BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
AB 1299 (Bradford) - Telecommunications: universal service
programs: California Advanced Services Fund.
Amended: July 10, 2013 Policy Vote: EU&C 8-2
Urgency: No Mandate: No
Hearing Date: August 30, 2013 Consultant:
Marie Liu
SUSPENSE FILE. AS AMENDED.
Bill Summary: AB 1299 would create a new grant and loan program
for public housing agencies or nonprofits to fund broadband
connections and services for publically supported housing
communities.
Fiscal Impact (as amended):
On-going costs of $150,000 from the Broadband Public
Housing Account within the California Advanced Services Fund
(special) for administrative costs to the California Public
Utilities Commission (CPUC) to administer the program.
Cost pressures of up to $25 million California Advanced
Services Fund for the redirection of funds, which would be
offset by additional surcharges collected pursuant to SB
740.
Background: Existing law establishes the California Advanced
Services Fund (CASF), administered by the CPUC, to help fund
deployment of broadband infrastructure and bring high-speed
Internet access to all areas of the state. The CASF is funded
from a customer surcharge on intrastate communication services.
Section 821 of the Public Utilities Code authorizes the
collection of $125 million from 2011 to 2015 through surcharges
on customers (for a total of $225 over the life of the fund).
Generally no more than $25 million may be collected in each year
during this time period. Of this amount $100 million is
deposited in the Broadband Infrastructure Grant Account, $10
million to the Rural and Urban Regional Broadband Consortia
Grant Account, and $15 million into the Broadband Infrastructure
Revolving Loan Account.
CASF funding is available only to a "telephone corporation"
AB 1299 (Bradford)
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regulated by the CPUC.
Proposed Law: This bill would create a new account in the CASF,
the Broadband Public Housing Account (account), that would be
available to the CPUC to award up to $20 million in grants and
loans to a public housing agency or certain nonprofits to
connect broadband networks to publically supported housing
communities and $5 million in grants and loans for broadband
adoption programs for residents of publically supported housing
communities.
To fund this program, the CPUC would be required to transfer $20
million from the Broadband Infrastructure Grant Account and $5
million from the Broadband Revolving Loan Account. This transfer
would only occur if the CPUC is authorized to collect additional
funding for the CASF. Any funds that have not been awarded by
December 31, 2016 in the account would revert to the original
accounts.
Related Legislation: SB 740 (Padilla) would allow Wireless
Internet Service Providers to be eligible for funding from the
CASF and would authorize the collection of additional surcharges
to further fund the CASF.
AB 1555 (Perez) Chapter 24/2009 expanded CASF eligibility to
other entities only for the purpose of providing matching funds
made available through the American Reinvestment and Recovery
Act of 2009.
SB 1040 (Padilla) Chapter 317/2010 authorized collection of an
additional $125 million through 2015 (for a total of $225
million).
Staff Comments: This bill would create a new grant and loan
program, which would result in new administrative costs to the
CPUC to develop and implement the program. Administrative costs
for this program would be influenced by both the level of
potential participation in the program and the fact that the
eligible entities may need additional technical assistance for
their participation as they are likely to have limited
experience with the CPU. Given that that there are approximately
113 public housing agencies in the state with approximately
3,300 active housing projects, the CPUC anticipates having to
potentially administer hundreds of grants and loans. Therefore,
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the CPUC estimates that one Public Utility Regulatory Analyst II
would be needed and half a Public Utilities Counsel I would be
necessary for a total on-going cost of approximately $150,000
per year.
Staff notes that the CPUC is currently reviewing the estimated
costs of reaching the state broadband goals, and therefore the
future needs of the CASF. Although this process has not been
completed, it is likely that the CASF will need additional
funding. Staff notes that the CPUC received $240.6 million in
applications for CASF funding in February for the latest round
of available funding.
This bill would only divert $25 million from the CASF if
additional funding is authorized by the Legislature. Staff notes
that SB 740 proposes an additional $90 million through 2020
(with no more than $25 million per year) while also expanding
eligibility for CASF funding. Staff notes that if and when the
CASF receives additional funding, it will not necessarily
include $25 million for the new grant program under this bill.
Proposed Author Amendments: Amend to revise the definitions
related to affordable housing and to change references to
"funding" instead of "grants."
Committee Amendments: Amend to make the passage of this bill
contingent on the chaptering of SB 740 (Padilla).