BILL ANALYSIS
AB 2758
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CONCURRENCE IN SENATE AMENDMENTS
AB 2758 (Berg)
As Amended June 30, 2004
Majority vote
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|ASSEMBLY: |78-0 |(May 25, 2004) |SENATE: |31-2 |(August 19, |
| | | | | |2004) |
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Original Committee Reference: U. & C.
SUMMARY :
1)Extends the sunset date to 2009 for the Rural
Telecommunication Infrastructure Grant Program (RTIG), AB 140
(Strom-Martin), Chapter 903, Statutes of 2001, administered by
the California Public Utilities Commission (PUC), funded out
of an existing surcharge on telephone services, to extend
telecommunications services to specified low income
communities.
2)Specifies that this bill would become inoperative if SB 1276
(Bowen) were not enacted.
The Senate amendments extend the grant date from 2008 to 2009
and specifies that this bill would become inoperative if SB 1276
were not enacted.
AS PASSED BY THE ASSEMBLY , this bill extended the sunset date
from 2006 to 2008 for RTIG, administered by PUC, funded out of
an existing surcharge on telephone services, to extend
telecommunications services to specified low income communities.
FISCAL EFFECT : According to Senate Appropriations Committee
analysis, there could be annual special fund costs of $10
million for the RTIG program and annual PUC administrative costs
of $200,000.
COMMENTS :
The Senate amendments require that this bill is contingent upon
the enactment of SB 1276 that reestablishes the High Cost Fund A
(HCFA) and High Cost Fund B (HCFB) programs at PUC. Under
existing law HCFA and HCFB authorize PUC to collect surcharges
AB 2758
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on customers monthly bills to support affordable basic phone
service in high cost areas. RTIG draws its support from the
surcharge collected for HCFB program and if they were to go away
then the funding stream for RTIG would no longer exist.
Furthermore, this bill extends the sunset date of the program by
one year.
Background: AB 140 (Strom-Martin), Chapter 903, Statutes of
2001 created the Rural Telecommunication Infrastructure Grant
Program administered by 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).
Analysis Prepared by : Daniel Kim / U. & C. / (916) 319-2083
AB 2758
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FN: 0007709