Existing law authorizes a state agency, with the approval of the Department of General Services, to install and operate toll-free telephone lease lines to provide access by the public and local governmental agencies and requires information made available on a toll-free telephone lease line to be accessible by both tone dial and rotary dial telephone. Existing law requires the department to adopt guidelines for the use of toll-free lease lines by state agencies as are necessary to promote the efficient use of the toll-free lease lines.

This bill would repeal this provision.

Existing law authorizes a state agency, with the approval of the Department of General Services, to install and operate toll-free telephone lease lines to provide access by the public and local governmental agencies and requires information made available on a toll-free telephone lease line to be accessible by both tone dial and rotary dial telephone.

This bill would repeal this provision.

This bill would require, no later than January 1 of an unspecified year, each state agency to change the telephone numbers that the agency operates from toll-free telephone numbers to non-toll-free telephone numbers. This bill would require each agency to post the new, non-toll-free numbers on its internet website and update all publications issued by the agency with the new non-toll-free number or numbers within 1 year of the change taking place. This bill would allow an agency to maintain a toll-free telephone number if the agency deems it necessary, but the primary telephone number or numbers offered to the public shall be a non-toll-free number or numbers.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2023 - 2024 Regular Session

AB 1135 (Lowenthal) - State agencies: toll-free and non-toll-free telephone lines: Department of Technology

Bill Summary:

AB 1135 requires a state agency to transition from the use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency.

Fiscal Impact:

• Unknown, likely significant total costs across all impacted state agencies to transition to non-toll-free telephone numbers (General Fund, federal funds, and various special funds). While not all state agencies and departments will require the same level of resources to comply with the mandates of this bill, costs will still be significant.

(See Staff Comments)

• The California Department of Technology (CDT) anticipates minor and absorbable costs to adopt guidelines for the use of toll-free and non-toll-free telephone lines.
• Unknown cost savings to the state, depending on the decline in the use of toll-free telephone numbers by members of the public (various special funds).

Background:

Toll-free numbers are phone numbers that allow callers to reach businesses or individuals without incurring any charges for the call. Instead, the recipient of the call pays for the charges. These numbers are typically used by businesses for customer service, sales, and support to encourage customers to contact them without worrying about call costs.

The availability of toll-free numbers began when landline telephone service was the only option for making voice calls, and customers incurred per-minute charges for long-distance calls. State agencies, like businesses and other organizations serving the public, made toll-free numbers available to any person could call them with no charge. Overall, toll-free numbers are a strategic tool for enhancing customer engagement and service reach. In California, various state provisions, require state agencies to maintain toll-free lines to make it easy and affordable for the public to contact them.

Proposed Law:

• Requires a state agency to transition from the use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency.
• By July 1, 2025, requires a state agency to update its website to post the non-toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
• Requires a state agency to include the non-toll-free telephone number when it updates a publication about how the public can contact the state agency.
• Requires a state agency to continue to operate a toll-free telephone number.
• Requires a state agency to ensure equitable access to the agency by all members of the public based on a consideration of the availability and affordability of voice calling plans that allow a customer to make voice calls without per-minute charges and of alternative methods to contact the agency.
• Authorizes, with CDT approval, a state agency to install and operate a toll-free or non-toll free telephone line.
  • Following CDT approval, requires the state agency to public the toll-free or non-toll-free telephone number at least once in the California Regulatory Notice Register.
• Requires CDT to adopt guidelines for the use of toll-free and non-toll-free telephone lines by state agencies as are necessary to promote the efficient use of the telephone lines.
• Repeal provisions related to the approval of state agency use of toll-free lines under the Department of General Services.

