BILL NUMBER: SB 1276 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 17, 2004
AMENDED IN ASSEMBLY JUNE 16, 2004
AMENDED IN ASSEMBLY JUNE 9, 2004
AMENDED IN SENATE APRIL 1, 2004
INTRODUCED BY Senator Bowen
(Coauthor: Assembly Member Firebaugh)
FEBRUARY 13, 2004
An act to amend Section Sections 270 and
739.3 of the Public Utilities Code, relating to
telecommunications , making an appropriation therefor, and
declaring the urgency thereof, to take effect immediately .
LEGISLATIVE COUNSEL'S DIGEST
SB 1276, as amended, Bowen. Telecommunications: telephone
service rates : universal service programs .
Existing law, the federal Telecommunications Act of 1996,
establishes a program of cooperative federalism for the regulation of
telecommunications to attain the goal of local competition, while
implementing specific, predictable, and sufficient federal and state
mechanisms to preserve and advance universal service, consistent with
certain universal service principles. The universal service
principles include the principle that consumers in all regions of the
nation, including low-income consumers and those in rural, insular,
and high cost areas, should have access to telecommunications and
information services, including interexchange services and advanced
telecommunications and information services, that are reasonably
comparable to those services provided in urban areas and that are
available at rates that are reasonably comparable to rates charged
for similar services in urban areas. The federal universal
service principles also include the principle that elementary and
secondary schools and classrooms, health care providers, and
libraries should have access to advanced telecommunications service.
The act authorizes states to adopt regulations not
inconsistent with Federal Communications Commission rules to preserve
and advance universal service. The act requires that every
telecommunications carrier that provides intrastate
telecommunications services contribute, on an equitable and
nondiscriminatory basis, in a manner determined by the state, to the
preservation and advancement of universal service in that state. The
act authorizes each state to adopt regulations to provide for
additional definitions and standards to preserve and advance
universal service within the state, only to the extent that they
adopt additional specific, predictable, and sufficient mechanisms
that do not rely on or burden federal universal service support
mechanisms.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Existing law authorizes the commission to fix just and reasonable
rates and charges. Existing law establishes the California
High-Cost Fund-A Administrative Committee Fund, the California
High-Cost Fund-B Administrative Committee Fund, the Universal
Lifeline Telephone Service Trust Administrative Committee Fund, the
Deaf and Disabled Telecommunications Program Administrative Committee
Fund, the Payphone Service Providers Committee Fund, and the
California Teleconnect Fund Administrative Committee Fund in the
State Treasury and requires that the moneys in the funds be expended
only to accomplish specified telecommunications universal service
programs, upon appropriation in the annual Budget Act.
This bill would provide that moneys in the funds are the proceeds
of rates and are held in trust for the benefit of ratepayers and to
compensate telephone corporations for their costs of providing
universal service. The bill would require that the moneys in the
funds be expended only to accomplish specified telecommunications
universal service programs, upon appropriation in the annual Budget
Act or upon supplemental appropriation.
Existing law, until January 1, 2005, requires the commission
to develop, implement, and maintain a program to establish a fair
and equitable local rate structure designed to reduce any disparity
in rates charged by small independent telephone corporations serving
rural and small metropolitan areas, and a competitively neutral, and
broadbased program to provide for transfer payments to telephone
corporations serving areas where the cost of providing services
exceeds rates charged by providers, as determined by the commission.
Pursuant to this requirement, the commission has imposed a surcharge
to intrastate telephone service to fund the transfer payments
funded through the California High-Cost Fund-A Administrative
Committee Fund and the California High-Cost Fund-B Administrative
Committee Fund .
This bill would extend this program these
programs until January 1, 2009. By extending the
program, the bill would result in a change in state taxes for the
purpose of increasing state revenues within the meaning of Section 3
of Article XIII A of the California Constitution, and thus would
require for passage the approval of2/3 of the membership of each
house of the Legislature The bill would make other
technical changes and would require the commission to structure the
programs so that any charge imposed to promote the goals of universal
service reasonably equals the value of the benefits of universal
service .
