BILL ANALYSIS
Appropriations Committee Fiscal Summary
AB 1825 (Strom-Martin)
Hearing Date: 8/23/00 Amended: 8/8/00
Consultant: Bob Franzoia Policy Vote: E,U&C 7-1
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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: 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
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-A collects a 0.27 percent surcharge to provide
universal service subsidy support in small and rural areas
served by 17 small local exchange telephone companies.
Costs for 2000 will be funded from reserves.
The CHCF-B, which was funded in 1999 with a 3.8 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 CHCF-B collects the surcharge
to provide universal service subsidy support in the high
cost areas of the service territories of Pacific Bell and
other large telephone companies. The PUC is considering
reducing the surcharge to 2.6 percent for 2000. The fund
has reserves of $154.5 million.