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
                       Consumer Protection                    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