The bill would require the commission by January 1, 2006, to
conduct a review of the program, as extended by the bill, for the
establishment of a fair and equitable local telephone rate support
structure, and a review of the California High-Cost Fund-B
Administrative Committee Fund, to accomplish an adjustment of subsidy
payments to reflect updated operating costs and an evaluation of
whether subsidy levels can be reduced while maintaining the goals of
the program.
Existing law establishes the California Teleconnect Fund
Administrative Committee to advise the Public Utilities Commission
regarding the development, implementation, and administration of a
program to advance universal service by providing discounted rates to
qualifying schools, libraries, hospitals, health clinics, and
community organizations, funded through the California Teleconnect
Fund Administrative Committee Fund.
This bill would appropriate $17,974,000 from the California
Teleconnect Fund Administrative Committee Fund to the commission for
the purpose of transferring funds to telephone corporations providing
discounted rates to qualifying schools, libraries, hospitals, health
clinics, and community organizations and authorized to receive these
funds.
The bill would declare that it is to take effect immediately as an
urgency statute.
Vote: 2/3. Appropriation: no yes
. Fiscal committee: yes. State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 270 of the Public Utilities Code, as
amended by Section 1 of Chapter 903 of the Statutes of 2001, is
amended to read:
270. (a) The following funds are hereby created in the State
Treasury:
(1) The California High-Cost Fund-A Administrative Committee Fund.
(2) The California High-Cost Fund-B Administrative Committee Fund.
(3) The Universal Lifeline Telephone Service Trust Administrative
Committee Fund.
(4) The Deaf and Disabled Telecommunications Program
Administrative Committee Fund.
(5) The Payphone Service Providers Committee Fund.
(6) The California Teleconnect Fund Administrative Committee Fund.
(b) Moneys in the funds are the proceeds of rates and are
held in trust for the benefit of ratepayers and to compensate
telephone corporations for their costs of providing universal
service. Moneys in the funds may only be expended pursuant to
this chapter and upon appropriation in the annual Budget Act or
upon supplemental appropriation . Any appropriation from the
California High-Cost Administrative Committee Fund-B for the purposes
of the grant program established in Section 276.5 of the Public
Utilities Code regarding rural telecommunications infrastructure, may
not be made until all of the following events have occurred:
(1) The United States Supreme Court has decided Iowa Utilities
Board v. Federal Communications Commission (219 F.3d 744 (8th Cir.);
certiorari granted January 22, 2001).
(2) The commission recalculates the statewide average cost to
serve a residential line stated in Decision 96-10-066, as it
determines to be appropriate.
(3) The commission is current on all claims made by carriers for
service provided in high-cost areas, except for those claims that the
commission is in the process of investigating, contesting, or
disallowing.
(c) Moneys in each fund may not be appropriated, or in any other
manner transferred or otherwise diverted, to any other fund or
entity, except as provided for in Sections 276 and 276.5.
(d) This section shall remain in effect only until January 1, 2006,
and as of that date is repealed, unless a later enacted statute,
that is enacted before January 1, 2006, deletes or extends that date.
SEC. 2. Section 270 of the Public Utilities Code, as added by
Section 2 of Chapter 903 of the Statutes of 2001, is amended to read:
270. (a) The following funds are hereby created in the State
Treasury:
(1) The California High-Cost Fund-A Administrative Committee Fund.
(2) The California High-Cost Fund-B Administrative Committee Fund.
(3) The Universal Lifeline Telephone Service Trust Administrative
Committee Fund.
(4) The Deaf and Disabled Telecommunications Program
Administrative Committee Fund.
(5) The Payphone Service Providers Committee Fund.
(6) The California Teleconnect Fund Administrative Committee Fund.
(b) Moneys in the funds are the proceeds of rates and are
held in trust for the benefit of ratepayers and to compensate
telephone corporations for their costs of providing universal
service. Moneys in the funds may only be expended pursuant to
this chapter and upon appropriation in the annual Budget Act or
upon supplemental appropriation .
(c) Moneys in each fund may not be appropriated, or in any other
manner transferred or otherwise diverted, to any other fund or
entity.
