BILL ANALYSIS Ó SB 745 Page 1 Date of Hearing: August 10, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair SB 745 (Hueso) - As Amended August 1, 2016 ----------------------------------------------------------------- |Policy |Utilities and Commerce |Vote:|10 - 4 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill makes various changes to the grant programs provided by the California Advanced Services Fund (CASF) and the program reporting requirements. Specifically, this bill: 1)Authorizes representatives of workforce organizations and air pollution control or air quality management districts to be included as an eligible consortium for funds in the CASF Rural and Urban Regional Broadband Consortia Grant Account (Consortia Account). SB 745 Page 2 2)Requires the California Public Utilities Commission (PUC), in its review of applications for funds from the CASF Broadband Public Housing Account (Public Housing Account), to prioritize unserved housing developments, defined as when at least one housing unit within the development is not offered broadband internet service. 3)Extends the date remaining funds from the Public Housing Account are transferred back to other CASF Accounts from December 31, 2016, to December 31, 2020. 4)Extends the due date on the PUC annual report to the Legislature from January 1 of each year to April 1 of each year, and requires the PUC to provide additional information including county information and specified details on the status of each CASF funded project. FISCAL EFFECT: The PUC anticipates increased costs of approximately $260,000 (CASF) to present county-by county-data on project progress and provide detailed information of efforts to leverage non-CASF funds in annual reports. Staff would also be required to process the additional applications and conduct administrative tasks related to grant oversight and reimbursement for applications from workforce organizations and air quality districts. COMMENTS: 1)Purpose. This bill explicitly adds representatives from workforce organizations and air pollution control or air SB 745 Page 3 quality management districts as eligible for grants and prioritizes undeserved housing developments under the CASF. Additionally, this bill expands the information required in the PUC's annual report to provide details on efforts to leverage non-CASF funds and provide county-level expenditure information. 2)Background. The CASF was established to encourage the deployment of broadband services to all Californians to promote economic growth, job creation, and the social benefits associated with advanced information and communications technologies. It is funded by a surcharge rate on the revenues collected by telecommunications carriers from the end-users of intrastate services. CASF funding is allocated into four accounts, the Infrastructure Account, the Consortia Account, the Revolving Loan Account, and the Public Housing Account. The Infrastructure Account funds the capital costs of broadband infrastructure projects in unserved and underserved areas in California. The Consortia Account provides funding for the cost of broadband deployment activities, other than the capital cost of facilities. The Revolving Loan Account supplements financing for projects also receiving CASF grant funding. The Public Housing Account supports projects to deploy local area networks and to increase adoption rates in publicly supported housing communities. Currently, the PUC is authorized to collect $315 million for the CASF through 2020, but not to exceed $25 million per year, unless the PUC 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. As of December 2015 the status of each CASF account is as follows: SB 745 Page 4 Infrastructure Account: Authorized to collect $270 million for funding for the capital costs of broadband infrastructure projects. Fifty-two projects have been approved and 20 projects are still pending/under review. Approximately $121.3 million has been awarded from the account. Revolving Loan Account: Authorized to collect $5 million to provide supplemental financing for projects that are also applying for funds from the Infrastructure Grant Account. Approximately $627,000 has been awarded from the account. Consortia Account: Authorizes $15 million to fund the cost of broadband deployment activities other than the capital cost of facilities. Approximately $9.3 million has been awarded from the account. Public Housing Account: Authorizes $25 million to provide grants and loans dedicated to broadband access and adoption in publicly supported housing communities. Ninety-nine projects have been approved and 271 projects are still pending/under review. Approximately $2.5 million has been awarded from the account. Analysis Prepared by:Jennifer Galehouse / APPR. / (916) 319-2081 SB 745 Page 5