BILL ANALYSIS
Appropriations Committee Fiscal Summary
2172 (Levine)
Hearing Date: 8/12/04 Amended: 7/19/04
Consultant: Lisa Matocq Policy Vote: E, U & C
6-3
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BILL SUMMARY: AB 2172 makes numerous changes to statutes
governing the leases and leases revenues of state-owned
property, managed by Department of General Services (DGS),
to wireless telecommunications providers as they relate to
the "Digital Divide".
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Fiscal Impact (in thousands)
Major Provisions 2004-05 2005-06
2006-07 Fund
Telecommunication Revenue shift of potentially $180
annually General/
leases from the General Fund
and various special Special
funds to the Digital Divide Account
PUC admin. costs Potential cost shift -
see comments below Special*
*Digital Divide Account and California Teleconnect Fund
Administrative Committee Fund.
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STAFF COMMENTS: SUSPENSE FILE.
AB 855 (Firebaugh and Levine, Ch. 820, St. of 2003)
required that, except for Department of Transportation
(DOT) leases, 15% of the revenues derived from new leases
of state-owned property to wireless telecommunications
providers be deposited into the newly-created Digital
Divide Account (rather than the General Fund and various
special funds). The Account is administered by the Public
Utilities Commission (PUC) for the purpose of funding,
subject to appropriation by the Legislature, community
technology grants to bridge the "Digital Divide". "Digital
Divide" refers to the disparity among Californians who own
a home computer and have Internet access and training, and
those who do not. Current law specifies that not more than
5% of revenues in the Account may be used for the PUC's
administrative costs.
This bill:
(1) extends the application of AB 855 to all
leases of department-managed and state-owned property,
including renewals,
(2) eliminates the DOT exemption mentioned above,
(3) eliminates the requirement that the
Legislature appropriate the funds,
(4) requires DGS to obtain the approval of the
Department of Water Resources (DWR) or the Reclamation
Board (Board), whichever is appropriate, before entering
into a telecommunications lease involving property that
is part of the
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(5) State Water Resources Development System, or
the Sacramento River and San Joaquin River flood control
system. The bill also excludes such leases from the
provision of current law that requires 15% of lease
revenues to be redirected to the Digital Divide Account.
It also requires DGS to charge the applicant a fee to
cover DWR's and the Board's related costs, and
(6) authorizes the PUC to use funds from the
California Teleconnect Fund Administrative Committee Fund
to cover its administrative costs.
Staff notes that the author may wish to consider amending
the bill to (1) restore the DOT exemption, which according
to the author's staff was inadvertently deleted, and (2)
clarify the funding source for the PUC's administrative
costs (the Digital Divide Account or the California
Teleconnect Fund Administrative Committee Fund).
The state currently receives about $1.2 million annually in
revenues from 300+ leases with telecommunications
providers. Thus, extending application of the 15%
redirection of revenues to the Digital Divide Account could
result in a revenue shift of about $180,000 annually from
the General Fund and various special funds to the Digital
Divide Account.
Governor Davis issued a signing message regarding AB 855.
In it, he stated, among other things, that the bill was
expected to generate an additional $20-40 million in lease
revenues for the state. He added, "I am signing AB 855
contingent upon the authors pursuing clean-up legislation
in January 2004?The authors have agreed that the clean-up
legislation will clarify: 1) DGS will not enter into a
lease of state property without the approval of the state
entity that has control over the property; and 2) that if a
wireless telecommunication facility is sited on land
purchased with money from a continuously appropriated
special fund, all revenue generated from the lease shall be
deposited into that special fund" (rather than depositing
15% into the Digital Divide Account). Staff notes that
although prior versions of this bill contained the special
fund exemption, the current version, with the exception of
the DWR provisions, does not.
Since enactment of AB 855, only five new DGS leases have
been negotiated totaling $1,590 in annual lease revenues.