(d) This section shall become operative on January 1, 2006.
SEC. 3. Section 739.3 of the Public Utilities Code is
amended to read:
739.3. (a) The commission shall develop, implement, and maintain
a suitable program to establish a fair and equitable local rate
structure aided by transfer payments
universal service rate support to small independent telephone
corporations serving rural and small metropolitan areas. The purpose
of the program shall be to promote the goals of universal telephone
service and to reduce any disparity in the rates charged by those
companies.
(b) For purposes of this section, small independent telephone
corporations means those independent telephone corporations serving
rural areas, as determined by the commission.
(c) The commission shall develop, implement, and maintain a
suitable, competitively neutral, and broadbased program to establish
a fair and equitable local rate support structure aided by
transfer payments universal service rate support
to telephone corporations serving areas where the cost of providing
services exceeds rates charged by providers, as determined by the
commission. The commission shall develop and implement the program
on or before October 1, 1996. The purpose of the program shall be to
promote the goals of universal telephone service and to reduce any
disparity in the rates charged by those companies. The
commission shall structure the program required by this subdivision
so that the amount of each transfer payment reasonably equals the
value of the benefits of universal service to the transferor entity
and its subscribers. Except as otherwise explicitly
provided, this subdivision does not limit the manner in which the
commission collects and disburses funds, and does not limit the
manner in which it may include or exclude the revenue of
transferring contributing entities in
structuring the program.
(d) The commission shall structure the programs required by
this section so that any charge imposed to promote the goals of
universal service reasonably equals the value of the benefits of
universal service to contributing entities and their subscribers.
(e) The commission shall investigate subsidy
reduction reducing the level of universal service rate
support , or elimination of subsidies
universal service rate support in service areas with
demonstrated competition.
(e) Not later than February 1, 2001, the Legislative Analyst shall
conduct a review of the state's universal telephone service program,
including subsequent modifications as appropriate, and report to the
Governor and the Legislature as part of the Legislative Analyst's
analysis of the Budget Bill to be issued in February 2001. In
evaluating the program, the Legislative Analyst shall consider all of
the following:
(1) The findings of the report required by subdivision (e).
(2) An assessment of whether any identified problems are issues
that affect the continued implementation of this chapter or issues
that warrant revisions of statutes or regulations.
(f) This section shall remain in effect until January 1, 2009, and
as of that date is repealed, unless a later enacted statute that
becomes effective on or before January 1, 2009, deletes or extends
that date.
SEC. 2.
SEC. 4. The Public Utilities Commission shall, by January 1,
2006, conduct a review of the program established pursuant to
subdivision (c) of Section 739.3 of the Public Utilities Code and of
the California High-Cost Fund-B Administrative Committee Fund, to
accomplish both of the following:
(a) Adjust subsidy universal service rate
support payments to reflect updated operating costs.
(b) Evaluate whether subsidy universal
service rate support levels can be reduced while still meeting
the goals of this program.
SEC. 5. There is hereby appropriated from the California
Teleconnect Fund Administrative Committee Fund to the Public
Utilities Commission, seventeen million nine hundred seventy-four
thousand dollars ($17,974,000) for the purpose of transferring funds
to telephone corporations providing discounted rates to qualifying
schools, libraries, hospitals, health clinics, and community
organizations and authorized to receive these funds pursuant to
Chapter 1.5 (commencing with Section 270) of Part 1 of Division 1.
SEC. 6. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
The authority to expend money from the California Teleconnect Fund
Administrative Committee Fund was deleted from the Budget Act for
fiscal year 2004-05. The California Teleconnect Fund Administrative
Committee Fund provides funding to compensate telephone corporations
for providing service at discounted rates to qualifying schools,
libraries, hospitals, health clinics, and community organizations.
In order to provide sufficient revenues for the telephone
corporations authorized to receive these funds pursuant to Chapter
1.5 (commencing with Section 270) of Part 1 of Division 1 of the
Public Utilities Code, so that those telephone corporations may
continue to provide teleconnect services, it is necessary that this
act take effect immediately.