BILL NUMBER: SB 745 ENROLLED
BILL TEXT
PASSED THE SENATE AUGUST 24, 2016
PASSED THE ASSEMBLY AUGUST 23, 2016
AMENDED IN ASSEMBLY AUGUST 19, 2016
AMENDED IN ASSEMBLY AUGUST 1, 2016
AMENDED IN ASSEMBLY JUNE 20, 2016
AMENDED IN SENATE JANUARY 4, 2016
INTRODUCED BY Senator Hueso
FEBRUARY 27, 2015
An act to amend Sections 281 and 914.7 of the Public Utilities
Code, relating to telecommunications, and making an appropriation
therefor.
LEGISLATIVE COUNSEL'S DIGEST
SB 745, Hueso. Telecommunications: universal service: California
Advanced Services Fund.
Existing law, the federal Telecommunications Act of 1996,
establishes a program of cooperative federalism for the regulation of
telecommunications to attain the goal of local competition, while
implementing specific, predictable, and sufficient federal and state
mechanisms to preserve and advance universal service, consistent with
certain universal service principles. The universal service
principles include the principle that consumers in all regions of the
nation, including low-income consumers and those in rural, insular,
and high-cost areas, should have access to telecommunications and
information services, including interexchange services and advanced
telecommunications and information services, that are reasonably
comparable to those services provided in urban areas and that are
available at rates that are reasonably comparable to rates charged
for similar services in urban areas. The act authorizes each state to
adopt regulations to provide for additional definitions and
standards to preserve and advance universal service within the state,
only to the extent that they adopt additional specific, predictable,
and sufficient mechanisms that do not rely on or burden federal
universal service support mechanisms.
Under existing law, the Public Utilities Commission has regulatory
authority over public utilities, including telephone corporations,
as defined. Existing law establishes the California Advanced Services
Fund, referred to as the CASF, in the State Treasury. Existing law
requires the commission to develop, implement, and administer the
CASF to encourage deployment of high-quality advanced communications
services to all Californians that will promote economic growth, job
creation, and the substantial social benefits of advanced information
and communications technologies, as provided in specified decisions
of the commission and in the CASF statute.
Existing law establishes the Rural and Urban Regional Broadband
Consortia Grant Account within the CASF. Existing law provides that
moneys in the Rural and Urban Regional Broadband Consortia Grant
Account are available for grants to eligible consortia to fund the
cost of broadband deployment activities other than the capital cost
of facilities, as specified by the commission, and provides that an
eligible consortium may include representatives of organizations,
including local and regional government, public safety, elementary
and secondary education, health care, libraries, postsecondary
education, community-based organizations, tourism, parks and
recreation, agricultural, and business.
This bill would specifically include representatives of workforce
organizations and air pollution control or air quality management
districts amongst the persons that can be included in an eligible
consortium.
Existing law establishes the Broadband Public Housing Account
within the CASF. Existing law provides that moneys in that account
are available for, among other things, grants and loans to publicly
supported communities to finance projects to connect to broadband
networks.
This bill would require the commission, in its review of
applications for grants and loans for this purpose, to prioritize
unserved housing developments, as defined.
Existing law transferred moneys from other accounts within the
CASF to the Broadband Public Housing Account for various specified
purposes and provided that those transferred moneys not awarded by
December 31, 2016, would be returned to the accounts from which they
were transferred.
This bill would postpone the return of those moneys until December
31, 2020. By authorizing the granting of moneys remaining in the
Broadband Public Housing Account until that date, this bill would
make an appropriation.
Existing law requires the commission to annually report to the
Legislature on the expenditures of CASF funds, as specified,
including the geographic regions of the state affected by those
expenditures in the prior year.
This bill would require the commission's report to the Legislature
to include that information by county, details on efforts to
leverage non-CASF funds, the status of each project funded through
the CASF, whether the project has been completed, and, if applicable,
the expected completion date of the project.
Appropriation: yes.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 281 of the Public Utilities Code is amended to
read:
281. (a) The commission shall develop, implement, and administer
the California Advanced Services Fund program to encourage deployment
of high-quality advanced communications services to all Californians
that will promote economic growth, job creation, and the substantial
social benefits of advanced information and communications
technologies, consistent with this section.
(b) (1) The goal of the program is, no later than December 31,
2015, to approve funding for infrastructure projects that will
provide broadband access to no less than 98 percent of California
households.
(2) In approving infrastructure projects, the commission shall
give priority to projects that provide last-mile broadband access to
households that are unserved by an existing facilities-based
broadband provider. The commission shall provide each applicant, and
any party challenging an application, the opportunity to demonstrate
actual levels of broadband service in the project area, which the
commission shall consider in reviewing the application.
(c) The commission shall establish the following accounts within
the fund:
(1) The Broadband Infrastructure Grant Account.
(2) The Rural and Urban Regional Broadband Consortia Grant
Account.
(3) The Broadband Infrastructure Revolving Loan Account.
(4) The Broadband Public Housing Account.
