Fiscal Note Summary — HB 1738, Universal Comm. Services (Multiple Agency, 2/9/2023)
Summary
Multiple Agency Fiscal Note Summary for HB 1738, titled Universal comm. services, followed by individual state agency fiscal notes. The summary lists the Utilities and Transportation Commission with estimated operating expenditures of 10,522,598 for 2023-25, and a note that there are additional indeterminate costs and/or savings. The individual note of agency 105, the Office of Financial Management, checks No Fiscal Impact. The individual note of agency 215, the Utilities and Transportation Commission, includes a narrative on rulemaking to review how program support is distributed. The summary is marked Final 2/ 9/2023.
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“Fiscal Note Summary — HB 1738, Universal Comm. Services (Multiple Agency, 2/9/2023).”
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Multiple Agency Fiscal Note Summary
Bill Number: 1738 HB Title: Universal comm. services
Estimated Cash Receipts
Agency Name 2023-25 2025-27 2027-29
GF-State NGF-Outlook Total GF-State NGF-Outlook Total GF-State NGF-Outlook Total
Utilities and 0 0 10,522,598 0 0 10,000,000 0 0 10,041,251
Transportation
Commission
Utilities and In addition to the estimate above,there are additional indeterminate costs and/or savings. Please see individual fiscal note.
Transportation
Commission
Total $ 0 0 10,522,598 0 0 10,000,000 0 0 10,041,251
Estimated Operating Expenditures
Agency Name 2023-25 2025-27 2027-29
FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total FTEs GF-State NGF-Outlook Total
Office of Financial .0 0 0 0 .0 0 0 0 .0 0 0 0
Management
Utilities and .6 0 0 10,522,598 .0 0 0 10,000,000 .1 0 0 10,041,251
Transportation
Commission
Total $ 0.6 0 0 10,522,598 0.0 0 0 10,000,000 0.1 0 0 10,041,251
Estimated Capital Budget Expenditures
Agency Name 2023-25 2025-27 2027-29
FTEs Bonds Total FTEs Bonds Total FTEs Bonds Total
Office of Financial .0 0 0 .0 0 0 .0 0 0
Management
Utilities and .0 0 0 .0 0 0 .0 0 0
Transportation
Commission
Total $ 0.0 0 0 0.0 0 0 0.0 0 0
Estimated Capital Budget Breakout
NONE
FNPID 66674
:
FNS029 Multi Agency rollup
Prepared by: Tiffany West, OFM Phone: Date Published:
(360) 890-2653 Final 2/ 9/2023
FNPID 66674
:
FNS029 Multi Agency rollup
Individual State Agency Fiscal Note
Bill Number: 1738 HB Title: Universal comm. services Agency: 105-Office of Financial
Management
Part I: Estimates
X No Fiscal Impact
Estimated Cash Receipts to:
NONE
Estimated Operating Expenditures from:
NONE
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
Requires new rule making, complete Part V.
Legislative Contact: Emily Poole Phone: 360-786-7106 Date: 02/06/2023
Agency Preparation: Kathy Cody Phone: (360) 480-7237 Date: 02/08/2023
Agency Approval: Jamie Langford Phone: 360-902-0422 Date: 02/08/2023
OFM Review: Steven Puvogel Phone: (360) 701-6459 Date: 02/08/2023
Form FN (Rev 1/00) 182,269.00 Request # 23-116-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1738 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.
HB 1738 changes the expiration date for the Universal Communications Services Account from July 1, 2025, to July 1,
2035. OFM transfers expenditures from the General Fund – State into the Universal Communications Account when
directed by enacted legislation. Removing the expiration date will have a de minimis impact on OFM.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
NONE
III. B - Expenditures by Object Or Purpose
NONE
III. C - Operating FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part I
and Part IIIA.
NONE
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE
IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.
NONE
Universal comm. services 105-Office of Financial Management
Form FN (Rev 1/00) 182,269.00 Request # 23-116-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1738 HB
Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.
