BILL NUMBER: AB 509 AMENDED
BILL TEXT
AMENDED IN SENATE AUGUST 30, 2011
AMENDED IN SENATE AUGUST 15, 2011
AMENDED IN SENATE JUNE 21, 2011
AMENDED IN ASSEMBLY MAY 27, 2011
AMENDED IN ASSEMBLY MARCH 25, 2011
INTRODUCED BY Assembly Member Skinner
FEBRUARY 15, 2011
An act to amend Sections 277, 382, and 739.1 of the
Public Utilities Code, and to amend Sections 19851, 19852,
and 19853 of the Revenue and Taxation Code, relating to taxation.
LEGISLATIVE COUNSEL'S DIGEST
AB 509, as amended, Skinner. Federal earned income tax credit:
notification: state departments and agencies.
The federal income tax law authorizes a refundable earned income
tax credit for certain low-income individuals who have earned income
and who meet certain other requirements. Existing California law
requires an employer, as defined, to notify all employees that they
may be eligible for the federal earned income tax credit (EITC), as
specified.
This bill would require state departments and agencies that serve
those who may qualify for the EITC, as defined, to notify their
program recipients that they may be eligible for the EITC, at least
once a year during the months of January through April, or
alternatively, to provide this annual notification during a regularly
scheduled contact with a recipient by telephone, mail, or electronic
communication, or by an in-person communication, as specified. This
bill would require state departments and agencies that do not
directly communicate with persons who may qualify for the EITC to
communicate indirectly through agencies or districts serving those
persons.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations,
and establishes the Universal Lifeline Telephone Service Trust
Administrative Committee Fund, moneys within which may be used for
specified purposes. Existing law, among other requirements, requires
the commission to establish a program of assistance to low-income
electric and gas customers, which is referred to as the California
Alternate Rates for Energy (CARE) program and provides that the
commission shall authorize recovery of administrative costs
associated within the implementation of the CARE program.
This bill would authorize the Public Utilities Commission to use
the moneys collected for the purposes of the Universal Lifeline
Telephone Service to accomplish the EITC notifications, described
above, and to recover any administrative costs associated with the
notifications. The bill also would authorize the commission in
addition to the recovery of specified administrative costs associated
with the CARE program, to recover administrative costs associated
with the notifications.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 277 of the Public Utilities
Code is amended to read:
277. (a) There is hereby created the Universal Lifeline Telephone
Service Trust Administrative Committee, which is an advisory board
to advise the commission regarding the development, implementation,
and administration of a program to ensure lifeline telephone service
is available to the people of the state, as provided for in Article 8
(commencing with Section 871) of Chapter 4 of Part 1 of Division 1,
and to carry out the program pursuant to the commission's direction,
control, and approval.
(b) All revenues collected by telephone corporations in rates
authorized by the commission to fund the program specified in
subdivision (a) shall be submitted to the commission pursuant to a
schedule established by the commission. Commencing on October 1,
2001, and continuing thereafter, the commission shall transfer the
moneys received, and all unexpended revenues collected prior to
October 1, 2001, to the Controller for deposit in the Universal
Lifeline Telephone Service Trust Administrative Committee Fund. All
interest earned by moneys in the fund shall be deposited in the fund.
(c) Moneys appropriated from the Universal Lifeline Telephone
Service Trust Administrative Committee Fund to the commission shall
be utilized exclusively by the commission for the program specified
in subdivision (a), including all costs of the board and the
commission associated with the administration and oversight of the
program and the fund, and for the purposes of Part 10.3 (commencing
with Section 19850) of Division 2 of the Revenue and Taxation Code.
SEC. 2. Section 382 of the Public Utilities
Code is amended to read:
382. (a) Programs provided to low-income electricity customers,
including, but not limited to, targeted energy-efficiency services
and the California Alternate Rates for Energy program shall be funded
at not less than 1996 authorized levels based on an assessment of
customer need.
(b) In order to meet legitimate needs of electric and gas
customers who are unable to pay their electric and gas bills and who
satisfy eligibility criteria for assistance, recognizing that
electricity is a basic necessity, and that all residents of the state
should be able to afford essential electricity and gas supplies, the
commission shall ensure that low-income ratepayers are not
jeopardized or overburdened by monthly energy expenditures. Energy
expenditure may be reduced through the establishment of different
rates for low-income ratepayers, different levels of rate assistance,
and energy efficiency programs.
