Senate BillNo. 740


Introduced by Senator Padilla

February 22, 2013


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 740, as introduced, Padilla. Telecommunications: universal service programs: California Advanced Services Fund.

Existing law, the federal Telecommunications Act of 1996, establishes a program of cooperative federalism 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. The act authorizes each state to adopt regulations to provide for additional definitions and standards to preserve and advance universal service within the state, only to the extent that they adopt additional specific, predictable, and sufficient mechanisms that do not rely on or burden federal universal service support mechanisms.

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations, as defined. Existing law establishes the California High-Cost Fund-A Administrative Committee Fund, the California High-Cost Fund-B Administrative Committee Fund, the Universal Lifeline Telephone Service Trust Administrative Committee Fund, the Deaf and Disabled Telecommunications Program Administrative Committee Fund, the Payphone Service Providers Committee Fund, the California Teleconnect Fund Administrative Committee Fund, and the California Advanced Services Fund (CASF) in the State Treasury and requires that moneys in the funds are the proceeds of rates and are held in trust for the benefit of ratepayers and to compensate telephone corporations for their costs of providing universal service and may be expended only to accomplish specified telecommunications universal service programs, upon appropriation in the annual Budget Act or upon supplemental appropriation. Existing law requires the commission to develop, implement, and administer the CASF 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 specified decisions of the commission and in the CASF statute.

Existing law requires that $100,000,000, collected by the surcharge, authorized by the commission, after January 1, 2011, is to be deposited into the Broadband Infrastructure Account. Existing law authorizes the commission to collect an additional sum not to exceed $125,000,000, after January 1, 2011, for a sum total of moneys collected through the surcharge not to exceed $225,000,000. Existing law authorizes the commission to collect the additional sum through the 2015 calendar year.

This bill would instead require that $200,000,000 be deposited into the Broadband Infrastructure account. The bill would increase the amount of additional money the commission is authorized to collect to $225,000,000, with a sum total not to exceed $325,000,000. The bill would authorize the commission to collect the additional money until 2020.

This bill would provide that, notwithstanding the requirement that moneys in the funds are to be used to compensate telephone corporations for their costs of providing universal service, an entity that is not a telephone corporation is eligible to apply to participate in the CASF program if the entity otherwise meets the eligibility requirements and complies with program requirements established by the commission.

This bill would declare that it is to take effect immediately as an urgency statute.

Vote: 23. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P3    1

SECTION 1.  

Section 281 of the Public Utilities Code is
2amended to read:

3

281.  

(a) The commission shall develop, implement, and
4administer the California Advanced Services Fund to encourage
5deployment of high-quality advanced communications services to
6all Californians that will promote economic growth, job creation,
7and the substantial social benefits of advanced information and
8communications technologies, as provided in Decision 07-12-054
9and Decision 09-07-020 and this section. The commission shall
10establish the following accounts within the fund:

11(1) The Broadband Infrastructure Grant Account.

12(2) The Rural and Urban Regional Broadband Consortia Grant
13Account.

14(3) The Broadband Infrastructure Revolving Loan Account.

15(b) (1) All moneys collected by the surcharge authorized by
16the commission pursuant to Decision 07-12-054, whether collected
17before or after January 1, 2009, shall be transmitted to the
18commission pursuant to a schedule established by the commission.
19The commission shall transfer the moneys received to the
20Controller for deposit in the California Advanced Services Fund.
21Moneys collected after January 1, 2011, shall be deposited in the
22following amounts in the following accounts:

23(A) begin deleteOne end deletebegin insertTwoend insertbegin insert end inserthundred million dollarsbegin delete ($100,000,000)end delete
24begin insert ($200,000,000)end insert into the Broadband Infrastructure Grant Account.

25(B) Ten million dollars ($10,000,000) into the Rural and Urban
26Regional Broadband Consortia Grant Account.

27(C) Fifteen million dollars ($15,000,000) into the Broadband
28Infrastructure Revolving Loan Account.

29(2) All interest earned on moneys in the fund shall be deposited
30in the fund.

P4    1(3) The commission shall not collect moneys, by imposing the
2surcharge described in paragraph (1) for deposit in the fund, in an
3amount that exceeds one hundred million dollars ($100,000,000)
4before January 1, 2011. After January 1, 2011, the commission
5may collect an additional sum not to exceedbegin delete oneend deletebegin insert twoend insert hundred
6twenty-five million dollarsbegin delete ($125,000,000)end deletebegin insert ($225,000,000)end insert, for a
7sum total of moneys collected by imposing the surcharge described
8in paragraph (1) not to exceedbegin delete twoend deletebegin insert threeend insert hundred twenty-five
9million dollarsbegin delete ($225,000,000)end deletebegin insert ($325,000,000)end insert. The commission
10may collect the additional sum beginning with the calendar year
11starting on January 1, 2011, and continuing through thebegin delete 2015end deletebegin insert 2020end insert
12 calendar year, in an amount not to exceed twenty-five million
13dollars ($25,000,000) per year, unless the commission determines
14that collecting a higher amount in any year will not result in an
15increase in the total amount of all surcharges collected from
16telephone customers that year.