Staff Comments:

Actual costs to each impacted state agency will depend on, among other things, the volume of calls the agency receives, the number of toll-free telephone numbers the agency operates, and the ease in which the agency can transition to non-toll-free telephone number(s). For example, some state agencies provided the following cost estimates:

• The Employment Development Department (EDD) reports one-time costs of approximately $12.3 million and ongoing costs of approximately $15,000 (General Fund). EDD notes that it would likely require approximately 22 months to implement and complete the transition to non-toll-free numbers.
• The Department of Health Care Services (DHCS) reports total costs ranging between $1.50 million and $2.95 million (General Fund and federal funds). DHCS notes it will require 50 non-toll-free numbers, with about 50 percent of these numbers requiring system directory changes. DHCS also contracts with call centers, which would be subject to the requirements of this bill.
• The Department of Motor Vehicles (DMV) reports total costs of approximately $300,000 to update signage, forms, publications, applications, and other documents (Motor Vehicle Account). DMV notes that the Motor Vehicle Account is the primary funding account for the DMV and the California Highway Patrol and is facing insolvency.
• The Department of Real Estate reports costs of approximately $26,000 for limited-term workload to procure a non-toll-free number, manage the transition to the number, and update various publications (Real Estate Fund).

While the above estimates are not reflective of all state agencies’ potential fiscal impacts, to the extent that even a modest number of state entities anticipate similar costs, the total fiscal impact of this bill will range into the millions of dollars.

Staff notes that a number of state entities that may be impacted by this bill are special funded and generally do not receive General Fund support. This bill may create significant new cost pressures that impact these entities’ operating costs and may necessitate or accelerate the need for future regulatory or license fee increases, or impact future budget requests.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Bill Dodd

Chair

2023 - 2024 Regular

Bill No: AB Hearing Date: 6/25/2024

SUBJECT:

DIGEST: This bill requires state agencies to transition from the use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency, as specified.

ANALYSIS:

Existing law:

1. Authorizes a state agency, with the approval of the Department of General Services (DGS), to install and operate toll-free telephone lease lines to provide access to the public and local governmental agencies and requires information made available on a toll-free telephone lease line to be accessible by both tone dial and rotary dial telephone.
2. Requires DGS to adopt guidelines for the use of toll-free lease lines by state agencies as are necessary to promote efficient use of the toll-free lease lines.
3. Grants the California Department of Technology (CDT) broad authority to manage policy, planning, procurement, and strategies for state agencies to operate adequate and efficient business telecommunications systems to meet agency requirements.
4. Requires various state agencies or programs to maintain a toll-free number for specified purposes. For example, the Director of the Department of Managed Health Care is required to establish and maintain a toll-free telephone number of the purpose of receiving complaints regarding health care service plans regulated by the director.

This bill:

1. Requires a state agency to transition from the use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency.
2. Requires, no later than July 1, 2025, a state agency to update its internet website to post the non-toll-free telephone number on the internet website instead of a toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
3. Requires a state agency, when it updates a publication with information about how the public can contact the state agency, to include the non-toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
4. Requires a state agency to continue to operate a toll-free telephone number offered to the public as a method of making a voice call to contact the agency.
5. Requires a state agency, when implementing the provisions of this bill, to ensure equitable access to the agency by all members of the public, based on consideration of both of the following:
   1. Availability and affordability of voice calling plans that allow a customer to make voice calls without per-minute charges.
   2. Availability and affordability of alternative methods to contact the agency to the public.
6. Makes technical and conforming changes to place the current law requiring approval of state agency use of toll-free lines under CDT rather than DGS and to specify that CDT approval guidelines be consistent with this bill.

Background

Author Statement. According to the author’s office, “when phone plans were run on a metered basis, and individuals were charged by the minute for phone calls, the use of the toll-free lines by state agencies was a perfect scheme to prevent the public from incurring unnecessary costs when they were seeking state services, by shifting the cost of a phone call to the state instead of the person making the call. Modern phone plans, conversely, feature unlimited calling throughout the country and are charged on a monthly basis, not by the minute, so the need for toll-free numbers to save callers money is diminishing precipitously and is, for the most part, obsolete. However, some state agencies continue to use toll-free lines as the primary means by which a member of the public may contact an agency telephonically.”

The author’s office further states that, “every time that someone calls a state agency on a toll-free line, the state pays for every minute of every call that is received on any given toll-free number. This is an unnecessary and wasteful use of tax dollars that could be utilized for purposes that are more important. AB 1135 will initiate a transition away from the use of toll-free lines by state agencies and departments, while ensuring that the public has equitable telephonic access to state services.”

