HOUSE BILL REPORT

                  SB 6400

                      As Passed House:

                        March 6, 1998

Title:  An act relating to extending the Washington telephone assistance program.

Brief Description:  Extending the Washington telephone assistance program through 2003.

Sponsors:  Senators Brown, Finkbeiner, Oke and Thibaudeau; by request of Department of Social and Health Services.

Brief History:

  Committee Activity:

Energy & Utilities:  2/18/98 [DP];

Finance:  2/26/98, 3/2/98 [DP].

Floor Activity:

Passed House:  3/6/98, 98-0.

HOUSE COMMITTEE ON ENERGY & UTILITIES

Majority Report:  Do pass.  Signed by 10 members:  Representatives Crouse, Chairman; DeBolt, Vice Chairman; Poulsen, Ranking Minority Member; Morris, Assistant Ranking Minority Member; Bush; Cooper; Delvin; Kastama; Mielke and B. Thomas.

Staff:  Linda Brooks (786-7153).

HOUSE COMMITTEE ON FINANCE

Majority Report:  Do pass.  Signed by 13 members:  Representatives B. Thomas, Chairman; Mulliken, Vice Chairman; Dunshee, Ranking Minority Member; Dickerson, Assistant Ranking Minority Member; Boldt; Butler; Conway; Kastama; Mason; Morris; Pennington; Schoesler and Thompson.

Minority Report:  Without recommendation.  Signed by 1 member:  Representative Carrell, Vice Chairman.

Staff:  Linda Brooks (786-7153).

Background:  In 1987, the Legislature established a program to assist low-income persons in obtaining basic telephone services.  The program, then known as the "Lifeline Assistance Program" and now known as the "Washington Telephone Assistance Program" (WTAP), is administered by the Department of Social and Health Services (DSHS).

The WTAP program provides the following benefits for  low-income persons:

Ca reduced monthly rate for local telephone service;

Ca 50 percent discount on phone connection fees; and

Cwaiver of deposit for local phone service.

Persons eligible for WTAP assistance are adult recipients of DSHS-administered programs that provide continuing financial or medical assistance, food stamps, or supportive services to persons in their homes. 

Currently, the WTAP program requires all low income customers to pay $9.25 per month for basic telephone service.  If basic telephone charges exceed $9.25 per month, then state and federal funds pay the balance.  The federal government matches every dollar that the state spends on the WTAP program up to a federal maximum amount of $3.50.  State funds match federal funds on a dollar-for-dollar basis up to the $3.50 federal cap, and state funds alone pay for any remaining balance.

An excise tax on all switched access lines generates revenues to pay for the state's costs of the WTAP program.  By statute the excise tax rate cannot exceed 14 cents per month per switched access line.  The current rate, established by the Washington Utilities and Transportation Commission (WUTC), is 13 cents per line per month.  This 13 cent excise tax applies only to switched wireline access lines.  There is no WTAP tax associated with wireless phone service.

The Federal Communications Commission  recently ruled that the federal government will pay $5.25 to help provide lifeline telephone assistance for each low-income consumer in every state, irrespective of whether the state provides any matching funds.  Additionally, if a state provides at least $3.50 in lifeline telephone assistance for each low income consumer, the federal government will contribute an extra $1.75 in support.  As a result, the total maximum amount of federal funds available per low income consumer is $7.00, provided that the state contributes at least $3.50 per low income consumer.

The DSHS has announced that it will lower the monthly rate that WTAP recipients are required to pay to $7.50 from the current $9.25 on March 1, 1998, to take advantage of additional federal money that is available without any increase in state matching funds.

Residential telephone rates, including the FCC line access charges, range from $9.50 to $25.50 per month according to data from the WUTC.

To illustrate how the WTAP program works for low income customers located in different areas of the state, the following illustrates how the phone bill would be paid after March 1, 1998, for three WTAP-eligible consumers living in three different areas of the state:

Area 1 where residential phone rate is $9.50 per month:

WTAP-eligible person pays$7.50 

Federal funds pay 2.00

State funds pay  0.00

$ 9.50 monthly local residential rate

Area 2 where residential phone rate is $16.00 per month (US West's new rate):

WTAP-eligible person pays$  7.50

Federal funds pay5.25

State funds pay 3.25

$16.00 monthly local residential rate

  Area 3 where residential phone rate is $25.50 per month:

WTAP-eligible person pays$ 7.50

Federal funds pay5.25

State funds pay 12.75

$25.50 monthly local residential rate

The WTAP program expires on June 30, 1998, unless extended by the Legislature.

Summary:  The Washington Telephone Assistance Program is extended until June 30, 2003.

Appropriation:  None.

Fiscal Note:  Available.

Effective Date:  Ninety days after adjournment of session in which bill is passed.

Testimony For:  (Energy & Utilities)   The telephone assistance program benefits elderly and disabled persons and low income families.   The program has been in existence for 10 years, and it should be reauthorized for another five years.

(Finance)  This bill benefits low income persons, and we encourage your support.

Testimony Against: (Energy & Utilities)  None.

(Finance)  None.

Testified:  (Energy & Utilities)  John Atherton, Department of Social and Health Services (pro).

(Finance)  John Atherton, Department of Social and Health Services (pro).