Fiscal Note — 5600 S SB, Universal communications prg, Utilities and Transportation Commission (02/22/2023)
Summary
An Individual State Agency Fiscal Note from the Utilities and Transportation Commission on 5600 S SB, titled Universal communications prg, with OFM review dated 02/22/2023. Part I shows the Universal Communications Services account at $5,522,958 for FY 2024 and $5,000,000 for FY 2025, with $10,522,958 for 2023-25 and $10,000,000 each for 2025-27 and 2027-29, for both cash receipts and operating expenditures. The narrative describes extending the program for ten or eleven years and a complex rulemaking, and includes a one-time cost of $312,000 to access the CostQuest Associates cost model.
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“Fiscal Note — 5600 S SB, Universal communications prg, Utilities and Transportation Commission (02/22/2023).”
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Individual State Agency Fiscal Note
Bill Number: 5600 S SB Title: Universal communications prg 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 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
Acct-State 19J-1
Total $ 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
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 0.0
Account
Universal Communications Services 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
Acct-State 19J-1
Total $ 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
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: Mahnur Khan Phone: 360-786-7437 Date: 02/21/2023
Agency Preparation: Amy Andrews Phone: 360-481-1335 Date: 02/22/2023
Agency Approval: Amy Andrews Phone: 360-481-1335 Date: 02/22/2023
OFM Review: Tiffany West Phone: (360) 890-2653 Date: 02/22/2023
Form FN (Rev 1/00) 184,692.00 Request # 2023-79-1
FNS063 Individual State Agency Fiscal Note 1 Bill # 5600 S SB
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 or eleven 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 (ten years) in section 2.
Section 7 is revised to update the program expiration date to June 30, 2035 (eleven years) and updates the section expiration
date to July 1, 2035.
The proposed bill extends the program for an additional ten or eleven 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.
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. The UTC assumes the baseline funding will continue
at $5 million per fiscal year and includes incremental revenue to cover the incremental expenditures identified within the
fiscal note for the complex rulemaking and software purchase.
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.
Universal communications prg 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 184,692.00 Request # 2023-79-1
FNS063 Individual State Agency Fiscal Note 2 Bill # 5600 S SB
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. Costs associated with a complex 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)
$210,958
(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.
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 – FY34 or FY35)
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.
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 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
Communications
Services Acct
Total $ 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
Universal communications prg 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 184,692.00 Request # 2023-79-1
FNS063 Individual State Agency Fiscal Note 3 Bill # 5600 S SB
III. B - Expenditures by Object Or Purpose
FY 2024 FY 2025 2023-25 2025-27 2027-29
FTE Staff Years 1.3 0.7
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 318,941 150,000 468,941 300,000 300,000
9-
Total $ 5,522,958 5,000,000 10,522,958 10,000,000 10,000,000
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
Asst Director | Policy 110,064 0.1 0.1
Commissioner 168,012 0.1 0.0
Consumer Program Spec 3 68,076 0.3 0.2
Deputy Director | Regulatory 101,136 0.1 0.0
Services
Director | Regulatory Services 134,532 0.1 0.0
Paralegal 3 78,900 0.1 0.0
Policy Advisor 100,008 0.1 0.1
Regulatory Analyst 2 82,896 0.1 0.0
Regulatory Analyst 3 93,840 0.3 0.2
Total FTEs 1.3 0.7 0.0
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 communications prg 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 184,692.00 Request # 2023-79-1
FNS063 Individual State Agency Fiscal Note 4 Bill # 5600 S SB
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.
Universal communications prg 215-Utilities and Transportation Commission
Form FN (Rev 1/00) 184,692.00 Request # 2023-79-1
FNS063 Individual State Agency Fiscal Note 5 Bill # 5600 S SB
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