Toll-Free Numbers. Toll-free numbers are phone numbers that allow callers to reach businesses or individuals without incurring any charges for the call. Instead, the recipient of the call pays for the charges. These numbers are typically used by businesses for customer service, sales, and support to encourage customers to contact them without worrying about call costs.

The availability of toll-free numbers began when landline telephone service was the only option for making voice calls, and customers incurred per-minute charges for long-distance calls. State agencies, like businesses and other organizations serving the public, made toll-free numbers available to any person could call them with no charge. Overall, toll-free numbers are a strategic tool for enhancing customer engagement and service reach. In California, various state provisions, require state agencies to maintain toll-free lines to make it easy and affordable for the public to contact them. For example, the Director of the Department of Managed Health Care is required to establish and maintain a toll-free telephone number of the purpose of receiving complaints regarding health care service plans regulated by the director.

Today, a very high percentage of the population subscribes to mobile telephone or internet-based service that permits unlimited voice calling regardless of distance or duration of calls. The author argues that, “therefore members of the public are being charged twice every time they call a state operated toll-free number. Typical per minute rates for toll-free lines range from one cent per minute to five cents per minute. While this is seemingly nominal cost, the volume of calls that state agencies receive is quite high, often ranging over several million calls annually, resulting in significant costs to the state.”

Possible Unintended Consequences. While there is certainly the possibility of savings by shifting to more state agency use of non-toll-free telephone lines, transition away from toll-free numbers could be a barrier or burden, particularly for low-income households and seniors that are reliant on landline telephone plans that are charged usage based on rates, as the costs of each call would be billed to the caller instead of the state. While the size of the potentially affected population is difficult to measure precisely, a reasonable proxy for the upper limit of this population are California Lifeline program enrollees using their benefit for a wireline plan. This particular population would consist of low-income households with landline telephone service, which likely are households led by seniors. As of November 2023, there were about 150,000 households utilizing their Lifeline benefit for a wireline telephone connection.

Unsurprisingly, the number of enrollees using their Lifeline benefits for wireline service has been shrinking month over month for a number of years. Additionally, even for households that utilize Lifeline benefits for wireline service, individuals in those households may have access to other forms of communication such as cellphone or email. Nonetheless, despite the relatively small number of households that would arguably be negatively impacted by this bill, ensuring the continued availability of equitable access to public services and communication with state agencies is a paramount public policy objective. The bill seeks to address this concern by requiring each state agency, when transitioning away from use of toll-free numbers, to consider availability and affordability of unlimited voice calling plans and other technologies for contacting the agency. These considerations will be different depending on the population served by particular state agency programs and the historical use or statutory requirement of toll-free lines for specific state agency purposes.

Prior/Related Legislation

AB 2886 (Moore, Chapter 393, Statutes of 1990) authorizes state agencies, with the approval of DGS, to install and operate toll-free telephone lease lines to provide access by the public and local government agencies and requires DGS to adopt guidelines for the use of toll-free lease lines by state agencies , as specified.

FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No

SUPPORT:

None received

OPPOSITION:

The Utility Reform Network (TURN)

ARGUMENTS IN OPPOSITION: According to TURN, “while it is true that many Californians have access to unlimited calling plans from wireless providers, a significant number of Californians could have difficulty accessing state services if unlimited calling was eliminated or relegated to being a secondary option. Senior citizens are one category of customers that would be harmed by the elimination of toll-free telephone numbers. Seniors experience impairments such as reduced eyesight and dexterity, which make it more difficult to use cell phones and computers in real time communication. Eliminating the requirement for state agencies to offer toll-free numbers would create challenges for a significant number of Californians.”

ASSEMBLY THIRD READING

ATR Bill Id:AB 1135

Author:(Lowenthal)

As Amended Ver:January 3, 2024

Majority vote

SUMMARY

This bill initiates a transition away from state agency use of toll-free telephone lines as the primary method for the public to make a voice call to contact the agency.

