BILL ANALYSIS
AB 2758
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Date of Hearing: March 22, 2004
ASSEMBLY COMMITTEE ON UTILITIES AND COMMERCE
Sarah Reyes, Chair
AB 2758 (Berg) - As Introduced: February 20, 2004
SUBJECT : Telecommunications: grants to areas not served by
local exchange carriers.
SUMMARY : Changes the sunset date for a grant program
administered by the California Public Utilities Commission
(CPUC), funded out of an existing surcharge on telephone
services, to extend telecommunications services to specified low
income communities. Specifically, this bill extends the sunset
for the Rural Telecommunication Infrastructure Grant Program
from 2006 to 2008.
EXISTING LAW
1)Requires the PUC to develop, implement, and maintain a
suitable program to establish a fair and equitable local rate
structure for small independent telephone corporations serving
rural and small metropolitan areas to promote universal
telephone service and reduce any disparity in the rates
charged by companies.
2)Establishes the creation of the California High Cost Fund An
Administrative Committee and the California High Cost Fund B
Administrative Committee to advise PUC on progress providing
telephone services to high cost areas of the state.
3)Establishes a grant program of up to $10 million annually
administered by PUC, funded out of either or both the High
Cost Fund A and High Cost Fund B, to extend telecommunication
services to low income communities.
4)Requires that that the grant program pays for the facilities
to serve those remote, unserved communities as specified in
statute.
5)Requires that this program sunset on January 1, 2006.
FISCAL EFFECT : Unknown.
COMMENTS :
AB 2758
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Background: AB 140 Strom-Martin (Chapter 903, Statutes of 2001)
created the Rural Telecommunication Infrastructure Grant Program
administered by the PUC with a funding level capped at $10
million per year and specifies that only one grant per community
may be awarded and no grant my exceed the $2.5 million cap.
The program authorizes annual expenditures of up to $10 million
with the money being taking from either of two state programs
which subsidize the cost of telephone service, the California
High Cost Fund A and California High Cost Fund B. These
programs are funded by a surcharge on telephone bills.
The program is needs based in that median income of the
community to be served cannot exceed the top level used in the
Universal Lifeline Telephone Service Index. Grant applicants
must also seek federal resources.
The grants are awarded in two rounds before the program sunsets
in 2006. The first round is for 2003 through 2004 and the
second round is for 2004 through 2006.
Why does the program need an extension? According to the 2002
Supplemental Budget Report on Implementation of AB 140 the
program was slow to start as a result of the budget crisis.
Funding for the program's first year was eliminated in March
2002, and staff resources were reallocated to other active
project areas. When program funding was included in the
proposed budget for fiscal year 2003-04 staff resumed work on
the program. Currently, program staff is conducting another
round of statewide meetings to inform interested parties of the
grant program and application process since the commission
approved its rulemaking on September 18, 2003 (D. 03-09-071).
REGISTERED SUPPORT / OPPOSITION :
Support
None on File
Opposition
None on File
AB 2758
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Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083