BILL NUMBER: AB 2130 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY MARCH 17, 2016
INTRODUCED BY Assembly Member Quirk
FEBRUARY 17, 2016
An act to amend Section 281 of the Public Utilities Code, relating
to telecommunications.
LEGISLATIVE COUNSEL'S DIGEST
AB 2130, as amended, Quirk. Telecommunications: universal service:
California Advanced Services Fund.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations.
Existing law establishes the California Advanced Services Fund,
referred to as the CASF, in the State Treasury.
Treasury, with 4 accounts. Existing law requires that a
surcharge imposed by the commission pursuant to a specified decision
of the commission be deposited in the fund. Existing law prohibits
the commission from collecting more than $100,000,000 before January
1, 2011, and authorizes the commission to collect an additional sum
not to exceed $215,000,000, through the surcharge for the period
beginning January 1, 2011, and continuing through the 2020 calendar
year, for a total cost limitation of $315,000,000.
Existing law requires the commission to develop, implement, and
administer the CASF 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 certain decisions of the commission and
in statute. technologies. Existing law states that the
goal of the California Advanced Services Fund 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. Existing law requires 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 and requires 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.
This bill would make nonsubstantive changes to the CASF statute.
This bill would establish the Broadband Build-Out Completion
Account within the CASF and would authorize the commission to collect
an additional sum not to exceed $100,000,000, on or after January 1,
2017, for deposit in the Broadband Build-Out Completion Account. The
bill would require that moneys in the account be disbursed pursuant
to a multiple-round, fair and open competitive bidding process for
infrastructure projects to provide broadband access to unserved areas
of California consistent with specified requirements and objectives.
Under existing law, a violation of the Public Utilities Act or any
order, decision, rule, direction, demand, or requirement of the
commission is a crime.
Because the program that is extended under the provisions of this
bill are within the act and a decision or order of the commission
implements the program requirements, a violation of these provisions
would impose a state-mandated local program by expanding the
definition of a crime.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
By authorizing the charge to fund the new account, this bill would
include a change in state statute that would result in a taxpayer
paying a higher tax within the meaning of Section 3 of Article XIII A
of the California Constitution, and thus would require for passage
the approval of 2/3 of the membership of each house of the
Legislature.
Vote: majority 2/3 . Appropriation:
no. Fiscal committee: no yes .
State-mandated local program: no yes .
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, 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 the state's
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.
(4) The Broadband Public Housing Account.
(5) The Broadband Build-Out Completion 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 on
and 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) Fifteen million dollars ($15,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Ten million dollars ($10,000,000) 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. On and 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) Notwithstanding subdivision (d), on or after January 1, 2017,
the commission may collect an additional sum not to exceed one
hundred million dollars ($100,000,000), for deposit in the Broadband
Build-Out Completion Account. The commission may collect the
additional sum beginning with the calendar year 2017 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)
(f) (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) 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 all of the
following:
(A) That projects under this paragraph provide last-mile broadband
access to households that are unserved by an existing
facilities-based broadband 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)
(g) 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, elementary and
secondary education, health care, libraries, postsecondary 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)
(h) 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)
(i) (1) For purposes of this subdivision, the following
terms have the following meanings:
(A) "Publicly subsidized" means either that the housing
development receives financial assistance from the United States
Department of Housing and Urban Development pursuant to an annual
contribution contract or is financed with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation bonds,
or local, state, or federal loans or grants and the rents of the
occupants, who are lower income households, do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
(B) "Publicly supported community" means a publicly subsidized
multifamily housing development that is wholly owned by either of the
following:
(i) A public housing agency that has been chartered by the state,
or by any city or county in the state, and has been determined to be
an eligible public housing agency by the United States Department of
Housing and Urban Development.
(ii) An incorporated nonprofit organization as described in
Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501(c)
(3)) that is exempt from taxation under Section 501(a) of that code
(16 U.S.C. Sec. 501(a)), and that has received public funding to
subsidize the construction or maintenance of housing occupied by
residents whose annual income qualifies as "low" or "very low" income
according to federal poverty guidelines.
(2) Moneys in the Broadband Public Housing Account shall be
available for the commission to award grants and loans pursuant to
this subdivision to an eligible publicly supported community if that
entity otherwise meets eligibility requirements and complies with
program requirements established by the commission.
(3) Not more than twenty million dollars ($20,000,000) shall be
available for grants and loans to a publicly supported community to
finance a project to connect a broadband network to that publicly
supported community. A publicly supported community may be an
eligible applicant only if the publicly supported community can
verify to the commission that the publicly supported community has
not denied a right of access to any broadband provider that is
willing to connect a broadband network to the facility for which the
grant or loan is sought.
