BILL NUMBER: SB 740 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY AUGUST 7, 2013
AMENDED IN ASSEMBLY JUNE 26, 2013
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, 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 moneys, collected by the surcharge,
authorized by the commission, after January 1, 2011, are to be
deposited into 3 separate accounts within the CASF. Existing law
authorizes the commission to collect a sum not to exceed
$125,000,000, after January 1, 2011, and requires that $100,000,000
of that amount be deposited into the Broadband Infrastructure Grant
Account. Existing law authorizes the commission to collect the sum
through the 2015 calendar year.
This bill would increase the amount the commission is authorized
to collect to a sum not to exceed $215,000,000, after January 1,
2011, and instead would require that $190,000,000 be deposited into
the Broadband Infrastructure Grant Account. The bill would authorize
the commission to collect that amount until 2020.
The 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. In approving infrastructure projects, the bill
would require the commission to give priority to projects that
provide last-mile broadband access to households that are unserved by
an existing facilities-based broadband provider. The bill would
require the commission to provide each applicant, and any party
challenging an application, the opportunity to demonstrate actual
levels of broadband service in the project area, as prescribed.
The 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 to provide access to broadband
to an unserved or underserved household, as defined, if the
entity otherwise meets the eligibility requirements and complies with
program requirements established by the commission.
Existing law requires the commission to conduct an interim and
final financial audit and an interim and final performance audit of
the implementation and effectiveness of the CASF and to report its
interim findings to the Legislature by April 1, 2011, and its final
findings to the Legislature by April 1, 2017.
This bill would require the commission to conduct an additional
interim financial audit and interim performance audit and to report
these findings to the Legislature by April 1, 2017. The bill would
instead require the commission to report its final findings to the
Legislature by April 1, 2021.
Existing law requires the commission, until January 1, 2016, to
provide an annual report to the Legislature that includes specified
information.
This bill would extend this reporting requirement until January 1,
2021, and would require the report to include information regarding
the status of the CASF balance and the projected amount to be
collected in each year through 2020 in order to
fund approved projects.
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
subsequent decisions and consistent with this
section.
(b) (1) 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.
(2) In approving infrastructure projects, the commission shall
give priority to projects that provide last-mile broadband access to
households that are unserved by an existing facilities-based
broadband provider. The commission shall provide each applicant, and
any party challenging an application, the opportunity to demonstrate
actual levels of broadband service in the project area, which the
commission shall consider in reviewing the application.
(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.
(d) (1) All moneys collected by the surcharge authorized by the
commission pursuant to Decision 07-12-054 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 hundred ninety million dollars ($190,000,000) 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 hundred fifteen million dollars
($215,000,000), for a sum total of moneys collected by imposing the
surcharge described in paragraph (1) not to exceed three hundred
fifteen million dollars ($315,000,000). 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.
(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 to provide access to broadband to an unserved or
underserved household, as defined in commission Decision 12-02-015,
if the entity otherwise meets the eligibility requirements and
complies with program requirements established by the commission.
These requirements shall include that all of
the following:
( A) That projects
under this paragraph primarily provide last-mile
broadband access to households that are unserved by an existing
facilities-based broadband provider. The
provider and only receive funding to provide broadband access to
households that are unserved or underserved, as defined in commission
Decision 12-02-015.
(B) That funding for a project providing broadband access to an
underserved household shall not be approved until after any existing
facilities-based provider has an opportunity to demonstrate to the
commission that it will, within a reasonable timeframe, upgrade
existing service. An existing facilities-based provider may, but is
not required to, apply for funding under this section to make that
upgrade.
(C) That the
commission shall provide each applicant, and any party challenging an
application, the opportunity to demonstrate actual levels of
broadband service in the project area, which the commission shall
consider in reviewing the application.
(D) That a local governmental agency may be eligible for an
infrastructure grant only if the infrastructure project is for an
unserved household or business, the commission has conducted an open
application process, and no other eligible entity applied.
(E) That the commission shall establish a service list of
interested parties to be notified of California Advanced Services
Fund applications.
(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.
(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.
(h) (1) The commission shall conduct two interim financial audits
and a final financial audit and two interim performance audits and a
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, and April 1,
2017. The commission shall report its final findings to the
Legislature by April 1, 2021. 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, 2022, 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.
(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 households and areas of
the state.
(H) The status of the California Advanced Service
Services Fund balance and the projected amount
to be collected in each year through 2020 in order
to fund approved projects.
(2) (A) The requirement for submitting a report imposed under
paragraph (1) is inoperative on January 1, 2021, 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 households and
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.