BILL ANALYSIS Ó SB 745 Page 1 SENATE THIRD READING SB 745 (Hueso) As Amended August 1, 2016 Majority vote SENATE VOTE: 36-1 ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Utilities |10-4 |Gatto, Burke, Eggman, |Patterson, Chávez, | | | | |Dahle, Obernolte | | | | | | | | | | | | | |Cristina Garcia, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | | | | | | | | | | | |Roger Hernández, | | | | |Quirk, Santiago, | | | | |Ting, Williams | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |11-4 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Jones, Obernolte | SB 745 Page 2 | | |Eggman, | | | | | | | | | | | | | | |Eduardo Garcia, | | | | |Quirk, Santiago, | | | | |Weber, Wood, McCarty | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Makes various changes to the California Advanced Services Fund (CASF). Specifically, this bill: 1)Requires the California Public Utilities Commission (CPUC), in its review of applications for funds from the CASF Broadband Public Housing Account (Public Housing Account), to prioritize unserved housing developments. 2)Specifies that a housing development is unserved when at least one housing unit within the housing 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 CPUC annual report to the Legislature from January 1 of each year to April 1 of each year. 5)Requires the CPUC to provide additional information in its SB 745 Page 3 annual report, including county information and specified details on the status of each CASF funded project. 6)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). FISCAL EFFECT: According to the Assembly Appropriations Committee, the CPUC anticipates increased costs of approximately $260,000 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)Author's Statement: According to the author, "Improving the information available to policymakers about the efforts and activities of the CASF program will help to further our efforts to improve access for more Californians. More detailed information at the county-level and information about efforts to leverage non-CASF resources will be beneficial to inform policymakers as to the existing challenges and opportunities. The funds in the Public Housing program are beneficial to low-income residents who would otherwise be without broadband service - and therefore, opportunities for employment, economic development, health improvements, services, etc." SB 745 Page 4 2)Background: The CASF was statutorily established by the Legislature through SB 1193 (Padilla), Chapter 393, Statutes of 2008, to help promote the deployment of broadband infrastructure in unserved and underserved areas of the state. The goal of the program was to reach areas of the state that had dial-up internet connectivity. The CASF is funded through a surcharge collected on all telecommunications end-users. As of June 2016, the CASF surcharge rate is at 0.464%. 3)CASF Accounts: CASF funding is allocated into four accounts, the Broadband Infrastructure Grant Account (Infrastructure Account), the Consortia Account, the Broadband Infrastructure Revolving Loan Account (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 CPUC is authorized to collect $315 million for the CASF through 2020, but not to exceed $25 million per year, unless the CPUC 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. 4)CASF Broadband Public Housing Account: In 2013, the Legislature passed AB 1299 (Bradford), Chapter 507, Statutes of 2013, which established the Public Housing Account within the CASF. As of December 2015, there remains approximately $22 million remaining in the Public Housing Account. Any remaining funds in the Public Housing Account that haven't SB 745 Page 5 been awarded by December 31, 2016, is to be transferred back to Infrastructure Account and Revolving Loan Account. This bill 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. 5)Resolution T-17515: In 2015, the Housing Authority of the County of San Bernardino (HACSB), Community Housing Works (CHW), and Eden Housing, Inc. (Eden), submitted applications for CASF funding. The projects were challenged by two Internet Service Providers (ISP) on the grounds that an ISP was already providing service to those publically supported communities. The subsequent review of the challenge concluded that nearly all of the public housing application locations were wired. HACSB, CHW, and Eden responded to the challengers by asserting that "although the units may have wiring to support broadband Internet service, residents do not subscribe to that service because they cannot afford the service." In June 2016, the CPUC approved $239,793 for the HACSB, CHW, and Eden projects. This bill requires the CPUC to prioritize unserved housing developments for funds from the Public Housing Account. 6)CASF Annual Report: Under current law, the CPUC is required to provide an annual report to the Legislature on January 1 of each year on the status of the CASF. This bill extends the due date on the CPUC annual report to the Legislature from January 1 of each year to April 1 of each year. In addition, this bill requires the CPUC to include more specified information in its annual report. 7)Regional Consortia: Under current law, moneys from the SB 745 Page 6 Consortia Account are available only to eligible consortia's to fund the cost of broadband deployment activities other than the capital cost of facilities. This bill would add representatives of workforce organizations and air pollution control or air quality management districts as eligible consortia that may apply for Consortia Account funds. Analysis Prepared by: Edmond Cheung / U. & C. / (916) 319-2083 FN: 0004095