BILL ANALYSIS Ó SB 740 Page 1 Date of Hearing: August 21, 2013 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair SB 740 (Padilla) - As Amended: August 7, 2013 Policy Committee: Utilities and Commerce Vote: 11-4 Urgency: Yes State Mandated Local Program: No Reimbursable: SUMMARY This bill expands eligibility in the California Advanced Services Fund (CASF), establishes a program goal, and increases the program funding. Specifically, this bill: 1)Specifies the goal of the CASF program is to approve funding for infrastructure projects that contribute to expanding broadband access to no less than 98% of California households no later than December 31, 2015. 2)Increases the amount the PUC is authorized to collect to an amount not to exceed $215 million, and requires that $190 million be deposited into the Broadband Infrastructure Grant Account. 3)Requires the Public Utilities Commission (PUC) to give priority to projects that provide last-mile broadband access to households that are unserved by an existing facilities-based broadband provider. 4)Allows an entity that is not a telephone corporation to apply to participate in the CASF program to provide access to broadband to an unserved or underserved household, as defined, if the entity meets the eligibility requirements and complies with program requirements established by the PUC. FISCAL EFFECT Unknown cost pressures, potentially in the hundreds of thousands of dollars from the CASF (special fund) for expanded grantee eligibility SB 740 Page 2 COMMENTS 1)Purpose. According to the author, this bill modifies the CASF to support broadband infrastructure in the most remote areas of the state that still lack the high-speed Internet access. It is intended to advance state policy to ensure that all Californians are served. 1)Background. In 2008, SB 1193 (Padilla) authorized the PUC to assess a surcharge on telephone ratepayers to fund the CASF. Existing law now requires $100 million collected by the surcharge to be deposited into the Broadband Infrastructure Account. The PUC is authorized to collect an additional sum not to exceed $125 million after January 1, 2011 through the 2015 calendar year. The CASF provides funding to encourage deployment of high-quality advanced communications services to all Californians. The program is designed to promote economic growth, job creation, and substantial social benefits of advanced information and communications technologies. Analysis Prepared by : Jennifer Galehouse / APPR. / (916) 319-2081