(c) Nothing in this section shall be construed to prohibit
electric and gas providers from offering any special rate or program
for low-income ratepayers that is not specifically required in this
section.
(d) Beginning in 2002, an assessment of the needs of low-income
electricity and gas ratepayers shall be conducted periodically by the
commission with the assistance of the Low-Income Oversight Board.
The assessment shall evaluate low-income program implementation and
the effectiveness of weatherization services and energy efficiency
measures in low-income households. The assessment shall consider
whether existing programs adequately address low-income electricity
and gas customers' energy expenditures, hardship, language needs, and
economic burdens.
(e) The commission shall, by not later than December 31, 2020,
ensure that all eligible low-income electricity and gas customers are
given the opportunity to participate in low-income energy efficiency
programs, including customers occupying apartments or similar
multiunit residential structures. The commission and electrical
corporations and gas corporations shall make all reasonable efforts
to coordinate ratepayer-funded programs with other energy
conservation and efficiency programs and to obtain additional federal
funding to support actions undertaken pursuant to this subdivision.
These programs shall be designed to provide long-term reductions
in energy consumption at the dwelling unit based on an audit or
assessment of the dwelling unit, and may include improved insulation,
energy efficient appliances, measures that utilize solar energy, and
other improvements to the physical structure.
(f) The commission shall allocate funds necessary to meet both the
low-income objectives in this section and the purposes of Part 10.3
(commencing with Section 19850) of Division 2 of the Revenue and
Taxation Code.
SEC. 3. Section 739.1 of the Public Utilities
Code is amended to read:
739.1. (a) As used in this section, the following terms have the
following meanings:
(1) "Baseline quantity" has the same meaning as defined in Section
739.
(2) "California Solar Initiative" means the program providing
ratepayer funded incentives for eligible solar energy systems adopted
by the commission in Decision 05-12-044 and Decision 06-01-024, as
modified by Article 1 (commencing with Section 2851) of Chapter 9 of
Part 2 and Chapter 8.8 (commencing with Section 25780) of Division 15
of the Public Resources Code.
(3) "CalWORKs program" means the program established pursuant to
the California Work Opportunity and Responsibility to Kids Act
(Chapter 2 (commencing with Section 11200) of Part 3 of Division 9 of
the Welfare and Institutions Code).
(4) "Public goods charge" means the nonbypassable separate rate
component imposed pursuant to Article 7 (commencing with Section 381)
of Chapter 2.3 and the nonbypassable system benefits charge imposed
pursuant to the Reliable Electric Service Investments Act (Article 15
(commencing with Section 399) of Chapter 2.3).
(b) (1) The commission shall establish a program of assistance to
low-income electric and gas customers with annual household incomes
that are no greater than 200 percent of the federal poverty guideline
levels, the cost of which shall not be borne solely by any single
class of customer. The program shall be referred to as the California
Alternate Rates for Energy or CARE program. The commission shall
ensure that the level of discount for low-income electric and gas
customers correctly reflects the level of need.
(2) The commission may, subject to the limitation in paragraph
(4), increase the rates in effect for CARE program participants for
electricity usage up to 130 percent of baseline quantities by the
annual percentage increase in benefits under the CalWORKs program as
authorized by the Legislature for the fiscal year in which the rate
increase would take effect, but not to exceed 3 percent per year.
(3) Beginning January 1, 2019, the commission may, subject to the
limitation in paragraph (4), establish rates for CARE program
participants pursuant to this section and Sections 739 and 739.9,
subject to both of the following:
(A) The requirements of subdivision (b) of Section 382 that the
commission ensure that low-income ratepayers are not jeopardized or
overburdened by monthly energy expenditures.
(B) The requirement that the level of the discount for low-income
electricity and gas ratepayers correctly reflects the level of need
as determined by the needs assessment conducted pursuant to
subdivision (d) of Section 382.
(4) Tier 1, tier 2, and tier 3 CARE rates shall not exceed 80
percent of the corresponding tier 1, tier 2, and tier 3 rates charged
to residential customers not participating in the CARE program,
excluding any Department of Water Resources bond charge imposed
pursuant to Division 27 (commencing with Section 80000) of the Water
Code, the CARE surcharge portion of the public goods charge, any
charge imposed pursuant to the California Solar Initiative, and any
charge imposed to fund any other program that exempts CARE
participants from paying the charge.
