BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1154
                                                                  Page  1

          Date of Hearing:   August 4, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   SB 1154 (Cedillo) - As Amended:  August 2, 2010 

          Policy Committee:                              Utilities and  
          Commerce     Vote:                            13-2

          Urgency:     No                   State Mandated Local Program:  
          Yes    Reimbursable: No

           SUMMARY  

          This bill requires the Public Utilities Commission (PUC) to  
          ensure all new applications and recertification applications for  
          the California Alternative Rates for Energy (CARE) and the  
          Universal Lifeline Telephone Service (UTLS) programs include  
          specified information about the federal Earned Income Tax Credit  
          (EITC).

           FISCAL EFFECT  

          1)Administrative costs to the PUC would be minor and absorbable.

          2)Annual special fund cost to provide EITC information to UTLS  
            participants would be about $400,000, based on the cost of  
            providing a two-sided insert for four million new applicants  
            and recertification applicants annually. [Universal Lifeline  
            Telephone Service Fund]

          3)Any costs to provide EITC information to CARE applicants would  
            be borne by natural gas and electricity ratepayers.

           COMMENTS  

           Background and Purpose  . The CARE program requires investor owned  
          utilities to provide a 20% discount on natural gas and  
          electricity service to specified low income customers. This  
          program is managed by the investor-owned utilities and paid  
          through a subsidy from all other utility ratepayers. The UTLS  
          program provides a 50% discount on basic landline phone service  
          to qualifying low income households. This program is managed by  
          an outside contractor on behalf of the PUC and is supported by a  








                                                                  SB 1154
                                                                  Page  2

          surcharge on intrastate phone calls. 

          The EITC provides a refundable federal income tax credit for low  
          and moderate income working households. According to the New  
          American Foundation, about 800,000 California residents who are  
          eligible for the EITC do not claim an estimated $1.2 billion in  
          credits. This bill seeks to expand the number of eligible  
          Californians taking advantage of the EITC by making available  
          information about the program to CARE and UTLS applicants.

           Analysis Prepared by  :    Chuck Nicol / APPR. / (916) 319-2081