BILL ANALYSIS                                                                                                                                                                                                    



                                                          SB 669
                                                          Page  1

Date of Hearing:   September 1, 1999

              ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                    Carole Migden, Chairwoman

         SB 669 (Polanco) - As Amended: August 23, 1999 

Policy Committee:                              Utilities and  
Commerce     Vote:                             11-0
             Governmental Organization              12-3

Urgency:     No                   State Mandated Local  
Program:YesReimbursable:          No

  SUMMARY  :

This bill codifies six existing Public Utilities Commission  
(PUC) advisory boards and requires the PUC to administer the  
revenues used to fund the boards' activities.  Specifically,  
this bill:

1)Statutorily establishes the following six telecommunications  
  advisory boards and funds :

   a)   The California High-Cost Fund-A Administrative Committee  
     and Fund, designed to keep rates for rural telephone  
     companies low.
   b)   The California High-Cost Fund-B Administrative Committee  
     and Fund, designed to keep rates for rural customers low.
   c)   The Universal Lifeline Telephone Service Trust  
     Administrative Committee and Fund, designed to provide  
     low-cost telephone service to low-income households.
   d)   The Deaf and Disabled Telecommunications Program  
     Administrative Committee and Fund, designed to provide  
     discounted telephone service and equipment to the deaf and  
     disabled.
   e)   The Payphone Service Providers Committee and Fund,  
     designed to provide consumer protection to pay telephone  
     customers.
   f)   The California Teleconnect Fund Administrative Committee  
     and Fund, designed to fund advanced communications services  
     for schools, libraries, and community organizations.

2)Requires the PUC to conduct financial audits of the revenues  
  for each of the funds, and to conduct compliance audits of  








                                                          SB 669
                                                         Page  2

  each program.

  FISCAL EFFECT  :

The PUC estimates special fund costs of about $200,000 in  
1999-00 and $400,000 annually thereafter to administer the  
programs.

  COMMENTS  :

  Background and Purpose  .  The six advisory boards advise PUC  
regarding the implementation, development, and administration of  
the programs listed above, and carry out the programs subject to  
the PUC's direction, control, and approval.  These programs are  
funded by surcharges on intrastate telephone billings.  The PUC  
adopts an annual budget for each program and establishes the  
appropriate surcharge level.  Currently, moneys for each program  
are held in trust, deposited in checking accounts, and/or held  
by the telecommunications corporations until requested to submit  
moneys to the PUC.  The 1999 budgets for the six programs total  
about $750 million.  The Department of Finance and Attorney  
General's Office have expressed their preference that the  
funding for these six programs be kept with the state and that  
the advisory boards be codified.  

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