Major Provisions

1. Requires state agencies to transition from use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency.
2. Requires each state agency, no later than July 1, 2025, to update its internet website to post a non-toll-free telephone number instead of a toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
3. Requires each state agency, when updating a publication with information about how to contact the agency, to include a non-toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
4. Requires each state agency to continue operating any toll-free telephone number that, on the effective date of this bill, is already offered to the public to contact the agency.
5. Requires each state agency, when transitioning to use of non-toll-free numbers, to ensure equitable access to the agency by all members of the public, based on consideration of availability and affordability of voice calling plans that allow a customer to make voice calls without per-minute charges and availability and affordability of alternative methods to contact the agency.
6. Makes technical and conforming changes to place the current law requiring approval of state agency use of toll-free lines under the California Department of Technology (CDT) rather than the Department of General Services (DGS) and to specify that CDT approval guidelines be consistent with this bill.

COMMENTS

1. Transition, Not a Mandate to Remove Toll-Free Lines. This bill seeks to achieve costs savings for the state made possible by widespread availability of unlimited voice calling plans, while balancing that objective with preserving the ability of the public to contact state agencies in an equitable manner. Recent amendments modify this bill from requiring state agencies to stop using toll-free voice lines by a specified date to instead require each state agency to transition away from using toll-free lines as the primary method for the public to contact the agency. As initial steps in the transition, agencies are required to promote use of non-toll-free telephone numbers on their web sites and in publications with information on how to contact the agency. State agencies are required to continue operating existing toll-free lines. Moreover, this bill does not prescribe an end date to the transition and requires each agency to consider availability and affordability of voice calling plans and other technologies to contact the agency.
2. Unlimited Calling Plans Diminish Need for Toll-Free Lines. The availability of toll-free numbers – starting with 800 numbers in the late 1960s – began when landline telephone service was the only option for making voice calls, and customers incurred per-minute charges for long-distance calls. State agencies, like businesses and other organizations serving the public, made toll-free numbers available so any person could call them with no charge. Toll-free numbers now include 888, 877, 866, 855, 844, and 833 area code numbers. Multiple provisions of current law – some enacted decades ago, some more recently -- require state agencies to maintain toll-free numbers for specified purposes, such as to receive complaints, reports of violations, and messages in crisis situations. State agencies pay the per-minute charge for incoming calls on toll-free lines to make it easy and affordable for the public to contact them. Today, a very high percentage of the population subscribes to mobile telephone or internet-based service that permits unlimited voice calling regardless of distance or duration of calls. Thus, it is a reasonable assumption that, for many Californians, lack of a toll-free line would not be a cost barrier or burden to contacting a state agency. Nonetheless, this bill raises equity concerns for some populations as there are still some households, predominantly seniors and low-income households, that may subscribe to tolled landline telephone lines or use prepaid wireless phones.
3. Preliminary Data Shows Cost Savings Potential. Preliminary data provided by the author on state agency use of toll-free lines demonstrates the potential for state cost savings. The author's informal survey of 237 state entities identified 67 (28%) that operate toll-free lines. For each incoming call to a state agency on a toll-free line, the state pays a per-minute charge, ranging from 1 cent to 5 cents per minute. Some state agencies, such as the Department of Motor Vehicles, Employment Development Department, and Franchise Tax Board (FTB), receive several million calls per year on toll-free lines. According to the author, FTB reported receiving 4.5 million calls in 2022 with an average call duration of seven and a half minutes. At the extreme, preliminary data shows some agency "longest wait time" in a given month as high as 12 hours. While the author is working with the California Department of Technology (CDT) to get more detailed information, overall, preliminary data demonstrates a potential for avoiding millions of dollars in state costs if calls are made to state agencies on non-toll-free lines rather than toll-free lines with per-minute charges.
4. Ensuring Equitable Access to State Agencies. The potential for state cost savings by shifting to more state agency use of non-toll-free telephone lines must be balanced against the need to ensure that all members of the public can easily contact state agencies. Transition away from toll-free numbers could be a barrier or burden particularly for low-income households and seniors reliant on landline telephone plans that are charged usage based rates, as the cost of each call would be billed to the caller instead of the state. While the size of the potentially affected population is difficult to measure precisely, a reasonable proxy for the low-income portion of this population is households enrolled in the California Lifeline program that use their benefit for a wireline plan. As of November 2023, there were about 150,000 households utilizing their Lifeline benefit for a wireline telephone connection. Notably, and perhaps unsurprisingly, the number of enrollees using their Lifeline benefit for wireline service has been shrinking month over month for quite some time. Additionally, even for households that utilize their Lifeline benefit for wireline service, individuals in those households may have access to other forms of communication such as a cellphone or email. For example, according to federal estimates, only 2.7% of California adults are "landline-only", and only 4.4% are "landline-mostly"; the remainder rely equally (8.9%), mostly (19%), or exclusively (64.2%) on their wireless phones.

