BILL ANALYSIS
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|SENATE RULES COMMITTEE | SB 1154|
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VETO
Bill No: SB 1154
Author: Cedillo (D)
Amended: 8/16/10
Vote: 21
SENATE ENERGY, U.&C. COMMITTEE : 10-0, 4/20/10
AYES: Padilla, Dutton, Corbett, Florez, Kehoe, Lowenthal,
Oropeza, Simitian, Strickland, Wright
NO VOTE RECORDED: Cox
SENATE APPROPRIATIONS COMMITTEE : 10-0, 5/27/10
AYES: Kehoe, Alquist, Corbett, Denham, Leno, Price,
Walters, Wolk, Wyland, Yee
NO VOTE RECORDED: Cox
SENATE FLOOR : 35-0, 6/1/10
AYES: Aanestad, Alquist, Ashburn, Calderon, Cedillo,
Cogdill, Corbett, Correa, Cox, Denham, DeSaulnier,
Ducheny, Dutton, Florez, Hancock, Harman, Hollingsworth,
Huff, Kehoe, Leno, Liu, Lowenthal, Negrete McLeod,
Padilla, Pavley, Price, Romero, Runner, Simitian,
Steinberg, Strickland, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Oropeza, Walters, Wiggins, Vacancy,
Vacancy
ASSEMBLY FLOOR : 55-23, 8/30/10 - See last page for vote
SENATE FLOOR : 36-0, 8/31/10
AYES: Alquist, Ashburn, Blakeslee, Calderon, Cedillo,
Cogdill, Corbett, Correa, Denham, DeSaulnier, Ducheny,
Dutton, Emmerson, Florez, Hancock, Harman, Hollingsworth,
Huff, Kehoe, Leno, Liu, Lowenthal, Negrete McLeod,
CONTINUED
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Padilla, Pavley, Price, Romero, Runner, Simitian,
Steinberg, Strickland, Walters, Wolk, Wright, Wyland, Yee
NO VOTE RECORDED: Aanestad, Oropeza, Wiggins, Vacancy
SUBJECT : Public Utilities Commission: Earned Income Tax
Credit
SOURCE : Author
DIGEST : This bill requires, until January 1, 2015, the
Public Utilities Commission (PUC) to ensure that all
applications for the California Alternate Rates for Energy
(CARE) and the Universal Lifeline Telephone Service (ULTS)
programs include information about the applicant's
eligibility to qualify for the federal (EITC). This bill
also requires the Low-Income Oversight Board to make
recommendations on whether CARE and ULTS programs could
assist with outreach regarding the EITC in a manner that
would not detract from the primary goals of these programs
and would minimize negative ratepayer impacts.
Assembly Amendments require that a telephone corporation
ULTS application include the information required by the
PUC, and sunsets the bill January 1, 2015.
ANALYSIS : Current law establishes the CARE program,
administered by the investor-owned utilities, which
provides eligible low-income customers a 20 percent
discount on their electric and natural gas bills.
Current law establishes the ULTS program, administered by
the PUC, which provides eligible low-income customers a 50
percent discount on the rate of basic telephone service.
Current federal law provides for the EITC, a refundable
federal income tax credit for low- to moderate-income
working households.
Existing law requires the PUC to establish a program of
assistance to low-income electric and gas customers, which
is referred to as the CARE program. The Moore Universal
Telephone Service Act establishes the ULTS program in order
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to provide low-income households with access to affordable
basic residential telephone service.
This bill, until January 1, 2015, requires the commission
to ensure that all applications for the CARE and ULTS
programs include specified information about the
applicant's eligibility to qualify for the federal Earned
Income Tax Credit. The bill requires that a telephone
corporation's ULTS application include the information
required by the commission.
Existing law establishes the Low-Income Oversight Board for
the purpose of advising the commission on low-income
electric, gas, and water customer issues and serving as a
liaison for the commission to low-income ratepayers and
representatives.
This bill requires the board to make recommendations on
whether the CARE and ULTS programs could assist with
outreach regarding the federal Earned Income Tax Credit in
a manner that would not detract from the primary goals of
these programs and would minimize negative ratepayer
impacts.
Background
Tax Credit Refunds . According to a March 2010 report of
the New America Foundation, an estimated 2.4 million
California residents will claim $4.95 billion in EITC
refunds in 2009. However, the report predicts an
additional 800,000 Californians will fail to claim the
credit, thereby leaving an estimated $1.2 billion in EITC
refunds on the table. On average, families not claiming
the credit would have received a refund amounting to
$1,400. The report states: "The families and individuals
who miss out are not the only losers when these refunds go
unclaimed. Local economies never benefit from this money.
