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) Page 1 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 AB 136 (Beall) Page 2 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.