Nonetheless, despite the relatively small number of households that would arguably be negatively impacted by this bill, ensuring the continued availability of equitable access to public services and communication with state agencies is a paramount public policy objective. This bill addresses this concern by requiring each state agency, when transitioning away from use of toll-free numbers, to consider availability and affordability of unlimited voice calling plans and other technologies for contacting the agency. These considerations will be different depending on the population served by particular state agency programs and the historical use or statutory requirement of toll-free lines for specific state agency purposes.

According to the Author

"AB 1135 will initiate a transition away from the use of toll-free lines by state agencies and departments, while ensuring that the public has equitable telephonic access to state services." The author argues that this change will save the state money.

Arguments in Support

No support on file.

Arguments in Opposition

The Utility Reform Network, a consumer advocacy organization, argues that this bill would negatively impact Californians that subscribe to tolled calling plans, which are disproportionately seniors. TURN also argue that this bill does not provide adequate clarification about what criteria should apply to a determination about whether an agency should continue to provide toll-free numbers, and or about how an agency that continues to provide toll-free numbers should implement the requirement that non-toll-free numbers are treated as the primary telephone number offered to the public.

FISCAL COMMENTS

According to the Assembly Appropriations Committee, any costs to state agencies should be minor and absorbable. The Department of Technology may experience costs in considering whether to allow a state agency to install and operate a toll-free or non-toll free telephone line, but the analysis notes that this is already a requirement of the Department of Technology under existing law. To the extent this bill results in a reduction in the state paying the costs of toll-free telephone charges, it will reduce state costs, possibly by a significant amount.

VOTES

ASM COMMUNICATIONS AND CONVEYANCE: 10-1-0

YES: Boerner, Bonta, Dixon, Garcia, Holden, Hoover, Maienschein, Stephanie Nguyen, Luz Rivas, Rodriguez

NO: Jim Patterson

ASM APPROPRIATIONS: 14-1-1

YES: Holden, Arambula, Wood, Calderon, Connolly, Dixon, Mike Fong, Grayson, Haney, Hart, Lowenthal, Pellerin, Ta, Villapudua

NO: Sanchez

ABS, ABST OR NV: Megan Dahle

UPDATED

VERSION: January 3, 2024

CONSULTANT: Emilio Perez / C. & C. / (916) 319-2637 FN: 0002596

Date of Hearing: January 18, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Chris Holden, Chair

ABPCA Bill Id:AB 1135

Author:(Lowenthal) – As Amended Ver:January 3, 2024

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill requires each state agency to transition away from use of toll-free telephone numbers to use of non-toll-free telephone numbers as the primary method for the public to make a voice call to the agency.

This bill requires each state agency, no later than July 1, 2025, to update its website to post the non-toll-free number, instead of the toll-free number, as the primary method for the public to make a voice call to the agency. In addition, the bill requires each state agency, when the agency updates a publication with information about how the public can contact the agency, to include the non-toll-free number as the primary method for the public to make a voice call to the agency. Nonetheless, the bill requires a state agency to continue to operate a toll-free telephone number to the public as a method of making a voice call to the agency.

The bill further directs a state agency, when implementing the requirements described above, to ensure equitable access to all members of the public, based on consideration of (a) availability and affordability of voice calling plans that allow a customer to make voice calls without per-minute charges, and (b) availability and affordability of alternative methods to contact the agency.

