BILL ANALYSIS                                                                                                                                                                                                    



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          Date of Hearing:  August 10, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 745  
          (Hueso) - As Amended August 1, 2016


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          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). 










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          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  








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            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:









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            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














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