BILL ANALYSIS
AB 1457
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Date of Hearing: April 9, 2003
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Darrell Steinberg, Chair
AB 1457 (Utilities and Commerce Committee) - As Introduced:
February 21, 2003
Policy Committee: Utilities and
Commerce Vote: 14-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill:
1)Appropriates $2.5 million from the California High Cost Fund-A
Administrative Committee Fund (CHCFA ACF) to the Public
Utilities Commission (PUC) to reimburse of small independent
telephone corporations serving rural and small metropolitan
areas for unpaid claims for June 2002.
2)Prohibits the PUC from raising any fee, charge or rate as a
result of the above reimbursements.
FISCAL EFFECT
One-time special fund cost of $2.5 million to provide the
reimbursements.
COMMENTS
1)Background . The CHCFA was established to advise the PUC on
the development, implementation and administration of a
program to make transfer payments to small independent
telephone corporations in order to provide fair and equitable
local exchange services in high-cost rural and small
metropolitan areas. Funding for this program was originally
under the control of the PUC, however, SB 669 (Polanco) -
Chapter 677, Statutes of 1999, established the CHCFA ACF-along
with separate funds for five other public purpose
telecommunication programs-within the State Treasury, and made
expenditure of those funds subject to the state budget
AB 1457
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process. Subsequently, a trailer bill to the 2001 Budget Act
[SB 742 (Escutia)] required the PUC, starting October 1, 2001,
to transfer all revenues collected henceforth and all
unexpended prior collections for these public purpose programs
from the PUC to the State Controller.
2)Purpose . This bill reimburses 17 small independent telephone
companies that receive payments through the CHCFA ACF and have
not been reimbursed by the PUC for their June 2002 claims.
This problem arose because the funds were previously
administered by the PUC on a cash accounting basis but, upon
transfer into the State Treasury, are now administered on an
accrual accounting basis. This change was not taken into
account when funding for the program was appropriated in the
2001 Budget Act, resulting in insufficient moneys available in
the fund to pay claims for the last month of that fiscal year.
Moreover, this problem was not identified in time to use the
deficiency process provided in Budget Control Section 27.
This bill is an urgency measure so that the companies can be
reimbursed at the earliest possible time. Further delay in
providing these funds will only increase interest charges on
the principal amount owed to these companies.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081