(d) (1) All moneys collected by the surcharge authorized by the
commission pursuant to Decision 07-12-054 shall be transmitted to the
commission pursuant to a schedule established by the commission. The
commission shall transfer the moneys received to the Controller for
deposit in the California Advanced Services Fund. Moneys collected on
and after January 1, 2011, shall be deposited in the following
amounts in the following accounts:
(A) One hundred ninety million dollars ($190,000,000) into the
Broadband Infrastructure Grant Account.
(B) Fifteen million dollars ($15,000,000) into the Rural and Urban
Regional Broadband Consortia Grant Account.
(C) Ten million dollars ($10,000,000) into the Broadband
Infrastructure Revolving Loan Account.
(2) All interest earned on moneys in the fund shall be deposited
in the fund.
(3) The commission shall not collect moneys, by imposing the
surcharge described in paragraph (1) for deposit in the fund, in an
amount that exceeds one hundred million dollars ($100,000,000) before
January 1, 2011. On and after January 1, 2011, the commission may
collect an additional sum not to exceed two hundred fifteen million
dollars ($215,000,000), for a sum total of moneys collected by
imposing the surcharge described in paragraph (1) not to exceed three
hundred fifteen million dollars ($315,000,000). The commission may
collect the additional sum beginning with the calendar year starting
on January 1, 2011, and continuing through the 2020 calendar year, in
an amount not to exceed twenty-five million dollars ($25,000,000)
per year, unless the commission 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.
(e) (1) All moneys in the California Advanced Services Fund shall
be available, upon appropriation by the Legislature, to the
commission for the program administered by the commission pursuant to
this section, including the costs incurred by the commission in
developing, implementing, and administering the program and the fund.
(2) Notwithstanding any other law and for the sole purpose of
providing matching funds pursuant to the federal American Recovery
and Reinvestment Act of 2009 (Public Law 111-5), any entity eligible
for funding pursuant to that act shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section, if that entity otherwise satisfies the eligibility
requirements under that program. Nothing in this section shall impede
the ability of an incumbent local exchange carrier, as defined by
subsection (h) of Section 251 of Title 47 of the United States Code,
that is regulated under a rate of return regulatory structure, to
recover, in rate base, California infrastructure investment not
provided through federal or state grant funds for facilities that
provide broadband service and California intrastate voice service.
(3) Notwithstanding subdivision (b) of Section 270, an entity that
is not a telephone corporation shall be eligible to apply to
participate in the program administered by the commission pursuant to
this section to provide access to broadband to an unserved or
underserved household, as defined in commission Decision 12-02-015,
if the entity otherwise meets the eligibility requirements and
complies with program requirements established by the commission.
These requirements shall include all of the following:
(A) That projects under this paragraph provide last-mile broadband
access to households that are unserved by an existing
facilities-based broadband provider and only receive funding to
provide broadband access to households that are unserved or
underserved, as defined in commission Decision 12-02-015.
(B) That funding for a project providing broadband access to an
underserved household shall not be approved until after any existing
facilities-based provider has an opportunity to demonstrate to the
commission that it will, within a reasonable timeframe, upgrade
existing service. An existing facilities-based provider may, but is
not required to, apply for funding under this section to make that
upgrade.
(C) That the commission shall provide each applicant, and any
party challenging an application, the opportunity to demonstrate
actual levels of broadband service in the project area, which the
commission shall consider in reviewing the application.
(D) That a local governmental agency may be eligible for an
infrastructure grant only if the infrastructure project is for an
unserved household or business, the commission has conducted an open
application process, and no other eligible entity applied.
(E) That the commission shall establish a service list of
interested parties to be notified of California Advanced Services
Fund applications.
(f) Moneys in the Rural and Urban Regional Broadband Consortia
Grant Account shall be available for grants to eligible consortia to
fund the cost of broadband deployment activities other than the
capital cost of facilities, as specified by the commission. An
eligible consortium may include, as specified by the commission,
representatives of organizations, including, but not limited to,
local and regional government, public safety, elementary and
secondary education, health care, libraries, postsecondary education,
community-based organizations, tourism, parks and recreation,
agricultural, business, workforce organizations, and air pollution
control or air quality management districts, and is not required to
have as its lead fiscal agent an entity with a certificate of public
convenience and necessity.
(g) Moneys in the Broadband Infrastructure Revolving Loan Account
shall be available to finance capital costs of broadband facilities
not funded by a grant from the Broadband Infrastructure Grant
Account. The commission shall periodically set interest rates on the
loans based on surveys of existing financial markets.
(h) (1) For purposes of this subdivision, the following terms have
the following meanings:
(A) "Publicly subsidized" means either that the housing
development receives financial assistance from the United States
Department of Housing and Urban Development pursuant to an annual
contribution contract or is financed with low-income housing tax
credits, tax-exempt mortgage revenue bonds, general obligation bonds,
or local, state, or federal loans or grants and the rents of the
occupants, who are lower income households, do not exceed those
prescribed by deed restrictions or regulatory agreements pursuant to
the terms of the financing or financial assistance.
