BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
1154 (Cedillo)
Hearing Date: 05/27/2010 Amended: 04/27/2010
Consultant: Brendan McCarthy Policy Vote: EU&C 10-0
SB 1154 (Cedillo), Page 2
_________________________________________________________________
____
BILL SUMMARY: SB 1154 requires the Public Utilities Commission
to provide information on the federal Earned Income Tax Credit
to applicants for two specified programs for low income
electricity and telecommunications customers. The bill also
requires the Low-Income Oversight Board to make recommendations
on whether those programs can be used to provide additional
outreach to potential beneficiaries of the tax credit.
_________________________________________________________________
____
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Developing information and $25 Special
*
providing staff support
Producing and distributing $270 $270
$270Special **
Information to telephone
customers
* Public Utilities Commission Utilities Reimbursement Account.
** Universal Lifeline Telephone Service Fund.
_________________________________________________________________
____
STAFF COMMENTS: SUSPENSE FILE.
Under current law, the California Alternate Rates for Energy
program requires investor owned utilities to provide a 20
percent discount on natural gas and electricity service to
specified low income customers. The cost of this program is paid
for by ratepayers. Also under current law, the Universal
Lifeline Telephone Service program provides a 50 percent
discount on basic landline phone service to qualifying low
income households. This program is supported by a surcharge on
intrastate phone calls.
Under current practice, the California Alternate Rates for
Energy program is managed by investor owned utilities, while the
Universal Lifeline Telephone Service program is managed by an
outside contractor on behalf of the Public Utilities Commission.
SB 1154 (Cedillo), Page 2
Under current law, the Low Income Oversight Board advises the
Public Utilities Commission on issues relating to low income
electricity and gas customers.
Under current federal law, the Earned Income Tax Credit provides
a refundable federal income tax credit for low and moderate
income working households. According to research by the New
American Foundation, about 800,000 California residents who are
eligible for the Earned Income Tax Credit do not claim the
credit (totaling about $1.2 billion in federal tax credits).
This bill requires the Public Utilities Commission to provide
information to all applicants for either the California
Alternate Rates for Energy or the Universal Lifeline Telephone
Service programs on the applicant's potential eligibility for
the Earned Income Tax Credit, the potential benefits to them of
the Earned Income Tax Credit, and sources of additional
information on the tax credit.
The bill also requires the Low Income Oversight Board to make
recommendations on whether the California Alternate Rates for
Energy or the Universal Lifeline Telephone Service programs
could provide additional outreach regarding the Earned Income
Tax Credit.
Staff estimates that the Public Utilities Commission would
require a modest amount of additional staff time to develop
information on the Earned Income Tax Credit for inclusion with
program applications and to support the Low Income Oversight
Board as it considers potential recommendations.
In addition, staff estimates that there will be additional state
costs for the contractor managing the Universal Lifeline
Telephone Service program to produce copies of the required
information and include them with program applications. (In the
last year, the program administrator sent out almost four
million applications or renewal forms.)
Because the California Alternate Rates for Energy Program is
managed by the investor owned utilities, with costs covered by
ratepayers, there would be no direct state cost to include this
additional information in program applications. However, any
additional costs to the utilities to produce and distribute this
information would be paid for by natural gas and electricity
ratepayers. (The state is a significant consumer of electricity,
thus the state will share in these costs. However, the total
SB 1154 (Cedillo), Page 2
cost to the state as a ratepayer is likely to be minor.)