BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           855 (Firebaugh)
          
          Hearing Date:  8/18/03          Amended: 8/18/03       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          6-0
                                                                       
                                         G. O.  8-1    
            
          _______________________________________________________________
          BILL SUMMARY:  AB 855, an urgency measure, requires that  
          15% of the revenues derived from new leases of state-owned  
          property to wireless telecommunications providers be  
          redirected from the General Fund to a separate account,  
          administered by the Public Utilities Commission (PUC), for  
          the purpose of funding a "Digital Divide" grant program, as  
          specified. 

                              Fiscal Impact (in thousands)
           Major Provisions            2003-04             2004-05              
           2005-06            Fund
           
          DGS inventory list          Unknown costs, probably not substantial   
                General
          Lease revenues/            Unknown loss of revenues to the General    
              General/
          Digital Divide program   Fund, potentially $270 annually. Funds       
                Special*
                                are to be redirected to grant program.
          PUC Digital Divide         Unknown, potentially $100-200 annually     
                Unknown 
            Administration
           
          *California Teleconnect Fund Administrative Committee Fund
           
          STAFF COMMENTS:  This bill meets the criteria for referral  
          to the Suspense File.  "Digital Divide" refers to the  
          disparity among Californians who own a home computer and  
          have Internet access and training, and those who do not.  
           
          Under current law, DGS is authorized to lease state-owned  
          property to various entities.  Each year, DGS collects  
          about $1 million in lease revenues from 299 wireless  
          telecommunications providers. The 15% of lease revenues  
          redirected from the General Fund to the new Digital Divide  










          Account within the California Teleconnect Fund are to be  
          used, upon appropriation by the Legislature, to fund a  
          community technology grant program to bridge the Digital  
          Divide.  The bill specifies that the PUC may not implement  
          the grant program until at least $200,000 has been  
          deposited into the Digital Divide Account.  According to  
          background information of a similar bill, AB 468  
          (Firebaugh) of 2002, there is an identified need for at  
          least 900 facilities in the next year with each lease  
          averaging approximately $2,000.  Therefore, the shift of  
          funds could be $270,000 annually.  Increased costs to the  
          PUC for administratiion could be $100,000 to $200,000  
          annually assuming 1-2 new positions.  

          DGS currently maintains the State Property Inventory (SPI),  
          which is a public document.  This bill requires DGS to  
          compile, within 120 days of the effective date of the bill,  
          and maintain an inventory of state-owned property that may  
          be available for lease to wireless telecommunications  
          providers.  This implies that DGS would be required to  
          compile a separate and tailored list for the wireless 

          Page Two

          telecommunications industry, and could set a precedent for  
          other industries to request such an inventory list.  The  
          bill requires DGS to make the list available upon request,  
          in a cost-effective manner. 

          STAFF RECOMMENDS that the bill be amended to:

          (1)clarify that DGS may charge a fee sufficient to cover  
            its costs of compiling and maintain the inventory list  
            for the telecommunications industry, 
          (2)specify that the PUC's administrative costs are to be  
            funded from the lease revenues, and 
          (3)clarify whether the PUC or the California Teleconnect  
            Fund Administrative Committee is responsible for  
            administering the universal service program. 

          AB 468 (Firebaugh) of 2002, which passed off this  
          Committee's Suspense File, was similar to this bill and was  
          vetoed by the Governor.  In his veto message, Governor  
          Davis expressed concern over (1) exempting from local land  
          use review the location of telecommunications facilities,  
          and (2) the transfer of revenues from the General Fund  










          given the state's fiscal situation.  AB 1150 (Firebaugh) of  
          2002 was also similar to this bill and died in the Assembly  
          Appropriations Committee.