BILL ANALYSIS Ó
AB 1503
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Date of Hearing: May 13, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
AB
1503 (Perea) - As Amended April 30, 2015
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill requires the Public Utilities Commission (PUC) to
include auxiliary organizations of the California State
University (CSU) system in the California Teleconnect Fund
discount program.
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FISCAL EFFECT:
1)Increased expenditures for local assistance to CSU auxiliaries
potentially in the $5 million to $20 million annual range
(CTF).
As an example, there are a total of 93 California State
University Auxiliaries on 24 campuses. The CSU, Fresno (CSUF)
auxiliary was denied a reported $217,000 discount. If one
auxiliary at each campus qualified for a $200,000 discount,
annual costs would be $4.8 million. If each of the 93
auxiliaries qualified for a $200,000 discount, annual costs
would be $18.6 million.
This program is funded through a surcharge on all intrastate
communications services. According to the PUC, to ensure
sufficient revenues and a positive fund balance, the CTF
surcharge would likely increase between 0.1% to 0.25%. The
CTF surcharge will increase from .93% to 1.08% effective on
June 1, 2015.
2)One-time administrative costs of approximately $250,000 for
PUC to establish a framework for the eligibility criteria for
CSU auxiliaries in a new proceeding or revise the existing CTF
proceeding (CTF).
COMMENTS:
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1)Rationale. The CSU Fresno Association, Inc., a nonprofit
auxiliary association of CSUF, operates the college bookstore,
campus housing, and the athletic facility. Last year, the
association applied for a $217,000 discount from the CA
Teleconnect Fund for telecommunications and internet access
services, but was deemed ineligible.
According to the author, when non-profit auxiliaries need to
spend more financial resources on these telecommunications and
internet services, they either have fewer financial resources
available to give back to other student programs or they
cannot offer communications services at the same or sufficient
level.
This bill allows auxiliary associations of California State
Universities to qualify for communications discounts under the
program.
2)Background. The CTF was created by the CPUC in 1996, under to
foster the development of a telecommunications infrastructure
for California and reduce the digital divide. The program is
funded by a surcharge on all end users of intrastate
telecommunications services.
The program provides a 50% discount on select
telecommunications and Internet access services to qualifying
entities. Qualifying entities include K-12 schools, community
colleges, libraries, municipal, county government,
district-owned and operated hospitals, health networks and
clinics, and non-profit community based organizations.
Communication services eligible for the 50% discount include
T1 and T3 lines (fiber optics), cable internet, digital
subscriber lines (DSL), wireless internet, and dial-up.
3)Current CTF Proceeding. In January 2013, the CPUC issued a
Rulemaking (13-01-010) to determine whether the CTF is meeting
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its statutory goals, and whether the CTF's current structure
and administrative processes are adequate to further the
program's goals. Among other things, the rulemaking seeks to
regularly review the CTF to ensure that the programs'
subsidies flow to its intended recipients. A proposed proposed
decision in this proceeding is out for comment and eligible
for a vote at the May 21, 2015 PUC meeting.
4)CSU Auxiliary Organizations. CSU auxiliary organizations are
non-profit organizations that operate pursuant to written
agreements with the CSU Board of Trustees. They have separate
governing boards with close campus linkages and follow all
legal and policy rules established by the CSU system and
campus administration. Auxiliary organizations perform
essential functions associated with the institution that
complement the core academic programs at each campus. CSU
auxiliary organizations are generally classified into one or
more of the following functions: student self-governance,
student body center/union/recreation center;
externally-supported research and sponsored programs,
including workshops, institutes or conferences; commercial
services, such as book stores or food service; or
Philanthropic activities, including acceptance of donor gifts.
This bill would include CSU auxiliary organizations as
qualifying entities that may apply for the discount under the
CTF.
Analysis Prepared by:Jennifer Galehouse / APPR. / (916)
319-2081
AB 1503
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