BILL ANALYSIS
AB 1457
Page 1
ASSEMBLY THIRD READING
AB 1457 (Utilities and Commerce Committee)
As Amended February 21, 2003
2/3 vote. Urgency
UTILITIES AND COMMERCE 14-0 APPROPRIATIONS 24-0
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|Ayes:|Reyes, Richman, Calderon, |Ayes:|Steinberg, Bates, Berg, |
| |Campbell, Canciamilla, | |Calderon, Corbett, Chu, |
| |Diaz, Longville, La | |Daucher, Diaz, Firebaugh, |
| |Malfa, La Suer, Levine, | |Goldberg, Haynes, Leno, |
| |Maddox, Nunez, | |Maldonado, Nation, |
| |Ridley-Thomas, Wolk | |Negrete McLeod, Nunez, |
| | | |Pacheco, Pavley, |
| | | |Ridley-Thomas, Runner, |
| | | |Samuelian, Simitian, |
| | | |Laird, Yee |
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SUMMARY : Authorizes and appropriates from the California High
Cost Fund-A Administrative Committee Fund (CHCFA ACF), 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 $2.5 million from CHCFA ACF 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 fiscal year (FY) 2001-02.
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.
AB 1457
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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 CHCFA 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.
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 : One-time special fund cost of $2.5 million to
provide the reimbursements.
COMMENTS : This bill reimburses 17 small independent telephone
companies that receive payments through CHCFA ACF and have not
been reimbursed by PUC for their June 2002 claims. This problem
arose because the funds were previously administered by 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 FY. 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.
This bill as amended in Assembly Appropriations makes clarifying
technical amendments.
Previous legislation: SB 487 (Costa) of 2001-02 would have
appropriated $3.1 million from CHCFA ACF to PUC for the purpose
of paying past HCFA claims payments owed to the carriers. SB
487 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.
AB 1457
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Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
FN: 0000479