BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 994
                                                                  Page  1

          Date of Hearing:   January 19, 2000

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                              Carole Migden, Chairwoman

                   AB 994 (Wright) - As Amended:  January 14, 2000 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            9-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:               

           SUMMARY  

          This bill requires the Public Utilities Commission to study the  
          feasibility of establishing rural telephone cooperatives in  
          California and report to the governor and the Legislature by  
          January 2002.

           FISCAL EFFECT  

          The PUC estimates one-time special fund costs of about $100,000  
          (1.25 positions) to complete the study.

           COMMENTS  

           Purpose  .  The author has proposed this bill in response to a  
          State Auditor report estimating that 112,000 people in  
          California (three percent of the state's rural population) live  
          in areas where traditional telephone service is not available.  
          The main obstacle to telephone service in these areas is the  
          high cost of installing telephone lines and poles that must in  
          part be borne by households.  Rural cooperatives are  
          consumer-owned businesses in which members purchase shares in  
          the business to provide capital for facilities such as telephone  
          lines and poles. Cooperatives are eligible for low-interest  
          loans from federal programs such as the Rural Utilities Service  
          Telecommunications Program.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916)319-2081