Universal comm. services 105-Office of Financial Management
Form FN (Rev 1/00) 182,269.00 Request # 23-116-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1738 HB
Individual State Agency Fiscal Note
Bill Number: 1738 HB Title: Universal comm. services Agency: 215-Utilities and
Transportation Commission
Part I: Estimates
No Fiscal Impact
Estimated Cash Receipts to:
ACCOUNT FY 2024 FY 2025 2023-25 2025-27 2027-29
Universal Communications Services 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
Acct-State 19J-1
Total $ 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
In addition to the estimates above, there are additional indeterminate costs and/or savings. Please see discussion.
Estimated Operating Expenditures from:
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 1.3 0.0 0.7 0.0 0.1
Account
Universal Communications Services 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
Acct-State 19J-1
Total $ 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
Estimated Capital Budget Impact:
NONE
The cash receipts and expenditure estimates on this page represent the most likely fiscal impact. Factors impacting the precision of these estimates,
and alternate ranges (if appropriate), are explained in Part II.
Check applicable boxes and follow corresponding instructions:
If fiscal impact is greater than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete entire fiscal note
X
form Parts I-V.
If fiscal impact is less than $50,000 per fiscal year in the current biennium or in subsequent biennia, complete this page only (Part I).
Capital budget impact, complete Part IV.
X Requires new rule making, complete Part V.
Legislative Contact: Emily Poole Phone: 360-786-7106 Date: 02/06/2023
Agency Preparation: Amy Andrews Phone: 360-481-1335 Date: 02/07/2023
Agency Approval: Amy Andrews Phone: 360-481-1335 Date: 02/07/2023
OFM Review: Tiffany West Phone: (360) 890-2653 Date: 02/09/2023
Form FN (Rev 1/00) 182,399.00 Request # 2023-52-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 1738 HB
Part II: Narrative Explanation
II. A - Brief Description Of What The Measure Does That Has Fiscal Impact
Significant provisions of the bill and any related workload or policy assumptions that have revenue or expenditure impact on the responding agency by
section number.
Extends the state universal communications services program for ten years. Section expiration date is updated to July 1,
2035 in sections 1, 2, 3, 4, 5, 6, and the program expiration date is updated to June 30, 2034 in section 2.
Section 2 is revised, and communication providers adopted plan must provide, enhance, and maintain broadband services.
Section 3 requires the commission to review rules no less than every five years.
Section 7 amends the program expiration date to June 30, 2034, and updates the section expiration date to July 1, 2035.
The proposed bill extends the program for an additional ten years. Current rules were created based on the program
expiring on June 30, 2024. Rulemaking will take into consideration key areas such as technology, funding, deployment costs
or other factors. Additionally, the UTC believes the eligibility criteria need to be reviewed and revised by considering
changes in federal high-cost support, BEAD funding, and digital equity goals. Any broadband commitment should ensure it
does not jeopardize potential BEAD or other federal support. State USF support distribution is currently based on a frozen
federal metric that should also be reviewed to identify policy and funding priorities now and in the future.
The UTC assumes a complex rulemaking is necessary to identify number of unserved and underserved locations and
determine the cost per location for equitable distribute of the support funding of $5,000,000 per fiscal year. As part of the
rule making, staff will review the broadband buildout location requirements, eligibility criteria, and the broadband speed to be
consistent with stated goal in SB 5511.
The current cost per location was derived based on the CostQuest Associates cost model that Federal Communications
Commission (FCC) has published in its alternative connect America program in the past. Over time, however, the cost of
providing broadband service and building infrastructure have changed, the Commission needs to conduct new cost review
and analysis based on the CostQuest Associates cost model which includes up-to-date data made available for purchase.
One-time cost of $312,000 to access CostQuest Associates cost model is included to support the rulemaking effort and
program administrative support. By gaining access to the cost model, staff will be able to determine accurate costs and
pinpoint specific locations where the state USF support is effectively used.
The commission will continue to administer the program and the administrative expenses will continue to be recovered from
the funding of $5,000,000 per fiscal year.
