Amended in Senate June 1, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 2570

Introduced by Assembly Member Quirk

February 19, 2016

An act to amend begin delete Section 314.5 of end delete begin insert Sections 873 and 879 of, and to add Section 878.5 to, end insert the Public Utilities Code, relating to begin delete the Public Utilities Commission. end delete begin insert telecommunications. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 2570, as amended, Quirk. begin delete Public Utilities Commission: inspection and audit of books and records. end delete begin insert Telecommunications: universal service: wireless communications. end insert

begin insert

Under existing law, the Public Utilities Commission has regulatory authority over public utilities, including telephone corporations. The Moore Universal Telephone Service Act establishes the Universal Lifeline Telephone Service program in order to provide low-income households with access to affordable basic residential telephone service. The act requires the commission to annually designate a class of lifeline service necessary to meet minimum communications needs. The act requires that a lifeline telephone service subscriber be provided with one lifeline subscription, as defined by the commission, at his or her principal place of residence.

end insert begin insert

This bill would specify that minimum communication needs includes wireless communications. The bill would prohibit the commission from reimbursing a telephone corporation for a reimbursement claim for providing wireless lifeline service to a new subscriber who enrolls for service with the telephone corporation if the subscriber enrolled for wireless lifeline service with another telephone corporation within the previous 60 days. The bill would require the commission to reimburse a telephone corporation providing wireless lifeline service within 60 days of the date the telephone corporation submits a reimbursement claim. If the commission does not reimburse a telephone corporation for a reimbursement claim for wireless lifeline service within 60 days, the bill would require the commission to pay all of the costs of the telephone corporation resulting from the late reimbursement, including, but not limited to, financing fees, interest payments, and staff time.

end insert begin delete

Under existing law, the Public Utilities Commission has regulatory authority over public utilities and can establish its own procedures, subject to statutory limitations or directions and constitutional requirements of due process. The Public Utilities Act requires the commission to inspect and audit the books and records of certain public utilities, at specified intervals, for regulatory and tax purposes. Existing law requires reports of these inspections and audits and other pertinent information to be furnished to the State Board of Equalization for use in the assessment of public utilities.

end delete begin delete

This bill would delete the requirement that reports of the inspections and audits and other pertinent information be furnished to the State Board of Equalization.

end delete

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert Section 873 of the end insert begin insert Public Utilities Code end insert begin insert is
amended to read: end insert

873.  

(a) The commission shall annually do all of the following:

(1) Designate a class of lifeline service necessary to meet
minimum communications begin delete needs. end delete begin insert needs, including wireless
communications. end insert

(2) Set the rates and charges for that service.

(3) Develop eligibility criteria for that service.

(4) Assess the degree of achievement of universal service,
including telephone penetration rates by income, ethnicity, and
geography.

(b) Minimum communications needs includes, but is not limited
to, the ability to originate and receive calls and the ability to access
electronic information services.

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 878.5 is added to the end insert begin insert Public Utilities Code end insert begin insert , to
read: end insert

begin insert

begin insert 878.5. end insert   

The commission shall not reimburse a telephone
corporation for a reimbursement claim for providing wireless
lifeline service to a new subscriber who enrolls for service with
the telephone corporation if the subscriber enrolled in wireless
lifeline service with another telephone corporation within the
previous 60 days.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 879 of the end insert begin insert Public Utilities Code end insert begin insert is amended
to read: end insert

879.  

(a) The commission shall, at least annually, initiate a
proceeding to set rates for lifeline telephone service. All telephone
corporations providing lifeline telephone service shall annually
file, on a date set by the commission, proposed lifeline telephone
service rates and a statement of projected revenue needs to meet
the funding requirements to provide lifeline telephone service to
qualified subscribers, together with proposed funding methods to
provide the necessary funding. These funding methods shall include
identification of those services whose rates shall be adjusted to
provide the necessary funding.

(b) The commission shall commence a proceeding within 30
days after the date set for the filings required in subdivision (a),
giving interested parties an opportunity to comment on the
proposed rates and funding requirements and the proposed funding
methods. The commission may change the rates, funding
requirements, and funding methods proposed by the telephone
corporations in any manner necessary, including reasonably
spreading the funding among the services offered by the telephone
corporations, to meet the public interest. Within 60 days of the
annual filing, the commission shall issue an order setting lifeline
telephone service rates and funding methods for each telephone
corporation making a filing as required in subdivision (a). The
commission may establish a lifeline service pool composed of the
rate adjustments and surcharges imposed by the commission
pursuant to this section for the purpose of funding lifeline telephone
service.

(c) Any order issued by the commission pursuant to this section
shall require telephone corporations providing lifeline telephone
service to apply the funding requirement in the form of a surcharge
to service rates which may be separately identified on the bills of
customers using those services. The commission shall not allow
any surcharge under this section on the rates charged by those
telephone corporations for lifeline telephone service.

(d) The commission shall permit telephone corporations
operating between service areas to adjust the rates of any service
which may be affected by any surcharge imposed by this section.

begin insert

(e) The commission shall reimburse a telephone corporation
providing wireless lifeline service within 60 days of the date the
telephone corporation submits a reimbursement claim. If the
commission does not reimburse a telephone corporation for a
reimbursement claim for wireless lifeline service within 60 days,
the commission shall pay all of the costs of the telephone
corporation resulting from the late reimbursement, including, but
not limited to, financing fees, interest payments, and staff time.

end insert

begin delete

SECTION 1.  

Section 314.5 of the Public Utilities Code is
amended to read:

314.5.  

The commission shall inspect and audit the books and
records for regulatory and tax purposes (a) at least once in every
three years in the case of every electrical, gas, heat, telegraph,
telephone, and water corporation serving over 1,000 customers,
and (b) at least once in every five years in the case of every
electrical, gas, heat, telegraph, telephone, and water corporation
serving 1,000 or fewer customers. An audit conducted in
connection with a rate proceeding shall be deemed to fulfill the
requirements of this section.

end delete