(5) Rates charged to CARE program participants shall not have more
than three tiers. An electrical corporation that does not have a
tier 3 CARE rate may introduce a tier 3 CARE rate that, in order to
moderate the impact on program participants whose usage exceeds 130
percent of baseline quantities, shall be phased in to 80 percent of
the corresponding rates charged to residential customers not
participating in the CARE program, excluding any Department of Water
Resources bond charge imposed pursuant to Division 27 (commencing
with Section 80000) of the Water Code, the CARE surcharge portion of
the public goods charge, any charge imposed pursuant to the
California Solar Initiative, and any other charge imposed to fund a
program that exempts CARE participants from paying the charge. For an
electrical corporation that does not have a tier 3 CARE rate that
introduces a tier 3 CARE rate, the initial rate shall be no more than
150 percent of the CARE baseline rate. Any additional revenues
collected by an electrical corporation resulting from the adoption of
a tier 3 CARE rate shall, until the utility's next periodic general
rate case review of cost allocation and rate design, be credited to
reduce rates of residential ratepayers not participating in the CARE
program with usage above 130 percent of baseline quantities.
(c) The commission shall work with the public utility electrical
and gas corporations to establish penetration goals. The commission
shall authorize recovery of all administrative costs associated with
the implementation of the CARE program, and all the administrative
costs associated with the implementation of Part 10.3 (commencing
with Section 19850) of Division 2 of the Revenue and Taxation Code
that the commission determines to be reasonable, through a balancing
account mechanism. Administrative costs shall include, but are not
limited to, outreach, marketing, regulatory compliance, certification
and verification, billing, measurement and evaluation, and capital
improvements and upgrades to communications and processing equipment.
(d) The commission shall examine methods to improve CARE
enrollment and participation. This examination shall include, but
need not be limited to, comparing information from CARE and the
Universal Lifeline Telephone Service (ULTS) to determine the most
effective means of utilizing that information to increase CARE
enrollment, automatic enrollment of ULTS customers who are eligible
for the CARE program, customer privacy issues, and alternative
mechanisms for outreach to potential enrollees. The commission shall
ensure that a customer consents prior to enrollment. The commission
shall consult with interested parties, including ULTS providers, to
develop the best methods of informing ULTS customers about other
available low-income programs, as well as the best mechanism for
telephone providers to recover reasonable costs incurred pursuant to
this section.
(e) (1) The commission shall improve the CARE application process
by cooperating with other entities and representatives of California
government, including the California Health and Human Services Agency
and the Secretary of California Health and Human Services, to ensure
that all gas and electric customers eligible for public assistance
programs in California that reside within the service territory of an
electrical corporation or gas corporation, are enrolled in the CARE
program. To the extent practicable, the commission shall develop a
CARE application process using the existing ULTS application process
as a model. The commission shall work with public utility electrical
and gas corporations and the Low-Income Oversight Board established
in Section 382.1 to meet the low-income objectives in this section.
(2) The commission shall ensure that an electrical corporation or
gas corporation with a commission-approved program to provide
discounts based upon economic need in addition to the CARE program,
including a Family Electric Rate Assistance program, utilize a single
application form, to enable an applicant to alternatively apply for
any assistance program for which the applicant may be eligible. It is
the intent of the Legislature to allow applicants under one program,
that may not be eligible under that program, but that may be
eligible under an alternative assistance program based upon economic
need, to complete a single application for any commission-approved
assistance program offered by the public utility.
(f) The commission's program of assistance to low-income electric
and gas customers shall, as soon as practicable, include nonprofit
group living facilities specified by the commission, if the
commission finds that the residents in these facilities substantially
meet the commission's low-income eligibility requirements and there
is a feasible process for certifying that the assistance shall be
used for the direct benefit, such as improved quality of care or
improved food service, of the low-income residents in the facilities.
The commission shall authorize utilities to offer discounts to
eligible facilities licensed or permitted by appropriate state or
local agencies, and to facilities, including women's shelters,
hospices, and homeless shelters, that may not have a license or
permit but provide other proof satisfactory to the utility that they
are eligible to participate in the program.
(g) It is the intent of the Legislature that the commission ensure
CARE program participants are afforded the lowest possible electric
and gas rates and, to the extent possible, are exempt from additional
surcharges attributable to the energy crisis of 2000-01.