Commission review of program to be completed no less than every five years, simple rulemaking will be necessary if any
changes are required. The rulemaking will be in 2029.
II. B - Cash receipts Impact
Cash receipts impact of the legislation on the responding agency with the cash receipts provisions identified by section number and when appropriate, the
detail of the revenue sources. Description of the factual basis of the assumptions and the method by which the cash receipts impact is derived. Explanation
of how workload assumptions translate into estimates. Distinguished between one time and ongoing functions.
Cash receipt impact is indeterminate as the amount that will be deposited into the UCS account by the legislature and any
penalties or other recoveries received pursuant to RCW 80.36.670 is not known at this time. Currently, $5,000,000 is being
deposited at the beginning of each fiscal year into the UCS account. UTC assumes that amount will be the baseline for
continuing the program which includes program administration costs to support existing staff, however the rulemaking and
software costs are considered by the UTC to be provided by Account 19J – Universal Communications Services Account
as an incremental impact.
Universal comm. services 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 182,399.00 Request # 2023-52-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 1738 HB
Legislation extends program operation through June 30, 2034, extending the funding from amounts deposited by the
legislature in the UCS account established in RCW 80.36.690.
II. C - Expenditures
Agency expenditures necessary to implement this legislation (or savings resulting from this legislation), with the provisions of the legislation that result in
the expenditures (or savings) identified by section number. Description of the factual basis of the assumptions and the method by which the expenditure
impact is derived. Explanation of how workload assumptions translate into cost estimates. Distinguished between one time and ongoing functions.
Expenditure impact is indeterminate as the amount that will be deposited into the UCS account by the legislature is not
known at this time. Therefore, we do not know the number of applications that will be awarded and how much it will cost to
administer the program. Currently, $5 million is being deposited at the beginning of each fiscal year into the UCS account.
The UTC assumes the $5 million will remain the baseline for the program. The costs of the rulemaking are an incremental
cost while the cost to administer the program is assumed to be absorbed within the baseline $5 million.
The Commission would conduct a complex rulemaking in FY 2024 to update the existing state UCS program and codify a
process for calculating the broadband deployment cost per location, number of broadband deployment obligations for each
company, and update the broadband speed definition. The Commission would also be required to administer the program
through June 30, 2035. The Commission would conduct a simple rulemaking in FY 2029 if it determines that program rules
need to be revised to account for new factors. Costs associated with a complex rulemaking, simple rulemaking, and for
administering the program are assumed to be recovered from the Universal Service Fund (USF) appropriation that supports
the UCS program.
Complex Rulemaking (FY24)
$210,598
(Administrative Law Judge, 0.17; Commissioner, 0.05; Consumer Program Specialist 3, 0.31; Deputy Director | Regulatory
Services, 0.05; Director | Regulatory Services, 0.05; Paralegal 3, 0.07; Policy Advisor, 0.13; Regulatory Analyst 2, 0.05;
Regulatory Analyst 3, 0.31; Asst. Director, Policy, 0.10) “E” includes $27,000 attorney general expense.
Simple Rulemaking (FY29)
$41,251
(Administrative Law Judge, 0.06; Director | Regulatory Services, 0.02; Deputy Director | Regulatory Services, 0.02; Policy
Advisor, 0.02; Deputy Asst. Director | Regulatory Services, 0.02; Regulatory Analyst 2, 0.03; Regulatory Analyst 3, 0.04;
Asst. Director, Policy, 0.02) “E” includes $5,000 attorney general expense.
Broadband Infrastructure Cost Software (FY24) One-time cost
$312,000
The current cost per location was derived based on the CostQuest Associates cost model that Federal Communications
Commission (FCC) has published in its alternative Connect America program in the past. Over time, however, the cost of
providing broadband service and building infrastructure have changed, the Commission needs to conduct a new cost review
and analysis based on the CostQuest Associates cost model. These costs are not included in the rulemaking expenditure. By
gaining access to the cost model, staff will be able to determine accurate costs and pinpoint specific locations where the
state USF support is effectively used.