(4) (A) Not more than five million dollars ($5,000,000) shall be
available for grants and loans to a publicly supported community to
support programs designed to increase adoption rates for broadband
services for residents of that publicly supported community. A
publicly supported community may be eligible for funding for a
broadband adoption program only if the residential units in the
facility to be served have access to broadband services or will have
access to broadband services at the time the funding for adoption is
implemented.
(B) A publicly supported community may contract with other
nonprofit or public agencies to assist in implementation of a
broadband adoption program.
(5) To the extent feasible, the commission shall approve projects
for funding from the Broadband Public Housing Account in a manner
that reflects the statewide distribution of publicly supported
communities.
(6) In reviewing a project application under this subdivision, the
commission shall consider the availability of other funding sources
for that project, any financial contribution from the broadband
service provider to the project, the availability of any other public
or private broadband adoption or deployment program, including tax
credits and other incentives, and whether the applicant has sought
funding from, or participated in, any reasonably available program.
The commission may require an applicant to provide match funding, and
shall not deny funding for a project solely because the applicant is
receiving funding from another source.
(7) (A) To provide funding for the purposes of this subdivision,
the commission shall transfer to the Broadband Public Housing Account
twenty million dollars ($20,000,000) from the Broadband
Infrastructure Grant Account and five million dollars ($5,000,000)
from the Broadband Revolving Loan Account. Any moneys in the
Broadband Public Housing Account that have not been awarded pursuant
to this subdivision by December 31, 2016, shall be transferred back
to the Broadband Infrastructure Grant Account and Broadband
Infrastructure Revolving Loan Account in proportion to the amount
transferred from the respective accounts.
(B) The commission shall transfer funds pursuant to subparagraph
(A) only if the commission is otherwise authorized to collect funds
for purposes of this section in excess of the total amount authorized
pursuant to paragraph (3) of subdivision (d).
(j) (1) Moneys in the Broadband Build-Out Completion Account shall
be disbursed pursuant to a multiple-round, fair and open competitive
bidding process for infrastructure projects to provide broadband
access to unserved areas of California. The bidding process shall
include all of the following:
(A) Criteria for determining eligible areas for Broadband
Build-Out Completion Account funding by utilizing available
information as to those areas that are unserved and that are not
eligible for funding pursuant to Phase II of the Connect America
Fund, because of the limitations in Section 54.310 of Title 47 of the
Code of Federal Regulations, or similar programs distributing
federal Connect America Fund support.
(B) Publicizing and making publicly available material program
requirements in advance of the deadline for bid submission, including
terms for the service commitments described in paragraph (2).
Program requirements shall be technologically neutral.
(C) Establishing a reserve price for each eligible area after
considering the model used for the distribution of Phase II of the
Connect America Fund or similar programs for distributing federal
Connect America Fund support.
(D) Awarding funds with the objective of serving the maximum
number of unserved households. Bidders shall be allowed to determine
the amount of capital and operating expenses to include in the bid
and shall not be required to share this information with the
commission.
(2) Recipients of Broadband Build-Out Completion Account support
shall offer access to the Internet at speeds of at least 10 megabits
per second (Mbps) downstream and 1 Mbps upstream and shall offer a
voice service that meets all of the following requirements for the
term specified by the commission:
(A) It provides voice grade access to the public switched
telephone network or its replacement voice communications network.
(B) It enables real time, two-way voice communications.
(C) It provides the ability to call and connect to the local
emergency telephone systems described in the Warren-911-Emergency
Assistance Act (Article 6 (commencing with Section 53100) of Chapter
1 of Part 1 of Division 2 of Title 5 of the Government Code).
(3) The commission shall conduct a fair and open competitive
bidding process and shall award funds from the Broadband Build-Out
Completion Account no later than January 1, 2020.
(4) If funds remain in the Broadband Build-Out Completion Account
after the first award of funds, the commission shall promptly conduct
additional competitive bidding rounds to distribute the balance of
available funds in the account.
SEC. 2. No reimbursement is required by this act
pursuant to Section 6 of Article XIII B of the California
Constitution because the only costs that may be incurred by a local
agency or school district will be incurred because this act creates a
new crime or infraction, eliminates a crime or infraction, or
changes the penalty for a crime or infraction, within the meaning of
Section 17556 of the Government Code, or changes the definition of a
crime within the meaning of Section 6 of Article XIII B of the
California Constitution.