HOUSE BILL REPORT

HB 518

BYRepresentatives Nelson, Jacobsen, Todd, Appelwick, Brekke, Unsoeld and Lux

Authorizing the establishment of rates for lifeline telephone service.

House Committe on Energy & Utilities

Majority Report:     The substitute bill be substituted therefor and the substitute bill do pass.  (13)

     Signed by Representatives Nelson, Chair; Todd, Vice Chair; Armstrong, Brooks, Gallagher, Hankins, Jacobsen, Jesernig, Madsen, May, Sutherland, Unsoeld and S. Wilson.

Minority Report:     Do not pass.  (2)

     Signed by Representatives Barnes and Miller.

House Staff:Fred Adair (786-7113) and Ted Hunter (786-7114)

AS REPORTED BY COMMITTEE ON ENERGY & UTILITIES FEBRUARY 18, 1987

BACKGROUND:

Since the break-up of AT&T, rates for local telephone service have fluctuated with some local ratepayers experiencing increases.  In 1985 the legislature, in enacting the regulatory flexibility bill, made a commitment to universal telephone service in the state of Washington.  A lifeline assistance program for low-income households, partially funded by the federal government, is designed to maintain those currently on the telephone system and make telephone service affordable to those who do not presently have service.  However, the current assistance program does not reach all persons in need.

SUMMARY:

SUBSTITUTE BILL:  A lifeline assistance program is made available to participants in already existing aid programs:  aid to families with dependent children, chore service, food stamps, supplemental security income, refugee assistance, and community options program entry system (COPES).  The program is designed to target low-income households, particularly low-income seniors.  The program will be administered by the Department of Social and Health Services (DSHS).  The department shall notify the clients of the listed programs of their eligibility.  The benefits include a 50 percent discount on connection charges for those who do not have telephone service, a waiver of deposits, and a lifeline service rate established by the Utilities and Transportation Commission.  The lifeline service rate will apply to eligible customers whose lowest available rate is greater than the lifeline rate.

The program is funded through a lifeline excise tax not to exceed 16 cents per month on the access lines of local ratepayers.  A lifeline fund is created for use by DSHS in administering the program.  The legislature will review the program by December 15, 1989.  The act expires December 31, 1989.

SUBSTITUTE BILL COMPARED TO ORIGINAL:  A fixed lifeline service rate will be established rather than having it determined by the extent of federal assistance available.  Funding is by an excise tax rather than a surcharge.

Fiscal Note:    Attached.

House Committee ‑ Testified For:     Cheri Gonyaw, Department of Social and Health Services (Provided information; DSHS at the time had no official position on the bill); Chuck Adams and Rob Manifold, Public Counsel Section, Office of the Attorney General; Liz Thomas, Evergreen Legal Services; Walter Belka, Elder Citizens Coalition of Washington; Beverly Juntti, Council of Organizations of the Physically Handicapped; Ron Vignec, Salishan (Tacoma) Lutheran Mission; Vida Marchetti, faculty, Pacific Lutheran University; Jim Funk, Tacoma (for self); Rose Kirkus, Tacoma (for self); Stan Enebo, American Association of Retired Persons; Dale Vincent, Pacific Northwest Bell; Steve McLellan, Utilities and Transportation Commission; Art Butler, TRACER; Arnold Livingston, Senior Citizen Lobby; Jack Doyle, Washington Independent Telephone Association (Mr. Doyle was not for or against the bill, but spoke to certain language in the bill).

House Committee - Testified Against: None Presented.

House Committee - Testimony For:     A telephone is essential and must, therefore, be affordable to low-income persons.  For many seniors, the phone is the vital link with the outside community.  The unemployed need the phone to increase the likelihood of finding work.  The phone is needed for emergencies.  Although long distance rates are coming down, local service rates are, for the most part, increasing.  Local service is of principal importance to low-income people.  There is a public willingness to pay extra to enable lifeline rates.

House Committee - Testimony Against: Although no one opposed the bill, there was preference expressed by a number of people to fund the program from the general fund rather than a surcharge or a user excise tax.