BILL ANALYSIS Appropriations Committee Fiscal Summary 855 (Firebaugh) Hearing Date: 8/28/03 Amended: 8/18/03 and proposed to be amended 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 $14 in 2003-04 and increas- Special* ing to $154 by 2008-09, redirected to grant program PUC Digital Divide Unknown, potentially $100-200 annually Unknown *California Teleconnect Fund Administrative Committee Fund STAFF COMMENTS: 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. In 2002-03, DGS collected approximately $1.25 million in lease revenues from 312 wireless telecommunications providers (average annual lease is $4006). 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. Future lease revenues are indeterminable. However, over the past year, 13 new leases were negotiated. Assuming an avg. annual lease of $4,006, a similar number of new leases in future years, and 75% of current leases are renegotiated as new leases as they expire, the amount of redirected General Fund revenues could be $14,000 in 2003-04, increasing annually to about $154,000 by 2008-09. Increased costs to the PUC for admin. could be $100,000-200,000 annually assuming 1-2 new positions. Page Two 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. It is unclear whether DGS would be required to compile a separate list for wireless providers. The bill requires DGS to make the list available upon request, in a cost-effective manner. 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. Amend to clarify that DGS shall provide, upon request and payment of any applicable fee, the State Property Inventory list, and specify that the PUC's administrative costs are to be funded from the lease revenues.