Finally, the bill updates existing law to provide the Department of Technology discretion over whether to allow a state agency to install and operate a toll-free, or non-toll-free, telephone line for public contact with the agency, makes other related changes, and directs the department to adopt guidelines for the use of each type of telephone line by state agencies as necessary to promote the efficient use of telephone lines.

FISCAL EFFECT:

Any costs to state agencies should be minor and absorbable. The Department of Technology may experience costs in considering whether to allow a state agency to install and operate a toll-free or non-toll free, telephone line; however, this is already a requirement of the Department of Technology under existing law, which used to fulfill this responsibility prior to the creation of the Department of Technology.

To the extent this bill results in a reduction in the state paying the costs of toll-free telephone charges, it will reduce state costs, possibly by a significant amount.

COMMENTS:

1. Purpose. The author intends this bill to reduce the amount money state agencies spend to cover the costs of toll-free telephone lines available to the public without shifting those costs on to the public or reducing public access to state agencies. According to the author:

When phone plans were run on a metered basis…the use of toll-free lines by state agencies was a perfect scheme to prevent the public from incurring unnecessary costs when they were seeking state services…Modern phone plans, conversely, feature unlimited calling throughout the country and are charged on a monthly basis, not by the minute, so the need for toll-free numbers to save callers money is diminishing precipitously and is, for the most part, obsolete. However, some state agencies continue to use toll-free lines…Every time that someone calls a state agency on a toll-free line, the state pays for every minute of every call that is received on any given toll-free number… AB 1135 will initiate a transition away from the use of toll-free lines by state agencies and departments, while ensuring that the public has equitable telephonic access to state services.

1. Background. Traditionally, telephone companies charged customers for each minute of telephone use. Today, most Californians receive telephone service through mobile phone plans or through internet-based providers, both of which, generally, offer unlimited calling, meaning a customer does not incur greater costs with each minute of telephone use. Therefore, it is very likely that a Californian who contacts a state agency—to schedule an appointment, log a complaint or request information, for example—would experience no greater cost to use a non-toll-free number, as opposed to using a toll-free number, generally beginning with the prefixes 800, 888, etc.

However, many Californians continue to rely on landlines or some other type of telephone service that charge customers for each minute of their telephone use. The committee could not find data on just how many Californians rely on telephone service that charges by the minute. The analysis of this bill by Assembly Committee on Communications and Conveyance attempted some rough estimates, and put the number between about 150,000 persons on the low end (the rough number of Californians who participate in the state Lifeline program, which subsidizes telephone service to qualifying low-income Californians) and about 2 million (the estimated number of California adults who rely solely or mostly on landlines for telephone services, extrapolating from a survey in December of 2022 by the National Center for Health Statistics).

While the author has provided estimates of potential toll charge costs incurred by state agencies today, the committee does not know how many state agencies rely on toll-free numbers as their primary method for the public to make voice contact with those agencies, nor the costs to state government associated with use of those toll-free numbers. If this bill becomes law, it will be important to monitor its effect on both (a) state costs and (b) public access to state agencies, especially access by Californians most likely to rely on landline telephone service, a group that is, generally, lower-income, older and less tech-savvy than other Californians.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: January 10, 2024

ASSEMBLY COMMITTEE ON COMMUNICATIONS AND CONVEYANCE

Tasha Boerner, Chair

ABPCA Bill Id:AB 1135 (

Author:Lowenthal) – As Amended Ver:January 3, 2024

SUBJECT: State agencies: toll-free and non-toll-free telephone lines: Department of Technology

SUMMARY: This bill initiates a transition away from state agency use of toll-free telephone lines as the primary method for the public to make a voice call to contact the agency. Specifically, this bill:

1. Requires state agencies to transition from use of toll-free telephone numbers to non-toll-free telephone numbers as the primary method for the public to make a voice call to contact the agency.
2. Requires each state agency, no later than July 1, 2025, to update its internet website to post a non-toll-free telephone number instead of a toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
3. Requires each state agency, when updating a publication with information about how to contact the agency, to include a non-toll-free telephone number as the primary method for the public to make a voice call to contact the agency.
4. Requires each state agency to continue operating any toll-free telephone number that, on the effective date of this bill, is already offered to the public to contact the agency.
5. Requires each state agency, when transitioning to use of non-toll-free numbers, to ensure equitable access to the agency by all members of the public, based on consideration of availability and affordability of voice calling plans that allow a customer to make voice calls without per-minute charges and availability and affordability of alternative methods to contact the agency.
6. Makes technical and conforming changes to place the current law requiring approval of state agency use of toll-free lines under the California Department of Technology (CDT) rather than the Department of General Services (DGS) and to specify that CDT approval guidelines be consistent with this bill.

