BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1734| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 445-6614 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1734 Author: Assembly Utilities and Commerce Committee Amended: 5/13/02 in Senate Vote: 27 - Urgency SENATE ENERGY, U.&C. COMMITTEE : 8-0, 4/9/02 AYES: Bowen, Morrow, Alarcon, Battin, Murray, Sher, Vasconcellos, Vincent SENATE APPROPRIATIONS COMMITTEE : 8-0, 5/6/02 AYES: Alpert, Battin, Bowen, Johannessen, Johnson, Karnette, Perata, Poochigian ASSEMBLY FLOOR : Not relevant SUBJECT : Telecommunications services SOURCE : State Public Utilities Commission DIGEST : This bill makes changes to the Deaf and Disabled Telecommunications Program, within the State Public Utilities Commission. ANALYSIS : Current law establishes programs to enable and subsidize telecommunications service for the deaf, hearing impaired, and handicapped. The Deaf and Disabled Telecommunications Program (DDTP) was established about 20 years ago and provides telecommunications services to approximately 500,000 persons who are deaf, hearing impaired, or handicapped. It CONTINUED AB 1734 Page 2 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. The Deaf and Disabled Telecommunications Program Administrative Committee (DDTPAC) advises the State Public Utilities Commission (PUC) on the administration of this program. DDTPAC's budget is approximately $2.6 million. Current law establishes a fund in the state treasury to receive monies in support of this program and to disburse monies to pay for this program. The PUC is required to transfer funding for these programs from a PUC-administered account to this account by July 1, 2002. This bill authorizes the PUC, subject to annual appropriation of funds by the Legislature, to contract with others to operate the telecommunications programs for the deaf, hearing impaired, and handicapped, and makes supportive findings. This bill, commencing July 1, 2003, renames the DDTPAC as the Telecommunications Access for Deaf and Disabled Administrative Committee (TADDAC) and requires that not less than two-thirds of the committee membership be deaf or disabled. This bill specifies, commencing July 1, 2003, that any increased staffing costs incurred by the PUC for the oversight and administration of the program be funded by the Deaf and Disabled Telecommunications Program Administrative Committee Fund. This bill delays the transfer of program funds from the PUC to the TADDAC account in the treasury until July 1, 2003 by which time the TADDAC must develop a transition plan for program administration and governance and submit it to the PUC. This bill requires the PUC to employ staff overseeing the deaf and disabled telecommunications program who, to the AB 1734 Page 3 extent feasible and consistent with state civil service requirements, are members of the deaf and disabled community. Background Since the 1980's, the PUC has administered programs to assist the deaf and disabled in using telephone service. The programs provide specialized telecommunications equipment, discounted telephone rates, and a telecommunications translator service, known as a dual-party relay service, through which the deaf can communicate with others. Funding for these programs is provided by a surcharge on telecommunications service, which has been kept in accounts administered by the PUC. Aggregate program costs are about $50 million annually. These programs are currently contracted out, with the DDTPAC providing advice and program administration to the PUC. SB 669 (Polanco), Chapter 677, Statutes of 1999, was enacted to move this account, as well as all specially funded telecommunications accounts, from the PUC into the state treasury. The transfer of funds into the state treasury meant that fund administrators and programmatic employees could no longer be contracted out without legislative authorization, a restriction affecting 94 employees. Consequently, SB 669 also required the PUC to develop a plan to have the programs administered by state employees instead of being contracted out. The PUC's transition plan suggested three approaches to changing the current system: Option 1 makes the administrative and programmatic employees into PUC state employees. Option 2 obtains contracting out authority. Option 3 transfers the employees to another state agency serving the disabled. This bill chooses Option 2. AB 1734 Page 4 FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes Local: No Fiscal Impact (in thousands) Major Provisions 2002-03 2003-04 2004-05 Fund PUC staff for contract Potential increased costs of $220 Special* administration annually beginning 2003-04, offset by surcharge revenue Contract for admini- Unknown costs or savings. Any increased Special* stration costs should be offset by surcharge revenues TADDA Committee Potential cost savings of $185 annually, Special* beginning 2003-04 Funds transfer Delays, from July 1, 2002 to July 1, 2003, Special* the transfer of an unknown amount from the DEAF Trust to the DDTPACF *Deaf and Disabled Telecommunications Program Administrative Committee Fund (DDTPACF) SUPPORT : (Verified 5/14/02) State Public Utilities Commission (source) California Coalition of Agencies Serving Deaf and Hard of Hearing, Inc. Deaf Community Services of San Diego, Inc. Greater Los Angeles Council on Deafness, Inc. Office of Ratepayer Advocates Orange County Deaf Equal Access Foundation Self Help for Hard of Hearing People AB 1734 Page 5 6 individuals NC:cm 5/15/02 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****