BILL NUMBER: SB 740	INTRODUCED
	BILL TEXT


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: 2/3. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 281 of the Public Utilities Code is amended to
read:
   281.  (a) The commission shall develop, implement, and administer
the California Advanced Services Fund to encourage deployment of
high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and the substantial
social benefits of advanced information and communications
technologies, as provided in Decision 07-12-054 and Decision
09-07-020 and this section. The commission shall establish the
following accounts within the fund:
   (1) The Broadband Infrastructure Grant Account.
   (2) The Rural and Urban Regional Broadband Consortia Grant
Account.
   (3) The Broadband Infrastructure Revolving Loan Account.
   (b) (1) All moneys collected by the surcharge authorized by the
commission pursuant to Decision 07-12-054, whether collected before
or after January 1, 2009, shall be transmitted to the commission
pursuant to a schedule established by the commission. The commission
shall transfer the moneys received to the Controller for deposit in
the California Advanced Services Fund. Moneys collected after January
1, 2011, shall be deposited in the following amounts in the
following accounts:
   (A)  One   Two    hundred
million dollars  ($100,000,000)   ($200,000,000)
 into the Broadband Infrastructure Grant Account.
   (B) Ten million dollars ($10,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
   (C) Fifteen million dollars ($15,000,000) into the Broadband
Infrastructure Revolving Loan Account.
   (2) All interest earned on moneys in the fund shall be deposited
in the fund.
   (3) The commission shall not collect moneys, by imposing the
surcharge described in paragraph (1) for deposit in the fund, in an
amount that exceeds one hundred million dollars ($100,000,000) before
January 1, 2011. After January 1, 2011, the commission may collect
an additional sum not to exceed  one   two 
hundred twenty-five million dollars  ($125,000,000)
  ($225,000,000)  , for a sum total of moneys
collected by imposing the surcharge described in paragraph (1) not to
exceed two   three  hundred twenty-five
million dollars  ($225,000,000)   ($325,000,000)
 . The commission may collect the additional sum beginning with
the calendar year starting on January 1, 2011, and continuing
through the  2015   2020  calendar year, in
an amount not to exceed twenty-five million dollars ($25,000,000)
per year, unless the commission determines that collecting a higher
amount in any year will not result in an increase in the total amount
of all surcharges collected from telephone customers that year.
   (c) (1) All moneys in the California Advanced Services Fund shall
be available, upon appropriation by the Legislature, to the
commission for the program administered by the commission pursuant to
this section, including the costs incurred by the commission in
developing, implementing, and administering the program and the fund.

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

   (3) Notwithstanding subdivision (b) of Section 270, an entity that
is not a telephone corporation shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section if the entity otherwise meets the eligibility
requirements and complies with program requirements established by
the commission. 
   (d) Moneys in the Rural and Urban Regional Broadband Consortia
Grant Account shall be available for grants to eligible consortia to
fund the cost of broadband deployment activities other than the
capital cost of facilities, as specified by the commission. An
eligible consortium may include, as specified by the commission,
representatives of organizations, including, but not limited to,
local and regional government, public safety, K-12 education, health
care, libraries, higher education, community-based organizations,
tourism, parks and recreation, agricultural, and business, and is not
required to have as its lead fiscal agent an entity with a
certificate of public convenience and necessity.
   (e) Moneys in the Broadband Infrastructure Revolving Loan Account
shall be available to finance capital costs of broadband facilities
not funded by a grant from the Broadband Infrastructure Grant
Account. The commission shall periodically set interest rates on the
loans based on surveys of existing financial markets.
   (f) (1) The commission shall conduct an interim and final
financial audit and an interim and final performance audit of the
implementation and effectiveness of the California Advanced Services
Fund to ensure that funds have been expended in accordance with the
approved terms of the grant awards and loan agreements and this
section. The commission shall report its interim findings to the
Legislature by April 1, 2011. The commission shall report its final
findings to the Legislature by April 1, 2017. The reports shall also
include an update to the maps in the final report of the California
Broadband Task Force and data on the types and numbers of jobs
created as a result of the program administered by the commission
pursuant to this section.
   (2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2018, pursuant to Section
10231.5 of the Government Code.
   (B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
   (g) (1) Beginning on January 1, 2012, and annually thereafter, the
commission shall provide a report to the Legislature that includes
all of the following information:
   (A) The amount of funds expended from the California Advanced
Services Fund in the prior year.
   (B) The recipients of funds expended from the California Advanced
Services Fund in the prior year.
   (C) The geographic regions of the state affected by funds expended
from the California Advanced Services Fund in the prior year.
   (D) The expected benefits to be derived from the funds expended
from the California Advanced Services Fund in the prior year.
   (E) Actual broadband adoption levels from the funds expended from
the California Advanced Services Fund in the prior year.
   (F) The amount of funds expended from the California Advanced
Services Fund used to match federal funds.
   (G) An update on the expenditures from California Advanced
Services Fund and broadband adoption levels, and an accounting of
remaining unserved and underserved areas of the state.
   (2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2016, pursuant to Section
10231.5 of the Government Code.
   (B) A report to be submitted pursuant to paragraph (1) shall be
submitted in compliance with Section 9795 of the Government Code.
  SEC. 2.  This act is an urgency statute necessary for the immediate
preservation of the public peace, health, or safety within the
meaning of Article IV of the Constitution and shall go into immediate
effect. The facts constituting the necessity are:
   In order to authorize the award of funds for the expansion of
broadband deployment to unserved and underserved areas of California,
to stimulate investments in infrastructure critical to increasing
the state's productivity, and to improve the quality of information
available to all of the state's citizens, as needed for the health
and safety of those citizens, it is necessary that this act take
effect immediately.