BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                           1457 (Reyes)
          
          Hearing Date:  7/14/03          Amended: 6/17/03       
          Consultant:  Lisa Matocq            Policy Vote: E, U & C  
          6-0                      
          ____________________________________________________________ 
          ___
          BILL SUMMARY: 
          
          AB 1457, an urgency measure, appropriates $2.5 million from  
          the California High-Cost Fund-A Administrative Committee  
          Fund (High-Cost A) to the Public Utilities Commission  
          (PUC), in order to pay subsidies to small independent  
          telephone companies serving high-cost rural areas for  
          2001-02, as specified. 

                              Fiscal Impact (in thousands)
           
          Major Provisions                 2003-04           2004-05              
           2005-06               Fund  
          
          Appropriation               $2,500*  --                       --      
                     Special*

          *Appropriated in the bill from the High-Cost A Fund, and approved by  
          Budget Conference Committee.   
          
          STAFF COMMENTS:  This bill meets the criteria for referral  
          to the Suspense File. 

          Under current law, small, independent telephone companies  
          serving rural and small metropolitan areas in higher-cost  
          areas are eligible to receive a subsidy from the PUC.  The  
          subsidies are funded with revenues derived from a surcharge  
          imposed on all telephone bills. 

          Apparently, due to a change in accounting methods, from  
          cash to accrual, the PUC miscalculated the amount of  
          subsidies for fiscal year 2001-02. This bill appropriates  
          $2.5 million to pay the unpaid subsidies. 

          The Budget Conference Committee approved a $2.5 million  
          appropriation for this same purpose.  The bill contains  
          contingency language that should the Budget Act of 2003  










          include an appropriation for the same amount, Section 1 of  
          the bill shall be inoperative.