BILL NUMBER: SB 740 AMENDED
BILL TEXT
AMENDED IN SENATE MAY 7, 2013
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 amended, 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) , referred to
as the 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
moneys , collected by the surcharge, authorized by the
commission, after January 1, 2011, is are
to be deposited into the Broadband Infrastructure
Account 3 separate accounts within the CASF .
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 the goal of the CASF program is, no
later than December 31, 2015, to approve funding for infrastructure
projects that will provide broadband access to no less than 98% of
California households and would provide that it is the intent of the
Legislature to authorize collection of additional surcharge amounts
necessary to achieve this program goal. In awarding infrastructure
grants, this bill would require that priority be given to projects
that provide last-mile broadband connection to households that are
unserved by an existing facilities-based broadband provider. This
bill would provide that a middle-mile broadband project is eligible
for an infrastructure grant even if it passes through an area served
by an existing facilities-based broadband provider, as long as the
project applicant can demonstrate that the project provides last-mile
broadband connection to households that are unserved by any existing
facilities-based broadband provider.
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 provide that a
local governmental agency may be eligible for an infrastructure grant
only if the infrastructure project is for an unserved area, the
commission has conducted an open application process and
no other eligible entity applied, and the commission determines that
within the region of the local agency's jurisdiction there is less
than 98% broadband deployment.
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 program 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
(b) The goal of the program is, no later than December 31, 2015,
to approve funding for infrastructure projects that will provide
broadband access to no less than 98 percent of California households.
In awarding infrastructure grants, priority shall be given to
projects that provide last-mile broadband connection to households
that are unserved by an existing facilities-based broadband provider.
However, a middle-mile broadband project is eligible for an
infrastructure grant even if it passes through an area served by an
existing facilities-based broadband provider, as long as the project
applicant can demonstrate that the project provides last-mile
broadband connection to households that are unserved by any existing
facilities-based broadband provider.
( c) 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)
( d) (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) Two One hundred million dollars
($200,000,000) ($100,000,000) 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 two one
hundred twenty-five million dollars ($225,000,000)
($125,000,000) , for a sum total of moneys
collected by imposing the surcharge described in paragraph (1) not to
exceed three two hundred twenty-five
million dollars ($325,000,000) ($225,000,000)
. The commission may collect the additional sum beginning with
the calendar year starting on January 1, 2011, and continuing
through the 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.
(4) It is the intent of the Legislature to authorize collection of
additional surcharge amounts necessary to achieve the program goal
described in subdivision (b).
(c)
( e) (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. A local governmental agency may be
eligible for an infrastructure grant only if the infrastructure
project is for an unserved area, the commission has conducted an open
application process and no other eligible entity applied, and the
commission determines that within the region of the local agency's
jurisdiction there is less than 98 perce nt broadband
deployment.
(d)
( f) 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)
( g) 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)
( h) (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)
( i) (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.