EXISTING LAW:

1. Authorizes a state agency, with the approval of DGS, to install and operate toll-free telephone lease lines to provide access by the public and local governmental agencies and requires information made available on a toll-free telephone lease line to be accessible by both tone dial and rotary dial telephone. (Gov. Code Sec. 14627)
2. Requires DGS to adopt guidelines for the use of toll-free lease lines by state agencies as are necessary to promote their efficient use. (Gov. Code Sec. 14627)
3. Grants CDT broad authority to manage policy, planning, procurement and strategies for state agencies to operate adequate and efficient business telecommunications systems to meet agency requirements. (Gov. Code Sec. 11541)

Requires, in multiple code sections, individual state agencies or programs to maintain a toll-free number for a specified purpose. (Health and Safety Code Sec. 1368.02, Health and Safety Code Sec. 11362.735, among others)

FISCAL EFFECT: The Legislative Counsel has keyed this bill as fiscal.

COMMENTS:

1. Author’s Purpose: According to the author: “While toll-free numbers, at one time, served the important purpose of saving callers money by directing cost to the call recipient, they are now an antiquated technology. When phone plans were run on a metered basis, and individuals were charged by the minute for phone calls, the use of toll-free lines by state agencies was a perfect scheme to prevent the public from incurring unnecessary costs when they were seeking state services, by shifting the cost of a phone call to the state instead of the person making the call. Modern phone plans, conversely, feature unlimited calling throughout the country and are charged on a monthly basis, not by the minute, so the need for toll-free numbers to save callers money is diminishing precipitously and is, for the most part, obsolete. However, some state agencies continue to use toll-free lines as the primary means by which a member of the public may contact an agency telephonically. Every time that someone calls a state agency on a toll-free line, the state pays for every minute of every call that is received on any given toll-free number. In other words, not only is the public paying for the cost of a monthly phone plan, but their tax dollars are also paying for the operation of toll-free lines by the state. Therefore, members of the public are being charged twice every time they call a state-operated toll-free number. This is an unnecessary and wasteful use of tax dollars that could be utilized for purposes that are more important. Simply maintaining a toll-free number is not costly under telecom contracts and plans. The cost is generated from operating a toll-free number, as every call that the operator of the toll-free line receives is charged by the minute. Typical per minute rates for toll-free lines range from one cent per minute to five cents per minute. While this is a seemingly nominal cost, the volume of calls that state agencies receive is quite high, often ranging over several million calls annually, resulting in significant costs to the state. AB 1135 will initiate a transition away from the use of toll-free lines by state agencies and departments, while ensuring that the public has equitable telephonic access to state services.”
2. Transition, Not a Mandate. This bill seeks to achieve costs savings for the state made possible by widespread availability of unlimited voice calling plans, while balancing that objective with preserving the ability of the public to contact state agencies in an equitable manner. Recent amendments modify the bill from requiring state agencies to stop using toll-free voice lines by a specified date to instead require each state agency to transition away from using toll-free lines as the primary method for the public to contact the agency. As initial steps in the transition, agencies are required to promote use of non-toll-free telephone numbers on their web sites and in publications with information on how to contact the agency. State agencies are required to continue operating existing toll-free lines. Moreover, the bill does not prescribe an end date to the transition and requires each agency to consider availability and affordability of voice calling plans and other technologies to contact the agency.
3. Unlimited Calling Plans Diminish Need for Toll-Free Lines. The availability of toll-free numbers – starting with 800 numbers in the late 1960s – began when landline telephone service was the only option for making voice calls, and customers incurred per-minute charges for long-distance calls. State agencies, like businesses and other organizations serving the public, made toll-free numbers available so any person could call them with no charge. Toll-free numbers now include 888, 877, 866, 855, 844, and 833 area code numbers. Multiple provisions of current law – some enacted decades ago, some more recently -- require state agencies to maintain toll-free numbers for specified purposes, such as to receive complaints, reports of violations, and messages in crisis situations. State agencies pay the per-minute charge for incoming calls on toll-free lines to make it easy and affordable for the public to contact them. Today, a very high percentage of the population subscribes to mobile telephone or internet-based service that permits unlimited voice calling regardless of distance or duration of calls. Thus, it is a reasonable assumption that, for many Californians, lack of a toll-free line would not be a cost barrier or burden to contacting a state agency.
