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.