BILL ANALYSIS
Appropriations Committee Fiscal Summary
------------------------------------------------------------
| |1734(Wright) |
|-------------------------------+----------------------------|
| | |
|-------------------------------+----------------------------|
|Hearing Date: 5/6/02 |Amended: 4/30/02 |
|-------------------------------+----------------------------|
|Consultant: Lisa Matocq |Policy Vote: E, U & C |
| |8-0 |
| | |
------------------------------------------------------------
____________________________________________________________
___
BILL SUMMARY: AB 1734, an urgency bill, makes changes to
the Deaf and Disabled Telecommunications Program (DDTP),
within the Public Utilities Commission (PUC).
Fiscal Impact (in thousands)
Major Provisions 2002-03 2003-04
2004-05 Fund
PUC staff for contract Potential increased costs of $220
annually Special*
administration beg. 2003-04, offset by surcharge
revenues
Contract for administra- Unknown costs or savings. Any increased
Special*
tion costs should be offset by surcharge revenues
TADDA Committee Potential cost savings of $185 annually,
Special*
beg. 2003-04
Funds transfer Delays, from July 1, 2002 to July 1,
2003, the Special
transfer of an unknown amount from the
DEAF Trust to the DDTPACF
*Deaf and Disabled Telecommunications Program Administrative
Committee Fund (DDTPACF)
STAFF COMMENTS: The DDTP was established about 20 years
ago and provides telecommunications services to
approximately 500,000 persons who are deaf, hearing
impaired, or handicapped. It is estimated that three
million people may be eligible for service. The current
program budget is approximately $56 million, but is
projected to be $69 million in 2002-03, accounting for an
already approved expansion in relay service. DDTP revenues
are derived from a surcharge on all intrastate
telecommunications billings.
Currently, the Deaf and Disabled Telecommunications Program
Administrative Committee (DDTPA Committee) administers the
program, subject to PUC approval, and advises the PUC on
implementation, development, and administration. The
committee's budget is about $2.6 million. This bill:
renames the DDTPA Committee the Telecommunications Access
for Deaf and Disabled Administrative Committee (TADDA
Committee), makes changes to the composition of the
committee, and deletes the committee's authority to
administer the programs, making its role advisory,
Page Two
AB 1734 (Wright)
authorizes the PUC to, subject to annual appropriation of
funds by the Legislature, contract out for the
administration of the program,
specifies that any increased PUC staff costs for
oversight of the contract, or for associated legal
counsel shall be funded by the DDTPACF,
states legislative intent that the PUC expand outreach
efforts,
delays, from July 1, 2002 to July 1, 2003, the transfer
of funds from the Deaf Equipment Acquisition Fund (DEAF
Trust) to the DDTPACF (required by SB 669, Polanco, Ch.
677, St. of 1999), and
makes related changes.
Surcharge revenues are currently held in trust (DEAF Trust)
by the various telecommunications companies, and deposited
in commercial bank accounts. The DDTPAC approves program
expenses and drafts funds from these accounts. The
transfer of funds from the DEAF Trust to the DDTPACF was
required by SB 699 in order to give greater state oversight
and control of the surcharge revenues. This bill delays
the transfer in order to give the PUC additional time to
transition. If it is the intent of the author that the PUC
have authority to contract out for program administration
effective July 1, 20 03 , and that in the interim the DDTPA
Committee continue its administrative role, STAFF
RECOMMENDS that the bill be amended. Without an amendment,
the committee's role becomes advisory when the bill takes
effect. Absent a contract for administration, presumably
the PUC would administer the program.
As a result of the reduced workload of the TADDA Committee,
there are potential cost savings of $180,000 annually. It
is unknown whether the contract for administration would
result in costs of savings. However, any increased costs
should be recovered from surcharge revenues. There are
potential costs of $220,300 annually for PUC staff to
administer the contract and provide related legal counsel.
To the extent that the number of persons served increases
as a result of the outreach efforts, any increased costs
should be recovered by surcharge revenues. However, it is
noted that the current surcharge of .48% on all intrastate
telecommunications billings is relatively close to the
statutory cap of .50%.
STAFF NOTES that the bill contains a provision that allows
periodic advance payments of up to 25% of the total annual
contract amount, per payment, to be made to contractors.
According to PUC staff, one reason for this provision is to
establish a revolving fund for day-to-day costs.
The bill also contains a provision that relates to moneys
that were "borrowed" by the DEAF Trust from the California
High-Cost Fund B Trust for the purpose of providing
telecommunications services and equipment to deaf or
disabled persons. The $15 million loan was repaid on April
11, 2002.