4. Preliminary Data Shows Cost Savings Potential. Preliminary data provided by the author on state agency use of toll-free lines demonstrates the potential for state cost savings. The author’s informal survey of 237 state entities identified 67 (28 percent) that operate toll-free lines. For each incoming call to a state agency on a toll-free line, the state pays a per-minute charge, ranging from 1 cent to 5 cents per minute. Some state agencies, such as the Department of Motor Vehicles, Employment Development Department, and Franchise Tax Board (FTB), receive several million calls per year on toll-free lines. According to the author, FTB reported receiving 4.5 million calls in 2022 with an average call duration of 7 and a half minutes. At the extreme, preliminary data shows some agency “longest wait time” in a given month as high as 12 hours. While the author is working with the California Department of Technology (CDT) to get more detailed information, overall, preliminary data demonstrates a potential for avoiding millions of dollars in state costs if calls are made to state agencies on non-toll-free lines rather than toll-free lines with per-minute charges.
5. Ensuring Equitable Access to State Agencies. The potential for state cost savings by shifting to more state agency use of non-toll-free telephone lines must be balanced against the need to ensure that all members of the public can easily contact state agencies. Transition away from toll-free numbers could be a barrier or burden particularly for low-income households and seniors reliant on landline telephone plans that are charged usage based rates, as the cost of each call would be billed to the caller instead of the state. While the size of the potentially affected population is difficult to measure precisely, a reasonable proxy for the upper limit of this the population are California Lifeline^[1] program enrollees using their benefit for a wireline plan. This particular population would consist of low-income households with landline telephone service, which likely are households led by seniors. As of November 2023, there were about 150,000 households utilizing their Lifeline benefit for a wireline telephone connection. Notably, and perhaps unsurprisingly, the number of enrollees using their Lifeline benefit for wireline service has been shrinking month over month for quite some time. Additionally, even for households that utilize their Lifeline benefit for wireline service, individuals in those households may have access to other forms of communication such as a cellphone or email. For example, according to federal estimates, only 2.7% of California adults are “landline-only”, and only 4.4% are “landline-mostly”; the remainder rely equally (8.9%), mostly (19%), or exclusively (64.2%) on their wireless phones^[2].

Nonetheless, despite the relatively small number of households that would arguably be negatively impacted by this bill, ensuring the continued availability of equitable access to public services and communication with state agencies is a paramount public policy objective. The bill addresses this concern by requiring each state agency, when transitioning away from use of toll-free numbers, to consider availability and affordability of unlimited voice calling plans and other technologies for contacting the agency. These considerations will be different depending on the population served by particular state agency programs and the historical use or statutory requirement of toll-free lines for specific state agency purposes.

REGISTERED SUPPORT / OPPOSITION:

Support

None on file

Opposition

The Utility Reform Network (TURN)

Analysis Prepared by: Emilio Perez / C. & C. / (916) 319-2637

1. The California Lifeline program provides discounted telephone service to qualified households. Households may qualify based on income or through participating in other public assistance programs. As such, California households enrolled in the Lifeline program are among the likeliest population to be affected by this bill because of their socioeconomic status and interaction with state agencies to access other public assistance programs. ↑

2. National Health Interview Survey Early Release Program, Nat’l Ctr. for Health Stat. (Dec. 2022), https://www.cdc.gov/nchs/data/nhis/earlyrelease/Wireless_state_202212.pdf ↑