17(c) (1) All moneys in the California Advanced Services Fund
18shall be available, upon appropriation by the Legislature, to the
19commission for the program administered by the commission
20pursuant to this section, including the costs incurred by the
21commission in developing, implementing, and administering the
22program and the fund.

23(2) Notwithstanding any other law and for the sole purpose of
24providing matching funds pursuant to the federal American
25Recovery and Reinvestment Act of 2009 (Public Law 111-5), any
26entity eligible for funding pursuant to that act shall be eligible to
27apply to participate in the program administered by the commission
28pursuant to this section, if that entity otherwise satisfies the
29eligibility requirements under that program. Nothing in this section
30shall impede the ability of an incumbent local exchange carrier,
31as defined by subsection (h) of Section 251 of Title 47 of the
32United States Code, that is regulated under a rate of return
33regulatory structure, to recover, in rate base, California
34infrastructure investment not provided through federal or state
35grant funds for facilities that provide broadband service and
36California intrastate voice service.

begin insert

37(3) Notwithstanding subdivision (b) of Section 270, an entity
38that is not a telephone corporation shall be eligible to apply to
39participate in the program administered by the commission
40pursuant to this section if the entity otherwise meets the eligibility
P5    1requirements and complies with program requirements established
2by the commission.

end insert

3(d) Moneys in the Rural and Urban Regional Broadband
4Consortia Grant Account shall be available for grants to eligible
5consortia to fund the cost of broadband deployment activities other
6than the capital cost of facilities, as specified by the commission.
7An eligible consortium may include, as specified by the
8commission, representatives of organizations, including, but not
9limited to, local and regional government, public safety, K-12
10education, health care, libraries, higher education,
11community-based organizations, tourism, parks and recreation,
12agricultural, and business, and is not required to have as its lead
13fiscal agent an entity with a certificate of public convenience and
14necessity.

15(e) Moneys in the Broadband Infrastructure Revolving Loan
16Account shall be available to finance capital costs of broadband
17facilities not funded by a grant from the Broadband Infrastructure
18Grant Account. The commission shall periodically set interest rates
19on the loans based on surveys of existing financial markets.

20(f) (1) The commission shall conduct an interim and final
21financial audit and an interim and final performance audit of the
22implementation and effectiveness of the California Advanced
23Services Fund to ensure that funds have been expended in
24accordance with the approved terms of the grant awards and loan
25agreements and this section. The commission shall report its interim
26findings to the Legislature by April 1, 2011. The commission shall
27report its final findings to the Legislature by April 1, 2017. The
28reports shall also include an update to the maps in the final report
29of the California Broadband Task Force and data on the types and
30numbers of jobs created as a result of the program administered
31by the commission pursuant to this section.

32(2) (A) The requirement for submitting a report imposed under
33paragraph (1) is inoperative on January 1, 2018, pursuant to Section
3410231.5 of the Government Code.

35(B) A report to be submitted pursuant to paragraph (1) shall be
36submitted in compliance with Section 9795 of the Government
37Code.

38(g) (1) Beginning on January 1, 2012, and annually thereafter,
39the commission shall provide a report to the Legislature that
40includes all of the following information:

P6    1(A) The amount of funds expended from the California
2Advanced Services Fund in the prior year.

3(B) The recipients of funds expended from the California
4Advanced Services Fund in the prior year.

5(C) The geographic regions of the state affected by funds
6expended from the California Advanced Services Fund in the prior
7year.

8(D) The expected benefits to be derived from the funds expended
9from the California Advanced Services Fund in the prior year.

10(E) Actual broadband adoption levels from the funds expended
11from the California Advanced Services Fund in the prior year.

12(F) The amount of funds expended from the California
13Advanced Services Fund used to match federal funds.

14(G) An update on the expenditures from California Advanced
15Services Fund and broadband adoption levels, and an accounting
16of remaining unserved and underserved areas of the state.

17(2) (A) The requirement for submitting a report imposed under
18paragraph (1) is inoperative on January 1, 2016, pursuant to Section
1910231.5 of the Government Code.

20(B) A report to be submitted pursuant to paragraph (1) shall be
21submitted in compliance with Section 9795 of the Government
22Code.

23

SEC. 2.  

This act is an urgency statute necessary for the
24immediate preservation of the public peace, health, or safety within
25the meaning of Article IV of the Constitution and shall go into
26immediate effect. The facts constituting the necessity are:

27In order to authorize the award of funds for the expansion of
28broadband deployment to unserved and underserved areas of
29California, to stimulate investments in infrastructure critical to
30increasing the state’s productivity, and to improve the quality of
31information available to all of the state’s citizens, as needed for
32the health and safety of those citizens, it is necessary that this act
33take effect immediately.



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