These dollars are never spent at local businesses, so fewer
jobs are created, fewer wages are paid, and eventually less
tax revenue goes to state and local governments. These
refunds are a foregone economic stimulus for California."
According to the Internal Revenue Service Web site, income
eligibility for the EITC and the amount of credit varies
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with the number of children in the household, ranging from
a maximum tax credit of $5,657 in a household with three or
more qualifying children and adjusted gross income of less
than $43,279 to a maximum tax credit of $457 in a household
with no qualifying children and adjusted gross income of
less than $13,440.
CARE Program . A customer can be eligible for the CARE
program based on (1) household income, ranging from less
than $30,500 for a household of one or two persons to less
than $58,000 for a household of six persons, or (2)
enrollment in public assistance programs such as
Medicaid/Medi-Cal, Supplemental Security Income, etc. The
costs of the CARE programs are paid by ratepayers. Each
investor-owned utilities is authorized to recover its cost
of administering the CARE program through a surcharge on
each customer's bill. The utilities offer customers a
variety of procedures for applying for CARE, including
mail, telephone, and online applications and
recertifications. The utilities are required to submit
annual reports on the program to the PUC.
ULTS Program. A customer can be eligible for ULTS, also
known as Lifeline service, based on (1) household income
ranging from less than $24,000 for a household of one or
two persons to less than $34,000 for a household of four
persons, or (2) enrollment in public assistance programs.
The ULTS is funded through an all end-user surcharge on
intrastate telecommunications service, with funds going to
the PUC, which administers the program. The PUC pays an
outside contractor, Solix, for handling all initial
application forms and annual recertification applications.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Assembly Appropriations Committee:
1.Administrative costs to PUC would be minor and
absorbable.
2.Annual special fund cost to provide Tax Credit
information to Universal Lifeline Telephone Service
(UTLS) participants would be about $400,000, based on the
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cost of providing a two-sided insert for $4 million new
applicants and recertification applicants annually.
[Universal Lifeline Telephone Service Fund]
3.Any costs to provide Tax Credit information to low-income
customers eligible for the California Alternative Rates
for Energy (CARE) program would be borne by natural gas
and electricity ratepayers.
SUPPORT : (Verified 8/25/10)
TURN
ARGUMENTS IN SUPPORT : According to the author's office,
one of the main reasons eligible Californians do not apply
for the EITC is that they do not know about the program.
"Partnering with an established program like CARE and
Lifeline to do outreach about the federal EITC will allow
information about the EITC to reach target populations that
would most likely qualify for the EITC."
GOVERNOR'S VETO MESSAGE:
"I am returning Senate Bill 1154 without my signature.
This bill requires the California Public Utilities
Commission (CPUC) to ensure that CPUC-administered
low-income program applications include information
about the applicant's potential eligibility to qualify
for the federal Earned Income Tax Credit (EITC)
program.
Throughout my Administration, I have been supportive
of efforts to inform Californians of the tax benefits
they could realize under the EITC. Nonetheless, it is
outside the responsibility of the CPUC and electrical
and telephone corporations to provide outreach
materials on federal tax programs.
Additionally, I am concerned about the precedent of
requiring utility companies to advertise an
ever-growing list of programs that are not directly
related to the services they provide, yet would impose
costs on other ratepayers who may receive little or no
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benefit.
For these reasons, I am unable to sign this bill."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Arambula, Bass, Beall, Bill
Berryhill, Block, Blumenfield, Bradford, Brownley,
Buchanan, Caballero, Charles Calderon, Carter, Chesbro,
Coto, Davis, De La Torre, De Leon, Eng, Evans, Feuer,
Fletcher, Fong, Fuentes, Furutani, Galgiani, Gatto, Hall,
Hayashi, Hernandez, Hill, Huber, Huffman, Jones, Lieu,
Bonnie Lowenthal, Ma, Mendoza, Monning, Nava, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Skinner,
Solorio, Swanson, Torlakson, Torres, Torrico, Tran,
Yamada, John A. Perez
NOES: Anderson, Tom Berryhill, Conway, Cook, DeVore,
Fuller, Gaines, Garrick, Gilmore, Hagman, Harkey,
Jeffries, Knight, Logue, Miller, Nestande, Niello,
Nielsen, Norby, Silva, Smyth, Audra Strickland, Villines
NO VOTE RECORDED: Vacancy, Vacancy
DLW:nl 10/5/10 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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