(B) "Publicly supported community" means a publicly subsidized
multifamily housing development that is wholly owned by either of the
following:
(i) A public housing agency that has been chartered by the state,
or by any city or county in the state, and has been determined to be
an eligible public housing agency by the United States Department of
Housing and Urban Development.
(ii) An incorporated nonprofit organization as described in
Section 501(c)(3) of the Internal Revenue Code (26 U.S.C. Sec. 501(c)
(3)) that is exempt from taxation under Section 501(a) of that code
(26 U.S.C. Sec. 501(a)), and that has received public funding to
subsidize the construction or maintenance of housing occupied by
residents whose annual income qualifies as "low" or "very low" income
according to federal poverty guidelines.
(2) Notwithstanding subdivision (b) of Section 270, moneys in the
Broadband Public Housing Account shall be available for the
commission to award grants and loans pursuant to this subdivision to
an eligible publicly supported community if that entity otherwise
meets eligibility requirements and complies with program requirements
established by the commission.
(3) (A) Not more than twenty million dollars ($20,000,000) shall
be available for grants and loans to a publicly supported community
to finance a project to connect a broadband network to that publicly
supported community. A publicly supported community may be an
eligible applicant only if the publicly supported community can
verify to the commission that the publicly supported community has
not denied a right of access to any broadband provider that is
willing to connect a broadband network to the facility for which the
grant or loan is sought and the publically supported community is
unserved.
(B) (i) In its review of applications received pursuant to
subparagraph (A), the commission shall award grants only to unserved
housing developments.
(ii) For purposes of this subparagraph, a housing development is
unserved when at least one housing unit within the housing
development is not offered broadband Internet service.
(4) (A) Not more than five million dollars ($5,000,000) shall be
available for grants and loans to a publicly supported community to
support programs designed to increase adoption rates for broadband
services for residents of that publicly supported community. A
publicly supported community may be eligible for funding for a
broadband adoption program only if the residential units in the
facility to be served have access to broadband services or will have
access to broadband services at the time the funding for adoption is
implemented.
(B) A publicly supported community may contract with other
nonprofit or public agencies to assist in implementation of a
broadband adoption program.
(5) To the extent feasible, the commission shall approve projects
for funding from the Broadband Public Housing Account in a manner
that reflects the statewide distribution of publicly supported
communities.
(6) In reviewing a project application under this subdivision, the
commission shall consider the availability of other funding sources
for that project, any financial contribution from the broadband
service provider to the project, the availability of any other public
or private broadband adoption or deployment program, including tax
credits and other incentives, and whether the applicant has sought
funding from, or participated in, any reasonably available program.
The commission may require an applicant to provide match funding, and
shall not deny funding for a project solely because the applicant is
receiving funding from another source.
(7) (A) To provide funding for the purposes of this subdivision,
the commission shall transfer to the Broadband Public Housing Account
twenty million dollars ($20,000,000) from the Broadband
Infrastructure Grant Account and five million dollars ($5,000,000)
from the Broadband Infrastructure Revolving Loan Account. Any moneys
in the Broadband Public Housing Account that have not been awarded
pursuant to this subdivision by December 31, 2020, shall be
transferred back to the Broadband Infrastructure Grant Account and
Broadband Infrastructure Revolving Loan Account in proportion to the
amount transferred from the respective accounts.
(B) The commission shall transfer funds pursuant to subparagraph
(A) only if the commission is otherwise authorized to collect funds
for purposes of this section in excess of the total amount authorized
pursuant to paragraph (3) of subdivision (d).
SEC. 2. Section 914.7 of the Public Utilities Code is amended to
read:
914.7. (a) By April 1 of each year, the commission shall provide
a report to the Legislature that includes all of the following
information:
(1) The amount of funds expended from the California Advanced
Services Fund in the prior year.
(2) The recipients of funds expended from the California Advanced
Services Fund in the prior year.
(3) The geographic regions of the state affected by funds expended
from the California Advanced Services Fund in the prior year,
including information by county.
(4) The expected benefits to be derived from the funds expended
from the California Advanced Services Fund in the prior year.
(5) Details on the status of each project funded through the
California Advanced Services Fund, whether the project has been
completed, and, if applicable, the expected completion date of the
project.
(6) Actual broadband adoption levels from the funds expended from
the California Advanced Services Fund in the prior year.
(7) The amount of funds expended from the California Advanced
Services Fund used to match federal funds.
(8) Additional details on efforts to leverage non-California
Advanced Services Fund funds.
(9) An update on the expenditures from the California Advanced
Services Fund and broadband adoption levels, and an accounting of
remaining unserved and underserved households and areas of the state.
(10) The status of the California Advanced Services Fund balance
and the projected amount to be collected in each year through 2020 to
fund approved projects.
(b) Pursuant to Section 10231.5 of the Government Code, this
section is repealed on January 1, 2022.