BILL ANALYSIS
AB 1012
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Date of Hearing: May 20, 2009
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Kevin De Leon, Chair
AB 1012 (V. Manuel Perez) - As Amended: May 5, 2009
Policy Committee:
UtilitiesVote:14-0
Urgency: Yes State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Public Utilities Commission (PUC) to
administer monies received by the state, pursuant to the
American Recovery and Reinvestment Act (ARRA), for
broadband-related activities. The commission is to meet within
30 days of the effective date of this bill to develop a strategy
to expedite accessing ARRA funds, and to submit this strategy to
the Legislature within 60 days of its first meeting pursuant to
these requirements.
FISCAL EFFECT
The PUC anticipates costs of $770,000 for at least two years to
administer and monitor ARRA funds received by the state for six
full-time positions and part-time legal support. These
administrative costs would presumably be an allowable
expenditure of the federal ARRA monies provided to California.
COMMENTS
1)Purpose . According to the author's office, this bill is
intended to ensure that California is proactively engaged in
new federal broadband programs and able to secure the state's
fair share of ARRA funding for the development and/or
expansion of broadband infrastructure. Since all grant awards
are to be made by the end of September 30, 2010, and grants
are to be completed within two years of their approval, the
strategy required in this bill should be developed as soon as
possible, thus the bill includes an urgency clause. In
designating the PUC as the state agency to access and
administer ARRA broadband funds, the bill is consistent with a
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recommendation of the Legislative Analyst's Office in its
March report on the ARRA.
2)ARRA Broadband Funding : The $787 billion ARRA includes two
sources of broadband funding:
a) The Broadband Technology Opportunities Program (BTOP)
provides $4.4 billion in competitive grants, and contains
several set-asides, including $250 million for innovative
programs to encourage sustainable development of broadband
services, $200 million to upgrade technology and capacity
at public computing centers, and $350 million for to
support efforts to ensure access to affordable broadband.
Priority for grants is given to states that can provide
matching funds and there must be a single, centralized
agency that applies on behalf of all grant recipients under
this program.
b) The Distance Learning, Telemedicine, and Broadband
Program is a $2.5 billion competitive grant program aimed
at building broadband infrastructure in rural areas that do
not have sufficient access to high-speed broadband service.
Priority for grants is given to projects that will deliver
end-users a choice of more than one service provider and
provide service to the highest proportion of rural
residents that do not have access to broadband.
3)Existing State Broadband Programs . Two existing programs that
are tasked with advancing broadband in California:
a) The California Advanced Service Fund (CASF) is a
two-year program administered by the PUC and authorized by
SB 1193 (Padilla)/Chapter 393 of 2008. CASF provides grants
to telephone corporations to provide broadband services to
areas currently lacking such and to build out facilities in
underserved areas if funds are still available. Funding is
generated by an end-user surcharge billed and collected by
telecommunications carriers. The total CASF allocation is
$100 million, and the program has already allocated over $9
million in broadband infrastructure grants.
b) The California Emerging Technology Fund (CETF) is a
non-profit corporation established pursuant to requirements
from the PUC in approving the mergers of SBC-AT&T and
Verizon-MCI. The merged companies were required to
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contribute a total of $60 million over 5 years to advance
broadband.
Analysis Prepared by : Chuck Nicol / APPR. / (916) 319-2081