BILL ANALYSIS                                                                                                                                                                                                    




                    Appropriations Committee Fiscal Summary
          
                                      AB 1825 (Strom-Martin)
          
          Hearing Date:  8/14/00                      Amended: 8/8/00
          Consultant:  Bob Franzoia      Policy Vote: E, U&C  7-1
          ____________________________________________________________ 
          ___
          BILL SUMMARY: AB 1825 would require the Public Utilities  
          Commission (PUC), until 1/1/06, to establish a grant  
          program for the construction of telecommunications  
          infrastructure as follows:
          1)provide that corporations receiving transfer payments  
            shall continue to be fully reimbursed for the costs they  
            are entitled to recover.
          2)Fund the grant program from the California High-Cost  
            Fund-A Administrative Committee Fund (CHCF-A) or the  
            California High-Cost Fund-B Administrative Committee Fund  
            (CHCF-B) up to a specified annual limit, as determined by  
            the PUC.
          3)Require the PUC to award grants.
          4)Require the PUC to establish a working group to develop  
            technical criteria for evaluating the grants.
          The provisions of the bill would sunset on 1/1/06.

                              Fiscal Impact (in thousands)
           
          Major Provisions                     2000-01       2001-02   2002-03         
               Fund  
          
          Telecommunications $10,000 annually until 1/1/06  Special
          infrastructure grants                                         
          
          STAFF COMMENTS: This bill meets the criteria to be placed  
          on the Suspense file.

          The bill would provide that any community-based group  
          representing a qualifying community may apply for a grant  
          to build an original telecommunications infrastructure  
          service that can provide basic telecommunications services.  
           Grants are need-based in that the median income of the  
          community to be served cannot exceed the level used to  
          determine Universal Lifeline Telephone Service eligibility,  
          which is 150 percent of the federal poverty level.

          The CHCF-B, which is funded with a 2.6 percent surcharge on  










          all intrastate telephone service provides $500 million  
          annually to subsidize local telephone service rates for  
          roughly four million customers at an average of $125 per  
          customer, per year.  The bill provides that the funding  
          must come from existing monies in the funds and may not  
          result in an increase in the surcharge rate.  The CHCF-B  
          collects the surcharge from the largest telephone  
          companies, while the CHCF-A collects from the smallest  
          companies.