BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          AB 136 (Beall)
          
          Hearing Date: 08/25/2011        Amended: 06/30/2011
          Consultant: Brendan McCarthy    Policy Vote: EU&C 8-0
          _________________________________________________________________
          ____
          BILL SUMMARY: AB 136 requires the Public Utilities Commission to 
          provide speech generating devices to telephone customers that 
          have speech disabilities.
          _________________________________________________________________
          ____
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
           
          Program oversight      $165       $330        $330      Special 
          *

          Outside contracting for                       $130      
          $130Special *
             program delivery

          Providing devices to   Potential costs of $2,500 to     Special 
          *
             disabled customers     $3,500 per year

          * Deaf and Disabled Telecommunications Program Administrative 
          Committee Fund.
          _________________________________________________________________
          ____

          STAFF COMMENTS: SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
          
          Under current law, the Public Utilities Commission operates the 
          Deaf and Disabled Telecommunications Program. Under this 
          program, the Commission provides assistance to deaf and disabled 
          telecommunications customers, to allow them to use the telephone 
          system. Eligible customers may be provided with teletype or 
          other devices or they may use a relay system in which specially 
          trained operators interface between the disabled customer and 
          the person on the other end of the conversation. This program is 
          supported by a fee on intrastate telephone calls. The surcharge 
          is currently set at 0.2 percent of phone rates and is capped in 








          AB 136 (Beall)
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          statute at 0.5 percent.

          AB 136 expands the existing Deaf and Disabled Telecommunications 
          Program, to provide service to individuals with speech 
          disabilities that impair access to the telephone system. Under 
          the bill, the Commission is responsible to ensure that eligible 
          customers have access to speech generating devices and related 
          equipment. In order to be eligible for service, individuals must 
          be residents of the state and certified as being speech impaired 
          by a physician, speech pathologist, or government agency.

          The bill also requires the Commission to report to the 
          Legislature by December 31, 2012 on options for controlling the 
          cost of providing speech generating devices.

          The Public Utilities Commission anticipates that it will need 
          about $330,000 per year in additional staff costs to develop 
          program rules and to oversee the expansion of the program. In 
          addition, because the Commission does not have expertise in 
          speech disabilities or the devices used by individuals with 
          speech disabilities to communicate, it will need to contract out 
          some of the program delivery services, at an annual cost of 
          about $130,000.

          In addition to the program oversight cost to the Commission, 
          there will be costs to provide speech generating devices to the 
          target population. The cost of such devices can vary from $4,000 
          to $11,000 and in some cases can be as high as $18,000. The 
          total number of individuals that might request such a device 
          from the Commission is unknown. Based on available information 
          regarding the demand for these devices in the state's Medi-Cal 
          program, staff estimates that about 0.005 percent of the 
          population will request such a device each year. Excluding 
          populations served by state and federal programs such as 
          Medi-Cal, Medicare, and the Department of Rehabilitation, and 
          other groups unlikely to apply, staff estimates that about 860 
          individuals will request one of these devices from the 
          Commission per year. This yields total costs between $7 million 
          and $9.5 million per year.

          Staff notes that the Deaf and Disabled Telecommunications 
          Program Administrative Committee Fund has a structural deficit 
          and a projected fund balance at the end of the Budget Year of 
          about $11 million. Expansion of the program is likely to require 








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          an increase in the surcharge that supports the program.

          The proposed committee amendments specify that the Commission 
          will be the provider of last resort and that devices provided 
          under the program shall not cost more than the Medi-Cal rate.