BILL ANALYSIS
AB 219
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 219 (Utilities Committee)
As Amended June 21, 2001
2/3 vote. Urgency
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|ASSEMBLY: |73-1 |(April 16, |SENATE: |33-2 |(July 5, 2001) |
| | |2001) | | | |
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Original Committee Reference: U. & C.
SUMMARY : Extends the requirement for a recovery mechanism through
a surcharge on intrastate telephone service to recover costs for
providing telecommunications devices capable of serving the needs
of the deaf and hearing impaired and telecommunications equipment
for the disabled to January 1, 2006. The program, funded through
the existing surcharge is known as the Deaf and Disabled
Telecommunications Program (DDTP). Provides for a loan from the
California High Cost Fund-B (CHCF-B), another universal service
fund, to the DDTP fund (Deaf Trust), to continue operations until
surcharge authorization takes place.
The Senate amendments :
1)Add Section 270.1 to the Public Utilities Code to allow CHCF-B to
loan operating funds to Deaf Trust for the cost of operating the
program for six months and provide for reimbursement to CHCF-B
from the Deaf Trust, with interest.
2)Require local publicly owned utilities to refund to the General
Fund all proceeds from sale of generated electricity to
California which exceed a base price of $80 per megawatthour, or
any subsequent price set by the California Public Utilities
Commission (CPUC) based on an industry average of the cost of
providing electricity.
EXISTING LAW :
1)Requires CPUC to establish a rate recovery mechanism through
surcharges on intrastate telephone service to recover costs
specified for this program.
2)Provides CPUC with authority to establish retail rates for
electrical corporations in California.
AB 219
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3)Provides the Federal Energy Regulatory Commission (FERC) with
authority to set wholesale rates for generated electricity.
4)Provides governing boards of local publicly owned utilities with
authority to set rates for the utility.
AS PASSED BY THE ASSEMBLY , this bill extended the authorization for
collection of the DDTP surcharge and for continued Deaf Trust
program operation through January 1, 2006.
FISCAL EFFECT : Continuation of DDTP surcharge on telephone bills
totals about $45 million.
COMMENTS : Universal Service Surcharges. The Moore Universal
Telephone Service Act asserts that providing universally available
and affordable access to basic telephone service throughout the
state is an essential policy goal for California. Through various
programs funded through surcharges such as Universal Lifeline
Telephone Service (ULTS), basic telephone service is made
affordable to low-income households and available to all customers.
Affordability and availability are secondary to those users for
whom access to the network requires special equipment due to
hearing impairment or deafness.
DDTP provides that certified telecommunications customers who are
hearing impaired or deaf have access to the telecommunications
network through a dual-party relay system using a third party
intervention to connect individuals or offices of organizations
representing these groups with persons of normal hearing by way of
intercommunications devices. CPUC had this program certified
through the Federal Communications Commission's rules adopted
pursuant to the Americans with Disabilities Act of 1990.
DDTP also provides, through a program designed by CPUC,
supplemental telephone communications equipment for subscribers
certified to be disabled to accommodate access to the
telecommunications network. CPUC established a surcharge, which by
statute may not exceed of 1%, applied to intrastate telephone
service to fund the specified programs.
DDTP surcharge was never intended to disappear altogether, as the
need for maintaining access to the network for persons with
disabilities is an ongoing universal service imperative. Extension
of the surcharge for specified periods of time, in this case not to
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exceed five additional years, is prudent. As demand on the
telecommunications infrastructure increases, it remains critical to
keep the hearing impaired and deaf as well as other
telecommunications consumers with disabilities connected
effectively to the network. The loan from CHCF-B will allow the
program to continue to operate while surcharge authorization is
pending and until surcharge monies are again collected. An
additional amendment is proposed to clarify that the monies will be
repaid to the CHCF-B on June 30, 2002, and until that time will be
held in a balancing account separate from DDTP operational and
administrative funds. This alleviates any concerns regarding DDTP
remaining under CPUC fiscal control until July 1, 2002, while
CHCF-B moves to the state treasury on July 1, 2001.
Additional Senate amendments create conflicts. The existing
rate-making authority of CPUC is limited to retail rate setting of
electrical corporations in the state and not to any wholesale rates
of local publicly owned utilities. These amendments, in addition
to being unrelated to the subject matter of the existing bill,
would broaden CPUC constitutional authority and limit decision
making authority of governing boards of publicly owned utilities.
As noted in a memo from Legislative Counsel, the additional Senate
amendments dealing with local publicly owned utilities violate the
constitutional requirement that a statute embrace a single subject.
These amendments are not germane to the existing subject matter
of this bill.
Analysis Prepared by : Kelly Boyd / U. & C. / (916) 319-2083
FN: 0001779