BILL ANALYSIS
AB 1825
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Date of Hearing: March 10, 2000
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Carole Migden, Chairwoman
AB 1825 (Strom-Martin) - As Amended: May 1, 2000
Policy Committee: Utilities and
Commerce Vote: 9-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill:
1)Establishes a grant program within the California Teleconnect
Fund (CTF) to build telecommunications infrastructure in areas
currently without such service.
2)Requires a Rural Telecommunications Infrastructure Task Force,
in conjunction with the Public Utilities Commission (PUC), to
develop procedures for submitting grant proposals.
3)Requires the PUC to establish a government-industry work group
to develop technical criteria for evaluating grant proposals.
4)Limits the number of grants to five annually and sunsets the
program in January 2006.
5)Limits total grant funding to $10 million annually and caps
the portion of an authorized telephone surcharge that can be
used to fund the grant program.
FISCAL EFFECT
Annual $10 million special fund cost for five years.
COMMENTS
1)Background and Purpose . The CTF program is designed to provide
discounted basic telecommunications services to qualifying
schools, libraries, hospitals, and community-based
organizations. The CTF is funded by a surcharge on intrastate
AB 1825
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billings established by the PUC. The cap on this surcharge is
0.41%. The current surcharge has been reduced to only 0.05%,
however, because the fund has amassed a large reserve pending
PUC resolution of disputed payment requests.
A 1999 State Auditor report estimated 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. This bill is
intended to provide a funding mechanism to help defer some of
these high costs by allowing up to 0.06% of the authorized
0.41% CTF surcharge for a grant program to community-based
organizations in rural areas.
1)Related Legislation . AB 994 (Wright), which is in the Senate
Energy, Utilities and Commerce Committee, requires the Public
Utilities Commission to study the feasibility of establishing
rural telephone cooperatives in California
Analysis Prepared by : Chuck Nicol / APPR. / (916)319-2081