SEC. 4. SECTION 1. Section 19851 of
the Revenue and Taxation Code is amended to read:
19851. The Legislature finds and declares as follows:
(a) Congress created the federal earned income tax credit (EITC)
in 1975 to offset the adverse effects of the Medicare and social
security payroll taxes on working poor families and to encourage
low-income workers to seek employment rather than welfare.
(b) Due to a relatively low percentage of federal earned income
tax credit eligible persons who participate in the federal Earned
Income Tax Credit program, hundreds of millions of federal dollars go
unclaimed by the working poor in California.
(c) In order to alleviate the tax burden on working poor persons
and families, to enhance the wages and income of working poor persons
and families, to ensure that California receives its share of the
federal money available in the federal Earned Income Tax Credit
program, and to inject additional federal money into the California
economy, the state shall facilitate the furnishing of information to
working poor persons and families regarding the availability of the
federal earned income tax credit so that they may claim that credit
on their federal income tax returns.
(d) It is the intent of this act to offer the most cost-effective
assistance to eligible taxpayers through the following:
(1) Notices provided by their employers.
(2) Notices provided by state departments and agencies that serve
those who may qualify for the EITC.
SEC. 5. SEC. 2. Section 19852 of the
Revenue and Taxation Code is amended to read:
19852. For purposes of this part, the following terms have the
following meanings:
(a) "Employer" means any California employer who is subject to,
and is required to provide, unemployment insurance to his or her
employees, under the Unemployment Insurance Code.
(b) "Employee" means any person who is covered by unemployment
insurance by his or her employer, pursuant to the Unemployment
Insurance Code.
(c) "EITC" means the federal earned income tax credit, as defined
in Section 32 of the Internal Revenue Code.
(d) "State departments and agencies that serve those who may
qualify for the EITC" means those departments and agencies
that operate state or federally funded programs primarily engaged in
providing services to low-income individuals and families.
Departments, agencies, and programs under this subdivision may
include, but are not limited to, the following: the
following programs in the specified departments and agencies:
(1) The State Department of Education: free or reduced-price meal
program and National School Lunch Program.
(2) The State Department of Social Services: the CalWORKs program,
CalFresh, and foster families.
(3) The Public Utilities Commission: California Alternate Rates
for Energy, the Energy Savings Assistance Program, Payment Plans, and
Emergency Payment Assistance Programs, including Family Electric
Rate Assistance, the California Weatherization Assistance Program,
the Low Income Home Energy Assistance Program, the California
LifeLine Telephone Program, and Link-Up.
(4)
(2) Employment Development Department: California
Unemployment Insurance.
(5)
(3) State Department of Health Care Services: the
Medi-Cal program.
(6)
(4) Managed Risk Medical Insurance Board (MRMIB): the
Healthy Families Program.
SEC. 6. SEC. 3. Section 19853 of the
Revenue and Taxation Code is amended to read:
19853. (a) An employer shall notify all employees that they may
be eligible for the EITC within one week before or after, or at the
same time, that the employer provides an annual wage summary,
including, but not limited to, a Form W-2 or a Form 1099, to any
employee.
(b) The state departments and agencies that serve those who may
qualify for the EITC, as defined in subdivision (d) of Section 19852,
shall notify their program recipients that they may be eligible for
the EITC, at least once a year during the months of January through
April, or alternatively, shall provide this annual notification
during a regularly scheduled contact with a recipient by telephone,
mail, or electronic communication, or by an in-person communication.
State departments or agencies that do not directly communicate with
persons or households with persons who may qualify for the EITC may
communicate indirectly through agencies, districts, or regulated
entities that serve eligible persons or households with eligible
persons. Departments, agencies, and programs are encouraged to
develop the most effective method to provide notice to recipients of
EITC eligibility, as long as the notice contains substantially the
same language as the notice described in Section 19854.
(c) The employer shall provide the notification required by
subdivision (a) by handing directly to the employee or mailing to the
employee's last known address either of the following:
(1) Instructions on how to obtain any notices available from the
Internal Revenue Service for this purpose, including, but not limited
to, the IRS Notice 797 and Form W-5, or any successor notice or
form.
(2) Any notice created by the employer, as long as it contains
substantially the same language as the notice described in paragraph
(1) or in Section 19854.
(d) The employer shall not satisfy the notification required by
subdivision (a) by posting a notice on an employee bulletin board or
sending it through office mail. However, these methods of
notification are encouraged to help inform all employees of the EITC.
(e) Every employer shall process, in accordance with federal law,
Form W-5 for advance payments of the EITC, upon the request of the
employee.