Program Administration (FY24 – FY29)
Annual expenditures would be commensurate with current spending levels incurred in administering the program in its
current form. The Commission estimates 3% of annual USF funds to be used on administering the program. Therefore,
assuming $5 million is deposited each fiscal year, the estimated amount available for awarding grants is $4.85 million,
assuming administrative costs of $150,000 per fiscal year.
Universal comm. services 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 182,399.00 Request # 2023-52-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 1738 HB
Part III: Expenditure Detail
III. A - Operating Budget Expenditures
Account Account Title Type FY 2024 FY 2025 2023-25 2025-27 2027-29
19J-1 Universal State 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
Communications
Services Acct
Total $ 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
III. B - Expenditures by Object Or Purpose
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 1.3 0.7 0.1
A-Salaries and Wages
B-Employee Benefits
C-Professional Service Contracts 312,000 312,000
E-Goods and Other Services 42,017 42,017
G-Travel
J-Capital Outlays
M-Inter Agency/Fund Transfers
N-Grants, Benefits & Client Services 4,850,000 4,850,000 9,700,000 9,700,000 9,700,000
P-Debt Service
S-Interagency Reimbursements
T-Intra-Agency Reimbursements 318,581 150,000 468,581 300,000 341,251
9-
Total $ 5,522,598 5,000,000 10,522,598 10,000,000 10,041,251
III. C - Operating FTE Detail: List FTEs by classification and corresponding annual compensation. Totals need to agree with total FTEs in
Part I and Part IIIA
Job Classification Salary FY 2024 FY 2025 2023-25 2025-27 2027-29
Administrative Law Judge 119,088 0.2 0.1 0.0
Asst Director | Policy 110,064 0.1 0.1 0.0
Commissioner 168,012 0.1 0.0
Consumer Program Spec 3 68,076 0.3 0.2
Deputy Asst. Director | Regulatory 101,136 0.0
Services
Deputy Director | Regulatory 101,136 0.1 0.0 0.0
Services
Director | Regulatory Services 134,532 0.1 0.0 0.0
Paralegal 3 78,900 0.1 0.0
Policy Advisor 100,008 0.1 0.1 0.0
Regulatory Analyst 2 82,896 0.1 0.0 0.0
Regulatory Analyst 3 93,840 0.3 0.2 0.0
Total FTEs 1.3 0.7 0.1
III. D - Expenditures By Program (optional)
NONE
Part IV: Capital Budget Impact
IV. A - Capital Budget Expenditures
NONE
IV. B - Expenditures by Object Or Purpose
NONE
Universal comm. services 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 182,399.00 Request # 2023-52-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 1738 HB
IV. C - Capital Budget Breakout
Acquisition and construction costs not reflected elsewhere on the fiscal note and description of potential financing methods.
NONE
IV. D - Capital FTE Detail: FTEs listed by classification and corresponding annual compensation. Totals agree with total FTEs in Part IVB.
NONE
Part V: New Rule Making Required
Provisions of the bill that require the agency to adopt new administrative rules or repeal/revise existing rules.
New rules are necessary in WAC 480-123 to account for changes in technology, broadband speed demands, deployment
costs for each location, rising deployment costs and to define supported broadband speeds. Additionally, as the program
criteria were originally developed for a 5-year program timeframe, the UTC believes the eligibility criteria need to be
reviewed and revised by considering changes in federal high-cost support, BEAD funding, and digital equity goals. Any
broadband commitment should ensure it does not jeopardize potential BEAD or other federal support. State USF support
distribution is currently based on a frozen federal metric that should also be reviewed to identify policy and funding priorities
now and in the future.
The complex rulemaking is expected to entail one workshop, development of draft and proposed rules, and two rounds of
public comments.
The simple rulemaking would include changes to program operation to ensure it takes technological improvements, federal
funding, and broadband speeds into consideration.
Universal comm. services 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 182,399.00 Request # 2023-52-1
FNS063 Individual State Agency Fiscal Note 5 Bill # 1738 HB
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