
senate district. Multimember districts are districts where more than one legislator is elected at large in a
particular area. While this is not per se unconstitutional, it is very suspect under previous court analysis.
Mr. Obrecht handed out the guidelines and goals for redistricting adopted by Management Council.
(Appendix 8).
Matt Sackett explained the census figures the state has received. (Appendix 9). The state population
grew by 14.1% for a total population of 563,626. Two counties grew substantially (Campbell and
Sublette) and two lost population (Hot Springs and Platte). Given these numbers, the ideal senate district
should contain 18,788 people and the ideal house district should contain 9,394 people. Rep. Patton noted
that the ideal numbers are purely mathematical in that the only restriction is that the number of house
members should be no less than twice nor more than three times the number of senate members and that
whatever number of seats in each house, they must be no more than 10% from the ideal.
Mr. Sackett provided a handout showing how current districts are now deviating from the ideal population
(Appendix 9). Mr. Sackett then gave a presentation of how the Maptitude software works.
Mary Lankford, Sublette County Clerk, explained that counties establish their precincts to fit the voting
blocks after the redistricting plan has been adopted.
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 6 OF 8
The committee discussed avoidance of party affiliation in consideration of the data. The committee also
discussed the need to protect the interests of Native Americans in those areas where they are a significant
voting block.
Mr. Sackett noted that there will be a link on the legislative website for private citizens to see the
proposed plans and comment on them. It will also give notice of future meetings.
Rep. Patton discussed the possibility of opening up the discussion to change the number of members of
each house.
Senator Scott suggested that the committee create regions that could be feasibly self-contained. Then the
committee should have the local legislators in those regions prepare a plan for that region that would meet
the needs of the local citizenry. (Appendix 10).
Sherri Daigle, Teton County Clerk, testified that the clerks are here today to express their deep interest in
the process. They want to make themselves available with whatever information they have.
Dan Neil, ESPC, asked that no draft plan be treated as confidential.
Dr. Pat Arp, Deputy SOS, testified that her office is most interested in the detail work with the final
drawing of the plans. She asked that the committee pay attention to splitting streets and where people go
to vote.
The committee voted on the following principles:
1. Election districts should be contiguous, compact and reflect a community of interest (adopted);
2. Population of election districts should be substantially equal, with the range of deviation not to
exceed 10% (adopted);
3. To the greatest extent possible, in establishing election districts:
a. County boundaries should be followed;
b. The majority of the population of each county should be in one district;
c. Census blocks should be followed (adopted);
4. The plan should avoid diluting voting power of minorities in violation of the Voting Rights Act
(adopted);
5. The house shall have 60 seats and the senate shall have 30 seats; (The committee discussed this
issue extensively and adopted – Patton opposed).
6. Consideration should be given to two contiguous house districts in each senate district (adopted);
7. Significant geographical features should be considered in establishing districts (adopted); and
8. Consideration of residence of current legislators should be avoided (The committee discussed this
issue extensively and failed this provision).
9. Residence of current legislators should be shown on all maps drawn. (Failed).
Regional meetings were scheduled as follows:
1.
2.
3.
4.
5.
Rock Springs
May 25 morning
Pinedale May 25 evening
Casper
June 14 morning
Wright
June 14 evening
Laramie
June 28 morning
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 7 OF 8
6.
7.
8.
9.
10.
11.
Cheyenne
Powell
Worland
Lander
Rawlins
Torrington
June 28 evening
July 12 morning
July 12 evening
July 13 morning
July 13 evening
August 15 evening.
The committee set its next regular meeting for August 15 & 16 in Cheyenne.
M E E T I N G AD J O U R N M E N T
There being no further business, Co-Chairman Pete Illoway adjourned the meeting at 5:00 p.m.
Respectfully submitted,
Cale Case, Co-Chairman
Pete Illoway, Co-Chairman
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us
PAGE 8 OF 8
Committee Meeting
Materials Index
Appendix
Appendix Item
Appendix Description
Appendix Provider
1
Committee Sign-In Sheet
Lists meeting attendees
Legislative Service Office
2
Committee Meeting
Agenda
Provides an outline of the topics the
Committee planned to address at meeting
Legislative Service Office
3
Insurance
Proposed accreditation legislation
Dept. of Insurance
4
Insurance
Surplus Lines Laws
Dept. of Insurance
5
Telecommunications
CenturyLink/Qwest merger coverage
Qwest
6
Telecommunications
AT&T/T-Mobile merger coverage
AT&T
7
Redistricting
Principals of state legislative redistricting
law
Legislative Service Office
8
Redistricting
Guidelines/Goals for redistricting 2012
Legislative Service Office
9
Redistricting
Census data and maps
Legislative Service Office
10
Redistricting
Regional districting concepts
Senator Scott
JOINT CORPORATIONS, ELECTIONS, & POLITICAL SUBDIVISIONS COMMITTEE Summary of Proceedings
WYOMING LEGISLATIVE SERVICE OFFICE • 213 State Capitol • Cheyenne, Wyoming 82002
TELEPHONE (307) 777-7881 • FAX 307-777-5466 • E-MAIL [email protected] • WEB SITE http://legisweb.state.wy.us