BILL NUMBER: SB 1040 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JUNE 10, 2010
AMENDED IN SENATE APRIL 27, 2010
AMENDED IN SENATE APRIL 13, 2010
INTRODUCED BY Senator Padilla
FEBRUARY 12, 2010
An act to amend Section 281 of the Public Utilities Code, relating
to telecommunications, and declaring the urgency thereof, to take
effect immediately.
LEGISLATIVE COUNSEL'S DIGEST
SB 1040, as amended, Padilla. Telecommunications universal service
programs: California Advanced Services Fund.
The existing federal Telecommunications Act of 1996 establishes a
program for the regulation of telecommunications to attain the goal
of local competition, while implementing specific, predictable, and
sufficient federal and state mechanisms to preserve and advance
universal service, consistent with certain universal service
principles. The universal service principles include the principle
that consumers in all regions of the nation, including low-income
consumers and those in rural, insular, and high-cost areas, should
have access to telecommunications and information services, including
interexchange services and advanced telecommunications and
information services, that are reasonably comparable to those
services provided in urban areas and that are available at rates that
are reasonably comparable to rates charged for similar services in
urban areas.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations,
as defined. Existing law, until January 1, 2013, establishes the
California Advanced Services Fund (CASF) in the State Treasury, and
requires a surcharge, which is imposed by the commission and
collected through retail telecommunications customers' bills, to be
deposited in that fund. Existing law prohibits the commission from
collecting more than $100,000,000 through the surcharge. Existing law
requires the commission to develop, implement, and administer the
CASF to provide for transfer payments to encourage deployment of
high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and substantial
social benefits of advanced information and communications
technologies, as provided in a specified decision of the commission.
Existing law requires the commission to conduct both a financial
audit and a performance audit on the implementation and effectiveness
of CASF and to report its findings to the Legislature by December
31, 2010.
This bill would extend the operation of these provisions
indefinitely, and would prohibit the commission from collecting more
than $225,000,000 through the CASF surcharge. The bill would
require that not more than $25,000,000 of the funds in CASF be
encumbered during a fiscal year, beginning with the fiscal year
beginning July 1, 2010, and continuing through the 2015-16 fiscal
year. The bill would require the commission to conduct an
interim and final financial audit and interim and final performance
audit on the implementation and effectiveness of CASF and, to report
to the Legislature its interim findings by December 31, 2010, and its
final findings by April 1, 2017.
This bill would declare that it is to take effect immediately as
an urgency statute.
Vote: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 281 of the Public Utilities Code is amended to
read:
281. (a) The commission shall develop, implement, and administer
the California Advanced Services Fund to encourage deployment of
high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and the substantial
social benefits of advanced information and communications
technologies, as provided in Decision 07-12-054 and Decision
09-07-020 and this section. The commission shall establish the
following accounts within the fund:
(1) The Broadband Infrastructure Grant Account.
(2) The Rural and Urban Regional Broadband Consortia Grant
Account.
(3) The Broadband Infrastructure Revolving Loan Account.
(b) (1) All moneys collected by the surcharge authorized by the
commission pursuant to Decision 07-12-054, whether collected before
or after January 1, 2009, shall be transmitted to the commission
pursuant to a schedule established by the commission. The commission
shall transfer the moneys received to the Controller for deposit in
the California Advanced Services Fund. Moneys collected after
January 1, 2011, shall be deposited in the following amounts in the
following accounts:
(A) One hundred million dollars ($100,000,000) into the Broadband
Infrastructure Grant Account.
(B) Ten million dollars ($10,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Fifteen million dollars ($15,000,000) into the Broadband
Infrastructure Revolving Loan Account.
(2) All interest earned on moneys in the fund shall be deposited
in the fund.
(3) The commission shall not collect moneys, by imposing the
surcharge described in paragraph (1) for deposit in the fund, in an
amount that exceeds a total amount of two hundred twenty-five million
dollars ($225,000,000). Not more than twenty-five million
dollars ($25,000,000) may be encumbered, per fiscal year, from the
fund, beginning with the fiscal year that begins July 1, 2010, and
continuing through the 2015-16 fiscal year.
(4) The funds shall be deposited in the following amounts in the
following accounts for each fiscal year:
(A) Twenty million dollars ($20,000,000) into the Broadband
Infrastructure Grant Account.
(B) Two million dollars ($2,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Three million dollars ($3,000,000) into the Broadband
Infrastructure Revolving Loan Account.
(c) (1) All moneys in the California Advanced Services Fund shall
be available, upon appropriation by the Legislature, to the
commission for the program administered by the commission pursuant to
this section, including the costs incurred by the commission in
developing, implementing, and administering the program and the fund.
(2) Notwithstanding any other law and for the sole purpose of
providing matching funds pursuant to the federal American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), any entity eligible
for funding pursuant to that act shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section, if that entity otherwise satisfies the eligibility
requirements under that program. Nothing in this section shall impede
the ability of an incumbent local exchange carrier, as defined by
subsection (h) of Section 251 of Title 47 of the United States Code,
that is regulated under a rate of return regulatory structure, to
recover, in rate base, California infrastructure investment not
provided through federal or state grant funds for facilities that
provide broadband service and California intrastate voice service.
(d) Moneys in the Rural and Urban Regional Broadband Consortia
Grant Account shall be available for grants to eligible consortia to
fund the cost of broadband deployment activities other than the
capital cost of facilities , as specified by the commission
. An eligible consortium may include , as specified by the
commission, representatives of organizations, including, but
not limited to, local and regional government, public safety, K-12
education, health care, libraries, higher education, community-based
organizations, tourism, parks and recreation, agricultural, and
business, and is not required to have as its lead fiscal agent an
entity with a certificate of public convenience and necessity.
(e) Moneys in the Broadband Infrastructure Revolving Loan Account
shall be available to finance capital costs of broadband facilities
not funded by a grant from the Broadband Infrastructure Grant
Account. The commission shall periodically set interest rates on the
loans based on surveys of existing financial markets.
(f) (1) The commission shall conduct an
interim and final financial audit and an interim and final
performance audit of the implementation and effectiveness of the
California Advanced Services Fund to ensure that funds have been
expended in accordance with the approved terms of the grant awards
and loan agreements and this section. The commission shall report its
interim findings to the Legislature by December 31, 2010. The
commission shall report its final findings to the Legislature by
April 1, 2017. The reports shall also include an update to the maps
in the final report of the California Broadband Task Force and data
on the types and numbers of jobs created as a result of the program
administered by the commission pursuant to this section.
(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2018, pursuant to Section
10231.5 of the Government Code.
(B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
SEC. 2. This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
Numerous grant applications with merit have been filed seeking
funding through the California Advanced Services Fund, many of these
applications also seeking funding through the federal American
Recovery and Reinvestment Act of 2009 (Public Law 111-5), and these
grant applications threaten to exceed the existing financial limits
of the fund. In order to relieve financial pressure on the fund,
enable meritorious projects to go forward, and to prevent a potential
disruptive effect on the grant process, it is necessary that this
act take effect immediately.