BILL ANALYSIS
AB 1457
Page 1
Date of Hearing: April 1, 2003
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 1457 (Utilities and Commerce Committee) - As Introduced:
February 21, 2003
SUBJECT : Telecommunications: High-Cost Fund-A.
SUMMARY : Authorizes and appropriates from the California High
Cost Fund-A Administrative Committee Fund (HCFA), in the State
Treasury, to the California Public Utilities Commission (PUC)
for payments to small independent telephone corporations serving
rural and small metropolitan areas. Specifically, this bill :
1)Appropriates $2,500,000 from the California High Cost Fund-A
Administrative Committee Fund (CHCFA ACF), in the State
Treasury, to PUC for the purpose of reimbursing small
independent telephone corporations serving rural and small
metropolitan areas for previously unpaid claims. The unpaid
claims are for the month of June in the 2001-02 fiscal year.
2)Prohibits PUC from raising any fee, charge or rate as a result
of reimbursing small independent telephone corporations
serving rural and small metropolitan areas for unpaid claims
owed.
EXISTING LAW :
1)Requires PUC to develop, implement and maintain a suitable
program to establish a fair and equitable local rate structure
aided by transfer payments to small independent telephone
corporations serving rural and small metropolitan areas.
2)Requires PUC to create a program to promote goals of universal
service and to reduce any disparity in the rates charged by
those companies serving rural and small metropolitan areas.
3)Establishes the California High-Cost-Fund-A Administrative
Committee to advise PUC on the development, implementation and
administration of a program to create transfer payments to
small independent telephone corporations providing fair and
equitable local exchange services in high-cost rural and small
metropolitan areas.
AB 1457
Page 2
4)Establishes CHCFA ACF in the State Treasury in which funds can
only be expended pursuant to an appropriation in the annual
Budget Act.
FISCAL EFFECT : Unknown.
COMMENTS : Seventeen small independent telephone companies that
receive transfer payments through HCFA have not been reimbursed
by PUC for their June 2001-02 claims because of an error by PUC
in calculating how much was owed to these companies. The
balance owed to these telephone companies is $2.5 million.
According to PUC they tried to resolve the past unpaid claims
payments administratively, but the Department of Finance
informed them that they would need authorization from the
Legislature in order to have the Controller issue payments to
the telephone corporations.
Furthermore, PUC states that the payment of these past claims
will not result in a surcharge increase since it had already
expected to pay them in the prior year budget.
Previous legislation :
SB 487 (Costa) from the 2001-02 legislative year would have
appropriated $3.1 million from the California High Cost Fund A
to PUC for the purpose of paying past HCFA claims payments owed
to the carriers. The bill was completely gutted and amended
during the last week of session and was unable to get a hearing
before the constitutional deadline for session to adjourn and as
a result died in the Assembly.
REGISTERED SUPPORT / OPPOSITION :
Support
California Telephone Association
Kerman Telephone Company
Opposition
None on file.
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
AB 1457
Page 3